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68648828
21887800
48126622
12450121
129660141
1456825
5574844
10220725
4200836
9758959
6290672
6277797
12875
9863492
-104533
14922626
15015220
-92594
-3123851
2172347
2172347
-3123851
-636386
-636386
105276
58867
48293
39629404
20342692
36011645
900000
5631163
1048749
1432955
5700000
5947885
7002823
4505958
7500000
7309428
4871021
5562637
7200000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Land use rights</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">8,618,121</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">8,731,398</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Trademarks</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,540</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,718</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1.5pt">Patents</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">8,786</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">7,365</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Total</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">8,640,447</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">8,752,481</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; 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">(757,597</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">(594,565</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 4pt">Intangible assets, net</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,882,850</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">8,157,916</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Periods ending December 31,</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Amortization expense</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left"> </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: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">174,208</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">174,011</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2022</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">173,789</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2023</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">173,359</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2024</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">173,283</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Thereafter</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">7,014,200</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,882,850</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: center"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="white-space: nowrap; padding-bottom: 1.5pt"> </td>
<td style="white-space: nowrap; text-align: center"> </td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> </td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%; text-align: left">Agricultural Bank of China ("ABC")</td><td style="width: 1%"> </td>
<td style="width: 5%; text-align: center">(1)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">10,160,735</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">8,622,194</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">China Merchants Bank ("CMB")</td><td> </td>
<td style="text-align: center">(2)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,435,132</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,696,441</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Industrial and Commercial Bank of China ("ICBC")</td><td> </td>
<td style="text-align: center">(3)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,157,290</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,557,315</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Bank of China ("BOC")</td><td> </td>
<td style="text-align: center">(4)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,152,698</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,724,793</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">East West Bank ("EWB")</td><td> </td>
<td style="text-align: center">(5)</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">2,000,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; text-indent: -10pt; padding-left: 10pt">Pennsylvania Industrial Development Authority – current portion of long-term borrowing (see "long-term borrowing" below)</td><td> </td>
<td style="text-align: center; padding-left: 10pt"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">91,484</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">89,898</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">East West Bank loan – current portion of long-term borrowing (see "long-term borrowing" below)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt; padding-left: 10pt"> </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">200,000</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">200,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="text-align: center; padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">17,197,339</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">19,890,641</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(1)</font></td>
<td>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the year ended December 31, 2019, Taizhou Fuling entered
into a series of short-term bank loan agreements with ABC for a total amount of $18,972,445. The terms of these loans are one to
twelve months with variable interest rates based on the prevailing interest rates. The effective rates are from 4.50% to 5.04%
per annum. As of December 31, 2019, $8,811,710 of them had been repaid upon maturity.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the year ended December 31, 2018, Taizhou Fuling
entered into a series of short-term bank loan agreements with ABC for a total amount of $8,622,194. The terms of these loans are
six months with variable interest rates based on the prevailing interest rates, respectively. The effective rates are from 4.57%
to 5.15% per annum. As of December 31, 2019, all of them had been repaid upon maturity.</p></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(2)</font></td>
<td>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During year ended December 31, 2019, Taizhou Fuling entered
into a series of short-term bank borrowing agreements with CMB for a total amount of $7,626,660. The terms of these loans are three
to twelve months 3with variable interest rates based on the prevailing interest rates. The effective rates were from 4.49% to 5.88%
per annum. The loans are guaranteed by Zhejiang Special Plastic Ltd. and Taizhou Fuling's general manager and Chair of the
Board. As of December 31, 2019, $6,191,528 had been repaid in full upon maturity.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During year ended December 31, 2018, Taizhou Fuling entered
into a series of short-term bank borrowing agreements with CMB for a total amount of approximately $6.3 million (RMB 43.4 million).
The terms of these loans are five to twelve months with variable interest rates based on the prevailing interest rates. The effective
rates were from 2.40% to 6.09% per annum. The loans are guaranteed by Zhejiang Special Plastic Ltd. and Taizhou Fuling's
general manager and Chair of the Board. As of December 31, 2019, all of them had been repaid in full upon maturity.</p></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(3)</font></td>
<td>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the year ended December 31, 2019, Taizhou Fuling entered
into a series of short-term loan agreements with ICBC for a total amount of $4,521,116. The terms of these loans are three to twelve
months with the interest rates ranged from 5.00% to 5.22% per annum. As of December 31, 2019, $1,363,826 of them had been repaid
in full upon maturity.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the year ended December 31, 2018, Taizhou Fuling entered
into a series of short-term loan agreements with ICBC for a total amount of $4,557,315. The terms of these loans are five to twelve
months with the interest rates ranged from 3.47% to 5.44% per annum. As of December 31, 2019, all of them had been repaid in full
upon maturity.</p></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(4)</font></td>
<td><font style="font-size: 10pt">During the year ended December 31, 2019 and the year ended December 31, 2018, Taizhou Fuling entered into a series of short-term bank borrowing agreements and other financing agreements with BOC. The terms of the loans are five to twelve months, with fixed interest rates based on London InterBank Offered Rate ("LIBOR") (for loans dominated in USD) or prime loan rates issued by People's Bank of China (for loans dominated in RMB), plus certain base points. The effective interest rates vary from 3.02% to 5.53% per annum. The loans to Taizhou Fuling are guaranteed by the major shareholders.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(5)</font></td>
<td><font style="font-size: 10pt">On March 9, 2017, Direct Link entered into a line of credit agreement with East West Bank for $2,000,000 for one year. The annual interest rate is equivalent to LIBOR rate plus 2.75%. On April 7, 2017, Direct Link drew down $1,500,000 with the effective rate of 3.86% per annum. On December 1, 2017, Direct Link drew down another $500,000 with the effective rate of 4.45% per annum. On March 14, 2018, East West Bank approved to extend the loan to June 9, 2018. On June 26, 2018, East West Bank again approved to extend the loan to June 9, 2019. On September 13, 2019, East West Bank approved to extend the loan to September 7, 2021. (See "Long-term Borrowing" below)</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: center"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%; text-align: left">Pennsylvania Industrial Development Authority – long term</td><td style="width: 1%"> </td>
<td style="width: 5%; text-align: center">(1)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">566,750</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">658,234</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Agricultural Bank of China ("ABC")</td><td> </td>
<td style="text-align: center">(2)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">7,161,309</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,815,982</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">East West Bank ("EWB") – long term</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt">(3)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,517,952</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">729,141</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="text-align: center; padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">10,246,011</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">7,203,357</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(1)</font></td>
<td><font style="font-size: 10pt">On September 28, 2016, Fuling USA entered into a ten-year Machinery and Equipment Loan Agreement with the Pennsylvania Industrial Development Authority for $937,600, with fixed interest rate of 1.75%. This loan has been collateralized by the machinery and equipment, worth approximately $1.72 million. As of December 31, 2019, the amount of long-term borrowing was $658,234, and it consists of $91,484 of which is due within a year and $566,750 that is due over a year.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(2)</font></td>
<td><font style="font-size: 10pt">In fiscal year 2018, Taizhou Fuling entered into a series of  buyer's credit Loan Agreements with ABC for total of $5,815,982 (RMB 40 million) for 36 months. The effective rates varies from 5.23% to 5.37% per annum. In August 2019, Taizhou Fuling entered into a buyer's credit Loan Agreement with ABC for total of $1,420,781 (RMB 9.9 million) for 36 months. The effective rate was 4.99% per annum. </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(3)</font></td>
<td><font style="font-size: 10pt">On March 9, 2017, Fuling USA entered into a Delayed Draw Term Loan agreement with East West Bank for $1,000,000. The amount drawn will be turned into a 5-year term loan at LIBOR rate plus 3.00%. The loan is guaranteed by Fuling Global. On April 7 and December 1, 2017, Fuling USA drew down $500,000 (April 2017 Loan) and $500,000 (December 2017 Loan), respectively. April 2017 loan will expire on April 7, 2023 and December 2017 loan will expire on December 1, 2023. Both loans require interest only payment for the first year and require interest and principal payments from second year to sixth year. The initial effective rate was 4.11% per annum. In September 2019, both parties agreed to adjust the effective rate to 4.877%. As of December 31, 2019, the outstanding loan was $717,952,  which consists of $200,000 due within a year and $517,952 due over a year.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Twelve months ended December 31,</td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">91,484</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">93,098</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2022</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">94,740</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2023</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">96,411</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2024</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">98,112</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">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">184,389</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: left; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">658,234</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Twelve months ended December 31,</td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">200,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">200,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2022</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">200,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2023</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">108,597</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2024</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">9,355</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">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">-</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: left; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">717,952</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b></b></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">Total loan payment</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">3,754,753</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Less: imputed interest</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(175,545</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: principal</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">(3,579,208</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total current portion of payment obligation as of December 31, 2019</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">Total loan payment</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,714,820</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Less: imputed interest</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(160,941</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: principal</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">(2,177,200</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Total loan balance as of December 31, 2019</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">376,679</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: current portion of payment obligation</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">(376,679</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Long term payable as of December 31, 2019</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b></b></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">Total loans payment</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">5,709,824</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Less: imputed interest</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(343,940</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: principal</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">(3,141,188</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Total loans payable as of December 31, 2019</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,224,696</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: current portion of other loans payable</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">(1,906,882</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Long term payable as of December 31, 2019</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">317,814</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b></b></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">Total loan payment</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,152,698</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Less: principal</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">(395,195</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: left">Total loan balance as of December 31, 2019 from lease transaction</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,757,503</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Less: current portion of payment obligation</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">(701,915</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">Long term payable as of December 31, 2019</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">1,055,588</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
P20Y
P10Y
P3Y
P10Y
P10Y
P4Y
P5Y
P3Y
27984656
23934283
223700
105032
7011718
6601010
1387111
1859907
14047720
15489159
171936
170405
65103416
26766432
1006032
948090
2376165
73278653
30262851
3971202
980823
1344561
2393006
492429
15659789
19667470
3437207
4227620
5266096
9880813
8752481
8731398
13718
7365
8640447
8618121
13540
8786
594565
757597
174208
174011
173789
173359
7014200
179268
174303
172209
91484
89898
200000
91484
200000
93098
200000
94740
200000
96411
129141
282501
0.0457
0.0515
0.0347
0.0544
0.0302
0.0553
0.0240
0.0609
0.0450
0.0504
0.0588
0.0449
0.0522
0.0500
6191528
8811710
1363826
0.0175
7821842
1720000
14071515
7426966
13190384
937600
Direct Link entered into a line of credit agreement with East West Bank for $2,000,000 for one year. The annual interest rate is equivalent to LIBOR rate plus 2.75%. On April 7, 2017, Direct Link drew down $1,500,000 with the effective rate of 3.86% per annum. On December 1, 2017, Direct Link drew down another $500,000 with the effective rate of 4.45% per annum. On March 14, 2018, East West Bank approved to extend the loan to June 9, 2018. On June 26, 2018, East West Bank again approved to extend the loan to June 9, 2019. On September 13, 2019, East West Bank approved to extend the loan to September 7, 2021.
Taizhou Fuling entered into a series of buyer's credit Loan Agreements with ABC for total of $5,815,982 (RMB 40 million) for 36 months. The effective rates vary from 5.23% to 5.37% per annum. In August 2019, Taizhou Fuling entered into a buyer's credit Loan Agreement with ABC for total of $1,420,781 (RMB 9.9 million) for 36 months. The effective rate was 4.99% per annum.
Fuling USA entered into a Delayed Draw Term Loan agreement with East West Bank for $1,000,000. The amount drawn will be turned into a 5-year term loan at LIBOR rate plus 3.00%. The loan is guaranteed by Fuling Global. On April 7 and December 1, 2017, Fuling USA drew down $500,000 (April 2017 Loan) and $500,000 (December 2017 Loan), respectively. April 2017 loan will expire on April 7, 2023 and December 2017 loan will expire on December 1, 2023. Both loans require interest only payment for the first year and require interest and principal payments from second year to sixth year. The initial effective rate was 4.11% per annum. In September 2019, both parties agreed to adjust the effective rate to 4.877%. As of December 31, 2019, the outstanding loan was $717,952, which consists of $200,000 due within a year and $517,952 due over a year.
2888053
286902
1802884
1802884
2601151
1439063
580044
1448990
1746914
Due various dates from January 4, 2019 to June 27, 2019
Due May 5, 2019
Due various dates from January 26, 2020 to June 20, 2020
599898
90466
1904846
10374099
8963428
15055213
4455
17837
595461
783915
2217112
531275
319483
1126736
788370
2554432
0.21
0.21
-0.194
-0.325
-0.208
0.25
0.25
0.250
0.105
0.081
0.089
0.017
0.003
0.019
0.103
0.087
0.151
1343322
715087
1492279
2868000
3468000
1544000
420056
605081
378038
0.09
0.05
0.09
0.35
0.21
0.25
3754739
26163022
2714820
18916864
5709824
39786052
2320646
16170258
1973521
910829
1556304
196931
1680741
8062277
55715
71144
5147960
222500
55715
54550
71144
15705
8000
15705
58848571
59981251
13047425
4271140
1
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 3 – ACCOUNTS RECEIVABLE, NET</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Accounts receivable consisted of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Trade accounts receivable</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">23,934,283</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">27,984,656</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Less: allowance for doubtful accounts</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(105,032</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(223,700</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Accounts receivable, net</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">23,829,251</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">27,760,956</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 4 – INVENTORY, NET</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Inventories consisted of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Raw materials</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">6,601,010</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,011,718</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Work-in-progress</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,859,907</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,387,111</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Finished goods</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">15,489,159</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">14,047,720</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Less: inventory valuation allowance</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(170,405</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(171,936</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Total inventory</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">23,779,671</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">22,274,613</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 5 – PROPERTY, PLANT AND EQUIPMENT, NET</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property, plant and equipment, net consisted of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Property and buildings</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">30,262,851</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">26,766,432</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Leasehold improvement</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,971,202</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,376,165</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Machinery and equipment (1)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">36,719,216</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">34,006,697</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Automobiles</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">980,823</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,006,032</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Office and electric 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">1,344,561</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">948,090</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Subtotal</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">73,278,653</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">65,103,416</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Construction in progress</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">492,429</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,393,006</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; 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">(19,667,470</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">(15,659,789</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: left; padding-bottom: 4pt">Property 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">54,103,612</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">51,836,633</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<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">
<td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt">(1)</font></td><td><font style="font-size: 10pt">A total amount of $9,880,813
machinery was related to the finance lease transaction (see Note 11).</font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Depreciation expense was $5,266,096, $4,227,620 and $3,437,207
for the years ended December 31, 2019, 2018 and 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Construction in progress("CIP") represents costs
of construction incurred for the Company's new plant and equipment.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company started the construction for its facility expansion
in Wenling, China in April 2016. For the year ended December 31, 2018, construction in progress of approximately $9.9 million was
completed and was transferred to property, plant and equipment. For the year ended December 31, 2019, construction in progress
of approximately $5.6 million was completed and was transferred to property, plant and equipment. As of December 31, 2019,
the new facility in China is completed.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In December 2018, the Company signed a building lease agreement
with the local Interpuerto Industrial Park in Monterrey, Mexico to set up a manufacturing facility ("the Mexico factory").
