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Commitments and Contingencies
 3 Months Ended
Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

(17) Commitments and Contingencies

 

Operating Lease

 

The Company leases 32.95 acres of land from a local government in Xushui District, Baoding City, Hebei, China through a real estate lease with a 30-year term, which expires on December 31, 2031. The lease requires an annual rental payment of approximately $18,903 (RMB120,000). This operating lease is renewable at the end of the 30-year term.

 

As mentioned in Note (8) Related Party Transactions, in connection with the sale of Industrial Buildings to Hebei Fangsheng, Hebei Fangsheng agrees to lease the Industrial Buildings back to the Company at an annual rental of $157,522 (RMB1,000,000), for a total term of up to five years.

 

Future minimum lease payments of all operating leases are as follows:

 

March 31,  Amount 
2023   71,411 
2024   18,903 
2025   18,903 
2026   18,903 
2027   18,903 
Thereafter   89,789 
Total operating lease payments  $236,813 

 

Capital commitment

 

As of March 31, 2022, the Company has entered into several contracts for the purchase of paper machine of a new tissue paper production line PM10 and the improvement of Industrial Buildings. Total outstanding commitments under these contracts were $4,749,646 and $4,700,927 as of March 31, 2022 and December 31, 2021, respectively. The Company expected to pay off all the balances within 1-3 years.

 

Guarantees and Indemnities

 

The Company agreed with Baoding Huanrun Trading Co., a major supplier of raw materials, to guarantee certain obligations of this third party, and as of March 31, 2022 and December 31, 2021, the Company guaranteed its long-term loan from financial institutions amounting to $4,883,274 (RMB31,000,000) and $4,862,211 (RMB31,000,000), respectively, that matured at various times in 2018-2023. If Huanrun Trading Co., were to become insolvent, the Company could be materially adversely affected.