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Discontinued Operations

12 Months Ended

Dec. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

15. DISCONTINUED OPERATIONS

HeDeTang HK

On September 18, 2019, SkyPeople Foods Holdings Limited (“SkyPeople Foods”) 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 Holdings (HK) Ltd. (“HeDeTang HK”) from SkyPeople Foods, 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 were $106.85 million as of February 27, 2020 and the total liabilities of HeDeTang HK were $231.21 million as of February 27, 2020, resulting in a gain on disposal of $99.87 million. There was no income or loss from HeDeTang HK from January 1, 2020 to the sale.

The discontinued operation presented in the financial statement includes Huludao Wonder operation, a subsidiary which produces concentrated apple juice. 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 intended to transfer the concentrated fruit juice production equipment in Huludao Wonder to another subsidiary and to sell the land use right and facilities upon favorable circumstances. On February 27, 2020 pursuant to a Share Transfer Agreement entered into by SkyPeople Foods and New Continent International Co., Ltd. on September 18, 2019, the ownership of Huludao Wonder was transferred as a subsidiary of HeDeTang HK to New Continent International Co., Ltd.

On March 11, 2020, the Company’s Board of Directors passed a resolution to sell the operation of Globalkey Supply Chain limited and Zhonglian Hengxin Assets Management Co., Ltd (“Zhonglian Hengxin”) and close the operation of Digital Online Marketing Limited, Future Digital Fintech (Xi’an) Co., Ltd., SkyPeople Foods Holding Ltd. and Chain Future Digital Tech (Beijing) Co., Ltd. Based on the disposal plan and in accordance with ASC 205-20, the Company presented the operating results from these operations as a discontinued operation. On October 31, 2020, the transfer of ownership of Globalkey Supply Chain Limited and Zhonglian Hengxin was completed with a disposal gain of $181,741.

On July 24, 2020, the Company’s Board of Directors passed a resolution to sell the operation of Hedetang Farm Products Trading Markets (Mei County) Co., Ltd. and close the operation of Chain Cloud Mall Logistics Center (Shaanxi) Co., Ltd. On July 27,2020, Skypeople Foods Holdings Limited Company was dissolved; On July 28, 2020 digital online marketing limited company was dissolved; On October 31, 2020, Chain Cloud Mall Network and Technology (Tianjin) Co., Limited and Chain Cloud Mall Logistics Center (Shanxi) Co., Ltd. completed the transfer of its ownership of Hedetang Farm Products Trading Markets (Mei county) Co., Ltd with a disposal gain of $18,191,960.

Loss from discontinued operations for fiscal years 2020 and 2019 was as follows:

		December 31,				December 31,
		2020				2019
REVENUES		$	-			$	344,250
COST OF SALES			-				316,162
GROSS PROFIT			-				28,088

OPERATING EXPENSES:
General and administrative			274,370				5,476,173
Selling expenses			-				231,519
Bad debt expenses			202,679				3,101,859
Total			477,049				8,809,551

OTHER INCOME (EXPENSE)
Interest income			189				209
Interest expense			-				(7,300,188	)
other income (expenses)			(1,197	)			116,917
Total			(1,008	)			(7,183,062	)
Loss from discontinued operations before income tax			(478,057	)			(15,964,525	)
Income tax provision			-				-
Loss from discontinued operation before noncontrolling interest		$	(478,057	)			(15,964,525	)
Gain on disposal of discontinued operations			145
Less: Net loss attributable to non-controlling interests							(1,681,739	)
LOSS FROM DISCONTINUED OPERATION		$	(477,912	)		$	(14,282,786	)

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

		December 31, 2020				December 31, 2019
Cash		$	2,985			$	471,536
Accounts receivable			-				11,720
Other receivables			-				1,861
Inventory			-				454,269
Advances to suppliers and other current assets			-				167,831
Property and equipment, net			-				1,176,163
Right of use assets			-				57,571,254
Intangible assets, net			-				20,619,588
Amount due from related parties			32,097				18,054,736
Total assets related to discontinued operations		$	35,082				98,528,958

Accounts payable		$	-			$	2,156,219
Accrued expenses			431,011				84,567,693
Advances from customers			-				983,472
Short-term bank loans			-				37,245,139
Lease liabilities			-				60,613,970
Amount due from related parties			434,557				14,768,360
Total liabilities related to discontinued operations		$	865,568			$	200,334,853