Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 14, 2013 | |
Document And Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Huixin Waste Water Solutions, Inc. | ' |
Entity Central Index Key | '0001381807 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 22,456,695 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $35,809,292 | $33,871,287 |
Accounts receivable | 3,122,104 | 2,729,778 |
Inventories | 1,221,626 | 1,447,570 |
Other current assets | 20,200 | 31,479 |
Total current assets | 40,173,222 | 38,080,114 |
Property, plant and equipment and land and mining rights, net | 93,533,987 | 13,618,082 |
Deposit for mining right acquisition | ' | 63,480,677 |
Total assets | 133,707,209 | 115,178,873 |
Current liabilities: | ' | ' |
Short - term debt | 19,555,344 | 19,044,203 |
Accounts payable | 2,077,240 | 2,444,555 |
Accrued expenses | 1,108,939 | 2,335,342 |
Due to shareholders | 15,290 | 15,290 |
Value added taxes payable | 821,333 | 646,743 |
Other taxes payable | 149,941 | 160,605 |
Income tax payable | 170,719 | 1,332,804 |
Total current liabilities | 23,898,806 | 25,979,542 |
Deferred income taxes | 468,736 | 311,425 |
Total liabilities | 24,367,542 | 26,290,967 |
Commitments and contingencies | ' | ' |
Shareholders' equity: | ' | ' |
Preferred stock, $0.000128 par value, 781,250 shares authorized, 177,530 and 184,198 shares issued and outstanding on September 30, 2013 and December 31, 2012 | 23 | 24 |
Common stock: $0.00018254172 par value, 39,062,500 shares authorized, 22,456,695 and 21,089,275 shares issued and outstanding on September 30, 2013 and December 31, 2012 | 4,099 | 3,850 |
Additional paid-in capital | 31,502,795 | 24,840,803 |
Accumulated other comprehensive income | 9,652,056 | 7,071,841 |
Retained earnings (the restricted portion of retained earnings is $496,396 on September 30, 2013 and December 31, 2012 | 68,180,694 | 56,971,388 |
Total shareholders' equity | 109,339,667 | 88,887,906 |
Total liabilities and shareholders' equity | $133,707,209 | $115,178,873 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Balance Sheets [Abstract] | ' | ' |
Preferred Stock, Par Value | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 781,250 | 781,250 |
Preferred Stock, Shares Issued | 177,530 | 184,198 |
Preferred Stock, Shares Outstanding | 177,530 | 184,198 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 39,062,500 | 39,062,500 |
Common Stock, Shares Issued | 22,456,695 | 21,089,275 |
Common Stock, Shares Outstanding | 22,456,695 | 21,089,275 |
Restricted Portion of Retained Earnings | $496,396 | $496,396 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Statements of Income [Abstract] | ' | ' | ' | ' |
Net revenue | $21,361,331 | $22,407,329 | $64,002,554 | $61,298,540 |
Cost of revenue | 11,575,232 | 12,308,208 | 34,875,014 | 33,746,528 |
Gross profit | 9,786,099 | 10,099,121 | 29,127,540 | 27,552,012 |
Operating expenses: | ' | ' | ' | ' |
Selling and marketing | 744,583 | 797,674 | 2,161,603 | 2,218,268 |
General and administrative | 1,382,882 | 1,490,942 | 10,590,151 | 3,826,647 |
Research and development | 179,432 | 151,176 | 533,787 | 470,722 |
Total operating expenses | 2,306,897 | 2,439,792 | 13,285,541 | 6,515,637 |
Income from operations | 7,479,202 | 7,659,329 | 15,841,999 | 21,036,375 |
Other income/(expense): | ' | ' | ' | ' |
Interest income | 29,879 | 79,596 | 78,483 | 708,023 |
Interest expense | -298,621 | -228,123 | -882,000 | -284,243 |
Total other income/(expense) | -268,742 | -148,527 | -803,517 | 423,780 |
Income before provision for income taxes | 7,210,460 | 7,510,802 | 15,038,482 | 21,460,155 |
Provision for income taxes | 1,811,743 | 1,901,646 | 3,816,936 | 5,454,958 |
Net income | 5,398,717 | 5,609,156 | 11,221,546 | 16,005,197 |
Less cumulative dividends on preferred stock | 43,227 | 100,081 | 129,560 | 300,243 |
Net income attributable to common shareholders | $5,355,490 | $5,509,075 | $11,091,986 | $15,704,954 |
Net income per common share - basic | $0.24 | $0.28 | $0.51 | $0.80 |
Net income per common share - diluted | $0.23 | $0.26 | $0.49 | $0.73 |
Weighted average number of common shares outstanding - basic | 22,456,695 | 19,600,305 | 21,842,586 | 19,600,305 |
