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Loans Payable

6 Months Ended

Jun. 30, 2022

(8) Loans Payable

Short-term bank loans

On November 25, 2021, the Company entered into a working capital loan agreement with the ICBC, with a balance of $5,660,518 and $5,958,561 as of June 30, 2022 and December 31, 2021, respectively. The working capital loan was secured by the land use right of Dongfang Paper as collateral for the benefit of the bank and guaranteed by Mr. Liu. The loan bears a fixed interest rate of 4.785% per annum. The loan will be due and repaid at various installments by November 17, 2022.

As of June 30, 2022, there were guaranteed short-term borrowings of $5,660,518 and unsecured bank loans of $nil. As of December 31, 2021, there were guaranteed short-term borrowings of $5,958,561 and unsecured bank loans of $nil.

The average short-term borrowing rates for the three months ended June 30, 2022 and 2021 were approximately 4.79%. The average short-term borrowing rates for the six months ended June 30, 2022 and 2021 were approximately 4.79%.

Long-term loans from credit union

As of June 30, 2022 and December 31, 2021, loans payable to Rural Credit Union of Xushui District, amounted to $9,327,413 and $9,818,530, respectively.

	June 30,			December 31,
	2022			2021
Rural Credit Union of Xushui District Loan 1	$	1,281,402		$	1,348,871
Rural Credit Union of Xushui District Loan 2		3,725,005			3,921,139
Rural Credit Union of Xushui District Loan 3		2,384,003			2,509,528
Rural Credit Union of Xushui District Loan 4		1,937,003			2,038,992
Total		9,327,413			9,818,530
Less: Current portion of long-term loans from credit union		(4,410,406	)		(6,838,465	)
Long-term loans from credit union	$	4,917,007		$	2,980,065

As of Jun 30, 2022, the Company’s long-term debt repayments for the next coming years were as follows:

	Amount
Fiscal year
Remainder of 2022	$	4,410,406
2023		4,917,007
Total		9,327,413

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, 2022 and December 31, 2021, total outstanding loan balance was $1,281,402 and$1,348,871, respectively, Out of the total outstanding loan balance, current portion amounted were $685,401 and $329,376 as of June 30, 2022 and December 31, 2021, respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $596,001 and $1,019,495 are presented as non-current liabilities in the consolidated balance sheet as of June 30, 2022 and December 31, 2021, 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 $682,421 and $1,130,333 as of June 30, 2022 and December 31, 2021, respectively. Interest payment is due quarterly and bears a fixed rate of 0.64% per month. As of June 30, 2022 and December 31, 2021, the total outstanding loan balance was $3,725,005 and $3,921,139, respectively. Out of the total outstanding loan balance, current portion amounted were $3,725,005 and $1,960,569 as of June 30, 2022 and December 31, 2021 respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $nil and $1,960,570 are presented as non-current liabilities in the consolidated balance sheet as of June 30, 2022 and December 31, 2021, 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 was renewed on March 22, 2021 and December 24, 2021 and extended for additional 3 years in total, which will be due on April 16, 2024 according to the new schedule. The loan is secured by Hebei Tengsheng with its land use right as collateral for the benefit of the credit union. Interest payment is due quarterly and bears a fixed rate of 0.6% per month. As of June 30, 2022 and December 31, 2021, the total outstanding loan balance was $2,384,003 and $2,509,528, respectively. Out of the total outstanding loan balance, current portion amounted were $nil and $2,509,528 as of June 30, 2022 and December 31, 2021 respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $2,384,003 and $nil are presented as non-current liabilities in the consolidated balance sheet as of June 30, 2022 and December 31, 2021, 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 was renewed on March 22, 2021 and December 24, 2021 and extended for additional 3 years in total, which will be due on December 11, 2024 according to the new schedule. The loan is secured by Hebei Tengsheng with its land use right as collateral for the benefit of the credit union. Interest payment is due monthly and bears a fixed rate of 7.56% per annum. As of June 30, 2022 and December 31, 2021, the total outstanding loan balance was $1,937,003 and $2,038,992, respectively. Out of the total outstanding loan balance, current portion amounted were $nil and $2,038,992 as of June 30, 2022 and December 31, 2021 respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $1,937,003 and $nil are presented as non-current liabilities in the consolidated balance sheet as of June 30, 2022 and December 31, 2021, respectively.

Total interest expenses for the short-term bank loans and long-term loans for the three months ended June 30, 2022 and 2021 were $248,244 and $264,967, respectively. Total interest expenses for the short-term bank loans and long-term loans for the six months ended June 30, 2022 and 2021 were $505,550 and $523,450, respectively.