Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 06, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Orient Paper Inc. | ' |
Entity Central Index Key | '0001358190 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 20,316,400 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current Assets | ' | ' |
Cash and cash equivalents | $6,930,444 | $3,131,163 |
Restricted cash | 11,377,489 | 2,454,108 |
Accounts receivable (net of allowance for doubtful accounts of $51,304 and $67,592 as of September 30, 2014 and December 31, 2013, respectively) | 4,162,160 | 3,327,494 |
Inventories | 6,980,107 | 11,428,405 |
Prepayments and other current assets | 831,504 | 1,068,031 |
Assets held for sale | ' | 4,130,590 |
Deferred tax asset - current | ' | 413,537 |
Total current assets | 30,281,704 | 25,953,328 |
Prepayment on property, plant and equipment | 1,482,324 | 1,492,098 |
Property, plant, and equipment, net | 196,090,574 | 178,535,259 |
Recoverable VAT | 3,473,601 | 3,277,188 |
Deferred tax asset - non-current | 221,319 | 268,329 |
Total Assets | 231,549,522 | 209,526,202 |
Current Liabilities | ' | ' |
Short-term bank loans | 8,126,778 | 6,544,288 |
Current portion of long-term loans from credit union | 113,775 | 1,660,613 |
Current obligations under capital lease | 8,186,242 | 8,264,795 |
Accounts payable | 612,995 | 926,571 |
Notes payable | 21,129,622 | 4,908,216 |
Security deposit from a related party | ' | 1,636,072 |
Due to a related party | 186,025 | 64,546 |
Accrued payroll and employee benefits | 333,545 | 498,010 |
Other payables and accrued liabilities | 3,262,017 | 2,651,472 |
Income taxes payable | 730,411 | 1,218,140 |
Deferred tax liabilities | 24,808 | ' |
Total current liabilities | 42,706,218 | 28,372,723 |
Loans from credit union | 5,761,885 | 4,253,788 |
Loan from a related party | 2,373,981 | 2,389,633 |
Deferred gain on sale-leaseback | 806,870 | 1,160,271 |
Long-term obligations under capital lease | 8,135,569 | 12,296,639 |
Total liabilities | 59,784,523 | 48,473,054 |
Commitments and Contingencies | ' | ' |
Stockholders' Equity | ' | ' |
Common stock, 500,000,000 shares authorized, $0.001 par value per share, 20,316,400 and 18,753,900 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively | 20,316 | 18,754 |
Additional paid-in capital | 49,218,982 | 46,909,543 |
Statutory earnings reserve | 6,038,406 | 6,038,406 |
Accumulated other comprehensive income | 16,068,812 | 17,146,308 |
Retained earnings | 100,418,483 | 90,940,137 |
Total stockholders' equity | 171,764,999 | 161,053,148 |
Total Liabilities and Stockholders' Equity | $231,549,522 | $209,526,202 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Balance Sheets [Abstract] | ' | ' |
Accounts receivable, allowance for doubtful accounts | $51,304 | $67,592 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares issued | 20,316,400 | 18,753,900 |
Common stock, shares outstanding | 20,316,400 | 18,753,900 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Statements Of Income and Comprehensive Income [Abstract] | ' | ' | ' | ' |
Revenues | $40,754,205 | $37,686,114 | $104,344,334 | $90,471,282 |
Cost of sales | -34,343,357 | -29,250,300 | -87,141,643 | -74,306,836 |
Gross Profit | 6,410,848 | 8,435,814 | 17,202,691 | 16,164,446 |
Selling, general and administrative expenses | -995,613 | -957,029 | -2,893,828 | -2,730,751 |
Gain (Loss) from disposal of property, plant and equipment | -689,422 | 84,737 | -689,422 | 84,737 |
Gain from disposal of assets held for sale | 203,488 | ' | 203,488 | ' |
Income from Operations | 4,929,301 | 7,563,522 | 13,822,929 | 13,518,432 |
Other Income (Expense): | ' | ' | ' | ' |
Interest income | 35,090 | 24,159 | 79,938 | 78,948 |
Subsidy income | ' | 170,651 | ' | 170,651 |
Interest expense | -344,191 | -244,385 | -888,028 | -723,103 |
Income before Income Taxes | 4,620,200 | 7,513,947 | 13,014,839 | 13,044,928 |
Provision for Income Taxes | -1,247,256 | -1,979,103 | -3,536,493 | -3,550,893 |
Net Income | 3,372,944 | 5,534,844 | 9,478,346 | 9,494,035 |
Other Comprehensive Income: | ' | ' | ' | ' |
Foreign currency translation adjustment | 13,170 | 882,139 | -1,077,496 | 4,082,200 |
Total Comprehensive Income | $3,386,114 | $6,416,983 | $8,400,850 | $13,576,235 |
Earnings Per Share: | ' | ' | ' | ' |
Basic and Fully Diluted Earnings per Share | $0.18 | $0.30 | $0.50 | $0.51 |
Weighted Average Number of Shares | ' | ' | ' | ' |
Outstanding - Basic and Fully Diluted | 18,923,374 | 18,456,900 | 18,909,001 | 18,457,879 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash Flows from Operating Activities: | ' | ' |
Net income | $9,478,346 | $9,494,035 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 5,877,824 | 5,980,720 |
Gain from disposal of property, plant and equipment | 689,422 | -84,737 |
Gain from disposal of assets held for sale | -203,488 | ' |
Recovery from bad debts | -15,855 | -8,592 |
Reversal of stock-based expense for service received | ' | -16,158 |
Deferred tax | 481,138 | 274,427 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -841,053 | 441,591 |
Prepayments and other current assets | 12,139 | 1,449,388 |
Inventories | 4,375,716 | 2,912,685 |
Accounts payable | -307,667 | 54,408 |
Notes payable | 16,262,014 | -3,219,834 |
Accrued payroll and employee benefits | -161,625 | -18,336 |
Other payables and accrued liabilities | 618,254 | 764,331 |
Income taxes payable | -480,000 | 154,977 |
Net Cash Provided by Operating Activities | 35,785,165 | 18,178,905 |
Cash Flows from Investing Activities: | ' | ' |
Proceeds from sale of property, plant and equipment | 239,194 | 2,582,747 |
Proceeds from sale of assets held for sale | 2,682,957 | ' |
Purchases of property, plant and equipment | -25,767,813 | -47,078,178 |
Net Cash Used in Investing Activities | -22,845,662 | -44,495,431 |
Cash Flows from Financing Activities: | ' | ' |
Proceeds from issuance of shares and warrants, net | 2,311,002 | ' |
Proceeds from related party loans | 643,500 | 953,507 |
Repayment of related party loans | -643,500 | -953,507 |
Proceeds from bank loans | 6,504,805 | 9,063,833 |
Repayment of bank loans | -4,878,604 | -6,648,958 |
Proceeds from sale-leaseback financing | ' | 24,148,756 |
Payment of capital lease obligation | -4,095,015 | -1,355,435 |
(Increase in) Release of restricted cash | -8,944,108 | 1,609,917 |
Dividends paid | ' | -230,747 |
Net Cash (Used in) Provided by Financing Activities | -9,101,920 | 26,587,366 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | -38,302 | 400,605 |
Net Increase in Cash and Cash Equivalents | 3,799,281 | 671,445 |
Cash and Cash Equivalents - Beginning of Period | 3,131,163 | 13,140,288 |
Cash and Cash Equivalents - End of Period | 6,930,444 | 13,811,733 |
Supplemental Disclosure of Cash Flow Information: | ' | ' |
Cash paid for interest, net of capitalized cost | 648,552 | 644,524 |
Cash paid for income taxes | $3,535,355 | $3,121,490 |
Organization_and_Business_Back
Organization and Business Background | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Organization and Business Background [Abstract] | ' | ||||||||
Organization and Business Background | ' | ||||||||
(1) Organization and Business Background | |||||||||
Orient Paper, Inc. (“Orient Paper” or “the Company”) was incorporated under the laws of the State of Nevada on December 9, 2005, under the name of Carlateral, Inc. Carlateral, Inc. started its business by providing financing services specializing in subprime title loans, secured primarily using automobiles (and also boats, recreational vehicles, machinery, and other equipment) as collateral. | |||||||||
Hebei Baoding Orient Paper Milling Company Limited (“Orient Paper HB”) was incorporated on March 10, 1996, under the laws of the People’s Republic of China (“PRC”). Orient Paper HB is mainly engaged in the production and distribution of paper products such as corrugating medium paper and offset printing paper. Orient Paper HB also has capability to produce other paper and packaging-related products, such as plastic paper and craft paper. Orient Paper HB uses recycled paper as its primary raw material. | |||||||||
Dongfang Zhiye Holding Limited (“Dongfang Holding”) was formed on November 13, 2006, under the laws of the British Virgin Islands, and is an investment holding company. As such, Dongfang Holding does not generate any financial or operating transactions. On July 16, 2007, Dongfang Holding entered into an agreement to acquire the equity ownership of Orient Paper HB and placed all the equity interest in trust with Mr. Zhenyong Liu, Mr. Xiaodong Liu, and Mr. Shuangxi Zhao (the original equity owners of Orient Paper HB, each, an “Orient Paper HB Equity Owner” and collectively, “Orient Paper HB Equity Owners”), pursuant to a trust agreement executed on the same date. Under the terms of the trust agreement, the Orient Paper HB Equity Owners would exercise control over the disposition of Dongfang Holding’s shares in Orient Paper HB on Dongfang Holding’s behalf until Dongfang Holding successfully completed the change in registration of Orient Paper HB’s capital with the relevant PRC Administration of Industry and Commerce as the 100% owner of Orient Paper HB’s equity interest. In connection with the consummation of the restructuring transactions on June 24, 2009 as described below, Dongfang Holding directed its trustee to return its equity ownership in Orient Paper HB to the Orient Paper HB Equity Owners. | |||||||||
On October 29, 2007, Orient Paper entered into an Agreement and Plan of Merger (“Merger Agreement”) with (i) Orient Paper wholly owned subsidiary, CARZ Merger Sub, Inc., (ii) Dongfang Holding, and (iii) all shareholders of Dongfang Holding (Zhenyong Liu, Xiaodong Liu, Chen Li, Ning Liu, Jie Liu, Shenzhen Huayin Guaranty & Investment Company Limited, Top Good International Limited, Total Giant Group Limited, Total Shine Group Limited, Victory High Investment Limited, Think Big Trading Limited, Huge Step Enterprises Limited, and Sure Believe Enterprise Limited). | |||||||||
Pursuant to the Merger Agreement, Dongfang Holding merged with CARZ Merger Sub, Inc. via a share exchange, with Dongfang Holding as the surviving entity. In exchange for their shares in Dongfang Holding, the Dongfang Holding shareholders received an aggregate of 7,450,497 newly-issued shares of Orient Paper’s common stock, $0.001 par value, which were distributed pro ratably among the Dongfang Holding shareholders in accordance with their respective ownership interests in Dongfang Holding. | |||||||||
As a result of the merger transaction, Dongfang Holding became a wholly-owned subsidiary of Orient Paper, which, in turn, has the controlling right on Dongfang Holding’s operating company, Orient Paper HB, pursuant to the terms of the trust agreement. Orient Paper HB, the entity through which the Company operates its business currently has no subsidiaries, either wholly- or partially-owned. | |||||||||
Prior to the completion of the reverse merger, Orient Paper only had limited operations (since its incorporation on December 9, 2005). On December 21, 2007, the name of the Company was changed from Carlateral, Inc. to Orient Paper, Inc. in order to better reflect the current business plan subsequent to the reverse merger. Accordingly, the reverse merge has been recorded as a recapitalization of Orient Paper. | |||||||||
To ensure proper compliance of the Company’s control over the ownership and operations of Orient Paper HB with certain PRC regulations, on June 24, 2009, the Company entered into a series of contractual agreements (the “Contractual Agreements”) with Orient Paper HB and Orient Paper HB Equity Owners via the Company’s wholly owned subsidiary Shengde Holdings, Inc. (“Shengde Holdings”) a Nevada corporation and Baoding Shengde Paper Co., Ltd. (“Orient Paper Shengde”), a wholly foreign-owned enterprise in the PRC with an original registered capital of $10,000,000 (subsequently increased to $60,000,000 in June 2010). Orient Paper Shengde is mainly engaged in production and distribution of digital photo paper and is 100% owned by Shengde Holdings. Prior to February 10, 2010, the Contractual Agreements included (i) Exclusive Technical Service and Business Consulting Agreement, which generally provides that Orient Paper Shengde shall provide exclusive technical, business and management consulting services to Orient Paper HB, in exchange for service fees including a fee equivalent to 80% of Orient Paper HB’s total annual net profits; (ii) Loan Agreement, which provides that Orient Paper Shengde will make a loan in the aggregate principal amount of $10,000,000 to Orient Paper HB Equity Owners in exchange for each such shareholder agreeing to contribute all of its proceeds from the loan to the registered capital of Orient Paper HB; (iii) Call Option Agreement, which generally provides, among other things, that Orient Paper HB Equity Owners irrevocably grant to Orient Paper Shengde an option to purchase all or part of each owner’s equity interest in Orient Paper HB. The exercise price for the options shall be RMB1 which Orient Paper Shengde should pay to each of Orient Paper HB Equity Owner for all their equity interests in Orient Paper HB; (iv) Share Pledge Agreement, which provides that Orient Paper HB Equity Owners will pledge all of their equity interests in Orient Paper HB to Orient Paper Shengde as security for their obligations under the other agreements described in this section. Specifically, Orient Paper Shengde is entitled to dispose of the pledged equity interests in the event that Orient Paper HB Equity Owners breach their obligations under the Loan Agreement or Orient Paper HB fails to pay the service fees to Orient Paper Shengde pursuant to the Exclusive Technical Service and Business Consulting Agreement; and (v) Proxy Agreement, which provides that Orient Paper HB Equity Owners shall irrevocably entrust a designee of Orient Paper Shengde with such shareholder’s voting rights and the right to represent such shareholder to exercise such owner’s rights at any equity owners’ meeting of Orient Paper HB or with respect to any equity owner action to be taken in accordance with the laws and Orient Paper HB’s Articles of Association. The terms of the agreement are binding on the parties for as long as Orient Paper HB Equity Owners continue to hold any equity interest in Orient Paper HB. An Orient Paper HB Equity Owner will cease to be a party to the agreement once it transfers its equity interests with the prior approval of Orient Paper Shengde. As the Company had controlled Orient Paper HB since July 16, 2007 through Dongfang Holding and the trust until June 24, 2009, and continues to control Orient Paper HB through Orient Paper Shengde and the Contractual Agreements, the execution of the Contractual Agreements is considered as a business combination under common control. | |||||||||
On February 10, 2010, Orient Paper Shengde and the Orient Paper HB Equity Owners entered into a Termination of Loan Agreement to terminate the above $10,000,000 Loan Agreement. Because of the Company’s decision to fund future business expansions through Orient Paper Shengde instead of Orient Paper HB, the $10,000,000 loan contemplated was never made prior to the point of termination. The parties believe the termination of the Loan Agreement does not in itself compromise the effective control of the Company over Orient Paper HB and its businesses in the PRC. | |||||||||
An agreement was also entered into among Orient Paper Shengde, Orient Paper HB and the Orient Paper HB Equity Owners on December 31, 2010, reiterating that Orient Paper Shengde is entitled to 100% of the distributable profit of Orient Paper HB, pursuant to the above mentioned Contractual Agreements. In addition, Orient Paper HB and the Orient Paper HB Equity Owners shall not declare any of Orient Paper HB’s unappropriated earnings as dividend, including the unappropriated earnings of Orient Paper HB from its establishment to 2010 and thereafter. | |||||||||
Orient Paper has no direct equity interest in Orient Paper HB. However, through the Contractual Agreements described above Orient Paper is found to be the primary beneficiary of Orient Paper HB and is deemed to have the effective control over Orient Paper HB’s activities that most significantly affect its economic performance, resulting in Orient Paper HB being treated as a controlled variable interest entity of Orient Paper in accordance with Topic 810 - Consolidation of the Accounting Standards Codification (the “ASC”) issued by the Financial Accounting Standard Board (the “FASB”). The revenue of the Company generated from Orient Paper HB for the three months ended September 30, 2014 and 2013 were 98.60% and 95.78%, respectively. The revenue of the Company generated from Orient Paper HB for the nine months ended September 30, 2014 and 2013 were 97.18% and 96.14%, respectively. Orient Paper HB also accounted for 80.46% and 80.25% of the total assets of the Company as of September 30, 2014 and December 31, 2013, respectively. | |||||||||