The Mexico factory build began in April 2019 followed by equipment installation. On August 19, 2019, the Mexico factory officially
began production. As of December 31, 2019, CIP related to the Mexico factory amounted to $424,880.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0">In September 2019, Fuling Indonesia signed a ten-year land and building
lease agreement with a third party in Central Java, Indonesia. The Company expects to install 64 production lines of manufacturing
equipment totalling approximately $5 million during 2020. As of December 31, 2019, CIP related to the Indonesia factory amounted
to $0.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 6 – INTANGIBLE ASSETS, NET</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Intangible assets, net consisted of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Land use rights</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">8,618,121</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">8,731,398</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Trademarks</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,540</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,718</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1.5pt">Patents</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">8,786</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">7,365</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Total</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">8,640,447</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">8,752,481</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; 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">(757,597</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">(594,565</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 4pt">Intangible assets, 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">7,882,850</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">8,157,916</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Amortization expense was $172,209, $179,268 and $174,303 for
the years ended December 31, 2019, 2018 and 2017, respectively. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Estimated future amortization expense for intangible assets
is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Periods ending December 31,</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Amortization expense</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left"> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">174,208</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">174,011</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2022</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">173,789</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2023</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">173,359</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2024</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">173,283</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">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">7,014,200</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: left; 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">7,882,850</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 14 </b>– <b>EQUITY</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Statutory Reserve</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company is required to make appropriations to certain reserve
funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined
in accordance with generally accepted accounting principles of the PRC ("PRC GAAP"). Appropriations to the statutory
surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve
is equal to 50% of the entity's registered capital. Appropriations to the surplus reserve are made at the discretion of the
Board of Directors. As of December 31, 2019 and 2018, the balance of statutory reserve was $6,962,390 and $5,532,945, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Share Issuance</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0">On November 18, 2019, the Company granted 7,853 shares to its former Chief
Financial Officer, Gilbert Lee. On November 18, 2018, the Company granted 15,705 shares to Gilbert Lee. On November 18, 2017, the
Company granted 15,705 shares and 8,000 shares collectively to Gilbert Lee and two directors, respectively. The Company recorded
$48,293, $105,276 and $58,867 as stock-based compensation expense for the years ended December 31, 2019, 2018 and 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Trade accounts receivable</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">23,934,283</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">27,984,656</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Less: allowance for doubtful accounts</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(105,032</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(223,700</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Accounts receivable, net</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">23,829,251</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">27,760,956</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Raw materials</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">6,601,010</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,011,718</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Work-in-progress</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,859,907</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,387,111</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Finished goods</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">15,489,159</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">14,047,720</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Less: inventory valuation allowance</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(170,405</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(171,936</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Total inventory</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">23,779,671</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">22,274,613</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Property and buildings</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">30,262,851</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">26,766,432</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Leasehold improvement</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,971,202</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,376,165</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Machinery and equipment (1)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">36,719,216</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">34,006,697</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Automobiles</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">980,823</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,006,032</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Office and electric 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">1,344,561</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">948,090</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Subtotal</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">73,278,653</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">65,103,416</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Construction in progress</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">492,429</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,393,006</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; 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">(19,667,470</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">(15,659,789</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: left; padding-bottom: 4pt">Property 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">54,103,612</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">51,836,633</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
9900000
5600000
424880
The Company expects to install 64 production lines of manufacturing equipment totaling approximately $5 million during 2020. As of December 31, 2019, CIP related to the Indonesia factory amounted to $0.
173283
7507445
3935926
910897
6103899
7014796
0.0500
P3Y9M18D
575971
534589
407081
10514
19630
82225
0.20
0.80
0.49
1.00
0.49
1.00
0.60
0.30
0.10
510000
21360000
5800000
40200000
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 11pt"><tr style="vertical-align: bottom"><td style="font: 11pt Calibri,sans-serif; white-space: nowrap; text-align: center"> </td><td style="font: bold 10pt Times New Roman,serif; white-space: nowrap; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman,serif; white-space: nowrap; text-align: center">December 31,<br /> 2019</td><td style="font: bold 10pt Times New Roman,serif; white-space: nowrap; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; width: 88%; text-align: left; padding-bottom: 1.5pt">Right-of-use assets</td><td style="font: 10pt Times New Roman,serif; width: 1%; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; width: 9%; text-align: right">7,507,445</td><td style="font: 10pt Times New Roman,serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td>
<td style="font: 11pt Calibri,sans-serif; text-align: left"> </td><td style="font: 11pt Calibri,sans-serif; text-align: right"> </td><td style="font: 11pt Calibri,sans-serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; text-align: left">Operating lease liabilities - current</td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left">$</td><td style="font: 10pt Times New Roman,serif; text-align: right">910,897</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman,serif; text-align: left; padding-bottom: 1.5pt">Operating lease liabilities - non-current</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: right">6,103,899</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; text-align: left; padding-bottom: 4pt">Total operating lease liabilities</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: left">$</td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: right">7,014,796</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td>Remaining lease term and discount rate:</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: left; padding-left: 0.75pt">Weighted average remaining lease term (years)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">3.8</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 0.75pt">Weighted average discount rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5.00</td><td style="text-align: left">%</td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,743,951</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,973,521</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2022</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">910,829</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2023</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,556,304</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2024</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">196,931</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">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">1,680,741</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: left">Total lease payments</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">8,062,277</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Less: imputed interest</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">(1,047,481</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: left; padding-bottom: 4pt">Present value of lease liabilities</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">7,014,796</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
1743951
-1047481
7014796
1571139
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Non-controlling Interests</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Non-controlling interests represents the individual shareholder's
proportionate share of 51% of equity interest in Domo and 100% of equity interest in Mexico Factory. Fuling USA is obligated to
absorb the risks and rewards of Mexico Factory according to the contractual arrangement, so the non-controlling interests result
of Mexico Factory is absorbed by Fuling USA rather than the Mexican local shelter services company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Use of Estimates</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The preparation of financial statements in conformity with U.S.
GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. These estimates are based on information as of the date of the financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Significant estimates required to be made by management include,
but are not limited to, the valuation of accounts receivable, inventories, advances to suppliers, useful lives of property, plant
and equipment, intangible assets, and the recoverability of long-lived assets. Actual results could differ from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Cash and Cash Equivalents</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company considers all highly liquid investment instruments
with an original maturity of three months or less from the date of purchase to be cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Restricted Cash</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Restricted cash consists of cash equivalents used as collateral
to secure short-term bank notes payable and bank borrowings. The Company is required to keep certain amounts on deposit that are
subject to withdrawal restrictions. Upon the maturity of the bank acceptance notes and bank borrowings, the Company is required
to deposit the remainder to the escrow account to settle the bank notes payable and bank borrowings. The notes payable and bank
borrowings with security deposits are generally short term in nature due to their short maturity period of three months to one
year; thus, restricted cash is classified as a current asset.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2019 and 2018, the Company had restricted
cash of $1,102,591 and $2,396,993, respectively, of which $580,044 and $1,439,064, respectively, was related to the bank acceptance
notes payable (see Note 9), and $342,158 and $649,675, respectively, was related to the letters of credit (see Note 12). The remaining
$180,389 and $308,254, respectively, were related to other miscellaneous deposits made in bank.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Accounts Receivable</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Accounts receivable are recognized and carried at original invoiced
amount less an estimated allowance for uncollectible accounts. The Company usually grants credit to customers with good credit
standing with a maximum of 90 days and determines the adequacy of reserves for doubtful accounts based on individual account analysis
and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence
that the Company may not be able to collect amounts due. The allowance is based on management's best estimates of specific
losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts
receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Actual
amounts received may differ from management's estimate of credit worthiness and the economic environment. Delinquent account
balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection
is not probable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Inventories</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Inventories are stated at the lower of cost or net realizable
value. Costs include the cost of raw materials, freight, direct labor and related production overhead. The cost of inventories
is calculated using the weighted average method. Any excess of the cost over the net realizable value of each item of inventories
is recognized as a provision for diminution in the value of inventories.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net realizable value is the estimated selling price in the normal
course of business less any costs to complete and sell products.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Property, Plant and Equipment</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property and equipment are stated at cost. The straight-line
depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td style="border-bottom: black 1.5pt solid; width: 79%"><font style="font-size: 10pt"><b>Items</b></font></td>
<td style="width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; width: 20%; text-align: center"><font style="font-size: 10pt"><b>Useful life</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Property and buildings</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">10–20 years</font></td></tr>
<tr style="vertical-align: top; background-color: white">
<td><font style="font-size: 10pt">Leasehold improvements</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">Lesser of useful life and<br />
lease term</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Machinery equipment</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">3–10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Automobiles</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">4–10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Office equipment and furniture</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">3–5 years</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Expenditures for maintenance and repairs, which do not materially
extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which
substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired
or sold are removed from the respective accounts, and any gain or loss is recognized in the statement of income in other income
and expenses.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Intangible Assets</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Intangible assets consist primarily of land use rights, trademark
and patents. Under the PRC law, all land in the PRC is owned by the government and cannot be sold to an individual or company.
The government grants individuals and companies the right to use parcels of land for specified periods of time. These land use
rights are sometimes referred to informally as "ownership." Land use rights are stated at cost less accumulated amortization.
Intangible assets are amortized using the straight-line method with the following estimated useful lives:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td style="border-bottom: black 1.5pt solid; width: 79%"><font style="font-size: 10pt"><b>Items</b></font></td>
<td style="width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; width: 20%; text-align: center"><font style="font-size: 10pt"><b>Useful life</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Land use rights</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">50 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Trademarks</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Patents</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">7-10 years</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Impairment of Long-lived Assets</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company reviews long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash
flows from the use of the asset and its eventual disposition are below the asset's carrying value, then the asset is deemed
to be impaired and written down to its fair value. There were no impairments of these assets as of December 31, 2019 and 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Revenue Recognition</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company follows paragraph 606 of the FASB Accounting Standards
Codification for revenue recognition and ASU 2014-09. On January 1, 2018, the Company adopted ASU 2014-09, which is a comprehensive
new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to
a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company
considers revenue realized or realizable and earned when all the five following criteria are met: (1) Identify the Contract with
a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the Transaction
Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance
Obligation. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Substantially all of the Company's revenue is derived
from product sales. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered
to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than
one year, and virtually all of the Company's contracts are short-term. The Company recognizes revenue for the transfer of
promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange
for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods.
The Company does not have any contract assets since the Company has an unconditional right to consideration when the Company has
satisfied its performance obligation and payment from customers is not contingent on a future event. Generally, payment is due
from customers within 40 to 60 days of the invoice date, and the contracts do not have significant financing components nor variable
consideration. Returns and allowances are not a significant aspect of the revenue recognition process as historically they have
been immaterial. All of the Company's contracts have a single performance obligation satisfied at a point in time and the
transaction price is stated in the contract, usually as a price per unit. All estimates are based on the Company's historical
experience, complete satisfaction of the performance obligation, and the Company's best judgment at the time the estimate
is made. Historically, sales returns have not significantly impacted the Company's revenue.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company disaggregates its revenue from contracts by products
and region, as we believe it best depicts the nature and source of the revenue. The Company's disaggregation of revenues
for the year ended December 2019, 2018 and 2017 is disclosed in Note 15.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Income Taxes</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company accounts for income taxes under ASC 740. Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated
financial statement carrying amounts of existing assets and liabilities and their respective tax bases.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including
the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The provisions of ASC 740-10-25, "Accounting for Uncertainty
in Income Taxes," prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement
of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition
of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for
interest and penalties associated with tax positions, and related disclosures. The Company does not believe that there were any
uncertain tax positions at December 31, 2019 and 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the extent applicable, the Company records interest and penalties
as general and administrative expenses. The statute of limitations for the Company's U.S. federal income tax returns and
certain state income tax returns subject to examination by tax authorities for three years from the date of filing. As of December
31, 2019, the tax years ended December 31, 2016 through December 31, 2018 for the Company's PRC subsidiaries remain open
for statutory examination by PRC tax authorities. As of December 31, 2019, the tax years ended December 31, 2016 through December
31, 2018 for the Company's U.S. subsidiaries remain open for statutory examination by U.S. tax authorities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Value Added Tax ("VAT")</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sales revenue represents the invoiced value of goods, net of
VAT. The VAT is based on gross sales price and VAT rates range up to 17%, depending on the type of products sold. The VAT may be
offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished
products. Further, when exporting goods, the exporter is entitled to some or all of the refund of the VAT paid or assess. Since
a majority of the Company's products are exported to the U.S. and Europe, the Company is eligible for VAT refunds when the
Company completes all the required tax filing procedures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">All of the VAT returns of the Company have been and remain subject
to examination by the tax authorities for five years from the date of filing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Foreign Currency Translation</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company's principal country of operations is the PRC.
