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Loans Payable

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

(7) Loans Payable

Short-term bank loans

				September 30,				December 31,
				2019				2018
Industrial and Commercial Bank of China ("ICBC") Loan 1		(a)		$	-			$	4,079,730
Bank of Cangzhou		(b)			-				5,099,662
ICBC Loan 2		(c)			2,544,925				2,622,683
ICBC Loan 3		(d)			3,817,387				-
Total short-term bank loans				$	6,362,312			$	11,802,075

(a)	On February 6, 2018, the Company entered into a working capital loan agreement with the ICBC, with a balance of $4,079,730 as of December 31, 2018. The working capital loan was guaranteed by Hebei Tengsheng with its land use right pledged as collateral for the benefit of the bank. The loan bears a fixed interest rate of 5.4% per annum. The loan was due and repaid on January 28, 2019.
(b)	On January 2, 2018, the Company entered into a working capital loan agreement with the Bank of Cangzhou, with a balance of $5,099,662 as of December 31, 2018. The loan bore a fixed interest rate of 6.09% per annum. The working capital loan was secured by the Company's land use right and guaranteed by the Company's CEO and Baoding Shengde with its production equipment as collateral for the benefit of the bank. The loan was due and repaid on January 3, 2019.
(c)	On November 22, 2018, the Company entered into a working capital loan agreement with the ICBC, with a balance of $2,544,925 and $2,622,683 as of September 30, 2019 and December 31, 2018, respectively. The working capital loan is secured by the Company's land use right as collateral for the benefit of the bank. The loan bears a fixed interest rate of 4.741% per annum. The loan will be due by November 26, 2019.

(d)	On January 28, 2019, the Company entered into a working capital loan agreement with the ICBC, with a balance of $3,817,387 as of September 30, 2019. The working capital loan was guaranteed by Hebei Tengsheng with its land use right pledged as collateral for the benefit of the bank. The loan bears a fixed interest rate of 4.785% per annum. The loan will be due and repaid by January 30, 2020.

As of September 30, 2019, there were guaranteed short-term borrowings of $6,362,312 and unsecured bank loans of $nil. As of December 31, 2018, there were guaranteed short-term borrowings of $11,802,075 and unsecured bank loans of $nil.

The average short-term borrowing rates for the three months ended September 30, 2019 and 2018 were approximately 4.77% and 5.59%, respectively. The average short-term borrowing rates for the nine months ended September 30, 2019 and 2018 were approximately 4.76% and 5.58%, respectively.

Long-term loans from credit union

As of September 30, 2019 and December 31, 2018, loans payable to Rural Credit Union of Xushui District, amounted to $7,012,682 and $7,197,808, respectively.

		September 30,				December 31,
		2019				2018
Rural Credit Union of Xushui District Loan 1		$	1,215,909			$	1,253,060
Rural Credit Union of Xushui District Loan 2			3,534,617				3,642,615
Rural Credit Union of Xushui District Loan 3			-				2,302,133
Rural Credit Union of Xushui District Loan 4			2,262,156				-
Total			7,012,682				7,197,808
Less: Current portion of long-term loans from credit union			(311,046	)			(2,491,549	)
Long-term loans from credit union		$	6,701,636			$	4,706,259

As of September 30, 2019, the Company's long-term debt repayments for the next five years were as follows:

		Amount
Fiscal year
Remainder of 2019		$	226,216
2020			1,215,909
2021			1,329,016
2022			1,555,232
2023			2,686,309
Total			7,012,682

On April 16, 2014, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 5 years, which was originally due in various installments from June 21, 2014 to November 18, 2018. The loan is guaranteed by an independent third party. Interest payment is due quarterly and bears the rate of 0.64% per month. On November 6, 2018, the loan was renewed for additional 5 years and will be due and payable in various installments from December 21, 2018 to November 5, 2023. As of September 30, 2019 and December 31, 2018, total outstanding loan balance was $1,215,909 and $1,253,060, respectively. Out of the total outstanding loan balance, current portion amounted were $113,108 and $87,423 as of September 30, 2019 and December 31, 2018, respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $1,102,801 and $1,165,637 are presented as non-current liabilities in the consolidated balance sheet as of September 30, 2019 and December 31, 2018, respectively.

On July 15, 2013, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 5 years, which was originally due and payable in various installments from December 21, 2013 to July 26, 2018. On June 21, 2018, the loan was extended for additional 5 years and will be due and payable in various installments from December 21, 2018 to June 20, 2023. The loan is secured by certain of the Company's manufacturing equipment with net book value of $4,313,899 and $5,782,640 as of September 30, 2019 and December 31, 2018, respectively. Interest payment is due quarterly and bears a fixed rate of 0.64% per month. As of September 30, 2019 and December 31, 2018, the total outstanding loan balance was $3,534,617 and $3,642,615, respectively. Out of the total outstanding loan balance, current portion amounted were $127,246 and $101,993 as of September 30, 2019 and December 31, 2018, respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $3,407,371 and $3,540,622 are presented as non-current liabilities in the consolidated balance sheet as of September 30, 2019 and December 31, 2018, respectively.

On April 20, 2017, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which was due and payable in various installments from August 26, 2017 to April 19, 2019. The loan was guaranteed by Hebei Tengsheng with its land use right pledged as collateral for the benefit of the bank. Interest payment was due quarterly and bore a fixed rate of 0.6% per month. As of September 30, 2019 and December 31, 2018, the total outstanding loan balance was $nil and $2,302,133, respectively, which are presented as non-current liabilities in the consolidated balance sheet as of September 30, 2019 and December 31, 2018, respectively.

On April 17, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which was due and payable in various installments from August 21, 2019 to April 16, 2021. The loan is secured by Hebei Tengsheng with its land use right as collateral for the benefit of the bank. Interest payment is due quarterly and bears a fixed rate of 0.6% per month. As of September 30, 2019 and December 31, 2018, the total outstanding loan balance was $2,262,156 and $nil, respectively. Out of the total outstanding loan balance, current portion amounted were $70,692 and $nil as of September 30, 2019 and December 31, 2018, respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $2,191,464 and $nil are presented as non-current liabilities in the consolidated balance sheet as of September 30, 2019 and December 31, 2018, respectively.

Total interest expenses for the short-term bank loans and long-term loans for the three months ended September 30, 2019 and 2018 were $214,907 and $328,955, respectively. Total interest expenses for the short-term bank loans and long-term loans for the nine months ended September 30, 2019 and 2018 were $445,860 and $620,294, respectively.