As of September 30, 2014 and December 31, 2013, details of the Company’s subsidiaries and variable interest entities are as follows: | |||||||||
Place of | |||||||||
Date of Incorporation | Incorporation or | Percentage of | |||||||
Name | or Establishment | Establishment | Ownership | Principal Activity | |||||
Subsidiary: | |||||||||
Dongfang Holding | 13-Nov-06 | BVI | 100% | Inactive investment holding | |||||
Shengde Holdings | 25-Feb-09 | State of Nevada | 100% | Investment holding | |||||
Orient Paper Shengde | 1-Jun-09 | PRC | 100% | Paper Production and distribution | |||||
Variable interest entity: | |||||||||
Orient Paper HB | 10-Mar-96 | PRC | Control* | Paper Production and distribution | |||||
* Orient Paper HB is treated as a 100% controlled variable interest entity of the Company | |||||||||
Basis_of_Presentation_and_Sign
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | ' |
Basis of Presentation and Significant Accounting Policies | ' |
(2) Basis of Presentation and Significant Accounting Policies | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and notes required by the United States of America generally accepted accounting principles (“GAAP”) for annual financial statements are not included herein. These interim statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2013 of Orient Paper, Inc. a Nevada corporation, and its subsidiaries and variable interest entity (which we sometimes refer to collectively as “Orient Paper”, “we”, “us” or “our”). | |
Principles of Consolidation | |
Our unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of September 30, 2014 and the results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for any future period. | |
Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates. | |
Liquidity and Going Concern | |
As of September 30, 2014, the Company had current assets of $30,281,704 and current liabilities of $42,706,218 (including amounts due to related parties of $858,158), resulting in a working capital deficit of approximately $12,424,514; while as of December 31, 2013, the Company had current assets of $25,953,328 and current liabilities of $28,372,723 (including amounts due to related parties of $2,266,961), resulting in a working capital deficit of approximately $2,419,395. We are currently seeking to restructure the term of our liabilities by raising funds through long-term loans to pay off liabilities with shorter terms. Our ability to continue as a going concern is dependent upon obtaining the necessary financing or negotiating the terms of the existing short-term liabilities to meet our current and future liquidity needs. Although management believes it can secure financial resources to satisfy the Company's current liabilities and the capital expenditure needs in the next 12 months, there are no guarantees that these financial resources will be secured. Therefore, there is a substantial doubt about the ability of the Company to continue as a going concern. Our condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. | |
On March 25, 2014, our Chairman and Chief Executive Officer (“CEO”) Mr. Zhenyong Liu agrees in writing to permit the Company to continue to postpone the repayment of the accrued interest on his loan to Orient Paper HB until the Company is able to pay its other creditors in its normal course of business. The accrued interest owned to Mr. Liu was approximately $672,133, which was recorded in other payables and accrued liabilities as part of the current liabilities in the condensed financial statement as of September 30, 2014 (see Note (12) below). |
Restricted_Cash
Restricted Cash | 9 Months Ended |
Sep. 30, 2014 | |
Restricted Cash [Abstract] | ' |
Restricted Cash | ' |
(3) Restricted Cash | |
Restricted cash of $11,377,489 as of September 30, 2014 was presented for the cash deposited at the Bank of Hebei, Shanghai Pudong Development Bank (“SPD Bank”) and the Commercial Bank of the City of Zhangjiakou for purpose of securing the bank and commercial acceptance notes from these banks (see Note (11)). The restriction will be lifted upon the maturity of the notes payable from October 14, 2014 through March 28, 2015. | |
Restricted cash of $2,454,108 as of December 31, 2013 was presented for the cash deposited at the Bank of Hebei for purpose of securing the bank acceptance notes from the bank (see Note (11)). The restriction will be lifted upon the maturity of the notes payable from May 15 through June 19 during the year of 2014. | |
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventories [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
(4) Inventories | |||||||||
Raw materials inventory includes mainly recycled paper and coal. Finished goods include mainly products of corrugating medium paper and offset printing paper. Inventories consisted of the following as of September 30, 2014 and December 31, 2013: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw Materials | |||||||||
Recycled paper board | $ | 4,690,806 | $ | 8,004,988 | |||||
Pulp | 14,163 | 14,257 | |||||||
Recycled white scrap paper | 810,051 | 1,791,873 | |||||||
Coal | 207,674 | 573,799 | |||||||
Base paper and other raw materials | 110,812 | 212,984 | |||||||
5,833,506 | 10,597,901 | ||||||||
Finished Goods | 1,146,601 | 830,504 | |||||||
Totals | $ | 6,980,107 | $ | 11,428,405 |
Prepayments_and_Other_Current_
Prepayments and Other Current Assets | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Prepayments and other current assets [Abstract] | ' | ||||||||
Prepayments and other current assets | ' | ||||||||
(5) Prepayments and other current assets | |||||||||
Prepayments and other current assets consisted of the following as of September 30, 2014 and December 31, 2013: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Prepaid NYSE MKT annual fee | $ | 7,500 | $ | 7,500 | |||||
Recoverable VAT | - | 500,000 | |||||||
Prepaid insurance | 117,500 | 61,529 | |||||||
Prepayment for purchase of materials | 452,754 | 8,180 | |||||||
Prepaid land lease | 53,637 | 490,822 | |||||||
Guarantee deposit | 196,668 | - | |||||||
Others | 3,445 | - | |||||||
$ | 831,504 | $ | 1,068,031 | ||||||
Prepayment_on_Property_Plant_a
Prepayment on Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2014 | |
Prepayment on property, plant and equipment [Abstract] | ' |
Prepayment on property, plant and equipment | ' |
(6) Prepayment on property, plant and equipment | |
As of September 30, 2014 and December 31, 2013, prepayment on property, plant and equipment consisted of $1,482,324 and $1,492,098, respectively in respect of prepaid land use right prepayment made on October 26, 2012 for the entitlement of land use right for some 54,267 square meters of land located in our Xushui County, Baoding plant. The purchase is expected to be completed in year 2015. | |
Assets_Held_for_Sale
Assets Held for Sale | 9 Months Ended |
Sep. 30, 2014 | |
Assets held for sale [Abstract] | ' |
Assets held for sale | ' |
(7) Assets held for sale | |
As of December 31, 2013, assets held for sale in the amount of $4,130,590 represented the three employee dormitory buildings to be sold to a related party company controlled by our Chairman and CEO Mr. Zhenyong Liu. The sale was consummated on August 15, 2014 and a gain on disposal of approximately $203,488 was recognized during the three and nine months ended September 30, 2014. Please refer to Note (10) for the details of the related party transaction. |
Property_Plant_and_Equipment
Property, Plant and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, plant and equipment | ' | ||||||||
(8) Property, plant and equipment | |||||||||
As of September 30, 2014 and December 31, 2013, property, plant and equipment consisted of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Property, Plant, and Equipment: | |||||||||
Land use rights | $ | 7,710,672 | $ | 7,761,511 | |||||
Building and improvements | 22,260,067 | 22,406,836 | |||||||
Machinery and equipment | 120,744,142 | 121,088,942 | |||||||
Vehicles | 702,701 | 683,051 | |||||||
Construction in progress | 86,866,437 | 65,160,213 | |||||||
238,284,019 | 217,100,553 | ||||||||
Less: accumulated depreciation and amortization | (42,193,445 | ) | (38,565,294 | ) | |||||
Property, Plant and Equipment, net | $ | 196,090,574 | $ | 178,535,259 | |||||
As of September 30, 2014 and December 31, 2013, land use rights represented a parcel of state-owned land located in Xushui County of Hebei Province in China, with lease terms of 50 years expiring in 2061. | |||||||||
The Company entered into a sale-leaseback arrangement with a leasing company in China on June 16, 2013 for a total financing proceeds in the amount of RMB 150 million (approximately US$24 million). Under the sale-leaseback arrangement, Orient Paper HB sold certain of its paper manufacturing equipment to the leasing company for an amount of RMB 150 million (approximately US$24 million). Concurrent with the sale of equipment, Orient Paper HB leases back all of the equipment (“Leased Equipment”) sold to the leasing company for a lease term of three years. At the end of the lease term, Orient Paper HB may pay a nominal purchase price of RMB 15,000 (approximately $2,400) to the leasing company and buy back all of the Leased Equipment. The sale-leaseback is treated by the Company as a mere financing and capital lease transaction, rather than a sale of assets (under which gain or loss is immediately recognized) under ASC 840-40-25-4. All of the Leased Equipment are included as part of the property, plant and equipment of the Company as of September 30, 2014 and December 31, 2013. As a result of the sale, a deferred gain on sale of Leased Equipment in the amount of $1,379,282 was created at the closing of the transaction and presented as a non-current liability. The deferred gain would be amortized by the Company during the lease term and would be used to offset the depreciation of the Leased Equipment, which are recorded at the new cost of $25,823,414 and $25,993,677 as of September 30, 2014 and December 31, 2013, respectively. See “Financing with Sale-Leaseback” under Note (9), Loans Payable, for details of the transaction and asset collaterals. The depreciation of Leased Equipment has started in July 2013 and was included with the depreciation expense of the Company’s own assets in the consolidated statement of income. During the three months ended September 30, 2014 and 2013, depreciation of Leased Equipment were $825,620 and $396,736, respectively. During the nine months ended September 30, 2014 and 2013, depreciation of Leased Equipment were $1,237,181 and $396,736, respectively. The accumulated depreciation of the Leases Equipment was $2,060,896 and $829,794 as of September 30, 2014 and December 31, 2013. During the three months ended September 30, 2014 and 2013, the gain realized on sale-leaseback transaction were $115,094 and $62,798, respectively. During the nine months ended September 30, 2014 and 2013, the gain realized on sale-leaseback transaction were $345,981 and $62,798, respectively. The gain realized was recorded in cost of sales as a reduction of depreciation expenses. The unamortized deferred gains on sale-leaseback are $806,870 and $1,160,271 as of September 30, 2014 and December 31, 2013, respectively. | |||||||||
Construction in progress mainly represents payments for the new 15,000 tonnes per year tissue paper manufacturing equipment PM8, the tissue paper workshops, four warehouses, office buildings and the new staff dormitory in the Wei County industrial park. The tissue paper development project at the Wei County Industrial Park is expected to be completed in the second half of 2015. Upon completion, it will bring about an addition of $117,930,321 to the Company’s machinery and equipment. For the three months ended September 30, 2014 and 2013, the amount of interest capitalized is $207,830 and $113,941, respectively. For the nine months ended September 30, 2014 and 2013, the amount of interest capitalized is $717,058 and $152,036, respectively. | |||||||||
As of September 30, 2014 and December 31, 2013, certain property, plant and equipment of Orient Paper HB with net values of $16,956,708 and $21,901,456 have been pledged for the long-term loan from credit union of Orient Paper HB, respectively. As of September 30, 2014 and December 31, 2013, certain of the Company’s property, plant and equipment in the amount of $32,767 and $34,177 have been pledged for the facility obtained from Bank of Hebei. See “Notes Payable” under Note (11) for details. In addition, land use right with net values of $7,337,989 and $7,502,794 as of September 30, 2014 and December 31, 2013 was pledged for the sale-leaseback financing. See “Financing with Sale-Leaseback” under Note (9), Loans Payable, for details of the transaction and asset collaterals. | |||||||||
As of September 30, 2014 and December 31, 2013, essentially all production equipment of Orient Paper Shengde with net value of $33,820,493 and $36,134,038 has been pledged for the guarantee of Orient Paper HB’s performance under the capital lease. | |||||||||
Depreciation and amortization of property, plant and equipment was $2,010,130 and $2,059,270 for the three months ended September 30, 2014 and 2013, respectively. Depreciation and amortization of property, plant and equipment was $5,877,824 and $5,980,720 for the nine months ended September 30, 2014 and 2013, respectively. | |||||||||
Loans_Payable
Loans Payable | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Loans Payable [Abstract] | ' | ||||||||||||
Loans Payable | ' | ||||||||||||
(9) Loans Payable | |||||||||||||
Short-term bank loans | |||||||||||||
September 30, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Industrial & Commercial Bank of China (“ICBC”) Loan 1 | (a) | $ | - | $ | 4,090,180 | ||||||||
ICBC Loan 2 | (b) | - | 818,036 | ||||||||||
ICBC Loan 3 | (c) | 1,625,356 | 1,636,072 | ||||||||||
ICBC Loan 4 | (d) | 2,438,033 | - | ||||||||||
The Commercial Bank of the City of Zhangjiakou | (e) | 3,250,711 | - | ||||||||||
ICBC Loan 5 | (f) | 812,678 | - | ||||||||||
Total short-term bank loans | $ | 8,126,778 | $ | 6,544,288 | |||||||||
(a) | On September 2, 2013, the Company entered into a working capital loan agreement with the ICBC for $4,090,180 as of December 31, 2013, for which $813,921 was paid on June 5, 2014 and $3,250,553 was paid on August 15, 2014. The loan bore an interest rate of 115% over the primary lending rate of the People’s Bank of China and was at 6.9% per annum at the time of funding. The Company paid off the principal balance and interest by August 15, 2014. Concurrent with the signing of the working capital loan agreement, the Company also entered into an agreement with the ICBC, which provided account management services to the Company during the terms of the underlying loan. The working capital loan was guaranteed by Hebei Fangsheng Real Estate Development Co. Ltd. (“Hebei Fangsheng”) with the land use right on our Headquarters Compound pledged by Hebei Fangsheng as collateral for the benefit of the bank. The land use right on our Headquarters Compound was acquired by Hebei Fangsheng from the Company on August 9, 2013 (see Note (10) for the related party transaction). Hebei Fangsheng is controlled by the Company’s Chairman and CEO Mr. Zhenyong Liu. | ||||||||||||
(b) | On September 6, 2013, the Company obtained a new accounts receivable factoring facility from the ICBC for $818,036 as of December 31, 2013. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remained in the Company’s books at all times, are not fully collected. The factoring facility expired on August 4, 2014 and bore an interest rate of 110% of the primary lending rate of the People’s Bank of China and was at 6.6% per annum at the time of funding. The Company paid off the principal balance and interest under the factoring facility on August 4, 2014. | ||||||||||||
Concurrent with the signing of the new factoring agreement, the Company also entered into a financial service agreement with the ICBC, which provided accounts receivable management services to the Company during the terms of the underlying factoring facility. The factoring facility was personally guaranteed by the Company’s Chairman and CEO Mr. Zhenyong Liu. | |||||||||||||
(c) | On December 3, 2013, the Company obtained from the ICBC an accounts receivable factoring facility with a maximum credit limit of $1,625,356 and $1,636,072 as of September 30, 2014 and December 31, 2013, respectively. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company’s books at all times, are not fully collected. The term of the factoring facility expires on October 21, 2014 and carries an interest rate of 6.6% per annum, or 10% plus the prime rate for the loan set forth by the People’s Bank of China at the time of funding. The unpaid balance of the loan was in the amount of $1,625,356 as of September 30, 2014. | ||||||||||||