The financial position and results of its operations are determined using RMB, the local currency, as the functional currency.
The Company uses Indonesian rupiah ("IDR") in Fuling Indonesia as functional currency. Our financial statements are
reported using U.S. Dollars. The results of operations and the statement of cash flows denominated in foreign currency are translated
at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance
sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional
currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated
based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not
necessarily agree with changes in the corresponding balances on the balance sheet. Translation adjustments arising from the use
of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income
included in statement of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated
statement of income and comprehensive income.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The value of RMB against US$ and other currencies may fluctuate
and is affected by, among other things, changes in the PRC's political and economic conditions. Any significant revaluation
of RMB may materially affect the Company's financial condition in terms of US$ reporting. The following table outlines the
currency exchange rates that were used in creating the consolidated financial statements in this report:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="background-color: white">
<td style="vertical-align: top; width: 37%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 21%; text-align: center"><font style="font-size: 10pt"><b>December 31,<br />
2019</b></font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 18%; text-align: center"><font style="font-size: 10pt"><b>December 31,</b><br />
<b>2018</b></font></td>
<td style="text-align: center; vertical-align: bottom; width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 21%; text-align: center"><font style="font-size: 10pt"><b>December 31,<br />
2017</b></font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td rowspan="2"><font style="font-size: 10pt">Period-end spot rate</font></td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"><font style="font-size: 10pt">US $1=RMB 6.9680</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.8776</font></td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.5074</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">US $1=IDR 13,864.71</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td></tr>
<tr style="background-color: white">
<td> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td rowspan="2"><font style="font-size: 10pt">Average rate</font></td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"><font style="font-size: 10pt">US $1=RMB 6.9088</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.6163</font></td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.7578</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">US $1=IDR 14,142.41</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Fair Value of Financial Instruments</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">ASC 825-10 requires certain disclosures regarding the fair value
of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the
inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use
of unobservable inputs. The three levels of inputs used to measure fair value are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font-size: 10pt">●</font></td>
<td><font style="font-size: 10pt">Level 1 - Quoted prices in active markets for identical assets and liabilities.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font-size: 10pt">●</font></td>
<td><font style="font-size: 10pt">Level 2 - Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font-size: 10pt">●</font></td>
<td><font style="font-size: 10pt">Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company considers the recorded value of its financial assets
and liabilities, which consist primarily of cash and cash equivalents, restricted cash, accounts receivable, inventories, advance
to suppliers, accounts payable, accrued expenses and other liabilities, advances from customers, notes payable to approximate the
fair value of the respective assets and liabilities at December 31, 2019 and 2018 based upon the short-term nature of the assets
and liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company believes that the carrying amount of the short-term
borrowings approximates fair value at December 31, 2019 and 2018 based on the terms of the borrowings and current market rates
as the rate is reflective of the current market rate.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Concentrations and Credit Risk</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">A majority of the Company's expense
transactions are denominated in RMB and a significant portion of the Company and its subsidiaries' assets and liabilities
are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions
are required by law to be transacted only by authorized financial institutions at exchange rates set by the People's Bank
of China ("PBOC"). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC
or other China foreign exchange regulatory bodies that require certain supporting documentation in order to affect the remittance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">As of December 31, 2019 and 2018, $6,771,075
and $4,116,684, respectively, of the Company's cash and cash equivalents, and restricted cash were on deposit at financial
institutions in the PRC where there currently is no rule or regulation requiring such financial institutions to maintain insurance
to cover bank deposits in the event of bank failure. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Substantially all of the Company's sales are made to customers
that are located primarily in the USA and Europe. The Company's operating results could be adversely affected by the government
policy on exporting business, foreign exchange rate fluctuation, and local market condition change. The Company has a concentration
of its revenues and receivables with specific customers. For the year ended December 31, 2019, no customer accounted for more
than 10% of total revenue. For the year ended December 31, 2018, no customer accounted for more than 10% of total revenue.
As of December 31, 2019, one customer's account receivable accounted for 18.9% of the total outstanding accounts receivable
balance. As of December 31, 2018, one customer's account receivable accounted for 14% of the total outstanding accounts
receivable balance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the year ended December 31, 2019, the Company purchased
approximately 10.2% of its raw materials from one supplier. For the year ended December 31, 2018, the Company purchased approximately
12% of its raw materials from one supplier. As of December 31, 2019, advanced payments to three major suppliers accounted
for 23.5%, 22.1% and 17.8% of the total advance payments outstanding. As of December 31, 2018, advanced payments to two major
suppliers accounted for 20% and 15% of the total advance payments outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A loss of either of these customers or suppliers could adversely
affect the operating results or cash flows of the Company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risks and Uncertainties</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The major operations of the Company are located in the PRC.
Accordingly, the Company's business, financial condition, and results of operations may be influenced by political, economic,
and legal environments in the PRC, as well as by the general state of the PRC economy. The Company's operations in the PRC
are subject to special considerations and significant risks not typically associated with companies in North America and Western
Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange.
The Company's results may be adversely affected by changes in the political, regulatory and social conditions in the PRC.
Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws
and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Recent Accounting Pronouncements</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i><u>New Accounting Pronouncements Recently Adopted</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company adopted ASU No. 2016-02—Leases (Topic 842)
since January 1, 2019, using a modified retrospective transition method permitted under ASU No. 2018-11. This transition approach
provides a method for recording existing leases only at the date of adoption and does not require previously reported balances
to be adjusted. In addition, we elected the package of practical expedients permitted under the transition guidance within the
new standard, which among other things, allowed us to carry forward the historical lease classification. Adoption of the new standard
resulted in the recording of additional lease assets and lease liabilities of approximately $7.5 million and $7.0 million, respectively,
as of December 31, 2019. The standard did not materially impact our consolidated net earnings and had no impact on cash flows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company adopted ASU 2018-07, Compensation – Stock
Compensation since January 1, 2019. ASU 2018-07 simplifies the accounting for share-based payments granted to nonemployees for
goods and services. Under this ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements
for share-based payments granted to employees. Adoption of this ASU does not have material impact on the Consolidated Financial
Statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i><u>New Accounting Pronouncements Not Yet Adopted</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments
– Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU is intended to improve financial
reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions
and other organizations. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting
date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU requires enhanced disclosures
to help investors and other financial statement users better understand significant estimates and judgments used in estimating
credit losses, as well as the credit quality and underwriting standards of the Company's portfolio. These disclosures include
qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements.
This ASU is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. The Company
will adopt ASU 2016-13 and its related amendments effective January 1, 2020, and the Company does not expect the adoption to have
a material effect on its consolidated financial statements.</p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"><tr style="vertical-align: bottom"><td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt; font-weight: bold; text-align: center"><u>ASSETS</u></td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Current assets:</td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Cash and cash equivalents</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">266,750</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">561,340</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accounts receivable, net</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,339,633</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,829,084</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Inventories, net</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,982,601</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,004,603</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Due from related party</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><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">437</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-left: 0.125in; font-weight: bold; text-align: left">Total current assets</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,588,984</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,395,464</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </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="padding-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 4pt">Total assets</td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">3,588,984</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">4,395,464</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: underline; font-weight: bold; text-align: center">LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; text-align: left">Current liabilities:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 10pt">Amounts due to inter-companies<sup>(1)</sup></font></td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,286,627</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,664,964</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Advances from customers</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">21,571</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accounts payable</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">380,219</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">609,818</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Taxes payable</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">12,217</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,455</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Due to related party</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">2,094</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="font-weight: bold; text-align: left">Total current liabilities</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,681,157</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,300,808</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt"> </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><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-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total liabilities</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">3,681,157</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">4,300,808</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </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="padding-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 4pt">Net assets</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">(92,173</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">94,656</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 60pt"> </p>
<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">
<td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt"><sup>(1)</sup></font></td><td><font style="font-size: 10pt">Amount due from/to inter-companies
consist of intercompany receivables/payables to other entities within the Company.</font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the years ended</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%">Revenue</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,653,381</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">10,858,274</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,744,914</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Net income (loss)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(181,557</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(204,967</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">25,246</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the years ended</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left"><font style="font-size: 10pt">Net cash provided by (used in) operating activities<sup>(1)</sup></font></td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(297,121</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(1,021,593</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">296,037</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Net cash provided by (used in) financing activities</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">2,531</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,475,795</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(376,338</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Net (decrease) increase in cash and cash equivalents</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(294,590</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">454,202</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(80,301</td><td style="text-align: left">)</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<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">
<td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt"><sup>(1)</sup></font></td><td><font style="font-size: 10pt">Intercompany balances are
eliminated upon consolidation.</font></td></tr></table>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td style="border-bottom: black 1.5pt solid; width: 79%"><font style="font-size: 10pt"><b>Items</b></font></td>
<td style="width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; width: 20%; text-align: center"><font style="font-size: 10pt"><b>Useful life</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Property and buildings</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">10–20 years</font></td></tr>
<tr style="vertical-align: top; background-color: white">
<td><font style="font-size: 10pt">Leasehold improvements</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">Lesser of useful life and<br />
lease term</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Machinery equipment</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">3–10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Automobiles</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">4–10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Office equipment and furniture</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">3–5 years</font></td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td style="border-bottom: black 1.5pt solid; width: 79%"><font style="font-size: 10pt"><b>Items</b></font></td>
<td style="width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; width: 20%; text-align: center"><font style="font-size: 10pt"><b>Useful life</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Land use rights</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">50 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Trademarks</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Patents</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">7-10 years</font></td></tr>
</table>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="background-color: white"><td style="vertical-align: top; width: 37%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 21%; text-align: center"><font style="font-size: 10pt"><b>December 31,<br />
2019</b></font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 18%; text-align: center"><font style="font-size: 10pt"><b>December 31,</b><br />
<b>2018</b></font></td>
<td style="text-align: center; vertical-align: bottom; width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 21%; text-align: center"><font style="font-size: 10pt"><b>December 31,<br />
2017</b></font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td rowspan="2"><font style="font-size: 10pt">Period-end spot rate</font></td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"><font style="font-size: 10pt">US $1=RMB 6.9680</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.8776</font></td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.5074</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">US $1=IDR 13,864.71</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td></tr>
<tr style="background-color: white">
<td> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td rowspan="2"><font style="font-size: 10pt">Average rate</font></td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"><font style="font-size: 10pt">US $1=RMB 6.9088</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.6163</font></td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.7578</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">US $1=IDR 14,142.41</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td></tr></table>
10858274
9744914
13653381
-204967
25246
-181557
1475795
-376338
2531
454202
-80301
-294590
Lesser of useful life and lease term
P10Y
P10Y
P7Y
P50Y
1
1
1
1
1
1
6.9680
6.8776
6.5074
13864.71
6.9088
6.6163
6.7578
14142.41
2396993
1439064
649675
308254
1102591
342158
580044
180389
0.51
1.00
0.17
4116684
6771075
0.10
0.12
0.14
0.10
0.189
0.102
0.20
0.15
0.235
0.221
0.178
1
1
2
2
3
3
3
Fuling USA entered into a Delayed Draw Term Loan agreement with East West Bank for $1,000,000. The amount drawn will be turned into a 5-year term loan at LIBOR rate plus 3.00%. The loan is guaranteed by Fuling Global. On April 7 and December 1, 2017, Fuling USA drew down $500,000 (April 2017 Loan) and $500,000 (December 2017 Loan), respectively. April 2017 loan will expire on April 7, 2023 and December 2017 loan will expire on December 1, 2023. Both loans require interest only payment for the first year and require interest and principal payments from second year to sixth year. The initial effective rate was 4.11% per annum. In September 2019, both parties agreed to adjust the effective rate to 4.877%. As of December 31, 2019, the outstanding loan was $717,952, which consists of $200,000 due within a year and $517,952 due over a year.