Weighted average number of common shares outstanding - diluted | 23,340,265 | 21,824,325 | 22,726,987 | 21,824,325 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Statements of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | $5,398,717 | $5,609,156 | $11,221,546 | $16,005,197 |
Other comprehensive income: | ' | ' | ' | ' |
Foreign currency translation adjustments | 627,540 | -127,092 | 2,580,215 | 350,325 |
Comprehensive income | $6,026,257 | $5,482,064 | $13,801,761 | $16,355,522 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Shareholders' Equity (USD $) | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Retained Earning, Restricted | Retained Earning, Unrestricted |
Beginning Balance at Dec. 31, 2012 | $88,887,906 | $24 | $3,850 | $24,840,803 | $7,071,841 | $496,396 | $56,474,992 |
Beginning Balance (Shares) at Dec. 31, 2012 | ' | 184,198 | 21,089,275 | ' | ' | ' | ' |
Net income | 11,221,546 | ' | ' | ' | ' | ' | 11,221,546 |
Shares issued in kind for the payment of preferred stock dividend | ' | ' | ' | 12,240 | ' | ' | -12,240 |
Shares issued in kind for the payment of preferred stock dividend (Shares) | ' | 816 | ' | ' | ' | ' | ' |
Preferred stock and related dividends in arrears converted to common stock | ' | -1 | 7 | -6 | ' | ' | ' |
Preferred stock and related dividends in arrears converted to common stock, (Shares) | ' | -7,484 | 37,420 | ' | ' | ' | ' |
Common stock issued for services | 6,650,000 | ' | 242 | 6,649,758 | ' | ' | ' |
Common stock issued for services, (Shares) | ' | ' | 1,330,000 | ' | ' | ' | ' |
Other comprehensive income - foreign currency translation adjustments | 2,580,215 | ' | ' | ' | 2,580,215 | ' | ' |
Balance at Sep. 30, 2013 | $109,339,667 | $23 | $4,099 | $31,502,795 | $9,652,056 | $496,396 | $67,684,298 |
Balance (Shares) at Sep. 30, 2013 | ' | 177,530 | 22,456,695 | ' | ' | ' | ' |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities: | ' | ' |
Net income | $11,221,546 | $16,005,197 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 2,320,151 | 1,047,465 |
Deferred income taxes | 145,125 | -453 |
Issuance of common stock for services | 6,650,000 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -315,119 | -873,048 |
Interest receivable | ' | 157,171 |
Inventories | 261,526 | -230,512 |
Advance to suppliers | ' | 3,852,007 |
Other assets | 11,975 | -4,495 |
Accounts payable | -429,362 | 690,404 |
Accrued expenses | -1,273,155 | -305,160 |
Value added taxes payable | 140,392 | 264,967 |
Other taxes payable | 112 | 64,453 |
Income tax payable | -1,203,594 | 655,406 |
Net cash provided by operating activities | 17,529,597 | 21,323,402 |
Cash flows from investing activities: | ' | ' |
Purchase of property, plant and equipment | -91,888 | -209,113 |
Mining rights acquisition | -16,250,008 | -31,703,760 |
Promissory note receivable from non related party | ' | 25,363,008 |
Net cash used in investing activities | -16,341,896 | -6,549,865 |
Cash flows from financing activities: | ' | ' |
Principal payments on short-term debt | -12,989,543 | -22,509,670 |
Proceeds received from short-term debt | 12,989,543 | 35,191,174 |
Decrease in restricted cash | ' | 550,000 |
Net cash provided by financing activities | ' | 13,231,504 |
Effect of exchange rate changes on cash and cash equivalents | 750,304 | 91,887 |
Net increase in cash and cash equivalents | 1,938,005 | 28,096,928 |
Cash and cash equivalents at the beginning of period | 33,871,287 | 26,383,537 |
Cash and cash equivalents at the end of period | 35,809,292 | 54,480,465 |
Supplemental disclosure of cash flow information: | ' | ' |
Income taxes paid | 4,875,404 | 4,799,533 |
Interest paid | 882,000 | 284,243 |
Non-cash investing and financing activities: | ' | ' |
Reclassify deposit for mining rights acquisition to property, plant and equipment and land and mining rights | 63,480,677 | ' |
Preferred stock issued in kind for payment of dividends | $12,240 | ' |
Organization_Nature_of_Busines
Organization, Nature of Business and Basis of Presentation | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Organization, Nature of Business and Basis of Presentation [Abstract] | ' | |||||||||