(d) | On June 26, 2014, the Company obtained a new accounts receivable factoring facility from the ICBC for $2,438,033 as of September 30, 2014. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company’s books at all times, are not fully collected. The factoring facility will expire on June 25, 2015 and bears an interest rate of 110% of the primary lending rate of the People’s Bank of China and was at 6.6% per annum at the time of funding. | ||||||||||||
Concurrent with the signing of the new factoring agreement, the Company also entered into a financial service agreement with the ICBC, which provides accounts receivable management services to the Company during the terms of the underlying factoring facility. | |||||||||||||
(e) | On June 9, 2014, the Company obtained from the Commercial Bank of the City of Zhangjiakou a banking facility on bank loans and notes payable, which is guaranteed by Zhenyong Liu and Shijiazhuang Baode Guarantee Service Company. In obtaining the guarantee from Shijiazhuang Baode Guarantee Service Company, Hebei Tengsheng Paper Co. Ltd (“Hebei Tengsheng”), a third party which owns the land use rights of about 330 acres (or 1.33 million square meters) of land in the Wei County and leases about one-fourth of the premises to Orient paper HB as our production bases of tissue paper and other future facilities, and an independent third party provided a guarantee with the land use rights and buildings pledged by Hebei Tengsheng as collateral. On July 18, 2014, the Company entered into a working capital loan agreement with the bank for $3,250,711 as of September 30, 2014. The loan expires on June 9, 2015 and bears a fixed interest rate of 11.88% per annum. | ||||||||||||
(f) | On August 19, 2014, the Company obtained a new accounts receivable factoring facility from the ICBC for $812,678 as of September 30, 2014. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company’s books at all times, are not fully collected. The factoring facility will expire on June 11, 2015 and bears an interest rate of 110% of the primary lending rate of the People’s Bank of China and was at 6.6% per annum at the time of funding. | ||||||||||||
As of December 31, 2013, all short-term borrowings are secured bank loans. As of September 30, 2014, there were secured short-term borrowings of $4,876,067 and unsecured bank loans of $3,250,711. The factoring facility was secured by the Company’s accounts receivable in the amount of $4,162,160 and $3,272,528 as of September 30, 2014 and December 31, 2013, respectively. | |||||||||||||
The average short-term borrowing rates for the nine months ended September 30, 2014 and 2013 were approximately 7.24% per annum and 6.62% per annum, respectively. The average short-term borrowing rate for the three months ended September 30, 2014 and 2013 were approximately 8.20% per annum and 6.65% per annum, respectively. | |||||||||||||
Long-term loans from credit union | |||||||||||||
As of September 30, 2014 and December 31, 2013, loans payable to Rural Credit Union of Xushui County, amounted to $5,875,660 and $5,914,401, respectively. | |||||||||||||
On March 31, 2011, the Company entered into a three-year term loan agreement with Rural Credit Union of Xushui County for an amount that is $1,611,531 as of December 31, 2013. The loan is guaranteed by an independent third party. Interest payment is due quarterly and bears the rate of 0.72% per month, which was due on March 30, 2014. The entire balance is presented as current portion of long term loan from credit union in the consolidated balance sheet as of December 31, 2013. Because of the ongoing negotiation for renewing the loan, the Company did not repay the loan upon expiry. On April 16, 2014, the Company repaid the entire amount without any penalty. On the same day, the Company entered into another agreement with the Rural Credit Union of Xushui County for an amount that is $1,600,975 as of September 30, 2014. The loan is guaranteed by an independent third party. Interest payment is due quarterly and bears the rate of 0.72% per month. The loan balance would be repayable by various installments through June 21, 2014 to November 18, 2018. As of September 30, 2014, total outstanding loan balance was $1,600,975 with $48,761 becoming due within one year and presented as current portion of long term loans from credit union in the condensed consolidated balance sheet. | |||||||||||||
On July 15, 2013, the Company entered into a new agreement with the Rural Credit Union of Xushui County for a term of 5 years, which is due and payable on various scheduled repayment dates between December 21, 2013 and July 26, 2018. The loan is secured by certain of the Company’s manufacturing equipment in the amount of $16,956,708 and $21,901,456 as of September 30, 2014 and December 31, 2013, respectively. Interest payment is due quarterly and bears a fixed rate of 0.72% per month. As of September 30, 2014, total outstanding loan balance was $4,274,685 with $65,014 becoming due within one year and presented as current portion of long term loans from credit union in the condensed consolidated balance sheet. As of December 31, 2013, total outstanding loan balance was $4,302,870, with $49,082 becoming due within one year and presented as current portion of long term loans from credit union in the condensed consolidated balance sheet. | |||||||||||||
Total interest expenses for the short-term bank loans and long-term loans for the three months ended September 30, 2014 and 2013 were $307,746 and $207,807, respectively. | |||||||||||||
Total interest expenses for the short-term bank loans and long-term loans for the nine months ended September 30, 2014 and 2013 were $778,472 and $592,184, respectively. | |||||||||||||
Financing with Sale-Leaseback | |||||||||||||
The Company entered into a sale-leaseback arrangement (the “Lease Financing Agreement”) with China National Foreign Trade Financial & Leasing Co., Ltd ("CNFTFL") on June 16, 2013, for a total financing proceeds in the amount of RMB150 million (approximately US$24 million). Under the sale-leaseback arrangement, Orient Paper HB sold the Leased Equipment to CNFTFL for an amount of RMB 150 million (approximately US$24 million). Concurrent with the sale of equipment, Orient Paper HB leases back all of the equipment sold to CNFTFL for a lease term of three years. At the end of the lease term, Orient Paper HB may pay a nominal purchase price of RMB 15,000 (approximately $2,400) to CNFTFL and buy back all of the Leased Equipment. The sale-leaseback is treated by the Company as a mere financing and capital lease transaction, rather than a sale of assets (under which gain or loss is immediately recognized) under ASC 840-40-25-4. All of the Leased Equipment are included as part of the property, plant and equipment of the Company for the periods presented; while the net present value of the minimum lease payment (including a lease service charge equal to 5.55% of the amount financed, i.e. approximately US$1.35 million) was recorded as obligations under capital lease and was calculated with CNFTFL’s implicit interest rate of 6.15% per annum and stated at $25,750,170 at the inception of the lease on June 16, 2013. The balance of the long-term obligations under capital lease were $8,135,569 and $12,296,639 as of September 30, 2014 and December 31, 2013, which is net of its current portion in the amount of $8,186,242 and $8,264,795, respectively. | |||||||||||||
Total interest expenses for the sale-leaseback arrangement for three months ended September 30, 2014 and 2013 were $207,830 and $114,041, respectively. Total interest expenses for the sale-leaseback arrangement for nine months ended September 30, 2014 and 2013 were $717,058 and $174,495, respectively. | |||||||||||||
As a result of the sale, a deferred gain on sale of Leased Equipment in the amount of $1,379,282 was created at the closing of the transaction and is presented as a non-current liability. The deferred gain would be amortized by the Company during the lease term and would be used to offset the depreciation of the Leased Equipment. | |||||||||||||
As part of the sale-leaseback transaction, Orient Paper HB entered into a Collateral Agreement with CNFTFL and pledged the land use right in the amount of approximately $7,337,989 on some 58,566 square meters of land as collateral for the lease. In addition to Orient Paper HB’s collateral, Orient Paper Shengde also entered into a Guarantee Contract with CNFTFL on June 16, 2013. Under the Guarantee Contract, Orient Paper Shengde agrees to guarantee Orient Paper HB’s performance under the lease and to pledge all of its production equipment as additional collateral. Net book value of Orient Paper Shengde’s asset guarantee was $33,820,493 and $36,134,038 as of September 30, 2014 and December 31, 2013, respectively. | |||||||||||||
The future minimum lease payments of the capital lease as of September 30, 2014 were as follows: | |||||||||||||
September 30, | Amount | ||||||||||||
2015 | $ | 8,886,191 | |||||||||||
2016 | 8,380,147 | ||||||||||||
$ | 17,266,338 |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
(10) Related Parties Transactions | |
Mr. Zhenyong Liu is the director, principal stockholder and chief executive officer of the Company. He loaned money to Orient Paper HB for working capital purposes over a period of time. On January 1, 2013, Orient Paper HB and Mr. Liu renewed the three-year term loan previously entered on January 1, 2010, and extended the maturity date further to December 31, 2015. The unsecured loan carries an annual interest rate based on the People’s Bank of China at the time of the renewal and was set at 6.15% per annum. As of September 30, 2014 and December 31, 2013, net amount due to Mr. Liu were $2,373,981 and $2,389,633, respectively. | |
The interest expenses incurred for above related party loans are $36,445 and $36,478 for the three months ended September 30, 2014 and 2013, while the interest expenses were $109,556 and $108,460 for the nine months ended September 30, 2014 and 2013. On March 25, 2014, our Chairman and CEO Mr. Zhenyong Liu agreed in writing to permit the Company to continue to postpone the repayment of the accrued interest on his loan to Orient Paper HB until the earliest date on which the Company's quarterly or annual financial statements filed with the SEC show a satisfactory working capital level. The accrued interest owned to Mr. Liu was approximately $672,133 and $566,343, which was recorded in other payables and accrued liabilities (see Note (12) below) as part of the current liabilities as of September 30, 2014 and December 31, 2013, respectively. | |
During the nine months and the three months ended September 30, 2014, the Company borrowed $643,500 and $300,000, respectively, from a shareholder to pay for various expenses incurred in the U.S. The amount was repayable on demand with interest free. The Company repaid the entire balance by the end of the period. | |
Sale of Headquarters Compound Real Properties to a Related Party | |
On August 7, 2013 the Company’s Audit Committee and the Board of Directors approved the sale of the land use right of the Headquarters Compound (the “LUR”), the office building and essentially all industrial-use buildings in the Headquarters Compound (the “Industrial Buildings”), and three employee dormitory buildings located within the Headquarters Compound (the “Dormitories”) to Hebei Fangsheng for cash prices of approximately $2.77 million, $1.15 million, and $4.31 million, respectively. In connection with the sale of the Industrial Buildings, Hebei Fangsheng agrees to lease the Industrial Buildings back to the Company for its original use for a term of up to three years, with an annual rental payment of approximately $162,763. As of September 30, 2014 and December 31, 2013, the accrued rent to Hebei Fangsheng are in the amount of $186,025 and $64,546, respectively. | |
The sale was conducted on an arms-length basis, and was reviewed by the Company’s Audit Committee and approved by the Board of Directors. The $2.77 million sale price of the industrial land use right was determined by the valuation from a government designated appraisal, which was 3.35% higher than a second independent appraisal commissioned by the Company. The $1.15 million sale price of the Industrial Buildings was determined by negotiation between the Company and Hebei Fangsheng and is equal to the appraised value based on the assumption that the use of the buildings would be continued until they are retired. Based on the assumption that such buildings would have to be torn down to comply with the re-zoning, a second independent appraisal obtained by the Company put the value at $0.4 million. Although the Company and Hebei Fangsheng agree to set the sale price of the Dormitories at the Company’s original construction cost of the three dormitory buildings for $4.31 million, an independent appraisal shows that the value for the three buildings as employee dormitories was $4.64 million. | |
As a condition for the sale of the Dormitories, Hebei Fangsheng agrees that it will act as an agent for the Company, which does not have the qualification to sell residential housing units in China, and that it is obligated to sell all of the 132 apartment units in the Dormitories to qualified employees of the Company at its acquisition price. Hebei Fangsheng further represents that it will not seek to profit from the resale of the Dormitories units and will allow the Company to inspect the books and records of the sale upon completion of the resale of the Dormitories units to ensure the objectives are achieved. | |
Sales of the LUR and the Industrial Buildings were completed in year 2013. Sales of the dormitories, which was classified as assets held for sale as of December 31, 2013, was consummated on August 15, 2014 with a gain on disposal of approximately $203,488 recognized during the three and nine months ended September 30, 2014. | |
Land Use Right Pledged by Hebei Fangsheng | |
Independent from the above related party sale transaction, on March 3, 2014 Hebei Fangsheng entered into a Collateral Agreement with SPD Bank in connection with the Company’s bank acceptance note obtained from the SPD Bank (see Note (11) below). Under the Collateral Agreement, Hebei Fangsheng pledged certain land-use-right on a parcel of land located in Wei County, Hebei for the benefit of the SPD Bank as collateral to secure the credit facility of the bank acceptance note during the period of March 3, 2014 and March 2, 2016. As explained above, Hebei Fangsheng is controlled by the Company’s Chairman and CEO Mr. Liu Zhenyong. | |
Notes_Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2014 | |
Notes payable [Abstract] | ' |
Notes payable | ' |
(11) Notes payable | |
As of September 30, 2014, the Company had fourteen bank acceptance notes of $6,501,422, $6,501,422 and $8,126,778, respectively, from Bank of Hebei, SPD Bank and the Commercial Bank of the City of Zhangjiakou, to one of its major suppliers for settling purchase of raw materials. These acceptances notes are used to essentially extend the payment of accounts payable and are issued under the banking facilities obtained from these three banks as well as the restricted bank deposit of $11,377,489 in these three banks as mentioned in Note (3). In particular, the banking facility obtained from Bank of Hebei was secured by certain of the Company’s property, plant and equipment in the amount of $32,767 and guaranteed by the Company’s Chairman and CEO Mr. Liu Zhenyong and Hebei Fangsheng and two independent third parties. The banking facility obtained from SPD Bank was secured by land use right from a related party as mentioned in Note (10). The banking facility obtained from the Commercial Bank of the City of Zhangjiakou was guaranteed by Zhenyong Liu and Shijiazhuang Baode Guarantee Service Company as mentioned in Note (9). The bank acceptance notes from those three banks bear interest rate at nil% per annum and 0.05% of notes amount as handling change. They will become due and payable on various dates starting from October 14, 2014 to March 28, 2015. | |
As of December 31, 2013, the Company had three bank acceptance notes from Bank of Hebei to one of its major suppliers for a total amount of $4,908,216 for settling purchase of raw materials. An amount equal to $2,454,108 is under the banking facility obtained from Bank of Hebei in November 13, 2013, while the remaining portion, amount of $2,454,108 are secured with a restricted bank deposit as mentioned in Note (3). The banking facility obtained from Bank of Hebei was secured by certain of the Company’s property, plant and equipment in the amount of $34,177, and guaranteed by the Company’s Chairman and CEO Mr. Liu Zhenyong and two independent third parties. The bank acceptance notes bear interest rate at nil% per annum and 0.05% of notes amount as handling change. They will become due and payable on various dates starting from May 15 through June 19 during the year of 2014. |