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 9 – BANK NOTES PAYABLE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0">Short-term bank notes payables are lines of credit extended by banks that
can be endorsed and assigned to vendors as payments for purchases. The notes payable are generally payable within six months. These
short-term notes payable are guaranteed by the bank for their full-face value. In addition, the banks usually require the Company
to deposit a certain amount of cash (usually range from 30% to 100% of the face value of the notes) at the bank as a guarantee
deposit, which is classified on the balance sheet as restricted cash. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company had the following bank notes payable as of December
31, 2019:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left; padding-bottom: 1.5pt">ABC, due various dates from January 26, 2020 to June 20, 2020</td><td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">1,802,884</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,802,884</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company had the following bank notes payable as of December
31, 2018:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%">ICBC, due May 5, 2019</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">286,902</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">ABC, due various dates from January 4, 2019 to June 27, 2019</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">2,601,151</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">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">2,888,053</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0">As of December 31, 2019 and 2018, $580,044 and $1,439,063 cash deposits
were held by banks as a guaranty for the notes payable, respectively. In addition, as of December 31, 2019 and 2018, notes payable
totalling $1,746,914 and $1,448,990 were secured by the properties of the Company and its principal shareholders\, respectively.</p>
0.30
1.00
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 10 – INCOME TAXES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company is subject to income taxes on an entity basis on
income arising in or derived from the tax jurisdiction in which each entity is domiciled.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Fuling Global and Total Faith are both offshore holding companies
and are not subject to tax on income or capital gains under the laws of the Cayman Islands and British Virgin Islands, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Taizhou Fuling and Wenling Changli are incorporated in the PRC
and are subject to PRC income tax, which is computed according to the relevant laws and regulations in the PRC. Under the Corporate
Income Tax Law of the People's Republic of China, corporate income tax rate applicable to all companies, including both domestic
and foreign-invested companies, is 25%. Taizhou Fuling was recognized as a High-technology Company by Chinese government and subject
to a favorable income tax rate of 15% from year 2012 to 2022. $1,492,279, $1,343,322 and $715,087 income tax expenses were exempted
for the years ended December 31, 2019, 2018 and 2017, respectively. Per share effect of the tax exemption was $0.09, $0.09 and
$0.05 for the years ended December 31, 2019, 2018 and 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Domo, Fuling USA and Direct Link are incorporated in the United
States and subject to the U.S. federal and state income tax. Fuling Indonesia is incorporated in Indonesia and subject to Indonesia
income tax.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The following table summarizes income before income taxes
and non-controlling interest allocation:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">United States</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,904,846</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">599,898</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">90,466</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt">Foreign</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">15,055,213</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">10,374,099</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">8,963,428</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="font-weight: bold; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">16,960,059</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">10,973,997</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">9,053,894</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Significant components of the income tax provision were as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; text-align: left">Current tax provision:</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><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="width: 64%; text-align: left">United States</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">17,837</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">4,455</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Foreign</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,217,112</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">595,461</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">783,915</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </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><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="font-weight: bold; text-align: left">Deferred tax provision:</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><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="padding-bottom: 1.5pt">Foreign</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">319,483</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">531,275</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: White">
<td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,554,432</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,126,736</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">788,370</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The deferred tax expense is the change of deferred tax assets
and deferred tax liabilities resulting from the temporary difference between tax and U.S. GAAP. Our operations in the U.S. have
incurred a cumulative net operating loss of approximately $1,544,000, $2,868,000 and $3,468,000, respectively, as of December 31,
2019, 2018 and 2017. Based on the Tax Cuts and Jobs Act, for tax years beginning January 1, 2018 or later, NOL is allowed to carryforward
for an indefinite period and are limited to 80% of each year's net income. Losses originating in tax years beginning prior
to January 1, 2018, carry-forwards are subject to the former tax rules and will expire if it is not utilized after 20 years. The
Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the
deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0">For the years ended December 31, 2019, 2018 and 2017, management believes
that the realization of the benefit arising from the losses of certain U.S. subsidiaries appears to be uncertain and may not be
realizable in the near future. Therefore, 100% valuation allowances of $378,038, $420,056 and $605,081 have been provided against
the deferred tax assets of these subsidiaries, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A new tax regulation under the Provisional Regulations of The
People's Republic of China Concerning Income Tax on Enterprises promulgated by the PRC took effect on May 7, 2018. The new
tax regulation allows companies to expense in full all machinery and equipment acquired between January 1, 2018 to December 31,
2020 instead of depreciate over depreciation period, except for any asset with unit price over $0.7 million (RMB 5 million). Thus,
deferred tax liabilities resulted from the temporary difference. In fiscal 2018, the Company acquired new machinery and equipment
of $3,852,713 (RMB 26.5 million) in total, which were qualified to be fully deducted from taxable income in 2018. In fiscal 2019,
the Company acquired new machinery and equipment of $2,993,566 (RMB 20.7 million) in total, which were qualified to be fully deducted
from taxable income in 2019. The related deferred tax liabilities amounted to $887,098 and $577,826 as of December 31, 2019 and
2018, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On December 22, 2017, the U.S. enacted the "Tax Cuts and
Jobs Act" (the "Act"). Under the provisions of the Act, the U.S. corporate tax rate decreased from 35% to 21%.
U.S. statutory federal rate of 21% rate is applied to the provision for income tax from the fiscal year of 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table reconciles the statutory rates to
the Company's effective tax rate:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended<br />
December 31,</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended<br />
December 31,</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended<br />
December 31,</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">U.S. Statutory rates</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">21.0</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">21.0</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">34.0</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Foreign income not recognized in the U.S.</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(20.8</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(19.4</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(32.5</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Foreign income tax rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">25.0</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">25.0</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">25.0</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Effect of favorable income tax rate in certain entity in PRC</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(8.9</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(10.5</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(8.1</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">R&D tax credit (1)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2.6</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(3.5</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2.4</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Change in valuation allowance</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(1.9</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(1.7</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(0.3</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Non-taxable permanent difference (2)</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">3.3</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">(0.6</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">(7.0</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 4pt">Effective tax 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">15.1</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">10.3</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">8.7</td><td style="padding-bottom: 4pt; text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(1)</font></td>
<td><font style="font-size: 10pt">From 1 January 2018 to 31 December 2020, for R&D expenses incurred for new technology, new products, or new craftsmanship, an extra 75% of the actual expenses incurred are also tax-deductible as an incentive.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(2)</font></td>
<td><font style="font-size: 10pt">It represents expenses incurred by the Company that were not deductible for PRC income tax and income (loss) generated in countries with no income tax obligations.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left; padding-bottom: 1.5pt">ABC, due various dates from January 26, 2020 to June 20, 2020</td><td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">1,802,884</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,802,884</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%">ICBC, due May 5, 2019</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">286,902</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">ABC, due various dates from January 4, 2019 to June 27, 2019</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">2,601,151</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">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,888,053</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="margin: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">United States</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,904,846</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">599,898</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">90,466</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt">Foreign</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">15,055,213</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">10,374,099</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">8,963,428</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="font-weight: bold; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">16,960,059</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">10,973,997</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">9,053,894</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; text-align: left">Current tax provision:</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><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="width: 64%; text-align: left">United States</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">17,837</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">4,455</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Foreign</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,217,112</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">595,461</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">783,915</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </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><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="font-weight: bold; text-align: left">Deferred tax provision:</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><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="padding-bottom: 1.5pt">Foreign</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">319,483</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">531,275</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: White">
<td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,554,432</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,126,736</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">788,370</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended<br />
December 31,</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended<br />
December 31,</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">For the year ended<br />
December 31,</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">U.S. Statutory rates</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">21.0</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">21.0</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">34.0</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Foreign income not recognized in the U.S.</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(20.8</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(19.4</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(32.5</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Foreign income tax rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">25.0</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">25.0</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">25.0</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Effect of favorable income tax rate in certain entity in PRC</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(8.9</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(10.5</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(8.1</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">R&D tax credit (1)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2.6</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(3.5</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2.4</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Change in valuation allowance</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(1.9</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(1.7</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(0.3</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Non-taxable permanent difference (2)</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">3.3</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">(0.6</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">(7.0</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 4pt">Effective tax 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">15.1</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">10.3</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">8.7</td><td style="padding-bottom: 4pt; text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(1)</font></td>
<td><font style="font-size: 10pt">From 1 January 2018 to 31 December 2020, for R&D expenses incurred for new technology, new products, or new craftsmanship, an extra 75% of the actual expenses incurred are also tax-deductible as an incentive.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(2)</font></td>
<td><font style="font-size: 10pt">It represents expenses incurred by the Company that were not deductible for PRC income tax and income (loss) generated in countries with no income tax obligations.</font></td></tr></table>
0.75
0.80
Taizhou Fuling was recognized as a High-technology Company by Chinese government and subject to a favorable income tax rate of 15% from year 2012 to 2020.
The new tax regulation allows companies to expense in full all machinery and equipment acquired between January 1, 2018 to December 31, 2020 instead of depreciate over depreciation period, except for any asset with unit price over $0.7 million (RMB 5 million). Thus, deferred tax liabilities resulted from the temporary difference. In fiscal 2018, the Company acquired new machinery and equipment of $3,852,713 (RMB 26.5 million) in total, which were qualified to be fully deducted from taxable income in 2018. In fiscal 2019, the Company acquired new machinery and equipment of $2,993,566 (RMB 20.7 million) in total, which were qualified to be fully deducted from taxable income in 2019. The related deferred tax liabilities amounted to $887,098 and $577,826 as of December 31, 2019 and 2018, respectively.
37599
0
83659
85767
0
2202942
27175
0
6971
92571
0
0
Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity's registered capital. Appropriations to the surplus reserve are made at the discretion of the Board of Directors.
7853
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 11 – OTHER LOANS PAYABLE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr style="vertical-align: top">
<td style="width: 0px"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman,serif">(1)</font></td><td><font style="font: 10pt Times New Roman,serif">In
October 2016, the Company entered into a sale leaseback arrangement and sold certain machinery located in China to an unrelated
third party for approximately $3,603,975 (RMB 25,112,500), and subsequently leased back the machinery for 24 months for a
total amount of approximately $3,754,739 (RMB 26,163,022). The Company was required to make a security deposit of approximately
$720,795 (RMB 5,022,500). The Company has a bargain purchase option at a price of $Nil to buyback these equipments by the end
of the lease term. All these machines are currently being used by the Company for its production purpose. The Company concluded
this transaction does not qualify for sale-leaseback accounting and shall record under financing method. Under the financing method,
the assets remain on the Company's consolidated balance sheet and the proceeds from the transactions are recorded as a financing
liability.</font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The loan was fully repaid in June 2018 prior to its maturity:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">Total loan payment</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">3,754,753</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Less: imputed interest</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(175,545</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: principal</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">(3,579,208</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total current portion of payment obligation as of December 31, 2019</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>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="background-color: white">Interest
expense incurred for the years ended December 31, 2019, 2018 and 2017 amounted to $0, $39,148 and $128,069, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(2)</font></td>
<td><font style="font-size: 10pt">In May 2017, the Company entered into another sale leaseback arrangement and sold certain machinery located in China to an unrelated third party for approximately $2,540,184 (RMB 17,700,000), and subsequently leased back the machinery for 36 months for a total amount of approximately $2,714,820 (RMB 18,916,864). The Company was required to make a security deposit of approximately $508,037 (RMB 3,540,000). The Company has a bargain purchase option at a price of $Nil to buyback these equipments by the end of the lease term. All these machines are currently being used by the Company for its production purpose. The Company concluded this transaction does not qualify for sale-leaseback accounting and shall record under financing method. Under the financing method, the assets remain on the Company's consolidated balance sheet and the proceeds from the transactions are recorded as a financing liability.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The minimum payments for the remaining lease term of 5 months
from December 31, 2019 to May 18, 2020 are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">Total loan payment</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,714,820</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Less: imputed interest</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(160,941</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: principal</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">(2,177,200</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Total loan balance as of December 31, 2019</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">376,679</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: current portion of payment obligation</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">(376,679</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Long term payable as of December 31, 2019</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="margin-top: 0; margin-bottom: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">According to the agreement, future obligations for payments
of the above finance lease agreement are as below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Twelve months ended December 31, 2019</td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">376,679</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">2021</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: left; 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">376,679</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="background-color: white"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="background-color: white">Interest
expense incurred for the years ended December 31, 2019, 2018 and 2017 amounted to $35,126, $76,700 and $64,231, respectively. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="background-color: white">The
loan was fully repaid in March, 2020 prior to its maturity.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(3)</font></td>
<td><font style="font-size: 10pt">In February 2018, the Company entered into another sale leaseback arrangement and sold certain machinery located in China to an unrelated third party for approximately $5,309,989 (RMB 37,000,000), and subsequently leased back the machinery for 36 months for a total amount of approximately $5,709,824 (RMB 39,786,052). The Company was required to make a security deposit of approximately $1,061,998 (RMB 7,400,000). The Company has a bargain purchase option at a price of $Nil to buyback these equipments by the end of the lease term. All these machines are currently being used by the Company for its production purpose. The Company concluded this transaction does not qualify for sale-leaseback accounting and shall record under financing method. Under the financing method, the assets remain on the Company's consolidated balance sheet and the proceeds from the transactions are recorded as a financing liability.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The minimum payments for the remaining lease term of 14 months
from December 31, 2019 to February 18, 2021 are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">Total loans payment</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">5,709,824</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Less: imputed interest</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(343,940</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: principal</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">(3,141,188</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Total loans payable as of December 31, 2019</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,224,696</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: current portion of other loans payable</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">(1,906,882</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Long term payable as of December 31, 2019</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">317,814</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">According to the agreement, future obligations for payments
of the above finance lease agreement are as below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Twelve months ended December 31,</td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,906,882</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">317,814</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">2022</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: White">
<td style="text-align: left; 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">2,224,696</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="background-color: white">Interest
expense incurred for the years ended December 31, 2019, 2018 and 2017 amounted to $153,959, $206,803 and $0, respectively. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="background-color: white">The
loan was fully repaid in March, 2020 prior to its maturity.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(4)</font></td>
<td><font style="font-size: 10pt">In April 2019, the Company entered into another sale leaseback arrangement and sold certain machinery located in China to an unrelated third party for approximately $2,152,698 (RMB 15,000,000), and subsequently leased back the machinery for 36 months for a total amount of approximately $2,320,646 (RMB 16,170,258). The Company was required to make a security deposit of approximately $430,540 (RMB 3,000,000). The Company has a bargain purchase option at a price of $Nil to buyback these equipments by the end of the lease term. All these machines are currently being used by the Company for its production purpose. The Company concluded this transaction does not qualify for sale-leaseback accounting and shall record under financing method. Under the financing method, the assets remain on the Company's consolidated balance sheet and the proceeds from the transactions are recorded as a financing liability.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The minimum payments for the remaining lease term of 29 months
from December 31, 2019 to May 18, 2022 are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">Total loan payment</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,152,698</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Less: principal</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">(395,195</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: left">Total loan balance as of December 31, 2019 from lease transaction</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,757,503</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Less: current portion of payment obligation</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">(701,915</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">Long term payable as of December 31, 2019</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,055,588</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">According to the agreement, future obligations for payments
of the above finance lease agreement are as below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Twelve months ended December 31,</td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">701,915</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">737,424</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">2022</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">318,164</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; 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">1,757,503</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="background-color: white">Interest
expense incurred for the years ended December 31, 2019, 2018 and 2017 amounted to $57,712, $0 and $0, respectively. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="background-color: white">The
loan was fully repaid in March, 2020 prior to its maturity.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b></b></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Twelve months ended December 31, 2019</td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">376,679</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">2021</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: left; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">376,679</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Twelve months ended December 31,</td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,906,882</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">317,814</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">2022</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: White">
<td style="text-align: left; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,224,696</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Twelve months ended December 31,</td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">701,915</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">737,424</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">2022</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">318,164</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; 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">1,757,503</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
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FULING GLOBAL INC.
