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Property and Equipment and Construction in Progress
 12 Months Ended
Dec. 31, 2019
Receivables, Long-term Contracts or Programs [Abstract]  
PROPERTY AND EQUIPMENT AND CONSTRUCTION IN PROGRESS

6. PROPERTY AND EQUIPMENT AND CONSTRUCTION IN PROGRESS

 

Property and Equipment

 

As of December 31, 2019 and 2018, the Company had net property and equipment (after impairment loss of $8.12 million recorded in 2018) of approximately $27.04 million and $27.50 million, respectively, which was for the Chengli project.

 

The Chengli project finished construction, and was transferred to the Company's fixed assets at a cost of $35.24 million (without impairment loss) and ready to be put into operation as of December 31, 2018. On January 22, 2019, Xi'an Zhonghong completed the transfer of Chengli CDQ WHPG project as the partial repayment for the loan of RMB 188,639,400 ($27.54 million) to HYREF (see Note 10). However, because the loan was not deemed repaid due to the buyback right (See Note 10 for detail), the Company kept the Chengli project in its books as fixed assets for accounting purposes as of December 31, 2019.

 

Construction in Progress

 

Construction in progress was for constructing power generation systems. The Xuzhou Huayu project was sold in February 2019 for RMB 120,000,000 ($17.52 million). The Company recorded impairment allowance of RMB 43,199,340 ($6.29 million) for 2018 and as of December 31, 2018 on Xuzhou Huayu. In 2018, the progress of the Xuzhou Tian'an project was slow due to strict environmental protection policies. The Company estimated the FV of the Xuzhou Tian'an project to be RMB 172,250,000.00 ($25.58 million) at December 31, 2018. The Company compared the carrying value and FV of the Tian'an Project, and recorded asset impairment of $13,512,592 for the project for the year ended December 31, 2018. The Company recorded additional RMB 6,047,602 ($876,660) asset impairment for Tian'an Project in 2019, which is the difference between the sale price and the carrying value as of December 31, 2019. As of December 31, 2019 and 2018, the Company's construction in progress included:

 

   2019   2018 
Xuzhou Huayu  $-   $23,778,899 
Xuzhou Tian'an   37,759,277    38,380,969 
Less: assets impairment allowance   (13,935,075)   (19,577,691)
Total  $23,824,202   $42,582,177 

 

As of December 31, 2019, the Company was committed to pay an additional $3.98 million for the Xuzhou Tian'an project. The construction of the Xuzhou Tian'an Project is anticipated to be completed by the second quarter of 2020.

 

On January 10, 2020, Zhonghong, Tianyu and Huaxin signed a transfer agreement to transfer all assets under construction and related rights and interests of Xuzhou Tian'an Project to Tianyu for RMB 170 million including VAT ($24.37 million) three installment payments. The 1st installment payment of RMB 50 million ($7.17 million) to be paid within 20 working days after the contract is signed. The 2nd installment payment of RMB 50 million ($7.17 million) is to be paid within 20 working days after completion of the project construction but no later than July 31, 2020. The final installment payment of RMB 70 million ($10.03 million) is to be paid before December 31, 2020. On March 11, 2020, the Company received the 1st installment payment.