Other_Payables_and_Accrued_Lia
Other Payables and Accrued Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Other payables and accrued liabilities [Abstract] | ' | ||||||||
Other payables and accrued liabilities | ' | ||||||||
(12) Other payables and accrued liabilities | |||||||||
Other payables and accrued liabilities consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accrued electricity | $ | 451,097 | $ | 372,726 | |||||
Accrued professional fees | 116,918 | 58,000 | |||||||
Value-added tax payable | 1,249,394 | 940,400 | |||||||
Accrued interest to a related party | 672,133 | 566,343 | |||||||
Accrued bank loan interest | 509,676 | 380,022 | |||||||
Advance from customer | 8,018 | 11,453 | |||||||
Insurance premium payable | - | 62,348 | |||||||
Payable for purchase of equipment | 119,043 | - | |||||||
Others | 135,738 | 260,180 | |||||||
Totals | $ | 3,262,017 | $ | 2,651,472 | |||||
Common_Stock
Common Stock | 9 Months Ended |
Sep. 30, 2014 | |
Common Stock [Abstract] | ' |
Common Stock | ' |
(13) Common Stock | |
Issuance of common stock to investors | |
On August 27, 2014, the Company issued 1,562,500 shares of our common stock and warrants to purchase up to 781,250 shares of our common stock (the “Offering”). Each share of common stock and accompanying warrant was sold at a price of $1.60. Please refer to Note (14), Stock Warrants, for details. | |
Issuance of common stock pursuant to the 2011 Incentive Stock Plan and 2012 Incentive Stock Plan | |
On January 12, 2012, the Company issued shares of 109,584 out of the 2011 Incentive Stock Plan of Orient Paper, Inc. (the “2011 ISP”) to certain of its directors and officers when the stock was at $3.45 per share, as compensation for their services in the past years. Total fair value of the stock was calculated at $378,065 as of the date of issuance. The 2011 ISP was approved by the shareholders of the Company in August 2011 and sets aside 375,000 shares of the Company’s common stock for the purpose of compensating services provided by the employees, directors and other service providers. | |
On December 31, 2013, the Company issued restricted common shares of 297,000 out of the 2011 ISP and 2012 Incentive Stock Plan (the “2012 ISP”) of Orient Paper, Inc. to certain of its directors and officers when the stock was at $2.66 per share, as compensation for their services in the past years. Total fair value of the stock was calculated at $790,020 as of the date of grant. See Note (17), Stock Incentive Plans, for more details of the 2011 ISP and the 2012 ISP. | |
Cancellation of certain director compensation shares | |
On April 4, 2013, the Company cancelled 2,875 shares of common stock previously issued on March 31, 2011 to two of its directors. The cancellation of shares was at the request of the New York Stock Exchange following a review of the Company’s shares listing application, where the stock exchange believes the shares were issued without shareholder approval and after the Company was subject to the shareholder approval requirement for any stock compensation. The Company reversed the related capital accounts and 2011 compensation expense of $3 and $16,155, respectively, during the year ended December 31, 2013. | |
Dividend declared | |
On April 4, 2013, the Company declared a quarterly dividend of $0.0125 per share to shareholders of record as of April 16, 2013. The dividend was paid on April 30, 2013. | |
On November 21, 2013, the Company declared another quarterly dividend of $0.005 per share to shareholders of record as of November 29, 2013. The dividend was paid on December 10, 2013. | |
Future declaration of dividends will depend on, among other things, the Company's results of operations, capital requirements, financial condition and on such other factors as the Company's Board of Directors may in its discretion consider relevant and in the best long term interest of the shareholders. |
Stock_Warrants
Stock Warrants | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Stock Warrants [Abstract] | ' | ||||||||
Stock warrants | ' | ||||||||
(14) Stock warrants | |||||||||
On August 27, 2014, the Company issued 1,562,500 shares of our common stock and warrants to purchase up to 781,250 shares of our common stock. The warrants have an exercise price of $1.70 per share with two warrants being exercisable for one share of common stock. These warrants are exercisable immediately upon issuance on September 3, 2014 and have a term of exercise equal to five years from the date of issuance till September 2, 2019. | |||||||||
The fair value of the warrants issued was estimated by using the Binominal pricing model with the following assumptions: | |||||||||
Terms of warrants | 5 years | ||||||||
Expected volatility | 72.00% | ||||||||
Risk-free interest rate | 1.69% | ||||||||
Expected dividend yield | 0.81% | ||||||||
In connection with the Offering, the Company issued warrants to its placement agent of this Offering, which can purchase an aggregate of up to 2.50% of the aggregate number of shares of common stock sold in the Offering, i.e. 39,062 shares. These warrants have substantially the same terms as the warrants issued to purchaser in the Offering, except that the exercise price is $2.00 per share and the expiration date is June 26, 2019. | |||||||||
The fair value of the warrants issued was estimated by using the Binominal pricing model with the following assumptions: | |||||||||
Terms of warrants | 4.81 years | ||||||||
Expected volatility | 69.80% | ||||||||
Risk-free interest rate | 1.62% | ||||||||
Expected dividend yield | 0.81% | ||||||||
The Company applied judgment in estimating key assumptions in determining the fair value of the warrants on the date of issuance. The Company used historical data to estimate stock volatilities and expected dividend yield. The risk-free rates are consistent with the terms of the warrants and are based on the United States Treasury yield curve in effect at the time of issuance. | |||||||||
A summary of stock warrant activities is as below: | |||||||||
Nine months ended | |||||||||
30-Sep-14 | |||||||||
Number | Weighted average exercise price | ||||||||
Outstanding and exercisable at beginning of the period | - | $ | - | ||||||
Issued during the period | 820,312 | 1.71 | |||||||
Exercised during the period | - | - | |||||||
Cancelled or expired during the period | - | - | |||||||
Outstanding and exercisable at end of the period | 820,312 | $ | 1.71 | ||||||
Range of exercise price | $1.70 to $2.00 | ||||||||
No warrants were issued, exercised, cancelled or expired during the year ended December 31, 2013. The weighted average fair value of warrants granted for the period ended September 30, 2014 was $0.99 per share. The total intrinsic value of warrants exercised for the period ended September 30, 2014 was $nil. As of September 30, 2014, the aggregated intrinsic value of warrants outstanding and exercisable was $nil. | |||||||||
Earnings_per_Share
Earnings per Share | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Earnings per Share [Abstract] | ' | ||||||||
Earnings per Share | ' | ||||||||
(15) Earnings Per Share | |||||||||
For the three months and nine months ended September 30, 2013, there were no securities with dilutive effect issued and outstanding. For the three months and nine months ended September 30, 2014, 820,312 shares related to warrants are excluded from the calculations of dilutive net income per share because their inclusion would have been anti-dilutive. The basic and diluted net income per share are calculated as follows: | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
Basic income per share | |||||||||
Net income for the period - numerator | $ | 3,372,944 | $ | 5,534,844 | |||||
Weighted average common stock outstanding - denominator | 18,923,374 | 18,456,900 | |||||||
Net income per share | $ | 0.18 | $ | 0.3 | |||||
Diluted income per share | |||||||||
Net income for the period - numerator | $ | 3,372,944 | $ | 5,534,844 | |||||
Weighted average common stock outstanding - denominator | 18,923,374 | 18,456,900 | |||||||
Effect of dilution | - | - | |||||||
Weighted average common stock outstanding - denominator | 18,923,374 | 18,456,900 | |||||||
Diluted income per share | $ | 0.18 | $ | 0.3 | |||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
Basic income per share | |||||||||
Net income for the period - numerator | $ | 9,478,346 | $ | 9,494,035 | |||||
Weighted average common stock outstanding - denominator | 18,909,001 | 18,457,879 | |||||||
Net income per share | $ | 0.5 | $ | 0.51 | |||||
Diluted income per share | |||||||||
Net income for the period - numerator | $ | 9,478,346 | $ | 9,494,035 | |||||
Weighted average common stock outstanding - denominator | 18,909,001 | 18,457,879 | |||||||
Effect of dilution | - | - | |||||||
Weighted average common stock outstanding - denominator | 18,909,001 | 18,457,879 | |||||||
Diluted income per share | $ | 0.5 | $ | 0.51 | |||||
Income_Taxes
Income Taxes | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
(16) Income Taxes | |||||||||
United States | |||||||||
Orient Paper and Shengde Holdings are incorporated in the State of Nevada and are subject to the U.S. federal tax and state statutory tax rates up to 34% and 0%, respectively. | |||||||||
PRC | |||||||||
Orient Paper HB and Orient Paper Shengde are PRC operating companies and are subject to PRC Enterprise Income Tax. Pursuant to the PRC New Enterprise Income Tax Law, Enterprise Income Tax is generally imposed at a statutory rate of 25%. | |||||||||
The provisions for income taxes for three months ended September 30, 2014 and 2013 were as follows: | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
Provision for Income Taxes | |||||||||
Current Tax Provision – PRC | $ | 1,019,837 | $ | 1,808,503 | |||||
Deferred Tax Provision – PRC | 227,419 | 170,600 | |||||||
Total Provision for Income Taxes | $ | 1,247,256 | $ | 1,979,103 | |||||
The provisions for income taxes for nine months ended September 30, 2014 and 2013 were as follows: | |||||||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
Provision for Income Taxes | |||||||||
Current Tax Provision – PRC | $ | 3,055,355 | $ | 3,276,466 | |||||
Deferred Tax Provision – PRC | 481,138 | 274,427 | |||||||
Total Provision for Income Taxes | $ | 3,536,493 | $ | 3,550,893 | |||||
During the three months ended September 30, 2014 and 2013, the effective income tax rate was estimated by the Company to be 27.0% and 26.3%, respectively, while during the nine months ended September 30, 2014 and 2013, the effective income tax rate was estimated by the Company to be 27.2% and 27.2%, respectively. The effective tax rate is lower than the U.S. statutory rate of 35% primarily because the undistributed earnings of our PRC subsidiary Orient Paper Shengde and the VIE, Orient Paper HB are considered or are expected to be indefinitely reinvested offshore to support our future capacity expansion. | |||||||||
The Company has adopted ASC Topic 740-10-05, Income Taxes. To date, the adoption of this interpretation has not impacted the Company’s financial position, results of operations, or cash flows. The Company performed self-assessment and the Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by taxing authorities. Audit periods remain open for review until the statute of limitations has passed, which in the PRC is usually 5 years. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of September 30, 2014 and December 31, 2013, management considered that the Company had no uncertain tax positions affecting its consolidated financial position and results of operations or cash flows, and will continue to evaluate for any uncertain position in future. There are no estimated interest costs and penalties provided in the Company’s condensed consolidated financial statements for both the three months and the nine months ended September 30, 2014 and 2013, respectively. The Company’s tax positions related to open tax years are subject to examination by the relevant tax authorities and the major one is the China Tax Authority. |
Stock_Incentive_Plan
Stock Incentive Plan | 9 Months Ended |
Sep. 30, 2014 | |
Stock Incentive Plan [Abstract] | ' |
Stock Incentive Plan | ' |
(17) Stock Incentive Plans | |
On August 28, 2011, the Company’s Annual General Meeting approved the 2011 ISP as previously adopted by the Board of Directors on July 5, 2011. Under the 2011 ISP, the Company may grant an aggregate of 375,000 shares of the Company’s common stock to the Company’s directors, officers, employees or consultants. No stock or option was issued under the 2011 ISP until January 11, 2012, when the Compensation Committee granted 109,584 shares of restricted common stock to certain officers and directors of the Company. On December 31, 2013, the Compensation Committee granted remaining 265,416 shares of restricted common stock under the 2011 ISP to certain officers and directors of the Company. | |
On September 10, 2012, the Company’s Annual General Meeting approved the 2012 ISP. Under the 2012 ISP, the Company may grant an aggregate of 200,000 shares of the Company’s common stock to the Company’s directors, officers, employees or consultants. Specifically, the Board and/or the Compensation Committee have authority to (a) grant, in its discretion, Incentive Stock Options or Non-statutory Options, Stock Awards or Restricted Stock Purchase Offers; (b) determine in good faith the fair market value of the stock covered by any grant; (c) determine which eligible persons shall receive grants and the number of shares, restrictions, terms and conditions to be included in such grants; and (d) make all other determinations necessary or advisable for the 2012 ISP's administration. On December 31, 2013, the Compensation Committee granted 31,584 shares of restricted common stock under the 2012 ISP to certain officers and directors of the Company. No stock or option was issued under the 2012 ISP subsequently. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Commitments and Contingencies [Abstract] | ' | ||||||
Commitments and Contingencies | ' | ||||||
(18) Commitments and Contingencies | |||||||
Operating Lease | |||||||
Orient Paper leases 32.95 acres of land from a local government in Xushui County, Baoding City, Hebei, China through a real estate lease with a 30-year term, which expires on December 31, 2031. The lease requires an annual rental payment of approximately $19,532 (RMB 120,000). This operating lease is renewable at the end of the 30-year term. | |||||||
On November 27, 2012, Orient Paper entered into a 49.4 acres land lease with an investment company in the Economic Development Zone in Wei County, Hebei, China. The lease term of the Wei County land lease commences on the date of the lease and lasts for 15 years. The lease requires an annual rental payment of $585,947 (RMB 3,600,000). The Company will be building two new tissue paper production lines and future production facilities in the leased Wei County land. | |||||||
As mentioned in Note (10) Related Party Transactions, in connection with the sale of Industrial Buildings to Hebei Fangsheng, Hebei Fangsheng agrees to lease the Industrial Buildings back to Orient Paper at an annual rental of $162,763 (RMB 1,000,000), for a term of up to three years. The Company will continue its operations in the current location for a maximum of three years while looking for a new location to relocate its offices and the digital photo paper operations currently located in the headquarters compound. | |||||||
The rental expenses for the three months ended September 30, 2014 and 2013 were $191,504 and $177,898, respectively. The rental expenses for the nine months ended September 30, 2014 and 2013 were $575,675 and $475,999, respectively. | |||||||
Future minimum lease payments of all operating leases are as follows: | |||||||
September 30, | Amount | ||||||
2015 | $ | 807,802 | |||||
2016 | 767,168 | ||||||
2017 | 604,632 | ||||||
2018 | 604,632 | ||||||
2019 | 604,632 | ||||||
Thereafter | 4,915,075 | ||||||
$ | 8,303,941 | ||||||
Capital commitment | |||||||
As of September 30, 2014, the Company has signed several contracts for construction of equipment and facilities, including a new tissue paper production line PM8. Total outstanding commitments under these contracts were $37,696,398 and $51,673,158 as of September 30, 2014 and December 31, 2013, respectively. With the exception of a 5%-10% performance holdback on the construction of equipment and facilities is payable in late 2015, the Company expected to pay off all the balances within 1 year. |
Segment_Reporting