0001637921
20-F
2019-12-31
false
--12-31
FY
2019
No
No
Yes
Non-accelerated Filer
true
false
false
15803763
2396993
1102591
1255420
2299873
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0.001
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 15 – SEGMENT REPORTING</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">ASC 280, "Segment Reporting", establishes standards
for reporting information about operating segments on a basis consistent with the Company's internal organizational structure
as well as information about geographical areas, business segments and major customers in financial statements for details on the
Company's business segments. The Company uses the "management approach" in determining reportable operating segments.
The management approach considers the internal organization and reporting used by the Company's chief operating decision
maker for making operating decisions and assessing performance as the source for determining the Company's reportable segments.
Management, including the chief operating decision maker, reviews operation results by the revenue of different products. Based
on management's assessment, the Company has determined that it has only one operating segment as defined by ASC 280. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table presents revenue by major products for the
years ended December 31, 2019, 2018 and 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">  </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 11pt">
<tr style="vertical-align: bottom">
<td style="font: 11pt Calibri,sans-serif"> </td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman,serif; text-align: center">For the years ended</td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt Calibri,sans-serif"> </td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman,serif; text-align: center">December 31,<br /> 2019</td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman,serif; text-align: center">December 31,<br /> 2018</td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman,serif; text-align: center">December 31,<br /> 2017</td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td>
<td colspan="2" style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td>
<td colspan="2" style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td>
<td colspan="2" style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; width: 64%">Cutlery</td><td style="font: 10pt Times New Roman,serif; width: 1%"> </td>
<td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman,serif; width: 9%; text-align: right">68,648,828</td><td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; width: 1%"> </td>
<td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman,serif; width: 9%; text-align: right">66,558,851</td><td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; width: 1%"> </td>
<td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman,serif; width: 9%; text-align: right">62,104,253</td><td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman,serif">Straws</td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">21,887,800</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">23,572,926</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">18,631,276</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; text-align: left">Cups and plates</td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">48,126,622</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">37,439,353</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">33,536,297</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt">Others</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: right">12,450,121</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: right">11,093,142</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: right">9,936,680</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt">Total</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: left">$</td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: right">151,113,371</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: left">$</td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: right">138,664,272</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: left">$</td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: right">124,208,506</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table presents revenue by geographic areas for
the years ended December 31, 2019, 2018 and 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the years ended</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">Revenue from United States</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">129,660,141</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">118,307,987</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">106,563,934</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Revenue from Europe</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,456,825</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6,621,940</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6,101,139</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue from Canada</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,574,844</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,635,667</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,943,946</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Revenue from China</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">10,220,725</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">8,286,146</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">7,740,720</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Revenue from other foreign countries</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">4,200,836</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">3,812,532</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">1,858,767</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">151,113,371</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">138,664,272</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">124,208,506</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Long-lived assets of $59,981,251 and $13,047,425 were located
in China and other countries, respectively, as of December 31, 2019. Long-lived assets of $58,848,571 and $4,271,140 were located
in China and other countries, respectively, as of December 31, 2018.</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 11pt"><tr style="vertical-align: bottom"><td style="font: 11pt Calibri,sans-serif"></td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman,serif; text-align: center">For the years ended</td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt Calibri,sans-serif"> </td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman,serif; text-align: center">December 31,<br /> 2019</td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman,serif; text-align: center">December 31,<br /> 2018</td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman,serif; text-align: center">December 31,<br /> 2017</td><td style="font: bold 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td>
<td colspan="2" style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td>
<td colspan="2" style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td>
<td colspan="2" style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; width: 64%">Cutlery</td><td style="font: 10pt Times New Roman,serif; width: 1%"> </td>
<td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman,serif; width: 9%; text-align: right">68,648,828</td><td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; width: 1%"> </td>
<td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman,serif; width: 9%; text-align: right">66,558,851</td><td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; width: 1%"> </td>
<td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman,serif; width: 9%; text-align: right">62,104,253</td><td style="font: 10pt Times New Roman,serif; width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman,serif">Straws</td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">21,887,800</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">23,572,926</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">18,631,276</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; text-align: left">Cups and plates</td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">48,126,622</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">37,439,353</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; text-align: right">33,536,297</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt">Others</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: right">12,450,121</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: right">11,093,142</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: right">9,936,680</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt">Total</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: left">$</td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: right">151,113,371</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: left">$</td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: right">138,664,272</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt; text-align: left"> </td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: left">$</td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: right">124,208,506</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the years ended</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">Revenue from United States</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">129,660,141</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">118,307,987</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">106,563,934</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Revenue from Europe</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,456,825</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6,621,940</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6,101,139</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue from Canada</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,574,844</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,635,667</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,943,946</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Revenue from China</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">10,220,725</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">8,286,146</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">7,740,720</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Revenue from other foreign countries</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">4,200,836</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">3,812,532</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">1,858,767</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">151,113,371</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">138,664,272</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">124,208,506</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
Yes
3935926
1156051
217259
938792
From March 29, 2019 to May 27, 2022
3
7500000
7000000
The Company signed a ten-year land and building lease agreement with a third party in Central Java, Indonesia.
true
false
false
E9
103967
1479874
3579208
2177200
3141188
175545
160941
343940
395195
1358566
94656
-92173
4300808
3681157
21571
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437
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 8 – SHORT-TERM AND LONG-TERM BORROWINGS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><u>Short-term Borrowings</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Short-term borrowings represent amounts due to various banks
and other companies normally maturing within one year. The principal of the borrowings is due at maturity. Accrued interest is
due either monthly or quarterly.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Short-term borrowings consisted of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: center"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="white-space: nowrap; padding-bottom: 1.5pt"> </td>
<td style="white-space: nowrap; text-align: center"> </td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> </td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%; text-align: left">Agricultural Bank of China ("ABC")</td><td style="width: 1%"> </td>
<td style="width: 5%; text-align: center">(1)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">10,160,735</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">8,622,194</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">China Merchants Bank ("CMB")</td><td> </td>
<td style="text-align: center">(2)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,435,132</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,696,441</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Industrial and Commercial Bank of China ("ICBC")</td><td> </td>
<td style="text-align: center">(3)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,157,290</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,557,315</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Bank of China ("BOC")</td><td> </td>
<td style="text-align: center">(4)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,152,698</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,724,793</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">East West Bank ("EWB")</td><td> </td>
<td style="text-align: center">(5)</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">2,000,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; text-indent: -10pt; padding-left: 10pt">Pennsylvania Industrial Development Authority – current portion of long-term borrowing (see "long-term borrowing" below)</td><td> </td>
<td style="text-align: center; padding-left: 10pt"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">91,484</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">89,898</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">East West Bank loan – current portion of long-term borrowing (see "long-term borrowing" below)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt; padding-left: 10pt"> </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">200,000</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">200,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="text-align: center; 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">17,197,339</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">19,890,641</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(1)</font></td>
<td>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the year ended December 31, 2019, Taizhou Fuling entered
into a series of short-term bank loan agreements with ABC for a total amount of $18,972,445. The terms of these loans are one to
twelve months with variable interest rates based on the prevailing interest rates. The effective rates are from 4.50% to 5.04%
per annum. As of December 31, 2019, $8,811,710 of them had been repaid upon maturity.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the year ended December 31, 2018, Taizhou Fuling
entered into a series of short-term bank loan agreements with ABC for a total amount of $8,622,194. The terms of these loans are
six months with variable interest rates based on the prevailing interest rates, respectively. The effective rates are from 4.57%
to 5.15% per annum. As of December 31, 2019, all of them had been repaid upon maturity.</p></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(2)</font></td>
<td>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During year ended December 31, 2019, Taizhou Fuling
entered into a series of short-term bank borrowing agreements with CMB for a total amount of $7,626,660. The terms of these
loans are three to twelve months with variable interest rates based on the prevailing interest rates. The effective rates
were from 4.49% to 5.88% per annum. The loans are guaranteed by Zhejiang Special Plastic Ltd. and Taizhou Fuling's
general manager and Chair of the Board. As of December 31, 2019, $6,191,528 had been repaid in full upon maturity.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During year ended December 31, 2018, Taizhou Fuling entered
into a series of short-term bank borrowing agreements with CMB for a total amount of approximately $6.3 million (RMB 43.4 million).
The terms of these loans are five to twelve months with variable interest rates based on the prevailing interest rates. The effective
rates were from 2.40% to 6.09% per annum. The loans are guaranteed by Zhejiang Special Plastic Ltd. and Taizhou Fuling's
general manager and Chair of the Board. As of December 31, 2019, all of them had been repaid in full upon maturity.</p></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(3)</font></td>
<td>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the year ended December 31, 2019, Taizhou Fuling entered
into a series of short-term loan agreements with ICBC for a total amount of $4,521,116. The terms of these loans are three to twelve
months with the interest rates ranged from 5.00% to 5.22% per annum. As of December 31, 2019, $1,363,826 of them had been repaid
in full upon maturity.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the year ended December 31, 2018, Taizhou Fuling entered
into a series of short-term loan agreements with ICBC for a total amount of $4,557,315. The terms of these loans are five to twelve
months with the interest rates ranged from 3.47% to 5.44% per annum. As of December 31, 2019, all of them had been repaid in full
upon maturity.</p></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(4)</font></td>
<td><font style="font-size: 10pt">During the year ended December 31, 2019 and the year ended December 31, 2018, Taizhou Fuling entered into a series of short-term bank borrowing agreements and other financing agreements with BOC. The terms of the loans are five to twelve months, with fixed interest rates based on London InterBank Offered Rate ("LIBOR") (for loans dominated in USD) or prime loan rates issued by People's Bank of China (for loans dominated in RMB), plus certain base points. The effective interest rates vary from 3.02% to 5.53% per annum. The loans to Taizhou Fuling are guaranteed by the major shareholders.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(5)</font></td>
<td><font style="font-size: 10pt">On March 9, 2017, Direct Link entered into a line of credit agreement with East West Bank for $2,000,000 for one year. The annual interest rate is equivalent to LIBOR rate plus 2.75%. On April 7, 2017, Direct Link drew down $1,500,000 with the effective rate of 3.86% per annum. On December 1, 2017, Direct Link drew down another $500,000 with the effective rate of 4.45% per annum. On March 14, 2018, East West Bank approved to extend the loan to June 9, 2018. On June 26, 2018, East West Bank again approved to extend the loan to June 9, 2019. On September 13, 2019, East West Bank approved to extend the loan to September 7, 2021. (See "Long-term Borrowing" below)</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><u>Long-term Borrowings</u> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Long-term borrowings represent amounts due to various banks
and other companies normally maturing over one year. The principal of the borrowings is due at maturity. Accrued interest is due
either monthly or quarterly. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Long-term borrowings consisted of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td style="text-align: center"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%; text-align: left">Pennsylvania Industrial Development Authority – long term</td><td style="width: 1%"> </td>
<td style="width: 5%; text-align: center">(1)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">566,750</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">658,234</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Agricultural Bank of China ("ABC")</td><td> </td>
<td style="text-align: center">(2)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">7,161,309</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,815,982</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">East West Bank ("EWB") – long term</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt">(3)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,517,952</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">729,141</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="text-align: center; padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">10,246,011</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">7,203,357</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 0px"></td>
<td style="width: 0.25in"><font style="font-size: 10pt">(1)</font></td>
<td><font style="font-size: 10pt">On September 28, 2016, Fuling USA entered into a ten-year Machinery and Equipment Loan Agreement with the Pennsylvania Industrial Development Authority for $937,600, with fixed interest rate of 1.75%. This loan has been collateralized by the machinery and equipment, worth approximately $1.72 million. As of December 31, 2019, the amount of long-term borrowing was $658,234, and it consists of $91,484 of which is due within a year and $566,750 that is due over a year.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Future obligations for payments of this long-term loan are as
below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Twelve months ended December 31,</td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">91,484</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">93,098</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2022</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">94,740</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2023</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">96,411</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2024</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">98,112</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">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">184,389</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: left; 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">658,234</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman,serif">(2)</font></td><td><font style="font: 10pt Times New Roman,serif">In
fiscal year 2018, Taizhou Fuling entered into a series of buyer's credit Loan Agreements with ABC for total of $5,815,982
(RMB 40 million) for 36 months. The effective rates vary from 5.23% to 5.37% per annum. In August 2019, Taizhou Fuling entered
into a buyer's credit Loan Agreement with ABC for total of $1,420,781 (RMB 9.9 million) for 36 months. The effective rate
was 4.99% per annum.</font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr style="vertical-align: top">
<td style="width: 0px"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman,serif">(3)</font></td><td><font style="font: 10pt Times New Roman,serif">On
March 9, 2017, Fuling USA entered into a Delayed Draw Term Loan agreement with East West Bank for $1,000,000. The amount drawn
will be turned into a 5-year term loan at LIBOR rate plus 3.00%. The loan is guaranteed by Fuling Global. On April 7 and December
1, 2017, Fuling USA drew down $500,000 (April 2017 Loan) and $500,000 (December 2017 Loan), respectively. April 2017
loan will expire on April 7, 2023 and December 2017 loan will expire on December 1, 2023. Both loans require interest only payment
for the first year and require interest and principal payments from second year to sixth year. The initial effective rate was
4.11% per annum. In September 2019, both parties agreed to adjust the effective rate to 4.877%. As of December 31, 2019, the outstanding
loan was $717,952, which consists of $200,000 due within a year and $517,952 due over a year.</font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Future obligations for payments of this long-term loan are as
below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Twelve months ended December 31,</td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">200,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">200,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2022</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">200,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2023</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">108,597</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2024</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">9,355</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">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">-</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: left; 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">717,952</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2019 and 2018, land use rights in the amount
of $7,426,966 and $7,821,842, and property and buildings in the amount of $13,190,384 and $14,071,515, respectively, were pledged
for all the above short-term and long-term borrowings.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 12 – COMMITMENTS AND CONTINGENCIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><u>Letters of Credit</u></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2019 and 2018, the Company had $222,500 and
$5,147,960 outstanding in trade letters of credit, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><u>Litigation</u></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company's subsidiary Fuling USA is a defendant-counterclaimant
in pending litigation in the District Court for the District of Connecticut in the U.S. The plaintiff asserted causes of action
for breach of contract, trademark infringement and related unfair competition claims under the Lanham Act, trade secret misappropriation,
interference with a business opportunity, breach of fiduciary duty, and violation of the Connecticut Unfair Trade Practices Act.
