XML 137 R20.htm IDEA: XBRL DOCUMENT

Accrued Expenses and Other Payables

3 Months Ended

Mar. 31, 2024

13. Accrued Expenses and Other Payables

Accrued expenses and other payables consisted of the following as of March 31, 2024 and December 31, 2023:

	March 31, 2024		December 31, 2023
	(Unaudited)
Customer deposits	$	269,169	$	384,232
Accrued operating and project payables		4,804,783		7,460,887
Payable to Uonone (See Note 15)		2,498,726		2,551,458
Accrued compensation expenses		1,700,291		2,387,574
Retainage payable to vendors		826,292		802,886
Preacquisition liability		1,486,273		1,517,639
Accrued settlement		276,428		276,428
Accrued warranty expense		243,372		248,508
VAT taxes payable		818,063		697,480
Income taxes payable		10,023		139,659
Refundable vendor bid deposits		13,852		14,145
Total accrued expenses and other payables	$	12,947,272	$	16,480,896

Accrued Compensation

At December 31, 2023 and March 31, 2024, accrued compensation includes $675,000 of compensation to the Company’s chief executive officer in connection with the cancellation in March 2019 of restricted stock grants and $1.8 million of accrued but unpaid compensation to the chief executive officer pursuant to his employment agreement. Accrued compensation at December 31, 2023 includes $600,000 due to the former executive vice president, who is also a 5% stockholder, and one other employee in connection with the cancellation in March 2019 of restricted stock grants and $338,095 of deferred compensation to its former executive vice president, all of which was paid during the three months ended March 31, 2024. The remaining balance relates to accrued unpaid commissions and accrued paid time off.

Customer Deposits

Customer deposits represent customer down payments and progress payments received prior to the completion of the Company’s earnings process. The amounts paid by customers are refundable during the period which, under applicable state and federal law, the customer’s order may be cancelled and the deposit refunded. Once the cancellation period has expired, the customer still may cancel the project but the Company is entitled to retain the deposit payments for work that was completed and materials that were delivered.

Accrued Warranty

The activity of the warranty liability (included in other liabilities) for the three months ended March 31, 2024 and 2023 is as follows:

	Three Months Ended March 31,
	2024			2023
	(Unaudited)
Balance – beginning of period	$	2,174,488		$	2,411,637
Provision for warranty liability		61,466			152,231
Expenditures and adjustments		(143,120	)		(29,006	)
Effect of exchange rate		(5,136	)		8,752
Balance – end of period		2,087,698			2,543,614
Less: current portion (accrued expenses and other payables)		(243,372	)		(255,859	)
Non-current portion (other liabilities)	$	1,844,326		$	2,287,755

Preacquisition Liability

As part of the April 2015 acquisition of ZHPV, the Company assumed a liability associated with the Ningxia project consisting of reimbursement of project expenses to an unrelated third-party including reimbursement of certain land rental expenses and land use taxes estimated at a total of approximately RMB 10.7 million ($1.6 million at March 31, 2024). The Company expects to negotiate to offset the entire liability with the unpaid contract receivables and reimbursements from the third party. All the receivables and reimbursements were previously fully reserved by the Company.