Segment Reporting | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||
Segment Reporting | ' | ||||||||||||||||||||
(19) Segment Reporting | |||||||||||||||||||||
Since March 10, 2010, Orient Paper Shengde started its operations and thereafter the Company manages its operations through two business operating segments: Orient Paper HB, which produces printing paper and corrugating medium paper, and Orient Paper Shengde, which produces digital photo paper. They are managed separately because each business requires different technology and marketing strategies. | |||||||||||||||||||||
The Company evaluates performance of its operating segments based on net income. Administrative functions such as finance, treasury, and information systems are centralized. However, where applicable, portions of the administrative function expenses are allocated between the operating segments based on gross revenue generated. The operating segments do share facilities in Xushui County, Baoding City, Hebei, China. All sales were sold to customers located in the PRC. | |||||||||||||||||||||
Summarized financial information for the two reportable segments is as follows: | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
September 30, 2014 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination of Inter- | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | segment | consolidated | |||||||||||||||||
Revenues | $ | 40,183,579 | $ | 570,626 | $ | - | $ | - | $ | 40,754,205 | |||||||||||
Gross Profit | 6,401,583 | 9,265 | - | - | 6,410,848 | ||||||||||||||||
Depreciation and amortization | 1,308,580 | 701,550 | - | - | 2,010,130 | ||||||||||||||||
Interest income | 33,752 | 1,338 | - | - | 35,090 | ||||||||||||||||
Interest expense | 344,191 | - | - | - | 344,191 | ||||||||||||||||
Income tax expense | 1,227,949 | 19,307 | - | - | 1,247,256 | ||||||||||||||||
Net Income (Loss) | 3,801,421 | (39,917 | ) | (388,560 | ) | - | 3,372,944 | ||||||||||||||
Three Months Ended | |||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination of Inter- | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | segment | consolidated | |||||||||||||||||
Revenues | $ | 36,097,505 | $ | 1,588,609 | $ | - | $ | - | $ | 37,686,114 | |||||||||||
Gross Profit | 8,029,435 | 406,379 | - | - | 8,435,814 | ||||||||||||||||
Depreciation and amortization | 1,364,219 | 695,051 | - | - | 2,059,270 | ||||||||||||||||
Interest income | 22,871 | 1,265 | 23 | - | 24,159 | ||||||||||||||||
Interest expense | 242,740 | - | 1,645 | - | 244,385 | ||||||||||||||||
Income tax expense | 1,879,452 | 99,651 | - | - | 1,979,103 | ||||||||||||||||
Net Income (Loss) | 5,649,511 | 270,450 | (385,117 | ) | - | 5,534,844 | |||||||||||||||
Nine Months Ended | |||||||||||||||||||||
September 30, 2014 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination of Inter- | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | segment | consolidated | |||||||||||||||||
Revenues | $ | 101,402,582 | $ | 2,941,752 | $ | - | $ | - | $ | 104,344,334 | |||||||||||
Gross Profit | 16,637,730 | 564,961 | - | - | 17,202,691 | ||||||||||||||||
Depreciation and amortization | 3,764,983 | 2,112,841 | - | - | 5,877,824 | ||||||||||||||||
Interest income | 77,043 | 2,895 | - | - | 79,938 | ||||||||||||||||
Interest expense | 888,028 | - | - | - | 888,028 | ||||||||||||||||
Income tax expense | 3,378,702 | 157,791 | - | - | 3,536,493 | ||||||||||||||||
Net Income (Loss) | 10,266,271 | 310,373 | (1,098,298 | ) | - | 9,478,346 | |||||||||||||||
Total Assets | 186,295,286 | 42,841,370 | 2,412,866 | - | 231,549,522 | ||||||||||||||||
Nine Months Ended | |||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination of Inter- | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | segment | consolidated | |||||||||||||||||
Revenues | $ | 86,982,167 | $ | 3,489,115 | $ | - | $ | - | $ | 90,471,282 | |||||||||||
Gross Profit | 15,536,788 | 627,658 | - | - | 16,164,446 | ||||||||||||||||
Depreciation and amortization | 3,914,115 | 2,066,605 | - | - | 5,980,720 | ||||||||||||||||
Interest income | 76,599 | 2,300 | 49 | - | 78,948 | ||||||||||||||||
Interest expense | 719,593 | - | 3,510 | - | 723,103 | ||||||||||||||||
Income tax expense | 3,397,122 | 153,771 | - | - | 3,550,893 | ||||||||||||||||
Net Income (Loss) | 10,247,650 | 371,382 | (1,124,997 | ) | - | 9,494,035 | |||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination of Inter- | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | segment | consolidated | |||||||||||||||||
Total Assets | $ | 168,149,877 | $ | 41,264,704 | $111,621 | $ | - | $ | 209,526,202 |
Concentration_of_Major_Custome
Concentration of Major Customers and Suppliers | 9 Months Ended |
Sep. 30, 2014 | |
Concentration and Major Customers and Suppliers | ' |
Concentration of Major Customers and Suppliers | ' |
(20) Concentration and Major Customers and Suppliers | |
For the three months ended September 30, 2014 and 2013, the Company had no single customer contributing over 10% of total sales. | |
For the nine months ended September 30, 2014 and 2013, the Company had no single customer contributing over 10% of total sales. | |
For the three months ended September 30, 2014, the Company had two major suppliers which primarily accounted for 52% and 21% of the total purchases. For the three months ended September 30, 2013, the Company had two major suppliers which primarily accounted for 77% and 8% of the total purchases. | |
For the nine months ended September 30, 2014, the Company had three major suppliers which primarily accounted for 62%, 13% and 8% of the total purchases. For the nine months ended September 30, 2013, the Company had two major suppliers which primarily accounted for 75% and 10% of the total purchases. | |
Concentration_of_Credit_Risk
Concentration of Credit Risk | 9 Months Ended |
Sep. 30, 2014 | |
Concentration of Major Customers and Suppliers and Concentration of Credit Risk [Abstract] | ' |
Concentration of Credit Risk | ' |
(21) Concentration of Credit Risk | |
Financial instruments for which the Company is potentially subject to concentration of credit risk consist principally of cash. The Company places its temporary cash investments in reputable financial institutions in the PRC and the United States. Although it is generally understood that the PRC central government stands behind all of the banks in China in the event of bank failure, there is no deposit insurance system in China that is similar to the protection provided by the Federal Deposit Insurance Corporation (FDIC) of the United States. The Company’s U.S. bank accounts are all fully covered by the FDIC insurance as of September 30, 2014 and December 31, 2013, respectively. |
Risks_and_Uncertainties
Risks and Uncertainties | 9 Months Ended |
Sep. 30, 2014 | |
Concentration of Major Customers and Suppliers and Concentration of Credit Risk [Abstract] | ' |
Risks and Uncertainties | ' |
(22) Risks and Uncertainties | |
Orient Paper is subject to substantial risks from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, foreign currency exchange rates, and operating in the PRC under its various laws and restrictions. | |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2014 | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | ' |
(23) Recent Accounting Pronouncements | |
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which are intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Under GAAP, financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. It lacks guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures. This amendment provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. | |
The amendment is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. Currently, the Company is evaluating the impact of the pending adoption of ASU 2014-14 on the disclosure of the consolidated financial statements. | |
Basis_of_Presentation_and_Sign1
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
Our unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of September 30, 2014 and the results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for any future period. | |
Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates. | |
Liquidity and Going Concern | ' |
Liquidity and Going Concern | |
As of September 30, 2014, the Company had current assets of $30,281,704 and current liabilities of $42,706,218 (including amounts due to related parties of $858,158), resulting in a working capital deficit of approximately $12,424,514; while as of December 31, 2013, the Company had current assets of $25,953,328 and current liabilities of $28,372,723 (including amounts due to related parties of $2,266,961), resulting in a working capital deficit of approximately $2,419,395. We are currently seeking to restructure the term of our liabilities by raising funds through long-term loans to pay off liabilities with shorter terms. Our ability to continue as a going concern is dependent upon obtaining the necessary financing or negotiating the terms of the existing short-term liabilities to meet our current and future liquidity needs. Although management believes it can secure financial resources to satisfy the Company's current liabilities and the capital expenditure needs in the next 12 months, there are no guarantees that these financial resources will be secured. Therefore, there is a substantial doubt about the ability of the Company to continue as a going concern. Our condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. | |
On March 25, 2014, our Chairman and Chief Executive Officer (“CEO”) Mr. Zhenyong Liu agrees in writing to permit the Company to continue to postpone the repayment of the accrued interest on his loan to Orient Paper HB until the Company is able to pay its other creditors in its normal course of business. The accrued interest owned to Mr. Liu was approximately $672,133, which was recorded in other payables and accrued liabilities as part of the current liabilities in the condensed financial statement as of September 30, 2014 (see Note (12) below). |
Organization_and_Business_Back1
Organization and Business Background (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Organization and Business Background [Abstract] | ' | ||||||||
Subsidiaries and Variable Interest Entities | ' | ||||||||
Place of | |||||||||
Date of Incorporation | Incorporation or | Percentage of | |||||||
Name | or Establishment | Establishment | Ownership | Principal Activity | |||||
Subsidiary: | |||||||||
Dongfang Holding | 13-Nov-06 | BVI | 100% | Inactive investment holding | |||||
Shengde Holdings | 25-Feb-09 | State of Nevada | 100% | Investment holding | |||||
Orient Paper Shengde | 1-Jun-09 | PRC | 100% | Paper Production and distribution | |||||
Variable interest entity: | |||||||||
Orient Paper HB | 10-Mar-96 | PRC | Control* | Paper Production and distribution | |||||
* Orient Paper HB is treated as a 100% controlled variable interest entity of the Company | |||||||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventories [Abstract] | ' | ||||||||
Schedule of inventories | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw Materials | |||||||||
Recycled paper board | $ | 4,690,806 | $ | 8,004,988 | |||||
Pulp | 14,163 | 14,257 | |||||||
Recycled white scrap paper | 810,051 | 1,791,873 | |||||||
Coal | 207,674 | 573,799 | |||||||
Base paper and other raw materials | 110,812 | 212,984 | |||||||
5,833,506 | 10,597,901 | ||||||||
Finished Goods | 1,146,601 | 830,504 | |||||||
Totals | $ | 6,980,107 | $ | 11,428,405 |
Prepayments_and_Other_Current_1
Prepayments and Other Current Assets (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Prepayments and other current assets [Abstract] | ' | ||||||||
Summary of prepayments and other current assets | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Prepaid NYSE MKT annual fee | $ | 7,500 | $ | 7,500 | |||||
Recoverable VAT | - | 500,000 | |||||||
Prepaid insurance | 117,500 | 61,529 | |||||||
Prepayment for purchase of materials | 452,754 | 8,180 | |||||||
Prepaid land lease | 53,637 | 490,822 | |||||||
Guarantee deposit | 196,668 | - | |||||||
Others | 3,445 | - | |||||||
$ | 831,504 | $ | 1,068,031 | ||||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Schedule of property, plant and equipment | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Property, Plant, and Equipment: | |||||||||
Land use rights | $ | 7,710,672 | $ | 7,761,511 | |||||
Building and improvements | 22,260,067 | 22,406,836 | |||||||
Machinery and equipment | 120,744,142 | 121,088,942 | |||||||
Vehicles | 702,701 | 683,051 | |||||||
Construction in progress | 86,866,437 | 65,160,213 | |||||||
238,284,019 | 217,100,553 | ||||||||
Less: accumulated depreciation and amortization | (42,193,445 | ) | (38,565,294 | ) | |||||
Property, Plant and Equipment, net | $ | 196,090,574 | $ | 178,535,259 |
Loans_Payable_Tables
Loans Payable (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Loans Payable [Abstract] | ' | ||||||||||||
Schedule of short-term bank loans | ' | ||||||||||||
September 30, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Industrial & Commercial Bank of China (“ICBC”) Loan 1 | (a) | $ | - | $ | 4,090,180 | ||||||||
ICBC Loan 2 | (b) | - | 818,036 | ||||||||||
ICBC Loan 3 | (c) | 1,625,356 | 1,636,072 | ||||||||||
ICBC Loan 4 | (d) | 2,438,033 | - | ||||||||||
The Commercial Bank of the City of Zhangjiakou | (e) | 3,250,711 | - | ||||||||||
ICBC Loan 5 | (f) | 812,678 | - | ||||||||||
Total short-term bank loans | $ | 8,126,778 | $ | 6,544,288 | |||||||||
Schedule of future minimum lease payments of capital lease | ' | ||||||||||||
September 30, | Amount | ||||||||||||
2015 | $ | 8,886,191 | |||||||||||
2016 | 8,380,147 | ||||||||||||
$ | 17,266,338 | ||||||||||||
Other_Payables_and_Accrued_Lia1
Other Payables and Accrued Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Other payables and accrued liabilities [Abstract] | ' | ||||||||
Summary of other Payables and Accrued Liabilities | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accrued electricity | $ | 451,097 | $ | 372,726 | |||||
Accrued professional fees | 116,918 | 58,000 | |||||||
Value-added tax payable | 1,249,394 | 940,400 | |||||||
Accrued interest to a related party | 672,133 | 566,343 | |||||||
Accrued bank loan interest | 509,676 | 380,022 | |||||||
Advance from customer | 8,018 | 11,453 | |||||||
Insurance premium payable | - | 62,348 | |||||||
Payable for purchase of equipment | 119,043 | - | |||||||
Others | 135,738 | 260,180 | |||||||
Totals | $ | 3,262,017 | $ | 2,651,472 | |||||
Stock_Warrants_Tables
Stock Warrants (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Stock Warrants [Line Items] | ' | ||||||||
Summary of stock warrant activities | ' | ||||||||
Nine months ended | |||||||||
30-Sep-14 | |||||||||
Number | Weighted average exercise price | ||||||||
Outstanding and exercisable at beginning of the period | - | $ | - | ||||||
Issued during the period | 820,312 | 1.71 | |||||||
Exercised during the period | - | - | |||||||
Cancelled or expired during the period | - | - | |||||||
Outstanding and exercisable at end of the period | 820,312 | $ | 1.71 | ||||||
Range of exercise price | $1.70 to $2.00 | ||||||||
Date of Issuance August 27, 2014 to September 2, 2019 [Member] | ' | ||||||||
Stock Warrants [Line Items] | ' | ||||||||
Fair value of warrants issued was estimated by using the Binominal pricing model | ' | ||||||||
Terms of warrants | 5 years | ||||||||
Expected volatility | 72.00% | ||||||||
Risk-free interest rate | 1.69% | ||||||||
Expected dividend yield | 0.81% | ||||||||
Date of Issuance September 3, 2014 to June 26, 2019 [Member] | ' | ||||||||
Stock Warrants [Line Items] | ' | ||||||||
Fair value of warrants issued was estimated by using the Binominal pricing model | ' | ||||||||
Terms of warrants | 4.81 years | ||||||||
Expected volatility | 69.80% | ||||||||
Risk-free interest rate | 1.62% | ||||||||
Expected dividend yield | 0.81% | ||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Earnings per Share [Abstract] | ' | ||||||||
Summary of basic and diluted net income per share | ' | ||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
Basic income per share | |||||||||
Net income for the period - numerator | $ | 3,372,944 | $ | 5,534,844 | |||||
Weighted average common stock outstanding - denominator | 18,923,374 | 18,456,900 | |||||||
Net income per share | $ | 0.18 | $ | 0.3 | |||||
Diluted income per share | |||||||||
Net income for the period - numerator | $ | 3,372,944 | $ | 5,534,844 | |||||
Weighted average common stock outstanding - denominator | 18,923,374 | 18,456,900 | |||||||
Effect of dilution | - | - | |||||||
Weighted average common stock outstanding - denominator | 18,923,374 | 18,456,900 | |||||||
Diluted income per share | $ | 0.18 | $ | 0.3 | |||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
Basic income per share | |||||||||