Organization, Nature of Business and Basis of Presentation | ' | |||||||||
-1 | Organization, Nature of Business and Basis of Presentation | |||||||||
Huixin Waste Water Solutions, Inc. (“the Company” or “Huixin”) was incorporated in the Cayman Islands on December 7, 2006. The Company was originally organized as a “blank check” shell company to investigate and acquire a target company or business desiring to be a publicly held corporation. Wealth Environmental Protection Group, Inc. (“WEP”) was incorporated under the laws of the British Virgin Islands on June 3, 2010 to serve as an investment holding company. On December 15, 2010, the Company (i) closed a share exchange transaction pursuant to which it became the 100% parent of WEP, and (ii) assumed the operations of WEP and its subsidiaries. | ||||||||||
The share exchange transaction has been treated as a recapitalization of WEP, with Huixin emerging as the surviving legal entity and WEP is considered as the acquirer for accounting purposes. Prior to the recapitalization, Huixin had essentially no assets or liabilities and issued approximately 96% of its outstanding shares to the shareholders of WEP and their designees in the recapitalization. The historical consolidated financial statements of WEP are retroactively presented as the financial statements of Huixin. A summary of the Company subsidiaries is currently as follows: | ||||||||||
Domicile and | ||||||||||
Date of | Paid -In | Effective | ||||||||
Name and Location | Incorporation | Capital | Ownership | Activities | ||||||
Wealth Environmental Protection Group, Inc (“WEP”) | British Virgin Islands | $ | 7,000 | 100% Owned | Holding Company | |||||
3-Jun-10 | ||||||||||
Wealth Environmental Technology Holding Ltd. (“Wealth Technology”) | Hong Kong | $ | 1,299 | 100% Owned | Holding Company | |||||
Hong Kong | 18-Jun-10 | |||||||||
Jiangmen Huiyuan Environmental Protection Technology Consultancy Co. | People’s Republic Of China (“PRC”) | $ | 15,082 | 100% Owned - Wholly Foreign Owned Entity (“WFOE”) | Holding Company | |||||
(“Jiangmen Huiyuan”) | 22-Jul-10 | |||||||||
Jiangmen, Guandong Province | ||||||||||
Guangdong Huixin Environmental Protection Co., Ltd. (formerly “Jiangmen Wealth Water Purifying Agent Co., Ltd”) (“Guangdong Huixin”) | PRC | $ | 4,049,060 | 100% Control Through | Manufacturer of water purifying agents | |||||
Jiangmen, Guandong Province | 25-Apr-03 | Contractual Arrangements | ||||||||
Guizhou Yufeng Melt Co., Ltd. (“Guizhou Yufeng”) | PRC | $ | 4,233,854 | 100% Control Through | Manufacturer of HAC Powder (defined below) using bauxite and limestone from mines controlled under mining rights agreements | |||||
Guizhou Province | 25-Mar-05 | Contractual Arrangements | ||||||||
Shanxi Wealth Aluminate | PRC | $ | 6,786,056 | 100% Control Through | Manufacturer of HAC Powder (defined below) using bauxite | |||||
Materials Co., Ltd (“Shanxi Weath”) | 8-Apr-04 | Contractual Arrangements | and limestone from mines controlled under mining rights agreements | |||||||
Shanxi Province | ||||||||||
On September 29, 2010, Jiangmen Huiyuan entered into a series of contractual agreements with Guangdong Huixin (formerly “Jiangmen Wealth Water”), and its shareholders, in which Jiangmen Huiyuan effectively assumed management of the business activities of Guangdong Huixin and has the right to appoint all executives and senior management and the members of the board of directors of Guangdong Huixin. The contractual arrangements are comprised of a series of agreements, including an Exclusive Business Cooperation Agreement, Exclusive Option Agreement, Equity Interest Pledge Agreement and Power of Attorney, through which Jiangmen Huiyuan has the right to provide exclusive complete business support and technical and consulting service to Guangdong Huixin for an annual fee in the amount of Guangdong Huixin’s yearly net profits after tax. Additionally, Guangdong Huixin’s shareholders have pledged their rights, titles and equity interest in Guangdong Huixin as security for Jiangmen Huiyuan to collect consulting and service fees provided to Guangdong Huixin through an Equity Pledge Agreement. In order to further reinforce Jiangmen Huiyuan’s rights to control and operate Guangdong Huixin, the shareholders of Guangdong Huixin have granted Jiangmen Huiyuan the exclusive right and option to acquire all of their equity interests in Guangdong Huixin through an Exclusive Option Agreement. | ||||||||||