Fuling USA filed an answer and counterclaims seeking declaratory judgment of non-infringement of the trademark, cancellation of
the trademark registration, breach of contract, and unjust enrichment. Prior to trial, the parties to the litigation reached a
settlement. A stipulation of dismissal of all claims with prejudice was filed with the Court. The case is closed in January, 2020.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 13 – RELATED PARTY TRANSACTIONS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended December 31, 2019,
2018 and 2017, significant related party transactions were as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company rents space from Zhejiang Special Plastic Ltd. For
the years ended December 31, 2019, 2018 and 2017, the total rent expense was $71,144, $55,715 and $54,550, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company rents space to Great NM. For the years ended December
31, 2019, 2018 and 2017, the total rent income was $83,659, $37,599 and $0, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company purchased $2,202,942, $85,767 and $0 materials from
Great NM for the year ended 2019, 2018 and 2017. The Company sold $6,971, $27,175 and $0 electricity to Great NM for the year ended
2019, 2018 and 2017. The Company sold $0, $92,571 and $0 fixed assets to Great NM for the year ended 2019, 2018 and 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2019 and 2018, the balances
due to related parties are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt; font-weight: bold">Due to related parties:</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Jiang Guilan (Chair of Board)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">27,019</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,200</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Zhejiang Special Plastic Ltd.</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">70,540</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">97,559</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">12,200</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; text-align: left">Accounts payable to related party:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 4pt">Great NM</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">303,083</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">82,014</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt; font-weight: bold">Due to related parties:</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Jiang Guilan (Chair of Board)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">27,019</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,200</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Zhejiang Special Plastic Ltd.</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">70,540</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">97,559</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">12,200</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; text-align: left">Accounts payable to related party:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 4pt">Great NM</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">303,083</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">82,014</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Fuling Global Inc. ("Fuling Global") is a Cayman
Islands corporation established on January 19, 2015.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Total Faith Holdings Limited ("Total Faith") is
a wholly-owned subsidiary of Fuling Global formed in accordance with laws and regulations of the British Virgin Islands in April
2004.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Fuling Global and its subsidiary Total Faith are holding companies
whose only asset, held through a subsidiary, is 100% of the registered capital of Taizhou Fuling Plastics Co., Ltd. ("Taizhou
Fuling"), as well as 49% ownership of Domo Industry Inc. ("Domo").</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Taizhou Fuling was established in October 1992 under the laws
of the People's Republic of China ("China" or "PRC") with initial capital of $0.51 million. After
several registered capital increases and capital contributions, the registered capital of Taizhou Fuling was increased to $21.36
million in November 2015.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Taizhou Fuling has three wholly-owned subsidiaries, Direct
Link USA LLC ("Direct Link"), Fuling Plastic USA, Inc. ("Fuling USA") and Wenling Changli Import and Export
Co., Ltd ("Wenling Changli"), which was established in September 2016 in China. Zhejiang Great Plastics Technology
Co., Ltd. ("Great Plastics") was a wholly-owned subsidiary, which was dissolved in October 2019. PT Fuling Food Packaging
Indonesia Co., Ltd. ("Fuling Indonesia"), 80% owned by Taizhou Fuling and 20% by Fuling USA, was incorporated in September
2019 in Indonesia.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Direct Link was incorporated in the State of Delaware in December
2011 and serves as an import trading company of Taizhou Fuling in the United States ("U.S."). Fuling USA was incorporated
in the Commonwealth of Pennsylvania in May 2014, as a wholly-owned subsidiary of Taizhou Fuling. In 2015 Fuling USA established
the Company's first production factory in the U.S., which principally engages in the production of plastic straw items. Prior
to the incorporation of Fuling USA, Taizhou Fuling wholly owned another subsidiary incorporated in 2009 in the State of New York,
named Fuling Plastics USA Inc. ("Old Fuling USA"). Old Fuling USA served as one of the trading entities of Taizhou
Fuling in the U.S. until early 2014 and its business was discontinued and transferred over to the new Fuling USA when the Company
decided to set up the new factory in Allentown, Pennsylvania. Old Fuling USA was dissolved on April 8, 2015.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Domo is a U.S. company established in the State of New York
in October 2007. Total Faith owns 49% of its equity interest. However, Total Faith holds 2 out of 3 seats and has a majority of
the voting rights on the board of directors. The Board of Directors of Domo is the controlling decision-making body with respect
to Domo instead of the equity holders. The number of seats in the Board empowers Total Faith the ability to control Domo's
daily operations and financial affairs, appoint its senior executives and approve all matters requiring shareholders' approval.
In addition, Domo's equity at risk is not sufficient to permit it to carry on its activities without additional subordinated
financial support from Total Faith and Domo is highly relying on the financial support from the Company. Total Faith is obligated
to absorb a majority of the risk of loss from Domo's activities and to receive majority of Domo's residual returns.
Based on these facts, Total Faith has gained effective control over Domo and Domo is considered a Variable Interest Entity ("VIE")
under Accounting Standards Codification ("ASC") 810-10-05-08A. Accordingly, Total Faith consolidates Domo's operating
results, assets and liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Fuling Global, Total Faith, Domo, Taizhou Fuling and Taizhou
Fuling's subsidiaries (herein collectively referred to as the "Company") are engaged in the production and distribution
of plastic and paper serviceware in China, Europe and U.S. Products exported to the U.S. and Europe are primarily sold to major
fast food restaurant chains and wholesalers.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">On November 22, 2018, Great Plastics signed sales contracts with
a third party to sell the land and buildings previously used as one of its manufacturing factories in China (aka, the "Sanmen
Factory") for total cash consideration of RMB 40.2 million (approximately US$5.8 million). The Company sold all related machines
and equipment to Taizhou Fuling and Zhejiang Great New Materials Co., Ltd. ("Great NM"). Great NM is a company 60%
owned by Mr. Qian Hu, 30% owned by Jinxue Jiang, a 5% shareholder and son of Sujuan Zhu, our director, and 10% owned by an immediate
family member of a 5% shareholder. The Company dissolved and deregistered Great Plastics in November 2019. Certain prior period
amounts of Great Plastics have been reclassified to conform to the current period presentation as discontinued operation. Such
reclassifications had no effect on net income or cash flows as previously reported.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On December 11, 2018, Fuling USA signed a service agreement
with a Mexican local shelter services company, which provides services of administration, accounting, compliance, import/export,
and human resources, etc., for Fuling USA's Mexico operation. The local shelter services company established a shelter company
("Mexico Factory") which is not legally owned by Fuling USA. Fuling USA pays for all the costs and expenses for the
operation. According to the agreement, Mexico Factory is obligated to manufacture, assemble and deliver the products to Fuling
USA or to whom Fuling USA appoints. Although Fuling USA doesn't legally own the equity interest of Mexico Factory, Fuling
USA has the ability to control and manage Mexico Factory's production and operation. In addition, Mexico Factory's
equity at risk is not sufficient to permit it to operate without additional subordinated financial support from Fuling USA. Based
on these facts, Fuling USA has effective control over Mexico Factory and Fuling USA is the primary beneficiary of Mexico Factory.
Based on these facts, Mexico Factory is considered a VIE of Fuling USA under ASC 810-10-05-08A. Accordingly, Fuling USA consolidates
Mexico's operating results, assets and liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Principles of Consolidation and Basis of Presentation </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company's consolidated financial statements are prepared
in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). The consolidated
financial statements include the financial statements of Fuling Global, Total Faith, Taizhou Fuling and its subsidiaries and VIE.
All significant intercompany balances and transactions have been eliminated in consolidation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In accordance with accounting standards regarding consolidation
of variable interest entities, VIEs are generally entities that lack sufficient equity to finance their activities without additional
financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs with which the Company
is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary
is required to consolidate the VIE for financial reporting purposes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company has concluded that Domo is a VIE, based on the facts
that Total Faith has a majority of voting rights on the board of directors and is obligated to absorb a majority of the risk of
loss from Domo's economic performance. Based on our evaluation of the VIE, we are the primary beneficiary of its risks and
rewards; therefore, we consolidate Domo for financial reporting purposes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As described in Note 1, management of the Company has concluded
that Mexico Factory is a VIE. Although the equity interest of Mexico Factory is 100% owned by Mexican local shelter services company
in the form, Fuling USA is considered the primary beneficiary because Fuling USA is obligated to absorb the risks and rewards of
Mexico Factory; therefore, the Company consolidates Mexico Factory for financial reporting purposes, and non-controlling interests
result of Mexico Factory is absorbed by Fuling USA rather than the Mexican local shelter services company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0">Fuling USA has the ownership for the assets and obligation for the liabilities
of Mexico Factory, and any assets or liabilities of Mexico Factory are recorded on the books of Fuling USA accordingly. Fuling
USA pays all the expenses and receives all the income of Mexico Factory, as a result, Mexico Factory is a pass-through entity with
no profit or loss of its own.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company has the power to direct activities of the VIE and
can have assets transferred freely out of the VIE without restrictions. Therefore, the Company considers that there is no asset
of the VIE that can only be used to settle obligations of the VIE. The creditors of the VIE's third-party liabilities do
not have recourse to the general credit of the primary beneficiary in normal course of business. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following tables represent the financial
information of the consolidated VIE as of December 31, 2019 and 2018 before eliminating the intercompany balances and transactions
between the VIE and other entities within the Company:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt; font-weight: bold; text-align: center"><u>ASSETS</u></td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Current assets:</td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Cash and cash equivalents</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">266,750</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">561,340</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accounts receivable, net</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,339,633</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,829,084</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Inventories, net</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,982,601</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,004,603</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Due from related party</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><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">437</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-left: 0.125in; font-weight: bold; text-align: left">Total current assets</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,588,984</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,395,464</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </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="padding-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 4pt">Total assets</td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">3,588,984</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">4,395,464</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: underline; font-weight: bold; text-align: center">LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; text-align: left">Current liabilities:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 10pt">Amounts due to inter-companies<sup>(1)</sup></font></td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,286,627</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,664,964</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Advances from customers</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">21,571</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accounts payable</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">380,219</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">609,818</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Taxes payable</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">12,217</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,455</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Due to related party</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">2,094</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="font-weight: bold; text-align: left">Total current liabilities</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,681,157</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,300,808</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt"> </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><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-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total liabilities</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">3,681,157</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">4,300,808</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </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="padding-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 4pt">Net assets</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">(92,173</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">94,656</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 60pt"> </p>
<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">
<td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt"><sup>(1)</sup></font></td><td><font style="font-size: 10pt">Amount due from/to inter-companies
consist of intercompany receivables/payables to other entities within the Company.</font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the years ended</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%">Revenue</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,653,381</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">10,858,274</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,744,914</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Net income (loss)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(181,557</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(204,967</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">25,246</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the years ended</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left"><font style="font-size: 10pt">Net cash provided by (used in) operating activities<sup>(1)</sup></font></td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(297,121</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(1,021,593</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">296,037</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Net cash provided by (used in) financing activities</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">2,531</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,475,795</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(376,338</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Net (decrease) increase in cash and cash equivalents</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(294,590</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">454,202</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(80,301</td><td style="text-align: left">)</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<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">
<td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt"><sup>(1)</sup></font></td><td><font style="font-size: 10pt">Intercompany balances are
eliminated upon consolidation.</font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Non-controlling Interests</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Non-controlling interests represents the individual shareholder's
proportionate share of 51% of equity interest in Domo and 100% of equity interest in Mexico Factory. Fuling USA is obligated to
absorb the risks and rewards of Mexico Factory according to the contractual arrangement, so the non-controlling interests result
of Mexico Factory is absorbed by Fuling USA rather than the Mexican local shelter services company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Use of Estimates</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The preparation of financial statements in conformity with U.S.
GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. These estimates are based on information as of the date of the financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Significant estimates required to be made by management include,
but are not limited to, the valuation of accounts receivable, inventories, advances to suppliers, useful lives of property, plant
and equipment, intangible assets, and the recoverability of long-lived assets. Actual results could differ from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Cash and Cash Equivalents</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company considers all highly liquid investment instruments
with an original maturity of three months or less from the date of purchase to be cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Restricted Cash</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Restricted cash consists of cash equivalents used as collateral
to secure short-term bank notes payable and bank borrowings. The Company is required to keep certain amounts on deposit that are
subject to withdrawal restrictions. Upon the maturity of the bank acceptance notes and bank borrowings, the Company is required
to deposit the remainder to the escrow account to settle the bank notes payable and bank borrowings. The notes payable and bank
borrowings with security deposits are generally short term in nature due to their short maturity period of three months to one
year; thus, restricted cash is classified as a current asset.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2019 and 2018, the Company had restricted
cash of $1,102,591 and $2,396,993, respectively, of which $580,044 and $1,439,064, respectively, was related to the bank acceptance
notes payable (see Note 9), and $342,158 and $649,675, respectively, was related to the letters of credit (see Note 12). The remaining
$180,389 and $308,254, respectively, were related to other miscellaneous deposits made in bank.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Accounts Receivable</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Accounts receivable are recognized and carried at original invoiced
amount less an estimated allowance for uncollectible accounts. The Company usually grants credit to customers with good credit
standing with a maximum of 90 days and determines the adequacy of reserves for doubtful accounts based on individual account analysis
and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence
that the Company may not be able to collect amounts due. The allowance is based on management's best estimates of specific
losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts
receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Actual
amounts received may differ from management's estimate of credit worthiness and the economic environment. Delinquent account
balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection
is not probable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Inventories</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Inventories are stated at the lower of cost or net realizable
value. Costs include the cost of raw materials, freight, direct labor and related production overhead. The cost of inventories
is calculated using the weighted average method. Any excess of the cost over the net realizable value of each item of inventories
is recognized as a provision for diminution in the value of inventories.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net realizable value is the estimated selling price in the normal
course of business less any costs to complete and sell products.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Property, Plant and Equipment</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property and equipment are stated at cost. The straight-line
depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td style="border-bottom: black 1.5pt solid; width: 79%"><font style="font-size: 10pt"><b>Items</b></font></td>
<td style="width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; width: 20%; text-align: center"><font style="font-size: 10pt"><b>Useful life</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Property and buildings</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">10–20 years</font></td></tr>
<tr style="vertical-align: top; background-color: white">
<td><font style="font-size: 10pt">Leasehold improvements</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">Lesser of useful life and<br />
lease term</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Machinery equipment</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">3–10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Automobiles</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">4–10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Office equipment and furniture</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">3–5 years</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Expenditures for maintenance and repairs, which do not materially
extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which
substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired
or sold are removed from the respective accounts, and any gain or loss is recognized in the statement of income in other income
and expenses.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Intangible Assets</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Intangible assets consist primarily of land use rights, trademark
and patents. Under the PRC law, all land in the PRC is owned by the government and cannot be sold to an individual or company.