Net income for the period - numerator | $ | 9,478,346 | $ | 9,494,035 | |||||
Weighted average common stock outstanding - denominator | 18,909,001 | 18,457,879 | |||||||
Net income per share | $ | 0.5 | $ | 0.51 | |||||
Diluted income per share | |||||||||
Net income for the period - numerator | $ | 9,478,346 | $ | 9,494,035 | |||||
Weighted average common stock outstanding - denominator | 18,909,001 | 18,457,879 | |||||||
Effect of dilution | - | - | |||||||
Weighted average common stock outstanding - denominator | 18,909,001 | 18,457,879 | |||||||
Diluted income per share | $ | 0.5 | $ | 0.51 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Summary of provisions for income taxes | ' | ||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
Provision for Income Taxes | |||||||||
Current Tax Provision – PRC | $ | 1,019,837 | $ | 1,808,503 | |||||
Deferred Tax Provision – PRC | 227,419 | 170,600 | |||||||
Total Provision for Income Taxes | $ | 1,247,256 | $ | 1,979,103 | |||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2014 | 2013 | ||||||||
Provision for Income Taxes | |||||||||
Current Tax Provision – PRC | $ | 3,055,355 | $ | 3,276,466 | |||||
Deferred Tax Provision – PRC | 481,138 | 274,427 | |||||||
Total Provision for Income Taxes | $ | 3,536,493 | $ | 3,550,893 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Commitments and Contingencies [Abstract] | ' | ||||||
Schedule of future minimum lease payments of capital lease | ' | ||||||
September 30, | Amount | ||||||
2015 | $ | 8,886,191 | |||||
2016 | 8,380,147 | ||||||
$ | 17,266,338 | ||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||
Summarized financial information for reportable segments | ' | ||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
September 30, 2014 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination of Inter- | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | segment | consolidated | |||||||||||||||||
Revenues | $ | 40,183,579 | $ | 570,626 | $ | - | $ | - | $ | 40,754,205 | |||||||||||
Gross Profit | 6,401,583 | 9,265 | - | - | 6,410,848 | ||||||||||||||||
Depreciation and amortization | 1,308,580 | 701,550 | - | - | 2,010,130 | ||||||||||||||||
Interest income | 33,752 | 1,338 | - | - | 35,090 | ||||||||||||||||
Interest expense | 344,191 | - | - | - | 344,191 | ||||||||||||||||
Income tax expense | 1,227,949 | 19,307 | - | - | 1,247,256 | ||||||||||||||||
Net Income (Loss) | 3,801,421 | (39,917 | ) | (388,560 | ) | - | 3,372,944 | ||||||||||||||
Three Months Ended | |||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination of Inter- | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | segment | consolidated | |||||||||||||||||
Revenues | $ | 36,097,505 | $ | 1,588,609 | $ | - | $ | - | $ | 37,686,114 | |||||||||||
Gross Profit | 8,029,435 | 406,379 | - | - | 8,435,814 | ||||||||||||||||
Depreciation and amortization | 1,364,219 | 695,051 | - | - | 2,059,270 | ||||||||||||||||
Interest income | 22,871 | 1,265 | 23 | - | 24,159 | ||||||||||||||||
Interest expense | 242,740 | - | 1,645 | - | 244,385 | ||||||||||||||||
Income tax expense | 1,879,452 | 99,651 | - | - | 1,979,103 | ||||||||||||||||
Net Income (Loss) | 5,649,511 | 270,450 | (385,117 | ) | - | 5,534,844 | |||||||||||||||
Nine Months Ended | |||||||||||||||||||||
September 30, 2014 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination of Inter- | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | segment | consolidated | |||||||||||||||||
Revenues | $ | 101,402,582 | $ | 2,941,752 | $ | - | $ | - | $ | 104,344,334 | |||||||||||
Gross Profit | 16,637,730 | 564,961 | - | - | 17,202,691 | ||||||||||||||||
Depreciation and amortization | 3,764,983 | 2,112,841 | - | - | 5,877,824 | ||||||||||||||||
Interest income | 77,043 | 2,895 | - | - | 79,938 | ||||||||||||||||
Interest expense | 888,028 | - | - | - | 888,028 | ||||||||||||||||
Income tax expense | 3,378,702 | 157,791 | - | - | 3,536,493 | ||||||||||||||||
Net Income (Loss) | 10,266,271 | 310,373 | (1,098,298 | ) | - | 9,478,346 | |||||||||||||||
Total Assets | 186,295,286 | 42,841,370 | 2,412,866 | - | 231,549,522 | ||||||||||||||||
Nine Months Ended | |||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination of Inter- | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | segment | consolidated | |||||||||||||||||
Revenues | $ | 86,982,167 | $ | 3,489,115 | $ | - | $ | - | $ | 90,471,282 | |||||||||||
Gross Profit | 15,536,788 | 627,658 | - | - | 16,164,446 | ||||||||||||||||
Depreciation and amortization | 3,914,115 | 2,066,605 | - | - | 5,980,720 | ||||||||||||||||
Interest income | 76,599 | 2,300 | 49 | - | 78,948 | ||||||||||||||||
Interest expense | 719,593 | - | 3,510 | - | 723,103 | ||||||||||||||||
Income tax expense | 3,397,122 | 153,771 | - | - | 3,550,893 | ||||||||||||||||
Net Income (Loss) | 10,247,650 | 371,382 | (1,124,997 | ) | - | 9,494,035 | |||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination of Inter- | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | segment | consolidated | |||||||||||||||||
Total Assets | $ | 168,149,877 | $ | 41,264,704 | $111,621 | $ | - | $ | 209,526,202 |
Organization_and_Business_Back2
Organization and Business Background (Details) | 9 Months Ended | |
Sep. 30, 2014 | ||
Dongfang Holding [Member] | ' | |
Schedule of company's subsidiaries and variable interest entities | ' | |
Entity Incorporation, Date Of Incorporation | 13-Nov-06 | |
Entity Incorporation State Country Name | 'BVI | |
Percentage of Ownership | 100.00% | |
Principal Activity | 'Inactive investment holding | |
Shengde Holding [Member] | ' | |
Schedule of company's subsidiaries and variable interest entities | ' | |
Entity Incorporation, Date Of Incorporation | 25-Feb-09 | |
Entity Incorporation State Country Name | 'State of Nevada | |
Percentage of Ownership | 100.00% | |
Principal Activity | 'Investment holding | |
Orient Paper Shengde [Member] | ' | |
Schedule of company's subsidiaries and variable interest entities | ' | |
Entity Incorporation, Date Of Incorporation | 1-Jun-09 | |
Entity Incorporation State Country Name | 'PRC | |
Percentage of Ownership | 100.00% | |
Principal Activity | 'Paper Production and distribution | |
Orient Paper HB [Member] | ' | |
Schedule of company's subsidiaries and variable interest entities | ' | |
Entity Incorporation, Date Of Incorporation | 10-Mar-96 | |
Entity Incorporation State Country Name | 'PRC | |
Percentage of Ownership | ' | [1] |
Principal Activity | 'Paper Production and distribution | |
[1] | Orient Paper HB is treated as a 100% controlled variable interest entity of the Company |
Organization_and_Business_Back3
Organization and Business Background (Details Textual) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||
Feb. 10, 2010 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2010 | Jun. 30, 2009 | Oct. 31, 2007 | Jul. 31, 2007 | Oct. 29, 2007 | Jun. 30, 2010 | Feb. 10, 2010 | Jun. 24, 2009 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Feb. 10, 2010 | Dec. 31, 2009 | |
CNY | USD ($) | USD ($) | USD ($) | Shengde Holdings [Member] | Dongfang Holding [Member] | Dongfang Holding [Member] | Dongfang Holding [Member] | Orient Paper Shengde [Member] | Orient Paper Shengde [Member] | Orient Paper Shengde [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | ||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||||||
Organization and Business Background (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock issued to Dongfang Holding shareholders under Merger Agreement | ' | ' | ' | ' | ' | ' | ' | ' | 7,450,497 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | ' | $0.00 | ' | $0.00 | ' | $0.00 | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Registered capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $60,000,000 | ' | $10,000,000 | ' | ' | ' | ' | ' | ' | ' |
Service fees to Orient Paper Shengde percentage of Orient Paper HB total net profits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80.00% | ' |
Exercise price for the options | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount loaned by Orient Paper Shengde to Orient Paper HB equity holders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 |
Loans terminated | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10,000,000 | ' | ' | ' | ' | ' | ' | $10,000,000 | ' |
Percentage of distributable profit of Orient Paper HB entitled to Orient Paper Shengde | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of revenue from Orient Paper HB | ' | 10.00% | 10.00% | 10.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 98.60% | 95.78% | 97.18% | 96.14% | ' | ' | ' |
Percentage of assets accounted by Orient Paper HB | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80.46% | ' | 80.46% | ' | 80.25% | ' | ' |
Basis_of_Presentation_and_Sign2
Basis of Presentation and Significant Accounting Policies (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Basis of Presentation and Significant Accounting Policies (Textual) | ' | ' |
Current Assets | $30,281,704 | $25,953,328 |
Current Liabilities | 42,706,218 | 28,372,723 |
Current liabilities and capital expenditure period | 'Next 12 months | ' |
Due to a related party | 186,025 | 64,546 |
Working capital | 12,424,514 | 2,419,395 |
Accrued interest | $672,133 | $566,343 |
Restricted_Cash_Details
Restricted Cash (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Restricted Cash (Textual) | ' | ' |
Restricted cash | $11,377,489 | $2,454,108 |
Description of lifting of restricted cash | 'The restriction will be lifted upon the maturity of the notes payable from October 14, 2014 through March 28, 2015. | 'The restriction will be lifted upon the maturity of the notes payable from May 15 through June 19 during the year of 2014. |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Schedule of inventories | ' | ' |
Raw materials, Gross | $5,833,506 | $10,597,901 |
Finished goods | 1,146,601 | 830,504 |
Totals | 6,980,107 | 11,428,405 |
Recycled paper board [Member] | ' | ' |
Schedule of inventories | ' | ' |
Raw materials, Gross | 4,690,806 | 8,004,988 |
Pulp [Member] | ' | ' |
Schedule of inventories | ' | ' |
Raw materials, Gross | 14,163 | 14,257 |
Recycled white scrap paper [Member] | ' | ' |
Schedule of inventories | ' | ' |
Raw materials, Gross | 810,051 | 1,791,873 |
Coal [Member] | ' | ' |
Schedule of inventories | ' | ' |
Raw materials, Gross | 207,674 | 573,799 |
Base paper and other raw materials [Member] | ' | ' |
Schedule of inventories | ' | ' |
Raw materials, Gross | $110,812 | $212,984 |
Prepayments_and_Other_Current_2
Prepayments and Other Current Assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Summary of prepayments and other current assets | ' | ' |
Prepaid NYSE MKT annual fee | $7,500 | $7,500 |
Recoverable VAT | ' | 500,000 |
Prepaid insurance | 117,500 | 61,529 |
Prepayment for purchase of materials | 452,754 | 8,180 |
Prepaid land lease | 53,637 | 490,822 |
Guarantee deposit | 196,668 | ' |
Others | 3,445 | ' |
Prepayments and other current assets, Total | $831,504 | $1,068,031 |
Prepayment_on_Property_Plant_a1
Prepayment on Property, Plant and Equipment (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 26, 2012 |
sqm | |||
Prepayment on property, plant and equipment (Textual) | ' | ' | ' |
Prepayment on property, plant and equipment | $1,482,324 | $1,492,098 | ' |
Entitlement of land use rights in Xushui County, Baoding plant | ' | ' | 54,267 |
Assets_Held_for_Sale_Details
Assets Held for Sale (Details) (USD $) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Dormitory | |||
Assets held for sale [Abstract] | ' | ' | ' |
Assets held for sale | ' | ' | $4,130,590 |
Number of employee dormitory buildings sold | ' | ' | 3 |
Gain on disposal of assets | $203,488 | $203,488 | ' |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property, Plant, and Equipment: | ' | ' |
Property, Plant, and Equipment, Gross | $238,284,019 | $217,100,553 |
Less: accumulated depreciation and amortization | -42,193,445 | -38,565,294 |
Property, Plant and Equipment, net | 196,090,574 | 178,535,259 |
Land Use Rights [Member] | ' | ' |
Property, Plant, and Equipment: | ' | ' |
Property, Plant, and Equipment, Gross | 7,710,672 | 7,761,511 |
Building and improvements [Member] | ' | ' |
Property, Plant, and Equipment: | ' | ' |
Property, Plant, and Equipment, Gross | 2,226,067 | 22,406,836 |
Machinery and equipment [Member] | ' | ' |
Property, Plant, and Equipment: | ' | ' |
Property, Plant, and Equipment, Gross | 120,744,142 | 121,088,942 |
Vehicles [Member] | ' | ' |
Property, Plant, and Equipment: | ' | ' |
Property, Plant, and Equipment, Gross | 702,701 | 683,051 |
Construction in progress [Member] | ' | ' |
Property, Plant, and Equipment: | ' | ' |
Property, Plant, and Equipment, Gross | $86,866,437 | $65,160,213 |
Property_Plant_and_Equipment_D1
Property, Plant and Equipment (Details Textual) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Jun. 16, 2013 | Jun. 16, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Sale-Leaseback Arrangement [Member] | Sale-Leaseback Arrangement [Member] | Sale-Leaseback Arrangement [Member] | Sale-Leaseback Arrangement [Member] | Sale-Leaseback Arrangement [Member] | Sale-Leaseback Arrangement [Member] | Sale-Leaseback Arrangement [Member] | Land Use Rights [Member] | Land Use Rights [Member] | |
T | USD ($) | CNY | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||
Property, Plant and Equipment (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '50 years | '50 years |
Lease expiration year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2061 | '2061 |
Property plant and equipment pledged for long term loan | $16,956,708 | ' | $16,956,708 | ' | $21,901,456 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total financing proceeds | ' | ' | ' | ' | ' | 24,000,000 | 150,000,000 | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of paper manufacturing equipment to leasing company | ' | ' | ' | 24,148,756 | ' | 24,000,000 | 150,000,000 | ' | ' | ' | ' | ' | ' | ' |
Term of lease | ' | ' | ' | ' | ' | '3 years | '3 years | ' | ' | ' | ' | ' | ' | ' |
Nominal purchase price | ' | ' | ' | ' | ' | 2,400 | 15,000 | ' | ' | ' | ' | ' | ' | ' |
Deferred gain on sale of leased equipment | 806,870 | ' | 806,870 | ' | 1,160,271 | 1,379,282 | ' | ' | ' | ' | ' | ' | ' | ' |
Capital lease equipment | 25,823,414 | ' | 25,823,414 | ' | 25,993,677 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation of capital lease equipment | ' | ' | ' | ' | ' | ' | ' | 825,620 | 396,736 | 1,237,181 | 396,736 | ' | ' | ' |
Accumulated depreciation of lease asset | ' | ' | ' | ' | ' | ' | ' | 2,060,896 | ' | 2,060,896 | ' | 829,794 | ' | ' |
Gain on sale leaseback realized transaction | ' | ' | ' | ' | ' | ' | ' | 115,094 | 62,798 | 345,981 | 62,798 | ' | ' | ' |
Unamortized deferred gain | ' | ' | ' | ' | ' | ' | ' | ' | ' | 806,870 | ' | 1,160,271 | ' | ' |
Amount of interest capitalized | 207,830 | 113,941 | 717,058 | 152,036 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets pledged for the guarantee of Orient Paper HB's capital lease | 33,820,493 | ' | 33,820,493 | ' | 36,134,038 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Production capacity of manufacturing equipment PM8 (per year) | ' | ' | 15,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of land use right pledged for sale-leaseback financing | 7,337,989 | ' | 7,337,989 | ' | 7,502,794 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization | 2,010,130 | 2,059,270 | 5,877,824 | 5,980,720 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Addition of machinery and equipment | ' | ' | 117,930,321 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property plant and equipment loan drawn from banking facility | $32,767 | ' | $32,767 | ' | $34,177 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans_Payable_Details
Loans Payable (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
Schedule of short-term bank loans | ' | ' | ||
Short-term bank loans | $8,126,778 | $6,544,288 | ||
ICBC Loan 1 [Member] | Factoring Facility [Member] | ' | ' | ||
Schedule of short-term bank loans | ' | ' | ||
Short-term bank loans | ' | [1] | 4,090,180 | [1] |
ICBC Loan 2 [Member] | Factoring Facility [Member] | ' | ' | ||
Schedule of short-term bank loans | ' | ' | ||
Short-term bank loans | ' | [2] | 818,036 | [2] |
ICBC Loan 3 [Member] | Factoring Facility [Member] | ' | ' | ||
Schedule of short-term bank loans | ' | ' | ||
Short-term bank loans | 1,625,356 | [3] | 1,636,072 | [3] |
ICBC Loan 4 [Member] | Factoring Facility [Member] | ' | ' | ||
Schedule of short-term bank loans | ' | ' | ||
Short-term bank loans | 2,438,033 | [4] | ' | [4] |
ICBC Loan 5 [Member] | Factoring Facility [Member] | ' | ' | ||
Schedule of short-term bank loans | ' | ' | ||
Short-term bank loans | 812,678 | [5] | ' | [5] |
The Commercial Bank of the City of Zhangjiakou [Member] | Factoring Facility [Member] | ' | ' | ||
