Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2016

Discontinued Operations [Abstract]

Schedule of discontinued operations consolidated financial statements

	December 31, 2016		December 31, 2015
Assets:
Current assets:
Accounts receivable, net	$	78,407	$	4,151,958
Inventories, net of reserve for obsolete inventories		31,019		160,036
Advances to suppliers		200,275		604,474
Equipment held for sale (1)		1,147,035		-
Prepaid expenses and other		302,250		981,770
Total current assets		1,758,986		5,898,238
Equipment held for sale (1)		-		3,338,002
Property and equipment, net		-		13,781,006
Total assets	$	1,758,986	$	23,017,246
Liabilities:
Current liabilities:
Short-term bank loans	$	-	$	693,300
Accounts payable		458,433		1,599,340
Accrued expenses and other liabilities		45,280		270,471
Accrued liability for claimed sale contract dispute (2)		-		5,562,365
Advances from customers		54,948		29,273
Total current liabilities		558,661		8,154,749
Total liabilities	$	558,661	$	8,154,749

(1) The Company committed to a plan to sell the manufacturing equipment that was previously used in petroleum and chemical equipment segment and reflected this equipment in discontinued operations as equipment held for sale. In connection with the Company’s analysis of the equipment held for sale, for the year ended December 31, 2016, the Company recorded an impairment charge of $1,660,305 which is included on the consolidated statements of operations in loss from discontinued operations. The Company subsequently sold the equipment in March 2017 to a third party (See Note 19).

(2) In December 2015, the Company received a notice of contract termination in writing from its largest customer, which was a customer in the petroleum and chemical equipment segment, alleging breach of contract for late delivery of product and for delivery of product with quality defects. As a result of the claimed breach of contract, the customer demanded payment of a penalty of 20% of the contract price plus penalties for late delivery and damages in the amounts of RMB 36,103,640 ($5,562,365 at December 31, 2015). In the third quarter of 2016, the claimed sale contract dispute was resolved, and the Company made the payment of RMB 36,103,640 RMB to this customer in full satisfaction of the customer’s claims against the Company.

Schedule of discontinued operations consolidated statements of operations

	Years Ended December 31,
	2016			2015
Revenues	$	595,855		$	20,554,626
Cost of revenues		1,562,774			19,701,621
Gross (loss) profit		(966,919	)		853,005
Operating expenses:
Impairment losses		1,660,305			7,016,658
Loss from sales contract dispute		-			5,806,778
Other operating expenses		1,124,304			3,592,743
Total operating expenses		2,784,609			16,416,179
Loss from operations		(3,751,528	)		(15,563,174	)
Other expense, net		(74,997	)		(77,857	)
Loss from discontinued operations before income taxes		(3,826,525	)		(15,641,031	)
Income taxes		-			127,345
Loss from discontinued operations, net of income taxes		(3,826,525	)		(15,768,376	)
Loss on sale / disposal of discontinued operations, net of income taxes		(6,459,407	)		-
Loss from discontinued operations, net of income taxes	$	(10,285,932	)	$	(15,768,376	)