LINE OF CREDIT, SHORT TERM DEBT AND BANK ACCEPTANCE NOTES (Tables)

12 Months Ended

Dec. 31, 2016

Short term loans as of December 31, 2016 and 2015 are presented below:

		December 31, 2016		December 31, 2015
Loan from CITIC bank	(a)	$	5,328	$	3,081
Loan from ICBC	(b)		4,320		4,621
Loan from Hangzhou Hengzhong Machinery Ltd.	(c)		794		-
		$	10,442	$	7,702

(a)

From March 25, 2016 to April 26, 2016, the Company entered multiple loan agreements through Jonway Auto with CITIC Bank Sanmen Brank for a total amount of approximately $5.3 million. The loans have annual interest of 5.96% and are due in various dates from March 25, 2017 to April 26, 2017. The loans are also secured by a land use right and a building with a total carrying amount of $4.4 million. One shareholder and CEO Alex Wang personally guaranteed these loans as well.

In October 2015, Jonway Auto borrowed a half year short-term loan of $3.1 million at annual interest rate of 5.9%. The loan was repaid upon maturity in April 2016.

(b)

On June 8, 2016, the Company entered into a one year short-term loan of $0.3 million at an annual interest rate of 5%. On July 22, 2016, the Company entered into a one year short-term loan of $1.0 million at an annual interest rate of 5%. On October 12, 2016, the Company entered into a one year short-term loan of $1.3 million at an annual interest rate of 5%. On October 13, 2016, the Company entered into a one year short-term loan of $1.0 million at an annual interest rate of 5%. These loans with aggregated amount of $4.3 million are secured by a land use right and a building with a total carrying amount of $2.9 million. One shareholder, Wang Huaiyi, and CEO Alex Wang also personally guaranteed these loans.

On June 22, 2016, the Company entered into a one year short-term loan of $0.7 million at an annual interest rate of 4.4%. The loan is secured by a restricted cash deposit of $0.7 million.

The Company fully repaid five loans totaling $4.6 million during 2016.

(c)

On July 28, 2016, the Company entered into an agreement with Hangzhou Zhongheng Machinery Ltd. (“Zhongheng”). Pursuant to the agreement, Zhongheng paid off one loan on behalf of the Company, and the Company would repay the outstanding payable due to Zhongheng within two months after Zhongheng made the payment on behalf of the Company. In exchange for the service, the Company agreed to pay a monthly interest of 1.5% on the payment made by Zhongheng. The 1.5% monthly interest is equivalent to a compound annual interest rate of about 9.34%.

Schedule of Bank Acceptance Notes

Bank acceptance notes are presented below:

	(In thousands)
	December 31, 2016		December 31, 2015
a) Bank acceptance notes payable to China Everbright bank	$	5,760	$	7,086
b) Bank acceptance notes payable to CITIC bank		4,967		6,428
c) Bank acceptance notes payable to Shanghai Pudong Development bank		-		852
	$	10,727	$	14,366

Notes payable to China Everbright bank have various maturity dates in June 2017. The notes payable are guaranteed by a land use right and a building with a total carrying value of $2.0 million. The Company is also required to maintain cash deposits at 50% of the notes payable with the bank, in order to ensure future credit availability.

Notes payable to CITIC bank have various maturity dates in March and April 2017, and subsequently renewed. The Company is required to maintain cash deposits at 100% of the notes payable with the bank, in order to ensure future credit availability.

Notes payable to Shanghai Pudong Development Bank was due and repaid in January and May 2016. The Company was required to maintain cash deposits at 100% of the notes payable with the bank.