Schedule of short-term bank loans | ' | ' | ||
Short-term bank loans | $3,250,711 | [6] | ' | [6] |
[1] | On September 2, 2013, the Company entered into a working capital loan agreement with the ICBC for $4,090,180 as of December 31, 2013, for which $813,921 was paid on June 5, 2014 and $3,250,553 was paid on August 15, 2014. The loan bears an interest rate of 115% over the primary lending rate of the People's Bank of China and was at 6.9% per annum at the time of funding. The Company paid off the principal balance and interest by August 15, 2014. Concurrent with the signing of the working capital loan agreement, the Company also entered into an agreement with the ICBC, which provided account management services to the Company during the terms of the underlying loan. The working capital loan was guaranteed by Hebei Fangsheng Real Estate Development Co. Ltd. ("Hebei Fangsheng") with the land use right on our Headquarters Compound pledged by Hebei Fangsheng as collateral for the benefit of the bank. The land use right on our Headquarters Compound was acquired by Hebei Fangsheng from the Company on August 9, 2013 (see Note (10) for the related party transaction). Hebei Fangsheng is controlled by the Company's Chairman and CEO Mr. Zhenyong Liu. | |||
[2] | On September 6, 2013, the Company obtained a new accounts receivable factoring facility from the ICBC for $818,036 as of December 31, 2013. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remained in the Company's books at all times, are not fully collected. The factoring facility expired on August 4, 2014 and bore an interest rate of 110% of the primary lending rate of the People's Bank of China and was at 6.6% per annum at the time of funding. The Company paid off the principal balance and interest under the factoring facility on August 4, 2014.Concurrent with the signing of the new factoring agreement, the Company also entered into a financial service agreement with the ICBC, which provided accounts receivable management services to the Company during the terms of the underlying factoring facility. The factoring facility was personally guaranteed by the Company's Chairman and CEO Mr. Zhenyong Liu. | |||
[3] | On December 3, 2013, the Company obtained from the ICBC an accounts receivable factoring facility with a maximum credit limit of $1,625,356 and $1,636,072 as of September 30, 2014 and December 31, 2013, respectively. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company's books at all times, are not fully collected. The term of the factoring facility expires on October 21, 2014 and carries an interest rate of 6.6% per annum, or 1.0% plus the prime rate for the loan set forth by the People's Bank of China at the time of funding. The unpaid balance of the loan was in the amount of $1,625,356 as of September 30, 2014. | |||
[4] | On June 26, 2014, the Company obtained a new accounts receivable factoring facility from the ICBC for $2,438,033 as of September 30, 2014. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company's books at all times, are not fully collected. The factoring facility will expire on June 25, 2015 and bears an interest rate of 110% of the primary lending rate of the People's Bank of China and was at 6.6% per annum at the time of funding. Concurrent with the signing of the new factoring agreement, the Company also entered into a financial service agreement with the ICBC, which provides accounts receivable management services to the Company during the terms of the underlying factoring facility. | |||
[5] | On August 19, 2014, the Company obtained a new accounts receivable factoring facility from the ICBC for $812,678 as of September 30, 2014. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company's books at all times, are not fully collected. The factoring facility will expire on June 11, 2015 and bears an interest rate of 110% of the primary lending rate of the People's Bank of China and was at 6.6% per annum at the time of funding. | |||
[6] | On July 18, 2014, the Company entered into a working capital loan agreement with the Commercial Bank of the City of Zhangjiakou for $3,250,711 as of September 30, 2014. The loan will expire on June 9, 2015 and bears an interest rate of 11.88% which is guaranteed by Zhenyong Liu and Shijiazhuang Baode Guarantee Service Company. |
Loans_Payable_Details_1
Loans Payable (Details 1) (USD $) | Sep. 30, 2014 |
Schedule of future minimum capital lease payments | ' |
2015 | $8,886,191 |
2016 | 8,380,147 |
Capital Leases, Future Payments | $17,266,338 |
Loans_Payable_Details_Textual
Loans Payable (Details Textual) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||
Jul. 15, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 02, 2013 | Sep. 02, 2013 | Sep. 02, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 16, 2013 | Jun. 16, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Rural Credit Union of Xushui County [Member] | Rural Credit Union of Xushui County [Member] | Term Loan [Member] | Term Loan [Member] | New term loan agreement [Member] | New term loan agreement [Member] | Lease financing agreement [Member] | ICBC Loan 1 [Member] | ICBC Loan 1 [Member] | ICBC Loan 1 [Member] | ICBC Loan 1 [Member] | ICBC Loan 1 [Member] | ICBC Loan 2 [Member] | ICBC Loan 2 [Member] | ICBC Loan 3 [Member] | ICBC Loan 3 [Member] | ICBC Loan 4 [Member] | ICBC Loan 4 [Member] | ICBC Loan 5 [Member] | ICBC Loan 5 [Member] | China National Foreign Trade Financial & Leasing Co. [Member] | China National Foreign Trade Financial & Leasing Co. [Member] | China National Foreign Trade Financial & Leasing Co. [Member] | The Commercial Bank of the City of Zhangjiakou [Member] | The Commercial Bank of the City of Zhangjiakou [Member] | ||||||||||||||
USD ($) | USD ($) | Rural Credit Union of Xushui County [Member] | Rural Credit Union of Xushui County [Member] | Rural Credit Union of Xushui County [Member] | Rural Credit Union of Xushui County [Member] | USD ($) | June 5, 2014 [Member] | August 15, 2014 [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Lease financing agreement [Member] | Lease financing agreement [Member] | Collateral Agreement [Member] | Factoring Facility [Member] | Factoring Facility [Member] | ||||||||||||||||||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | CNY | USD ($) | USD ($) | USD ($) | |||||||||||||||||||||||
sqm | |||||||||||||||||||||||||||||||||||||||||||
Loans Payable (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Unpaid balance of short term debt | ' | $8,126,778 | ' | $8,126,778 | ' | $6,544,288 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | [1] | $4,090,180 | [1] | ' | [2] | $818,036 | [2] | $1,625,356 | [3] | $1,636,072 | [3] | $2,438,033 | [4] | ' | [4] | $812,678 | [5] | ' | [5] | ' | ' | ' | $3,250,711 | [6] | ' | [6] |
Short-term bank loans, fixed interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.90% | ' | ' | ' | ' | 6.60% | ' | 6.60% | ' | 6.60% | ' | 6.60% | ' | ' | ' | ' | 11.88% | ' | ||||||||||||
Short-term bank loans interest rate as percentage of prime rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 115.00% | ' | ' | ' | ' | 110.00% | ' | 10.00% | ' | 110.00% | ' | 110.00% | ' | ' | ' | ' | ' | ' | ||||||||||||
Loan, maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4-Aug-14 | ' | 21-Oct-14 | ' | 25-Jun-15 | ' | 11-Jun-15 | ' | ' | ' | ' | 9-Jun-15 | ' | ||||||||||||
Loan paid off date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5-Jun-14 | 15-Aug-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Notes payable | ' | 21,129,622 | ' | 21,129,622 | ' | 4,908,216 | ' | ' | ' | ' | ' | ' | ' | ' | 813,921 | 3,250,553 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Accounts receivable | ' | 4,162,160 | ' | 4,162,160 | ' | 3,327,494 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Average short-term borrowing rates | ' | 8.20% | 6.65% | 7.24% | 6.62% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Outstanding loan balance of credit union | ' | 1,600,975 | ' | 1,600,975 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Loans from credit union | ' | 5,761,885 | ' | 5,761,885 | ' | 4,253,788 | 5,875,660 | 5,914,401 | 1,600,975 | 1,611,531 | 4,274,685 | 4,302,870 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Long-term debt, Interest rate per month | ' | ' | ' | ' | ' | ' | 0.72% | ' | 0.72% | ' | 0.72% | 0.72% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Security loan agreement by manufacturing equipment | ' | 16,956,708 | ' | 16,956,708 | ' | 21,901,456 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Current portion of long-term loans from credit union | ' | 113,775 | ' | 113,775 | ' | 1,660,613 | ' | 1,611,531 | 48,761 | ' | 65,014 | 49,082 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Interest expense for the short-term bank loans and long-term loans | ' | 307,746 | 207,807 | 778,472 | 592,184 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Total financing proceeds | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,000,000 | 150,000,000 | ' | ' | ' | ||||||||||||
Proceeds from sale of paper manufacturing equipment to leasing company | ' | ' | ' | ' | 24,148,756 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,000,000 | 150,000,000 | ' | ' | ' | ||||||||||||
Nominal purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,400 | 15,000 | ' | ' | ' | ||||||||||||
Lease service charge | ' | ' | ' | 'Equal to 5.55% of the amount financed. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Implicit interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.15% | 6.15% | ' | ' | ' | ||||||||||||
Stated capital lease | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,750,170 | ' | ' | ' | ' | ||||||||||||
Long-term obligations under capital lease | ' | 8,135,569 | ' | 8,135,569 | ' | 12,296,639 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Current obligations under capital lease | ' | 8,186,242 | ' | 8,186,242 | ' | 8,264,795 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Deferred gain on sale of leased equipment | ' | 806,870 | ' | 806,870 | ' | 1,160,271 | ' | ' | ' | ' | ' | ' | 1,379,282 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Assets pledged for the guarantee of Orient Paper HB's capital lease | ' | 33,820,493 | ' | 33,820,493 | ' | 36,134,038 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Value of land use right pledged for sale-leaseback financing | ' | 7,337,989 | ' | 7,337,989 | ' | 7,502,794 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,376,183 | ' | ' | ||||||||||||
Land collateral for capital lease | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 58,566 | ' | ' | ||||||||||||
Loan extension period | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Installment repayment description | 'Between December 21, 2013 and July 26, 2018. | ' | ' | ' | ' | ' | ' | ' | 'The loan balance would be repayable by various installments through June 21, 2014 to November 18, 2018. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Total interest expenses for the sale-leaseback arrangement | ' | 207,830 | 114,041 | 717,058 | 1,174,495 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Interest Portion of Minimum Lease Payments, Sale Leaseback Transactions | ' | 1,350,000 | ' | 1,350,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Secured short-term borrowings | ' | 4,876,067 | ' | 4,876,067 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Unsecured bank loans | ' | $3,250,711 | ' | $3,250,711 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
[1] | On September 2, 2013, the Company entered into a working capital loan agreement with the ICBC for $4,090,180 as of December 31, 2013, for which $813,921 was paid on June 5, 2014 and $3,250,553 was paid on August 15, 2014. The loan bears an interest rate of 115% over the primary lending rate of the People's Bank of China and was at 6.9% per annum at the time of funding. The Company paid off the principal balance and interest by August 15, 2014. Concurrent with the signing of the working capital loan agreement, the Company also entered into an agreement with the ICBC, which provided account management services to the Company during the terms of the underlying loan. The working capital loan was guaranteed by Hebei Fangsheng Real Estate Development Co. Ltd. ("Hebei Fangsheng") with the land use right on our Headquarters Compound pledged by Hebei Fangsheng as collateral for the benefit of the bank. The land use right on our Headquarters Compound was acquired by Hebei Fangsheng from the Company on August 9, 2013 (see Note (10) for the related party transaction). Hebei Fangsheng is controlled by the Company's Chairman and CEO Mr. Zhenyong Liu. | ||||||||||||||||||||||||||||||||||||||||||
[2] | On September 6, 2013, the Company obtained a new accounts receivable factoring facility from the ICBC for $818,036 as of December 31, 2013. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remained in the Company's books at all times, are not fully collected. The factoring facility expired on August 4, 2014 and bore an interest rate of 110% of the primary lending rate of the People's Bank of China and was at 6.6% per annum at the time of funding. The Company paid off the principal balance and interest under the factoring facility on August 4, 2014.Concurrent with the signing of the new factoring agreement, the Company also entered into a financial service agreement with the ICBC, which provided accounts receivable management services to the Company during the terms of the underlying factoring facility. The factoring facility was personally guaranteed by the Company's Chairman and CEO Mr. Zhenyong Liu. | ||||||||||||||||||||||||||||||||||||||||||
[3] | On December 3, 2013, the Company obtained from the ICBC an accounts receivable factoring facility with a maximum credit limit of $1,625,356 and $1,636,072 as of September 30, 2014 and December 31, 2013, respectively. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company's books at all times, are not fully collected. The term of the factoring facility expires on October 21, 2014 and carries an interest rate of 6.6% per annum, or 1.0% plus the prime rate for the loan set forth by the People's Bank of China at the time of funding. The unpaid balance of the loan was in the amount of $1,625,356 as of September 30, 2014. | ||||||||||||||||||||||||||||||||||||||||||
[4] | On June 26, 2014, the Company obtained a new accounts receivable factoring facility from the ICBC for $2,438,033 as of September 30, 2014. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company's books at all times, are not fully collected. The factoring facility will expire on June 25, 2015 and bears an interest rate of 110% of the primary lending rate of the People's Bank of China and was at 6.6% per annum at the time of funding. Concurrent with the signing of the new factoring agreement, the Company also entered into a financial service agreement with the ICBC, which provides accounts receivable management services to the Company during the terms of the underlying factoring facility. | ||||||||||||||||||||||||||||||||||||||||||
[5] | On August 19, 2014, the Company obtained a new accounts receivable factoring facility from the ICBC for $812,678 as of September 30, 2014. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company's books at all times, are not fully collected. The factoring facility will expire on June 11, 2015 and bears an interest rate of 110% of the primary lending rate of the People's Bank of China and was at 6.6% per annum at the time of funding. | ||||||||||||||||||||||||||||||||||||||||||
[6] | On July 18, 2014, the Company entered into a working capital loan agreement with the Commercial Bank of the City of Zhangjiakou for $3,250,711 as of September 30, 2014. The loan will expire on June 9, 2015 and bears an interest rate of 11.88% which is guaranteed by Zhenyong Liu and Shijiazhuang Baode Guarantee Service Company. |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | ||||||
Aug. 07, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Mar. 25, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Apartment | Mr. Zhenyong Liu [Member] | Mr. Zhenyong Liu [Member] | Mr. Zhenyong Liu [Member] | Mr. Zhenyong Liu [Member] | ||||||
Dormitory | Orient Paper HB [Member] | |||||||||
Related Party Transactions (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans payable to related parties | ' | ' | ' | ' | ' | ' | $2,373,981 | ' | $2,389,633 | ' |
Proceeds from shareholder loan | ' | 300,000 | ' | 643,500 | 953,507 | ' | ' | ' | ' | ' |
Interest rate on loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.15% |
Term of facility and loan payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years |
Loan from related parties, due date | ' | ' | ' | 2-Mar-16 | ' | ' | ' | ' | ' | ' |
Extended maturity date of loans from related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31-Dec-15 |