The government grants individuals and companies the right to use parcels of land for specified periods of time. These land use
rights are sometimes referred to informally as "ownership." Land use rights are stated at cost less accumulated amortization.
Intangible assets are amortized using the straight-line method with the following estimated useful lives:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td style="border-bottom: black 1.5pt solid; width: 79%"><font style="font-size: 10pt"><b>Items</b></font></td>
<td style="width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; width: 20%; text-align: center"><font style="font-size: 10pt"><b>Useful life</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Land use rights</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">50 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Trademarks</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Patents</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">7-10 years</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Impairment of Long-lived Assets</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company reviews long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash
flows from the use of the asset and its eventual disposition are below the asset's carrying value, then the asset is deemed
to be impaired and written down to its fair value. There were no impairments of these assets as of December 31, 2019 and 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Revenue Recognition</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company follows paragraph 606 of the FASB Accounting Standards
Codification for revenue recognition and ASU 2014-09. On January 1, 2018, the Company adopted ASU 2014-09, which is a comprehensive
new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to
a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company
considers revenue realized or realizable and earned when all the five following criteria are met: (1) Identify the Contract with
a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the Transaction
Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance
Obligation. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Substantially all of the Company's revenue is derived
from product sales. The Company considers purchase orders to be a contract with a customer. Contracts with customers are considered
to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than
one year, and virtually all of the Company's contracts are short-term. The Company recognizes revenue for the transfer of
promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange
for those goods. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods.
The Company does not have any contract assets since the Company has an unconditional right to consideration when the Company has
satisfied its performance obligation and payment from customers is not contingent on a future event. Generally, payment is due
from customers within 40 to 60 days of the invoice date, and the contracts do not have significant financing components nor variable
consideration. Returns and allowances are not a significant aspect of the revenue recognition process as historically they have
been immaterial. All of the Company's contracts have a single performance obligation satisfied at a point in time and the
transaction price is stated in the contract, usually as a price per unit. All estimates are based on the Company's historical
experience, complete satisfaction of the performance obligation, and the Company's best judgment at the time the estimate
is made. Historically, sales returns have not significantly impacted the Company's revenue.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company disaggregates its revenue from contracts by products
and region, as we believe it best depicts the nature and source of the revenue. The Company's disaggregation of revenues
for the year ended December 2019, 2018 and 2017 is disclosed in Note 15.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Income Taxes</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company accounts for income taxes under ASC 740. Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated
financial statement carrying amounts of existing assets and liabilities and their respective tax bases.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including
the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The provisions of ASC 740-10-25, "Accounting for Uncertainty
in Income Taxes," prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement
of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition
of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for
interest and penalties associated with tax positions, and related disclosures. The Company does not believe that there were any
uncertain tax positions at December 31, 2019 and 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the extent applicable, the Company records interest and penalties
as general and administrative expenses. The statute of limitations for the Company's U.S. federal income tax returns and
certain state income tax returns subject to examination by tax authorities for three years from the date of filing. As of December
31, 2019, the tax years ended December 31, 2016 through December 31, 2018 for the Company's PRC subsidiaries remain open
for statutory examination by PRC tax authorities. As of December 31, 2019, the tax years ended December 31, 2016 through December
31, 2018 for the Company's U.S. subsidiaries remain open for statutory examination by U.S. tax authorities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Value Added Tax ("VAT")</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sales revenue represents the invoiced value of goods, net of
VAT. The VAT is based on gross sales price and VAT rates range up to 17%, depending on the type of products sold. The VAT may be
offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished
products. Further, when exporting goods, the exporter is entitled to some or all of the refund of the VAT paid or assess. Since
a majority of the Company's products are exported to the U.S. and Europe, the Company is eligible for VAT refunds when the
Company completes all the required tax filing procedures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">All of the VAT returns of the Company have been and remain subject
to examination by the tax authorities for five years from the date of filing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Foreign Currency Translation</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company's principal country of operations is the PRC.
The financial position and results of its operations are determined using RMB, the local currency, as the functional currency.
The Company uses Indonesian rupiah ("IDR") in Fuling Indonesia as functional currency. Our financial statements are
reported using U.S. Dollars. The results of operations and the statement of cash flows denominated in foreign currency are translated
at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance
sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional
currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated
based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not
necessarily agree with changes in the corresponding balances on the balance sheet. Translation adjustments arising from the use
of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income
included in statement of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated
statement of income and comprehensive income.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The value of RMB against US$ and other currencies may
fluctuate and is affected by, among other things, changes in the PRC's political and economic conditions. Any
significant revaluation of RMB may materially affect the Company's financial condition in terms of US$ reporting. The
following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this
report:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="background-color: white">
<td style="vertical-align: top; width: 37%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 21%; text-align: center"><font style="font-size: 10pt"><b>December 31,<br />
2019</b></font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 18%; text-align: center"><font style="font-size: 10pt"><b>December 31,</b><br />
<b>2018</b></font></td>
<td style="text-align: center; vertical-align: bottom; width: 1%"> </td>
<td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 21%; text-align: center"><font style="font-size: 10pt"><b>December 31,<br />
2017</b></font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td rowspan="2"><font style="font-size: 10pt">Period-end spot rate</font></td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"><font style="font-size: 10pt">US $1=RMB 6.9680</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.8776</font></td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.5074</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">US $1=IDR 13,864.71</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td></tr>
<tr style="background-color: white">
<td> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td rowspan="2"><font style="font-size: 10pt">Average rate</font></td>
<td style="vertical-align: bottom"> </td>
<td style="text-align: center; vertical-align: bottom"><font style="font-size: 10pt">US $1=RMB 6.9088</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.6163</font></td>
<td style="text-align: center; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 10pt">US $1=RMB 6.7578</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">US $1=IDR 14,142.41</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td>
<td style="text-align: center"> </td>
<td style="text-align: center"><font style="font-size: 10pt">NA</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Fair Value of Financial Instruments</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">ASC 825-10 requires certain disclosures regarding the fair value
of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the
inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use
of unobservable inputs. The three levels of inputs used to measure fair value are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font-size: 10pt">●</font></td>
<td><font style="font-size: 10pt">Level 1 - Quoted prices in active markets for identical assets and liabilities.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font-size: 10pt">●</font></td>
<td><font style="font-size: 10pt">Level 2 - Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font-size: 10pt">●</font></td>
<td><font style="font-size: 10pt">Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company considers the recorded value of its financial assets
and liabilities, which consist primarily of cash and cash equivalents, restricted cash, accounts receivable, inventories, advance
to suppliers, accounts payable, accrued expenses and other liabilities, advances from customers, notes payable to approximate the
fair value of the respective assets and liabilities at December 31, 2019 and 2018 based upon the short-term nature of the assets
and liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company believes that the carrying amount of the short-term
borrowings approximates fair value at December 31, 2019 and 2018 based on the terms of the borrowings and current market rates
as the rate is reflective of the current market rate.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Concentrations and Credit Risk</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">A majority of the Company's expense
transactions are denominated in RMB and a significant portion of the Company and its subsidiaries' assets and liabilities
are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions
are required by law to be transacted only by authorized financial institutions at exchange rates set by the People's Bank
of China ("PBOC"). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC
or other China foreign exchange regulatory bodies that require certain supporting documentation in order to affect the remittance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">As of December 31, 2019 and 2018, $6,771,075
and $4,116,684, respectively, of the Company's cash and cash equivalents, and restricted cash were on deposit at financial
institutions in the PRC where there currently is no rule or regulation requiring such financial institutions to maintain insurance
to cover bank deposits in the event of bank failure. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Substantially all of the Company's sales are made to customers
that are located primarily in the USA and Europe. The Company's operating results could be adversely affected by the government
policy on exporting business, foreign exchange rate fluctuation, and local market condition change. The Company has a concentration
of its revenues and receivables with specific customers. For the year ended December 31, 2019, no customer accounted for more
than 10% of total revenue. For the year ended December 31, 2018, no customer accounted for more than 10% of total revenue.
As of December 31, 2019, one customer's account receivable accounted for 18.9% of the total outstanding accounts receivable
balance. As of December 31, 2018, one customer's account receivable accounted for 14% of the total outstanding accounts
receivable balance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the year ended December 31, 2019, the Company purchased
approximately 10.2% of its raw materials from one supplier. For the year ended December 31, 2018, the Company purchased approximately
12% of its raw materials from one supplier. As of December 31, 2019, advanced payments to three major suppliers accounted
for 23.5%, 22.1% and 17.8% of the total advance payments outstanding. As of December 31, 2018, advanced payments to two major
suppliers accounted for 20% and 15% of the total advance payments outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A loss of either of these customers or suppliers could adversely
affect the operating results or cash flows of the Company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risks and Uncertainties</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The major operations of the Company are located in the PRC.
Accordingly, the Company's business, financial condition, and results of operations may be influenced by political, economic,
and legal environments in the PRC, as well as by the general state of the PRC economy. The Company's operations in the PRC
are subject to special considerations and significant risks not typically associated with companies in North America and Western
Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange.
The Company's results may be adversely affected by changes in the political, regulatory and social conditions in the PRC.
Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws
and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Recent Accounting Pronouncements</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i><u>New Accounting Pronouncements Recently Adopted</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company adopted ASU No. 2016-02—Leases (Topic 842)
since January 1, 2019, using a modified retrospective transition method permitted under ASU No. 2018-11. This transition approach
provides a method for recording existing leases only at the date of adoption and does not require previously reported balances
to be adjusted. In addition, we elected the package of practical expedients permitted under the transition guidance within the
new standard, which among other things, allowed us to carry forward the historical lease classification. Adoption of the new standard
resulted in the recording of additional lease assets and lease liabilities of approximately $7.5 million and $7.0 million, respectively,
as of December 31, 2019. The standard did not materially impact our consolidated net earnings and had no impact on cash flows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company adopted ASU 2018-07, Compensation – Stock
Compensation since January 1, 2019. ASU 2018-07 simplifies the accounting for share-based payments granted to nonemployees for
goods and services. Under this ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements
for share-based payments granted to employees. Adoption of this ASU does not have material impact on the Consolidated Financial
Statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i><u>New Accounting Pronouncements Not Yet Adopted</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments
– Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU is intended to improve financial
reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions
and other organizations. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting
date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU requires enhanced disclosures
to help investors and other financial statement users better understand significant estimates and judgments used in estimating
credit losses, as well as the credit quality and underwriting standards of the Company's portfolio. These disclosures include
qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements.
This ASU is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. The Company
will adopt ASU 2016-13 and its related amendments effective January 1, 2020, and the Company does not expect the adoption to have
a material effect on its consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Principles of Consolidation and Basis of Presentation </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company's consolidated financial statements are prepared
in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). The consolidated
financial statements include the financial statements of Fuling Global, Total Faith, Taizhou Fuling and its subsidiaries and VIE.
