Note 4 - Notes Receivable

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE

4

- NOTES RECEIVABLE

On

September 30, 2018,

the Company entered into a line of credit promissory note agreement with Feilong Trading, Inc, which is a supplier to the Company. Pursuant to the promissory note agreement, Feilong Trading, Inc. was permitted to borrow up to

$4,000,000

from time to time. The note bore interest at the rate of

5%

per annum on the unpaid balance, compounded monthly. On

September 30, 2019,

the entire outstanding balance of

$3,622,505

was sold to Mr. Zhou Min Ni in exchange for

272,369

shares of common stock of the Company, which shares were received and recorded as treasury stock by the Company as of

September 30, 2019. 

In connection with the sale of this note receivable, the Company also required

89,882

additional shares of common stock of the Company owned by Mr. Ni to be placed in an escrow account for a period of

one

year (the “Escrow Period”), which will be delivered to the Company in part or in full, if the weighted average closing price of the Company’s common stock for the

250

-trading-day period immediately preceding the expiration of the Escrow Period is less than

$13.30.