Accrued interest to a related party | ' | 672,133 | ' | 672,133 | ' | 566,343 | ' | 672,133 | 566,343 | ' |
Rental payment | 162,763 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Industrial building lease term | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of apartments sold to qualified employees | ' | ' | ' | 132 | ' | ' | ' | ' | ' | ' |
Gross profit from sale of assets | ' | ' | 203,488 | ' | 203,488 | ' | ' | ' | ' | ' |
Sale price of industrial land use rights | 2,770,000 | ' | ' | 2,770,000 | ' | ' | ' | ' | ' | ' |
Percentage of valuation of land use rights higher than previous appraisal | ' | ' | ' | 3.35% | ' | ' | ' | ' | ' | ' |
Sale price of industrial building | 1,150,000 | ' | ' | 1,150,000 | ' | ' | ' | ' | ' | ' |
Value of building | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' |
Number of dormitory buildings | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' |
Original cost of construction of three dormitory buildings | 4,310,000 | ' | ' | 4,310,000 | ' | ' | ' | ' | ' | ' |
Valuation of three dormitory buildings done by valuer | ' | ' | ' | 4,640,000 | ' | ' | ' | ' | ' | ' |
Accrued rent | ' | 186,025 | ' | 186,025 | ' | 64,546 | ' | ' | ' | ' |
Loan from related parties, interest expense | ' | $36,445 | $36,478 | $109,556 | $108,460 | ' | ' | ' | ' | ' |
Notes_Payable_Details
Notes Payable (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Notes payable (Textual) | ' | ' |
Notes payable | $21,129,622 | $4,908,216 |
Restricted cash | 11,377,489 | 2,454,108 |
Description of maturity of loans payable | 'They will become due and payable on various dates starting from May 15 through June 19 during the year of 2014. | 'They will become due and payable on various dates starting from May 15 through June 19 during the year of 2014. |
Property plant and equipment loan drawn from banking facility | 32,767 | 34,177 |
Bank acceptance notes [Member] | ' | ' |
Notes payable (Textual) | ' | ' |
Notes payable | 8,126,778 | ' |
Bank of Hebei (c) [Member] | ' | ' |
Notes payable (Textual) | ' | ' |
Number of bank acceptance notes | 14 | 3 |
Number of commercial acceptance notes | 1 | ' |
Notes payable | 6,501,422 | 4,908,216 |
Restricted cash | ' | 2,454,108 |
Handling charges of bank acceptance notes percentage | ' | ' |
Property plant and equipment loan drawn from banking facility | 32,767 | 34,177 |
Bank of Hebei (c) [Member] | Bank acceptance notes [Member] | ' | ' |
Notes payable (Textual) | ' | ' |
Notes payable | $6,501,422 | ' |
SPD Bank [Member] | ' | ' |
Notes payable (Textual) | ' | ' |
Handling charges of bank acceptance notes percentage | 0.05% | 0.05% |
Other_Payables_and_Accrued_Lia2
Other Payables and Accrued Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Summary of other payables and accrued liabilities | ' | ' |
Accrued electricity | $451,097 | $372,726 |
Accrued professional fees | 116,918 | 58,000 |
Value-added tax payable | 1,249,394 | 940,400 |
Accrued interest to a related party | 672,133 | 566,343 |
Accrued bank loan interest | 509,676 | 380,022 |
Advance from customer | 8,018 | 11,453 |
Insurance premium payable | ' | 62,348 |
Payable for purchase of equipment | 119,043 | ' |
Others | 135,738 | 260,180 |
Totals | $3,262,017 | $2,651,472 |
Common_Stock_Details
Common Stock (Details) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||
Aug. 27, 2014 | Apr. 04, 2013 | Nov. 21, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Jan. 11, 2012 | Jan. 12, 2012 | Dec. 31, 2013 | Aug. 28, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 10, 2012 | |
Director | 2011 Incentive Stock Plan [Member] | 2011 Incentive Stock Plan [Member] | 2011 Incentive Stock Plan [Member] | 2011 Incentive Stock Plan [Member] | 2012 Incentive Stock Plan [Member] | 2012 Incentive Stock Plan [Member] | 2012 Incentive Stock Plan [Member] | |||||
Common Stock (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock and warrants | 1,562,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued to purchase common stock | 781,250 | ' | ' | 39,062 | ' | ' | ' | ' | ' | ' | ' | ' |
Company issued restricted common shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | 297,000 | ' | ' |
Shares issued under incentive stock plan | ' | ' | ' | ' | ' | 109,584 | ' | 265,416 | ' | ' | 31,584 | ' |
Share price | $1.60 | ' | ' | ' | ' | ' | $3.45 | $2.66 | ' | ' | ' | ' |
Number of shares authorized for issuance under stock incentive plan | ' | ' | ' | ' | ' | ' | ' | ' | 375,000 | ' | ' | 200,000 |
Total fair value of stock | ' | ' | ' | ' | ' | ' | $378,065 | $790,020 | ' | ' | ' | ' |
Common stock cancelled previously issued to directors | ' | 2,875 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of directors whose shares are cancelled | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quarterly cash dividend approved | ' | $0.01 | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reversal of related capital accounts | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' |
Allocated share based compensation expense | ' | ' | ' | ' | $16,155 | ' | ' | ' | ' | ' | ' | ' |
Stock_Warrants_Details
Stock Warrants (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Date of Issuance August 27, 2014 to September 2, 2019 [Member] | ' |
Stock Warrants [Line Items] | ' |
Terms of warrants | '5 years |
Expected volatility | 72.00% |
Risk-free interest rate | 1.69% |
Expected dividend yield | 0.81% |
Date of Issuance September 3, 2014 to June 26, 2019 [Member] | ' |
Stock Warrants [Line Items] | ' |
Terms of warrants | '4 years 9 months 22 days |
Expected volatility | 69.80% |
Risk-free interest rate | 1.62% |
Expected dividend yield | 0.81% |
Stock_Warrants_Details_1
Stock Warrants (Details 1) (Warrant [Member], USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Warrant [Member] | ' |
Number | ' |
Outstanding and exercisable at beginning of the period | ' |
Issued during the period | 820,312 |
Exercised during the period | ' |
Cancelled or expired during the period | ' |
Outstanding and exercisable at end of the period | 820,312 |
Weighted average exercise price | ' |
Outstanding and exercisable at beginning of the period | ' |
Issued during the period | $1.71 |
Exercised during the period | ' |
Cancelled or expired during the period | ' |
Outstanding and exercisable at end of the period | $1.71 |
Range of exercise price, Lower range limit | $1.70 |
Range of exercise price, Upper range limit | $2 |
Stock_Warrants_Details_Textual
Stock Warrants (Details Textual) (USD $) | 0 Months Ended | 9 Months Ended |
Aug. 27, 2014 | Sep. 30, 2014 | |
Stock Warrants (Textual) | ' | ' |
Issuance of common stock and warrants | 1,562,500 | ' |
Shares issued to purchase common stock | 781,250 | 39,062 |
Exercise price | $1.70 | $2 |
Warrants expiration date | 2-Sep-19 | 26-Jun-19 |
Warrants exercisable term | '5 years | ' |
Aggregate percentage of common stock sold under offering | ' | 2.50% |
Weighted average fair value of warrants | ' | $0.99 |
Total intrinsic value of warrants exercised | ' | ' |
Aggregated intrinsic value of warrants outstanding and exercisable | ' | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Basic income per share | ' | ' | ' | ' |
Net income for the period - numerator | $3,372,944 | $5,534,844 | $9,478,346 | $9,494,035 |
Weighted average common stock outstanding - denominator | 18,923,374 | 18,456,900 | 18,909,001 | 18,457,879 |
Net income per share | $0.18 | $0.30 | $0.50 | $0.51 |
Diluted income per share | ' | ' | ' | ' |
Net income for the period - numerator | $3,372,944 | $5,534,844 | $9,478,346 | $9,494,035 |
Weighted average common stock outstanding - denominator | 18,923,374 | 18,456,900 | 18,909,001 | 18,457,879 |
Effect of dilution | ' | ' | ' | ' |
Weighted average common stock outstanding - denominator | 18,923,374 | 18,456,900 | 18,909,001 | 18,457,879 |
Diluted income per share | $0.18 | $0.30 | $0.50 | $0.51 |
Earnings_Per_Share_Details_Tex
Earnings Per Share (Details Textual) | 9 Months Ended |
Sep. 30, 2014 | |
Earnings per Share [Abstract] | ' |
Dilutive net income per share | 820,312 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Provision for Income Taxes | ' | ' | ' | ' |
Current Tax Provision - PRC | $1,019,837 | $1,808,503 | $3,055,355 | $3,276,466 |
Deferred Tax Provision - PRC | 227,419 | 170,600 | 481,138 | 274,427 |
Total Provision for Income Taxes | $1,247,256 | $1,979,103 | $3,536,493 | $3,550,893 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Taxes (Textual) | ' | ' | ' | ' |
Statutory tax rate | ' | ' | 34.00% | ' |
State tax rate | ' | ' | 0.00% | ' |
Effective income tax rate | 27.00% | 26.30% | 27.20% | 27.20% |
Income tax, statute of limitations period | ' | ' | '5 years | ' |
PRC [Member] | ' | ' | ' | ' |
Income Taxes (Textual) | ' | ' | ' | ' |
Statutory tax rate | ' | ' | 25.00% | ' |
Effective income tax rate | ' | ' | 35.00% | ' |
Stock_Incentive_Plan_Details
Stock Incentive Plan (Details) | 0 Months Ended | 12 Months Ended | 12 Months Ended | ||
Jan. 11, 2012 | Dec. 31, 2013 | Aug. 28, 2011 | Dec. 31, 2013 | Sep. 10, 2012 | |
2011 Incentive Stock Plan [Member] | 2011 Incentive Stock Plan [Member] | 2011 Incentive Stock Plan [Member] | 2012 Incentive Stock Plan [Member] | 2012 Incentive Stock Plan [Member] | |
Stock Incentive Plan (Textual) | ' | ' | ' | ' | ' |
Number of shares authorized for issuance under stock incentive plan | ' | ' | 375,000 | ' | 200,000 |
Shares issued under incentive stock plan | 109,584 | 265,416 | ' | 31,584 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Sep. 30, 2014 |
Schedule of future minimum lease payments | ' |
2015 | $807,802 |
2016 | 767,168 |
2017 | 604,632 |
2018 | 604,632 |
2019 | 604,632 |
Thereafter | 4,915,075 |
Total operating lease payments | $8,303,941 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Nov. 27, 2012 | Nov. 27, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Minimum [Member] | Maximum [Member] | Local government, Xushui County [Member] | Local government, Xushui County [Member] | Investment Company [Member] | Investment Company [Member] | Hebei Fangsheng [Member] | Hebei Fangsheng [Member] | |
USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | ||||||||
acre | acre | ||||||||||||
Commitments and Contingencies (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Area of land leased | ' | ' | ' | ' | ' | ' | ' | 32.95 | 32.95 | 49.4 | 49.4 | ' | ' |
Lease expiration period | ' | ' | ' | ' | ' | ' | ' | '30 years | '30 years | '15 years | '15 years | '3 years | '3 years |
Lease expiration date | ' | ' | ' | ' | ' | ' | ' | 31-Dec-31 | 31-Dec-31 | ' | ' | ' | ' |
Operating lease annual rental payment | ' | ' | ' | ' | ' | ' | ' | $19,532 | 120,000 | $585,947 | 3,600,000 | $162,763 | 1,000,000 |
Operating lease renewable term | ' | ' | ' | ' | ' | ' | ' | 'Orient Paper leases 32.95 acres of land from a local government in Xushui County, Baoding City, Hebei, China through a real estate lease with a 30-year term, | 'Orient Paper leases 32.95 acres of land from a local government in Xushui County, Baoding City, Hebei, China through a real estate lease with a 30-year term, | 'Orient Paper entered into a 49.4 acres land lease with an investment company in the Economic Development Zone in Wei County, Hebei, China. The lease term of the Wei County land lease commences on the date of the lease and lasts for 15 years. The lease requires an annual rental payment of $585,432 (RMB 3,600,000). | 'Orient Paper entered into a 49.4 acres land lease with an investment company in the Economic Development Zone in Wei County, Hebei, China. The lease term of the Wei County land lease commences on the date of the lease and lasts for 15 years. The lease requires an annual rental payment of $585,432 (RMB 3,600,000). | ' | ' |
Performance holdback on new tissue paper, percentage | ' | ' | ' | ' | ' | 5.00% | 10.00% | ' | ' | ' | ' | ' | ' |
Outstanding commitments for construction of equipment and facilities | 37,696,398 | ' | 37,696,398 | ' | 51,673,158 | ' | ' | ' | ' | ' | ' | ' | ' |
Rental expenses | $191,504 | $177,898 | $575,675 | $475,999 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Summarized financial information for reportable segments | ' | ' | ' | ' | ' |
Revenues | $40,754,205 | $37,686,114 | $104,344,334 | $90,471,282 | ' |
Gross Profit | 6,410,848 | 8,435,814 | 17,202,691 | 16,164,446 | ' |
Depreciation and amortization | 2,010,130 | 2,059,270 | 5,877,824 | 5,980,720 | ' |
Interest income | 35,090 | 24,159 | 79,938 | 78,948 | ' |
Interest expense | 344,191 | 244,385 | 888,028 | 723,103 | ' |
Income tax expense | 1,247,256 | 1,979,103 | 3,536,493 | 3,550,893 | ' |
Net Income (Loss) | 3,372,944 | 5,534,844 | 9,478,346 | 9,494,035 | ' |
Total Assets | 231,549,522 | ' | 231,549,522 | ' | 209,526,202 |
Orient Paper HB [Member] | ' | ' | ' | ' | ' |
Summarized financial information for reportable segments | ' | ' | ' | ' | ' |
Revenues | 40,183,579 | 36,097,505 | 101,402,582 | 86,982,167 | ' |
Gross Profit | 6,401,583 | 8,029,435 | 16,637,730 | 15,536,788 | ' |
Depreciation and amortization | 1,308,580 | 1,364,219 | 3,764,983 | 3,914,115 | ' |
Interest income | 33,752 | 22,871 | 77,043 | 76,599 | ' |
Interest expense | 344,191 | 242,740 | 888,028 | 719,593 | ' |
Income tax expense | 1,227,949 | 1,879,452 | 3,378,702 | 3,397,122 | ' |
Net Income (Loss) | 3,801,421 | 5,649,511 | 10,266,271 | 10,247,650 | ' |
Total Assets | 186,295,286 | ' | 186,295,286 | ' | 168,149,877 |
Orient Paper Shengde [Member] | ' | ' | ' | ' | ' |
Summarized financial information for reportable segments | ' | ' | ' | ' | ' |
Revenues | 570,626 | 1,588,609 | 2,941,752 | 3,489,115 | ' |
Gross Profit | 9,265 | 406,379 | 564,961 | 627,658 | ' |
Depreciation and amortization | 701,550 | 695,051 | 2,112,841 | 2,066,605 | ' |
Interest income | 1,338 | 1,265 | 2,895 | 2,300 | ' |
Interest expense | ' | ' | ' | ' | ' |
Income tax expense | 19,307 | 99,651 | 157,791 | 153,771 | ' |
Net Income (Loss) | -39,917 | 270,450 | 310,373 | 371,382 | ' |
Total Assets | 42,841,370 | ' | 42,841,370 | ' | 41,264,704 |
Not Attributable to Segments [Member] | ' | ' | ' | ' | ' |
Summarized financial information for reportable segments | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' |
Gross Profit | ' | ' | ' | ' | ' |
Depreciation and amortization | ' | ' | ' | ' | ' |
Interest income | ' | 23 | ' | 49 | ' |
Interest expense | ' | 1,645 | ' | 3,510 | ' |
Income tax expense | ' | ' | ' | ' | ' |
Net Income (Loss) | -388,560 | -385,117 | -1,098,298 | -1,124,997 | ' |
Total Assets | 2,412,866 | ' | 2,412,866 | ' | 111,621 |
Elimination of Inter-segment [Member] | ' | ' | ' | ' | ' |
Summarized financial information for reportable segments | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' |
Gross Profit | ' | ' | ' | ' | ' |
Depreciation and amortization | ' | ' | ' | ' | ' |
Interest income | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' |
Income tax expense | ' | ' | ' | ' | ' |
Net Income (Loss) | ' | ' | ' | ' | ' |
Total Assets | ' | ' | ' | ' | ' |
Enterprise-wide, consolidated [Member] | ' | ' | ' | ' | ' |
Summarized financial information for reportable segments | ' | ' | ' | ' | ' |
Revenues | 40,754,205 | 37,686,114 | 104,344,334 | 90,471,282 | ' |
Gross Profit | 6,410,848 | 8,435,814 | 17,202,691 | 16,164,446 | ' |
Depreciation and amortization | 2,010,130 | 2,059,270 | 5,877,824 | 5,980,720 | ' |
Interest income | 35,090 | 24,159 | 79,938 | 78,948 | ' |
Interest expense | 344,191 | 244,385 | 888,028 | 723,103 | ' |
Income tax expense | 1,247,256 | 1,979,103 | 3,536,493 | 3,550,893 | ' |
Net Income (Loss) | 3,372,944 | 5,534,844 | 9,478,346 | 9,494,035 | ' |
Total Assets | $231,549,522 | ' | $231,549,522 | ' | $209,526,202 |
Segment_Reporting_Details_Text
Segment Reporting (Details Textual) | 9 Months Ended |
Sep. 30, 2014 | |
Segments | |
Segment Reporting (Textual) | ' |
Number of business operating segments | 2 |
Number of reportable segment | 2 |
Concentration_of_Major_Custome1
Concentration of Major Customers and Suppliers (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Supplier | Supplier | Supplier | Supplier | |
Concentration and major customers and suppliers (Textual) | ' | ' | ' | ' |
Percentage of revenue from Orient Paper HB | 10.00% | 10.00% | 10.00% | 10.00% |
Number of major suppliers | 2 | 2 | 3 | 3 |
Number of customer contributed over 10% of total sales | ' | ' | ' | ' |
Supplier A [Member] | ' | ' | ' | ' |
Concentration and major customers and suppliers (Textual) | ' | ' | ' | ' |
Percentage of revenue from Orient Paper HB | 52.00% | 77.00% | 62.00% | 75.00% |
Supplier B [Member] | ' | ' | ' | ' |
Concentration and major customers and suppliers (Textual) | ' | ' | ' | ' |
Percentage of revenue from Orient Paper HB | 21.00% | 8.00% | 13.00% | 10.00% |
Supplier C [Member] | ' | ' | ' | ' |
Concentration and major customers and suppliers (Textual) | ' | ' | ' | ' |
Percentage of revenue from Orient Paper HB | ' | ' | 8.00% | ' |