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Loans Payable

9 Months Ended

Sep. 30, 2022

(8) Loans Payable

Short-term bank loans

	September 30,		December 31,
	2022		2021
Industrial and Commercial Bank of China (“ICBC”) Loan 1	$	5,069,157	$	5,958,561
ICBC Loan 2		422,547		-
China Construction Bank Loan		140,849		-

Total short-term bank loans	$	5,632,553	$	5,958,561

On November 25, 2021, the Company entered into a working capital loan agreement with the ICBC, with a balance of $5,069,157 and $5,958,561 as of September 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.

On June 28, 2022, the Company entered into a working capital loan agreement with the ICBC, with a balance of $422,547 as of September 30, 2022. The loan bears a fixed interest rate of 4.3% per annum. The loan will be due by December 25, 2022.

On July 29, 2022, the Company entered into a working capital loan agreement with the China Construction Bank, with a balance of $140,849 as of September 30, 2022. The loan bears a fixed interest rate of 3.95% per annum. The loan will be due by July 29, 2023.

As of September 30, 2022, there were guaranteed short-term borrowings of $5,069,157 and unsecured bank loans of $563,396. 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 September 30, 2022 and 2021 were approximately 4.28% and 4.79%. The average short-term borrowing rates for the nine months endedSeptember 30, 2022 and 2021 were approximately 4.6% and 4.79%.

Long-term loans from credit union

As of September 30, 2022 and December 31, 2021, loans payable to Rural Credit Union of Xushui District, amounted to $8,867,855 and $9,818,530, respectively.

	September 30,			December 31,
	2022			2021
Rural Credit Union of Xushui District Loan 1	$	1,211,302		$	1,348,871
Rural Credit Union of Xushui District Loan 2		3,521,225			3,921,139
Rural Credit Union of Xushui District Loan 3		2,253,585			2,509,528
Rural Credit Union of Xushui District Loan 4		1,831,037			2,038,992
Jiangna Yu		50,706			-
Total		8,867,855			9,818,530
Less: Current portion of long-term loans from credit union		(4,175,620	)		(6,838,465	)
Long-term loans from credit union	$	4,692,235		$	2,980,065

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

	Amount
Fiscal year
Remainder of 2022	$	4,175,620
2023		4,656,256
2024 & after		35,979
Total		8,867,855

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, 2022 and December 31, 2021, total outstanding loan balance was $1,211,302 and$1,348,871, respectively, Out of the total outstanding loan balance, current portion amounted were $647,906 and $329,376 as of September 30, 2022 and December 31, 2021, respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $563,396 and $1,019,495 are presented as non-current liabilities in the consolidated balance sheet as of September 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 $460,107 and $1,130,333 as of September 30, 2022 and December 31, 2021, respectively. Interest payment is due quarterly and bears a fixed rate of 0.64% per month. As of September 30, 2022 and December 31, 2021, the total outstanding loan balance was $3,521,225 and $3,921,139, respectively. Out of the total outstanding loan balance, current portion amounted were $3,521,225 and $1,960,569 as of September 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 September 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 September 30, 2022 and December 31, 2021, the total outstanding loan balance was $2,253,585 and $2,509,528, respectively. Out of the total outstanding loan balance, current portion amounted were $nil and $2,509,528 as of September 30, 2022 and December 31, 2021 respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $2,253,585 and $nil are presented as non-current liabilities in the consolidated balance sheet as of September 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 September 30, 2022 and December 31, 2021, the total outstanding loan balance was $1,831,037 and $2,038,992, respectively. Out of the total outstanding loan balance, current portion amounted were $nil and $2,038,992 as of September 30, 2022 and December 31, 2021 respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $1,831,037 and $nil are presented as non-current liabilities in the consolidated balance sheet as of September 30, 2022 and December 31, 2021, respectively.

On July 1, 2022, the Company entered into a loan agreement with Jiangna Yu, a customer of the Company, pursuant to which the Company borrowed RMB 400,000 from Jiangna Yu for a term of five years. The loan is payable in monthly installment of RMB10,667 from July 2022 to July 2027. As of September 30, 2022, the total outstanding loan balance was $50,706. Out of the total outstanding loan balance, the current portion amounted $6,489, which is presented as current liabilities and the remaining balance of $44,217 is presented as non-current liabilities in the consolidated balance sheet as of September 30, 2022.

Total interest expenses for the short-term bank loans and long-term loans for the three months ended September 30, 2022 and 2021 were $248,239 and $264,644, respectively. Total interest expenses for the short-term bank loans and long-term loans for the nine months ended September 30, 2022 and 2021 were $753,789 and $788,094, respectively.