All significant intercompany balances and transactions have been eliminated in consolidation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In accordance with accounting standards regarding consolidation
of variable interest entities, VIEs are generally entities that lack sufficient equity to finance their activities without additional
financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs with which the Company
is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary
is required to consolidate the VIE for financial reporting purposes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company has concluded that Domo is a VIE, based on the facts
that Total Faith has a majority of voting rights on the board of directors and is obligated to absorb a majority of the risk of
loss from Domo's economic performance. Based on our evaluation of the VIE, we are the primary beneficiary of its risks and
rewards; therefore, we consolidate Domo for financial reporting purposes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As described in Note 1, management of the Company has concluded
that Mexico Factory is a VIE. Although the equity interest of Mexico Factory is 100% owned by Mexican local shelter services company
in the form, Fuling USA is considered the primary beneficiary because Fuling USA is obligated to absorb the risks and rewards of
Mexico Factory; therefore, the Company consolidates Mexico Factory for financial reporting purposes, and non-controlling interests
result of Mexico Factory is absorbed by Fuling USA rather than the Mexican local shelter services company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0">Fuling USA has the ownership for the assets and obligation for the liabilities
of Mexico Factory, and any assets or liabilities of Mexico Factory are recorded on the books of Fuling USA accordingly. Fuling
USA pays all the expenses and receives all the income of Mexico Factory, as a result, Mexico Factory is a pass-through entity with
no profit or loss of its own.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company has the power to direct activities of the VIE and
can have assets transferred freely out of the VIE without restrictions. Therefore, the Company considers that there is no asset
of the VIE that can only be used to settle obligations of the VIE. The creditors of the VIE's third-party liabilities do
not have recourse to the general credit of the primary beneficiary in normal course of business. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following tables represent the financial
information of the consolidated VIE as of December 31, 2019 and 2018 before eliminating the intercompany balances and transactions
between the VIE and other entities within the Company:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt; font-weight: bold; text-align: center"><u>ASSETS</u></td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Current assets:</td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Cash and cash equivalents</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">266,750</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">561,340</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accounts receivable, net</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,339,633</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,829,084</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Inventories, net</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,982,601</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,004,603</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Due from related party</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><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">437</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-left: 0.125in; font-weight: bold; text-align: left">Total current assets</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,588,984</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,395,464</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </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="padding-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 4pt">Total assets</td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">3,588,984</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">4,395,464</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: underline; font-weight: bold; text-align: center">LIABILITIES AND SHAREHOLDERS' EQUITY</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; text-align: left">Current liabilities:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 10pt">Amounts due to inter-companies<sup>(1)</sup></font></td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,286,627</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,664,964</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Advances from customers</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">21,571</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accounts payable</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">380,219</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">609,818</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Taxes payable</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">12,217</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,455</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Due to related party</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">2,094</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="font-weight: bold; text-align: left">Total current liabilities</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,681,157</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,300,808</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt"> </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><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-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total liabilities</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">3,681,157</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">4,300,808</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </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="padding-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 4pt">Net assets</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">(92,173</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">94,656</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 60pt"> </p>
<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">
<td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt"><sup>(1)</sup></font></td><td><font style="font-size: 10pt">Amount due from/to inter-companies
consist of intercompany receivables/payables to other entities within the Company.</font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the years ended</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%">Revenue</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,653,381</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">10,858,274</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,744,914</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Net income (loss)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(181,557</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(204,967</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">25,246</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the years ended</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left"><font style="font-size: 10pt">Net cash provided by (used in) operating activities<sup>(1)</sup></font></td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(297,121</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(1,021,593</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">296,037</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Net cash provided by (used in) financing activities</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">2,531</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,475,795</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(376,338</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Net (decrease) increase in cash and cash equivalents</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(294,590</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">454,202</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(80,301</td><td style="text-align: left">)</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<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">
<td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt"><sup>(1)</sup></font></td><td><font style="font-size: 10pt">Intercompany balances are
eliminated upon consolidation.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 7 – RIGHT OF USE LEASE ASSETS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company has six operating leases for manufacturing facilities
and offices. One lease includes an option to renew, which is at the Company’s sole discretion. The renewal to extend the
lease terms is not included in our right of use assets and lease liabilities as it is not reasonably certain of exercise. The Company
regularly evaluates the renewal options, and, when it is reasonably certain of exercise, it will include the renewal period in
its lease term. New lease modifications result in remeasurement of the right of use asset and lease liability. The Company’s
lease agreements do not contain any material residual value guarantees or material restrictive covenants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Effective January 1, 2019, the Company adopted the new lease
accounting standard using a modified retrospective transition method which allowed the Company not to recast comparative periods
presented in its consolidated financial statements. In addition, the Company elected the package of practical expedients, which
allowed the Company to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification
as operating or finance leases, and to not reassess initial direct costs. The Company has not elected the practical expedient to
use hindsight to determine the lease term for its leases at transition. The Company combines the lease and non-lease components
in determining the ROU assets and related lease obligation. Adoption of this standard resulted in the recording of operating lease
ROU assets and corresponding operating lease liabilities as disclosed below and had no impact on accumulated deficit as of December
31, 2019. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining
lease payments over the lease term. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Company’s operating leases primarily include leases for office
space and manufacturing facilities. The current portion of operating lease liabilities and the non-current portion of operating
lease liabilities are presented on the consolidated balance sheet. On January 1, 2019, the ROU assets and related lease liabilities
recognized were $3,935,926 and $3,935,926, respectively. Total lease expense amounted to $1,156,051, which included $217,259 interest
and $938,792 amortization expenses of ROU assets. Total cash paid for operating leases amounted to $1,571,139 for the year ended
December 31, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supplemental balance sheet information related to operating
leases was as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 11pt">
<tr style="vertical-align: bottom">
<td style="font: 11pt Calibri,sans-serif; white-space: nowrap; text-align: center"> </td><td style="font: bold 10pt Times New Roman,serif; white-space: nowrap; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman,serif; white-space: nowrap; text-align: center">December 31,<br /> 2019</td><td style="font: bold 10pt Times New Roman,serif; white-space: nowrap; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; width: 88%; text-align: left; padding-bottom: 1.5pt">Right-of-use assets</td><td style="font: 10pt Times New Roman,serif; width: 1%; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; width: 9%; text-align: right">7,507,445</td><td style="font: 10pt Times New Roman,serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 11pt Calibri,sans-serif"> </td><td style="font: 11pt Calibri,sans-serif"> </td>
<td style="font: 11pt Calibri,sans-serif; text-align: left"> </td><td style="font: 11pt Calibri,sans-serif; text-align: right"> </td><td style="font: 11pt Calibri,sans-serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; text-align: left">Operating lease liabilities - current</td><td style="font: 10pt Times New Roman,serif"> </td>
<td style="font: 10pt Times New Roman,serif; text-align: left">$</td><td style="font: 10pt Times New Roman,serif; text-align: right">910,897</td><td style="font: 10pt Times New Roman,serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman,serif; text-align: left; padding-bottom: 1.5pt">Operating lease liabilities - non-current</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman,serif; text-align: right">6,103,899</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman,serif; text-align: left; padding-bottom: 4pt">Total operating lease liabilities</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: left">$</td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman,serif; text-align: right">7,014,796</td><td style="font: 10pt Times New Roman,serif; padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The weighted average remaining lease terms and discount rates
for all of operating leases were as follows as of December 31, 2019:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
<td>Remaining lease term and discount rate:</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: left; padding-left: 0.75pt">Weighted average remaining lease term (years)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">3.8</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 0.75pt">Weighted average discount rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5.00</td><td style="text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company rents space from one of its related parties. For
the years ended December 31, 2019 and 2018, the total rent expense was $71,144 and $55,715, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company’s subsidiary Fuling USA leases manufacturing
facility under operating leases. Operating lease expense amounted $575,971 and $534,589 for the years ended December 31, 2019 and
2018, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0">On December 20, 2018, the Company entered into a five-year lease agreement
with a third party for its manufacturing facility in Mexico (see Note 1) in Mexico. The rent expense amounted $407,081 and $10,514
for the years ended December 31, 2019 and 2018, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On March 29, 2019, the Company entered into a lease agreement
with a third party for office use from March 29, 2019 to May 27, 2022. The rent expense for year ended December 31,2019 amounted
to $19,630.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In September 2019, the Company signed a ten-year land and building
lease agreement with a third party in Central Java, Indonesia. The lease expense amounted $82,225 the years ended December 31,
2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following is a schedule of maturities of lease liabilities
as of December 31, 2019:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2020</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,743,951</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,973,521</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2022</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">910,829</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2023</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,556,304</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2024</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">196,931</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">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">1,680,741</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: left">Total lease payments</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">8,062,277</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Less: imputed interest</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">(1,047,481</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: left; padding-bottom: 4pt">Present value of lease liabilities</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">7,014,796</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 16 – SUBSEQUENT EVENTS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">From January to March 2020, the Company repaid approximately $7.2
million short term bank loans and $0.9 million notes payable that became due. To take advantage of lower interest rate in first
quarter 2020, the Company repaid loans with higher interest rate to reduce financing cost and will replenish with short-term loans
when needed. The Company repaid approximately $5.7 million long-term bank loans with higher interest rate prior to maturity, and
all other loan payable balance (see Note 11). The Company also borrowed approximately $7.5 million short term bank loans as well
as approximately $0.5 million notes payable from various banks in China. All the loans and notes payable are guaranteed by its
shareholders and related parties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In December 2019, a novel strain of coronavirus (COVID-19) surfaced.
The spread of COVID-19 caused interruption of operation in our China facilities from February to early March, 2020. As the situation
is controlled and improved in March, the Company’s manufacturing facilities in China have resumed to 100% capacity since
March 17, 2020. The Company’s facilities throughout the globe have implemented additional safety measures to prevent contamination
from COVID-19. The Company will continue to closely monitor the situation to ensure a safe and healthy environment and mitigate
the impact on operation. The spread of COVID-19 around the world in the first quarter of 2020 has caused significant volatility
in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related
to COVID-19, as well as its impact on the U.S. and international economies and, as such, the Company is unable to determine if
it will have a material impact on financial result of fiscal 2020.</p>
From 1 January 2018 to 31 December 2020, for R&D expenses incurred for new technology, new products, or new craftsmanship, an extra 75% of the actual expenses incurred are also tax-deductible as an incentive.
It represents expenses incurred by the Company that were not deductible for PRC income tax and income (loss) generated in countries with no income tax obligations.
A total amount of $9,880,813 machinery was related to the finance lease transaction (see Note 11).
Intercompany balances are eliminated upon consolidation.
Amount due from/to inter-companies consist of intercompany receivables/payables to other entities within the Company.
During the year ended December 31, 2019, Taizhou Fuling entered into a series of short-term bank loan agreements with ABC for a total amount of $18,972,445. The terms of these loans are one to twelve months with variable interest rates based on the prevailing interest rates. The effective rates are from 4.50% to 5.04% per annum. As of December 31, 2019, $8,811,710 of them had been repaid upon maturity. During the year ended December 31, 2018, Taizhou Fuling entered into a series of short-term bank loan agreements with ABC for a total amount of $8,622,194. The terms of these loans are six months with variable interest rates based on the prevailing interest rates, respectively. The effective rates are from 4.57% to 5.15% per annum. As of December 31, 2019, all of them had been repaid upon maturity.
During year ended December 31, 2019, Taizhou Fuling entered into a series of short-term bank borrowing agreements with CMB for a total amount of $7,626,660. The terms of these loans are three to twelve months 3with variable interest rates based on the prevailing interest rates. The effective rates were from 4.49% to 5.88% per annum. The loans are guaranteed by Zhejiang Special Plastic Ltd. and Taizhou Fuling's general manager and Chair of the Board. As of December 31, 2019, $6,191,528 had been repaid in full upon maturity. During year ended December 31, 2018, Taizhou Fuling entered into a series of short-term bank borrowing agreements with CMB for a total amount of approximately $6.3 million (RMB 43.4 million). The terms of these loans are five to twelve months with variable interest rates based on the prevailing interest rates. The effective rates were from 2.40% to 6.09% per annum. The loans are guaranteed by Zhejiang Special Plastic Ltd. and Taizhou Fuling's general manager and Chair of the Board. As of December 31, 2019, all of them had been repaid in full upon maturity.
During the year ended December 31, 2019, Taizhou Fuling entered into a series of short-term loan agreements with ICBC for a total amount of $4,521,116. The terms of these loans are three to twelve months with the interest rates ranged from 5.00% to 5.22% per annum. As of December 31, 2019, $1,363,826 of them had been repaid in full upon maturity. During the year ended December 31, 2018, Taizhou Fuling entered into a series of short-term loan agreements with ICBC for a total amount of $4,557,315. The terms of these loans are five to twelve months with the interest rates ranged from 3.47% to 5.44% per annum. As of December 31, 2019, all of them had been repaid in full upon maturity.
During the year ended December 31, 2019 and the year ended December 31, 2018, Taizhou Fuling entered into a series of short-term bank borrowing agreements and other financing agreements with BOC. The terms of the loans are five to twelve months, with fixed interest rates based on London InterBank Offered Rate ("LIBOR") (for loans dominated in USD) or prime loan rates issued by People's Bank of China (for loans dominated in RMB), plus certain base points. The effective interest rates vary from 3.02% to 5.53% per annum. The loans to Taizhou Fuling are guaranteed by the major shareholders.
On March 9, 2017, Direct Link entered into a line of credit agreement with East West Bank for $2,000,000 for one year. The annual interest rate is equivalent to LIBOR rate plus 2.75%. On April 7, 2017, Direct Link drew down $1,500,000 with the effective rate of 3.86% per annum. On December 1, 2017, Direct Link drew down another $500,000 with the effective rate of 4.45% per annum. On March 14, 2018, East West Bank approved to extend the loan to June 9, 2018. On June 26, 2018, East West Bank again approved to extend the loan to June 9, 2019. On September 13, 2019, East West Bank approved to extend the loan to September 7, 2021. (See "Long-term Borrowing" below)
On September 28, 2016, Fuling USA entered into a ten-year Machinery and Equipment Loan Agreement with the Pennsylvania Industrial Development Authority for $937,600, with fixed interest rate of 1.75%. This loan has been collateralized by the machinery and equipment, worth approximately $1.72 million. As of December 31, 2019, the amount of long-term borrowing was $658,234, and it consists of $91,484 of which is due within a year and $566,750 that is due over a year.
In fiscal year 2018, Taizhou Fuling entered into a series of buyer's credit Loan Agreements with ABC for total of $5,815,982 (RMB 40 million) for 36 months. The effective rates varies from 5.23% to 5.37% per annum. In August 2019, Taizhou Fuling entered into a buyer's credit Loan Agreement with ABC for total of $1,420,781 (RMB 9.9 million) for 36 months. The effective rate was 4.99% per annum.
On March 9, 2017, Fuling USA entered into a Delayed Draw Term Loan agreement with East West Bank for $1,000,000. The amount drawn will be turned into a 5-year term loan at LIBOR rate plus 3.00%. The loan is guaranteed by Fuling Global. On April 7 and December 1, 2017, Fuling USA drew down $500,000 (April 2017 Loan) and $500,000 (December 2017 Loan), respectively. April 2017 loan will expire on April 7, 2023 and December 2017 loan will expire on December 1, 2023. Both loans require interest only payment for the first year and require interest and principal payments from second year to sixth year. The initial effective rate was 4.11% per annum. In September 2019, both parties agreed to adjust the effective rate to 4.877%. As of December 31, 2019, the outstanding loan was $717,952, which consists of $200,000 due within a year and $517,952 due over a year.