Based on Jiangmen Huiyuan’s contractual relationship with Guangdong Huixin, the Company has determined that a variable interest entity has been created and therefore Guangdong Huixin is considered a consolidated subsidiary of the Company. Additionally, because all of the companies are currently under common control, the series of agreements and restructurings referred to above have been accounted for as a reorganization of the entities and the financial statements have been prepared as if the reorganization had occurred retroactively. Accordingly these financial statements present the consolidated operating results, assets and liabilities of Guangdong Huixin and its subsidiaries, which are collectively referred to as the “Company”. | ||||||||||
The Company produces and sells water purifying agents and high-performance aluminates calcium (“HAC”) powder, the core ingredient of its water purifying agents in China. | ||||||||||
The accompanying condensed consolidated balance sheet as of December 31, 2012, which has been derived from the audited consolidated financial statements and the accompanying unaudited condensed consolidated financial statements, has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations and the Company believes that the disclosures made are adequate to make the information not misleading. | ||||||||||
In the opinion of management, these condensed consolidated financial statements reflect all adjustments which are of a normal recurring nature and which are necessary to present fairly the financial position of Huixin as of September 30, 2013, the results of operations, and cash flows for the three and nine-month periods ended September 30, 2013 and September 30, 2012. These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2012, filed with the SEC on March 29, 2013. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results which may be expected for the entire fiscal year. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||||||
-2 | Summary of Significant Accounting Policies, continued | ||||||||||||||||
Principles of Consolidation | |||||||||||||||||
These condensed consolidated financial statements present the consolidated accounts of WEP and its subsidiaries, Wealth Technology, Jiangmen Huiyan, and its variable interest entities, Guangdong Huixin, Guizhou Yunfeng and Shanxi Wealth, which are collectively referred to as the “Company”. This presentation is based upon the retroactive treatment of series of agreements and restructurings of companies under common control as described in Note (1). | |||||||||||||||||
All inter-company transactions and balances have been eliminated in preparation of the condensed consolidated financial statements. | |||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses in the condensed consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s condensed consolidated financial statements include collectability of accounts receivable, useful lives and impairment of property and equipment, mineral reserves available for mining production, total expected use of mineral reserves and value and realizability of intangible assets. Actual results could differ from those estimates. | |||||||||||||||||
Segments | |||||||||||||||||
For the three and nine months ended September 30, 2013 and 2012, the Company’s operations have been broken down into 3 segments based on production facility, consistent with the manner that management reviews operations on a regular basis. All our operations revolve around the production of water purification agents made to similar specifications. All of the Company’s segments have similar assets, customers and distribution methods, and their economic characteristics are similar with regard to their gross margin percentages. | |||||||||||||||||
Currency Reporting | |||||||||||||||||
