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Loans Payable

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

(7) Loans Payable

Short-term bank loans

		June 30,				December 31,
		2020				2019
Industrial and Commercial Bank of China (“ICBC”) Loan 1		$	6,073,875			$	6,163,814

Total short-term bank loans		$	6,073,875			$	6,163,814

On December 20, 2019, the Company entered into a working capital loan agreement with the ICBC, with a balance of $6,073,875 and $6,163,814 as of June 30, 2020 and December 31, 2019, respectively. The working capital loan was secured by land use right of Hebei Tengsheng 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 December 23, 2020.

As of June 30, 2020, there were guaranteed short-term borrowings of $6,073,875 and unsecured bank loans of $nil. As of December 31, 2019, there were guaranteed short-term borrowings of $6,163,814 and unsecured bank loans of $nil.

The average short-term borrowing rates for the three months ended June 30, 2020 and 2019 were approximately 4.79% and 4.77%, respectively. The average short-term borrowing rates for the six months ended June 30, 2020 and 2019 were approximately 4.79% and 4.76%, respectively.

Long-term loans from credit union

As of June 30, 2020 and December 31, 2019, loans payable to Rural Credit Union of Xushui District, amounted to $8,835,443 and $8,973,367, respectively.

		June 30,				December 31,
		2020				2019
Rural Credit Union of Xushui District Loan 1		$	1,214,775			$	1,232,763
Rural Credit Union of Xushui District Loan 2			3,531,322				3,583,613
Rural Credit Union of Xushui District Loan 3			2,260,047				2,293,512
Rural Credit Union of Xushui District Loan 4			1,836,288				1,863,479
Total			8,842,432				8,973,367
Less: Current portion of long-term loans from credit union			(3,658,450	)			(1,605,459	)
Long-term loans from credit union		$	5,183,982			$	7,367,908

As of June 30, 2020, the Company’s long-term debt repayments for the next five years were as follows:

		Amount
Fiscal year
Remainder of 2020		$	1,582,033
2021			3,022,812
2022			1,553,782
2023			2,683,805
Total			8,842,432

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 June 30, 2020 and December 31, 2019, total outstanding loan balance was $1,214,775 and $1,232,763, respectively. Out of the total outstanding loan balance, current portion amounted were $169,503 and $143,345 as of June 30, 2020 and December 31, 2019, respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $1,045,272 and $1,089,418 are presented as non-current liabilities in the consolidated balance sheet as of June 30, 2020 and December 31, 2019, 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 $3,013,792 and $3,935,270 as of June 30, 2020 and December 31, 2019, respectively. Interest payment is due quarterly and bears a fixed rate of 0.64% per month. As of June 30, 2020 and December 31, 2019, the total outstanding loan balance was $3,531,322 and $3,583,613, respectively. Out of the total outstanding loan balance, current portion amounted were $240,130 and $172,013 as of June 30, 2020 and December 31, 2019, respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $3,291,192 and $3,411,600 are presented as non-current liabilities in the consolidated balance sheet as of June 30, 2020 and December 31, 2019, 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 June 30, 2020 and December 31, 2019, the total outstanding loan balance was $2,260,047 and $2,293,512, respectively. Out of the total outstanding loan balance, current portion amounted were $2,260,047 and $1,146,756 as of June 30, 2020 and December 31, 2019, respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $nil and $1,146,756 are presented as non-current liabilities in the consolidated balance sheet as of June 30, 2020 and December 31, 2019, respectively.

On December 12, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which is due and payable in various installments from June 21, 2020 to December 11, 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 monthly and bears a fixed rate of 7.56% per annum. As of June 30, 2020 and December 31, 2019, the total outstanding loan balance was $1,836,288 and $1,863,479, respectively. Out of the total outstanding loan balance, current portion amounted were $988,770 and $143,345 as of June 30, 2020 and December 31, 2019, respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $847,518 and $1,720,134 are presented as non-current liabilities in the consolidated balance sheet as of June 30, 2020 and December 31, 2019, respectively.

Total interest expenses for the short-term bank loans and long-term loans for the three months ended June 30, 2020 and 2019 were $241,436 and $214,907, respectively. Total interest expenses for the short-term bank loans and long-term loans for the six months ended June 30, 2020 and 2019 were $486,154 and $445,860, respectively.