Discontinued Operations

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

NOTE 3 – DISCONTINUED OPERATIONS

On December 30, 2019, the Company's Board of Directors approved to enter into a VIE Termination Agreement relating to the termination of the Consulting Services Agreement, Operating Agreement, Equity Pledge Agreement, Option Agreement, Voting Rights Proxy Agreement dated October 12, 2007 with Huayang Companies. The operations in China was closed down and fully written-off at December 31, 2019. The assets and liabilities of Huayang Companies have been accounted for as discontinued operations in the Company's combined and consolidated balance sheets for all years presented. The operating results related to these lines of business have been included in discontinued operations in the Company's combined and consolidated statements of operations for all years presented. At December 31, 2019, the Company recognized a gain of $4,731,804 from deconsolidation of VIEs.

The carrying amount of the VIE's assets and liabilities are included and presented as discontinued operations in the accompanying consolidated financial statements of the Company and are summarized as follows:

	December 31, 2019		December 31, 2018
Current assets
Cash	$	-	$	591,516
Restricted cash		-		76,512
Notes receivable		-		149,757
Accounts receivable, net		-		4,236,447
Inventory, net		-		6,414,305
Advances to suppliers		-		565,295
Receivable from sale of subsidiary		-		2,791,590
Prepaid expenses and other receivables		-		880,649
Other current assets		-		209,926
Total current assets				15,915,997
Property and equipment, net		-		21,506,658
Intangible assets, net		-		2,933,874
Total assets		-		40,356,529
Liabilities
Current liabilities
Short-term bank loans		-		2,255,658
Accounts payable and accrued liabilities		-		4,701,501
Advances from customers		-		1,073,797
Income tax payable		-		60,065
Other liabilities, current		-		268,532
Other liabilities, non-current		-		244,910
Total liabilities		-		8,604,463
Net assets	$	-	$	31,752,066

The summarized operating result of discontinued operations included in the Company's combined and consolidated statements of operations is as follows:

	Years Ended December 31,
	2019			2018
Revenues, net	$	(6,661,473	)	$	9,299,867
Cost of revenues		(11,683,813	)		(13,430,279	)
Gross loss		(5,022,340	)		(4,130,412	)
Operating expenses		(19,696,644	)		(13,171,020	)
Loss from operations		(24,718,984	)		(17,301,432	)
Other expense, net		(232,102	)		(9,068,642	)
Loss from discontinued operations, net of income taxes	$	(24,951,086	)	$	26,370,074	)