The Company’s operations in the PRC use the local currency, Renminbi (“RMB”), as their functional currency, whereas amounts reported in the accompanying condensed consolidated financial statements and disclosures are stated in U.S. dollars, the reporting currency of the Company, unless stated otherwise. As such, the condensed consolidated balance sheets of the Company have been translated into U.S. dollars at the current rates as of September 30, 2013 and December 31, 2012 and the condensed consolidated statements of income have been translated into U.S. dollars at the weighted average rates during the periods the transactions were recognized. | |||||||||||||||||
The resulting translation gain adjustments are recorded as other comprehensive income in the condensed consolidated statements of comprehensive income and as a separate component of equity in the condensed consolidated balance sheets and condensed consolidated statements of shareholders’ equity. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company’s main source of revenue is generated from sales of water purifying agents and HAC powder. The Company recognizes revenue when there is persuasive evidence of a sales arrangement, delivery and acceptance by the customer has occurred, the sales price is fixed or determinable, and collection is probable. Under the Company’s typical sales terms for both water purifying agents and HAC powder, the Company recognizes revenue when product is shipped from its production facilities because shipments are made FOB shipping point with the customer bearing all shipping costs and title and risk of loss transferring to the customer upon shipment. Sales terms for water purifying agents and HAC powder do not include customer acceptance provisions, the right of return (unless the product is proven to be defective) or other post-delivery obligations. The Company has not experienced any significant returns associated with defective product. | |||||||||||||||||
Major Customers | |||||||||||||||||
During the three and nine months ended September 30, 2013 and 2012, there was no single customer which accounted for 10% or more of our net revenue. | |||||||||||||||||
Major Suppliers | |||||||||||||||||
During the three and nine months ended September 30, 2013 and 2012, certain suppliers accounted for more than 10% of the Company’s total net purchases as follows, and none of the major suppliers are related parties to the Company. | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Supplier 1 | 16 | % | 12 | % | 15 | % | 12 | % | |||||||||
Supplier 2 | 12 | % | 18 | % | 13 | % | 11 | % | |||||||||
Supplier 3 | 12 | % | 12 | % | 11 | % | 16 | % | |||||||||
Value-Added Tax (“VAT”) | |||||||||||||||||
Value added taxes represent amounts collected on behalf of specific Chinese government agencies that require remittance of tax by specified dates. Value added taxes are collected at the time of sales and are detailed on invoices provided to customers. The Company accounts for value added taxes on a net basis. The Company recorded and paid sales related taxes based on a percentage of the value added taxes and reported the revenue net of the sales related taxes. | |||||||||||||||||
Enterprises or individuals, who sell commodities, engage in repair and maintenance or import or export goods in the PRC are subject to a value-added tax in accordance with the PRC laws. The value-added tax standard rate for sales made by the Company is 17% of the gross sales price and the Company records its revenue net of VAT. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used to offset the VAT due on the sales of the finished products. When the Company purchases raw materials, the VAT incurred by the Company, and subject to credit, generally varies from 6% to 17% depending on the type of materials or services purchased. There is a significant difference in the VAT that the Company incurs on purchases and the amount the Company bills to customers for sales of HAC powder and water purifying agents due to the fact that the Company converts raw materials from their mined state to finished product and is responsible for the substantial portion of increased value in its products. | |||||||||||||||||
Value-Added Tax (“VAT”), continued | |||||||||||||||||
