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Discontinued Operations

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

12. DISCONTINUED OPERATIONS

HeDeTang HK

On September 18, 2019, HeDeTang Holdings (HK) Ltd. ("HeDeTang HK") entered into a Share Transfer Agreement (the "Agreement") with New Continent International Co., Ltd., (the "Buyer") a company incorporated in the British Virgin Islands. Pursuant to the terms of the Agreement, the Buyer purchased 100% ownership of HeDeTang HK, which value is primarily derived from HeDeTang HK's wholly-owned subsidiary HeDeJiaChuan Holdings Co., Ltd. and 73.41% owned subsidiary SkyPeople Juice Group Co., Ltd., for a total price of RMB 600,000 (approximately $85,714) (the "Sale Transaction"). The Sale Transaction was closed on February 27, 2020. In accordance with ASC Topic 205, Presentation of Financial Statement Discontinued Operations ("ASC Topic 205"), the Company presented the operation results from HeDeTang HK's and subsidiaries as a discontinued operation, as the Company believed that no continued cash flow would be generated by the discontinued component and that the Company would have no significant continuing involvement in the operations of the discontinued component. The total assets of HeDeTang HK was $64.37 million as of December 31,2019 and the total liabilities of HeDeTang HK was $196.87 million as of December 31, 2019.

Huludao Wonder

The Company's Huludao Wonder operation, a subsidiary which produces concentrated apple juice, suffered continued operating losses since 2014 and its cash flow was minimal for these three years. In December 2016, the Company established a winding-down plan to close this operation. Based on the restructuring plan and in accordance with ASC 205-20, the Company presented the operating results from Huludao Wonder as a discontinued operation, as the Company believed that no continued cash flow would be generated by the disposed component (Huludao Wonder) and that the Company would have no significant continuing involvement in the operation of the discontinued component. Management of the Company initiated a plan to sell the property located in Huludao in December 2016, and ceased the depreciation of the property in accordance with ASC 205-20. In accordance with the restructuring plan, the Company intends to transfer the concentrated fruit juice production equipment in Huludao Wonder to another subsidiary and to sell the land and facilities upon favorable circumstances.

In year 2016, Huludao Wonder stopped payment of interest on the loan it obtained from Suizhong Branch of Huludao Banking Co. Ltd. ("Suizhong Branch") in 2016. Suizhong Branch sued Huludao Wonder in the Intermediate People's Court (the "Huludao Court"), and as a result, in accordance with of the ruling of the Huludao court, the Company's fixed assets will offset long-term borrowings, along with its owed interest. Since the loan amount is larger than the remaining value of the fixed assets, the transaction became non-operating income for this subsidiary.

Loss from discontinued operations for fiscal years 2019 and 2018 was as follows:

		December 31,				December 31,
		2019				2018
REVENUES		$	330,195			$	756,838
COST OF SALES			315,737				891,154
GROSS PROFIT			14,459				(134,316	)

OPERATING EXPENSES:
General and administrative			2,994,965				10,308,627
Selling expenses			172,449				174,097
Bad debt expenses			3,026,472
Impairment loss			-				133,631,129
Total			6,193,885				144,113,852

OTHER INCOME (EXPENSE)
Interest income			116				-
Interest expense			(7,300,070	)			(1,721,012	)
other income (expenses)			90,149				6,770,498	)
Total			(7,209,805	)			(5,050,147	)
Loss from discontinued operations before income tax			(13,389,231	)			(139,198,021	)
Income tax provision			-				31
Loss from discontinued operation before Minority Interest		$	(13,389,231	)		$	(139,198,052	)
Less: Net loss attributable to non-controlling interests			(1,681,738	)			15,618,798
LOSS FROM DISCONTINUED OPERATION		$	(11,707,493	)		$	(123,579,254

The non-operating loss from discontinued operations was $11.71 million for fiscal year 2019 and $4.01 million for fiscal year 2018.

The major components of assets and liabilities related to discontinued operations are summarized below:

		December 31, 2019				December 31, 2018
Cash		$	123,087			$	220,342
Accounts receivable			11,720				73,244
Other receivables			1,861				15,381,465
Inventory			454,269				63,017
Advances to suppliers and other current assets			97,539				-
Property and equipment, net			1,176,163				2,276,704
Right of use assets			57,571,254
Intangible assets, net			15,347,535				15,968,625
Amount due from related parties			17,989,358
Total assets related to discontinued operations		$	92,772,786				33,933,396

Accounts payable		$	2,084,735			$	9,002,384
Accrued expenses			81,279,952				78,644,119
Advances from customers			815,382				772,078
Short-term bank loans			37,245,139				5,828,185
Lease liabilities			60,613,970				-
Amount due from related parties			14,222,570				-
Long-term loan			14,222,570				32,450,867
Total liabilities related to discontinued operations		$	196,261,748			$	126,697,633