Following is an analysis of VAT billed to the Company on purchases, VAT billed by the Company on sales and VAT remitted to PRC during the nine months ended September 30, 2013 and 2012, with information related to the liability for uncollected or unremitted VAT as of September 30, 2013 and December 31, 2012: | |||||||||||||||||
Nine Months | Nine Months | ||||||||||||||||
Ended | Ended | ||||||||||||||||
30-Sep-13 | 30-Sep-12 | ||||||||||||||||
VAT billed to customers for sales during the period | $ | 12,613,741 | $ | 12,017,833 | |||||||||||||
Less: VAT billed to the Company for purchases during the period | 4,627,436 | 4,780,061 | |||||||||||||||
Net VAT on transactions during the period | 7,986,305 | 7,237,772 | |||||||||||||||
Amount remitted to the PRC | (7,811,715 | ) | (6,970,630 | ) | |||||||||||||
VAT payable at beginning of period | 646,743 | 497,581 | |||||||||||||||
VAT payable at period end | $ | 821,333 | $ | 764,723 | |||||||||||||
As of | As of | ||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Liabilities for taxes collected but not remitted | $ | 367,694 | $ | 250,109 | |||||||||||||
Liabilities for taxes billed to customers but not collected | |||||||||||||||||
from the customers or remitted to PRC | 453,639 | 396,634 | |||||||||||||||
VAT payable at period end | $ | 821,333 | $ | 646,743 | |||||||||||||
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
3) | Earnings Per Share | ||||||||||||||||
Basic net earnings per share is computed using the weighted-average number of common shares outstanding. The dilutive effect of potential common shares outstanding is included in diluted net earnings per share. The computations of basic net earnings per share and diluted net earnings per share for three and nine months ended September 30, 2013 and 2012 are as follows: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net income attributable to common shareholders - Basic | $ | 5,355,490 | $ | 5,509,075 | $ | 11,091,986 | $ | 15,704,954 | |||||||||
Add: cumulative dividends attributable to convertible preferred stock | 43,227 | 100,081 | 129,560 | 300,243 | |||||||||||||
Net income attributable to common shareholders - Diluted | $ | 5,398,717 | $ | 5,609,156 | $ | 11,221,546 | $ | 16,005,197 | |||||||||
Weighted average number of common shares outstanding - Basic | 22,456,695 | 19,600,305 | 21,842,586 | 19,600,305 | |||||||||||||
Dilutive effect of preferred stock conversion | 883,570 | 2,224,020 | 884,401 | 2,224,020 | |||||||||||||
Weighted average number of common shares outstanding - Diluted | 23,340,265 | 21,824,325 | 22,726,987 | 21,824,325 | |||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.24 | $ | 0.28 | $ | 0.51 | $ | 0.8 | |||||||||
Diluted | $ | 0.23 | $ | 0.26 | $ | 0.49 | $ | 0.73 | |||||||||
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventories [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
-4 | Inventories | ||||||||
A summary of inventories is as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Raw Materials | $ | 899,629 | $ | 949,111 | |||||
Work in progress | 40,225 | 33,228 | |||||||
Finished goods | 281,772 | 465,231 | |||||||
$ | 1,221,626 | $ | 1,447,570 | ||||||
Inventories are stated at the lower of cost or market. The weighted average cost method is used to account for the Company inventories. |
Property_Plant_and_Equipment_a
Property, Plant and Equipment and Land and Mining Rights | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Property, Plant and Equipment and Land and Mining Rights [Abstract] | ' | ||||||||||||||||
Property, Plant, Equipment, Land and Mining Rights | ' | ||||||||||||||||
-5 | Property, Plant and Equipment and Land and Mining Rights | ||||||||||||||||
Property, plant and equipment and land use rights are carried at cost less accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line basis method over the following estimated useful lives: | |||||||||||||||||
Estimated | |||||||||||||||||
Category | Useful Life | ||||||||||||||||
Land use rights | 43 to 48 years | ||||||||||||||||
Mining rights | 14 to 30 years | ||||||||||||||||
Leasehold improvements | 20 to 40 years | ||||||||||||||||
Production equipment | 5 to 30 years | ||||||||||||||||
Furniture and fixtures | 5 years | ||||||||||||||||
Automobiles | 5 years | ||||||||||||||||
Mining rights, which are for definite terms ranging from 14 to 30 years, are amortized using the units of production method. In applying this method, the numerator is current year production and the denominator is expected production from mines over the life of the individual mining rights, with consideration of production limitations imposed by the mining rights agreements. | |||||||||||||||||
A summary of property, plant, equipment and land and mining rights is as follows: | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Leasehold improvement | $ | 3,437,873 | $ | 3,348,013 | |||||||||||||
Production equipment | 7,003,348 | 6,777,072 | |||||||||||||||
Furniture and fixtures | 493,943 | 468,644 | |||||||||||||||
Automobiles | 624,211 | 572,900 | |||||||||||||||
Land use rights | 2,356,426 | 2,294,833 | |||||||||||||||
Mining rights | 91,095,311 | 9,045,997 | |||||||||||||||
105,011,112 | 22,507,459 | ||||||||||||||||
Less: Accumulated depreciation and amortization | 11,477,125 | 8,889,377 | |||||||||||||||
$ | 93,533,987 | $ | 13,618,082 | ||||||||||||||
On August 28, 2012, the Company entered into a transfer agreement with Xiuwen Longchang Mineral Industry Co., Ltd (“Longchang Mineral”), pursuant to which, Longchang Mineral transferred its aluminum bauxite mine mining rights located in Xiuwen County, Longchang Town, Ganba, 25th Group, PRC to the Company for consideration of approximately $80 million (RMB502 million) and the Company transferred its aluminum bauxite mine mining rights located in Xiumen, Guizhou, PRC, to Longchang Mineral as in-kind exchange for consideration of approximately $2.87 million (RMB18 million). The Company paid approximately $63.4 million (RMB400 million) as a deposit for the mining rights acquisition. | |||||||||||||||||
On February 4, 2013, the Company transferred its Guizhou aluminum bauxite mine mining rights and paid approximately an additional $16.3 million (RMB102 million) to Longchang Mineral to complete the transaction. On February 6, 2013, the Company received a license form Guizhou National Land and Resource, PRC granting the Company a mining right for the aluminum bauxite mine located in Xiuwen County, Longchang Town, Ganba 25th Group. | |||||||||||||||||
Depreciation and amortization expense was $833,787 and $370,586 for the three months ended September 30, 2013 and 2012, and $2,320,151 and $1,047,465 for the nine months ended September 30, 2013 and 2012. A breakdown of depreciation and amortization expenses is summarized as follows: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Depreciation of plant, equipment and improvements | $ | 199,994 | $ | 185,403 | $ | 594,444 | $ | 557,403 | |||||||||
Amortization of land use rights | 12,937 | 12,612 | 38,488 | 37,907 | |||||||||||||
Amortization of mining rights | 620,856 | 172,571 | 1,687,219 | 452,155 | |||||||||||||
Total | $ | 833,787 | $ | 370,586 | $ | 2,320,151 | $ | 1,047,465 | |||||||||
As of September 30, 2013 and December 31, 2012, the Company holds mining rights to two limestone mines and two bauxite mines from which they are allowed to produce annually: | |||||||||||||||||
● | 300,000 tons of limestone, from which the calcium needed for production of its products is derived; | ||||||||||||||||
● | 360,000 tons of bauxite, from which the aluminum for production of its products is derived. | ||||||||||||||||
During the three and nine months ended September 30, 2013 and 2012, the Company had production from its limestone and bauxite mines as follows (in tons ): | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Limestone | 27,837 | 24,211 | 78,520 | 74,598 | |||||||||||||
Bauxite | 67,045 | 79,504 | 186,524 | 200,981 | |||||||||||||
Shortterm_Debt
Short-term Debt | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Short Term Debt [Abstract] | ' | ||||||||
Short-term debt | ' | ||||||||
-6 | Short-term debt | ||||||||
The Company's Short-term debt consists of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Short term note (a) | $ | 13,036,896 | $ | 12,696,135 | |||||
Short term note (b) | 6,518,448 | 6,348,068 | |||||||
Total | $ | 19,555,344 | $ | 19,044,203 | |||||
(a) | On August 28, 2013, the Company extended the $13.04 million (RMB80,000,000) short-term note with Industrial Bank Co., Limited (“IB”) for another 12 months, which are personally guaranteed by Mr. Ming Zhou Tan, CEO of the Company (“Mr. Tan”) and Ms. Hong Yu Du, Director (“Ms. Du”), and contains no financial maintenance covenants. The interest rate under the short-term note is based on the base rate, the interest rate set by the People’s Bank of China (6% as of September 30, 2013 and as of December 31, 2012). Interest under the short term note is paid monthly at the end of each month. As of September 30, 2013, all interest was fully paid. | ||||||||
(b) | On December 3, 2012, the Company entered into a $6.52 million (RMB40,000,000) short-term note agreement with IB with a one-year maturity, which are personally guaranteed by Mr. Tan and Ms. Du, and contains no financial maintenance covenants. The interest rate under the short-term note is based on the base rate, the interest rate set by the People’s Bank of China (6% as of September 30, 2013 and at December 31, 2012). Interest under the short term note is paid monthly at the end of each month. As of September 30, 2013, all interest was fully paid. | ||||||||
Interest expense related to short-term debt was $298,621 and $228,123 for the three months ended September 30, 2013 and 2012, and $882,000 and $284,243 for the nine months ended September 30, 2013 and 2012. |
Income_Taxes
Income Taxes | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Income Taxes [Abstract] | ' | ||||||||||||||||
Income Taxes | ' | ||||||||||||||||
-7 | Income Taxes | ||||||||||||||||
The Company has not recorded a provision for U.S. federal income tax for the three and nine months ended September 30, 2013 because substantially all of the Company’s operations are conducted in the PRC. | |||||||||||||||||
The Company conducts substantially all of its business in PRC and it is subject to PRC income taxes at a 25% standard tax rate in 2013 and 2012. Following is a reconciliation of the Company’s income tax provision of $1,811,743 and $1,901,646 for the three months ended September 30, 2013 and 2012, and $3,816,936 and $5,454,958 for the nine months ended September 30, 2013 and 2012, to the expected US statutory rate of 34%: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Computed tax at the U.S. federal statutory rate of 34% | $ | 2,463,956 | $ | 2,553,673 | $ | 5,190,826 | $ | 7,296,453 | |||||||||
Tax rate difference between the US and PRC on foreign earnings | (652,224 | ) | (675,972 | ) | (1,374,042 | ) | (1,931,414 | ) | |||||||||
Change in valuation allowance | 12,401 | 32,563 | 267,590 | 122,215 | |||||||||||||
Other | (12,390 | ) | (8,618 | ) | (267,438 | ) | (32,296 | ) | |||||||||
$ | 1,811,743 | $ | 1,901,646 | $ | 3,816,936 | $ | 5,454,958 | ||||||||||
At September 30, 2013 and December 31, 2012, differences between the basis of assets and liabilities reported in the accompanying financial statements and those recognized for tax reporting purposes in the PRC, and the related deferred taxes were as follows: | |||||||||||||||||
As of | As of | ||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Deferred tax assets: | |||||||||||||||||
Net operating losses | $ | 1,507,946 | $ | 1,240,356 | |||||||||||||
Liability for social insurance premiums and provident housing funds | 75,000 | 75,000 | |||||||||||||||
Total deferred tax assets | 1,582,946 | 1,315,356 | |||||||||||||||
Deferred tax liabilities: | |||||||||||||||||
Difference between book and tax amortization on mining rights | (543,736 | ) | (386,425 | ) | |||||||||||||
Total deferred tax liabilities | (543,736 | ) | (386,425 | ) | |||||||||||||
Net deferred tax assets before valuation allowance | 1,039,210 | 928,931 | |||||||||||||||
Valuation allowance | (1,507,946 | ) | (1,240,356 | ) | |||||||||||||
Net deferred tax liabilities | $ | (468,736 | ) | $ | (311,425 | ) | |||||||||||
The Company accounts for uncertainty in income taxes in accordance with applicable accounting standards, which prescribe a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These accounting standards also provide guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. | |||||||||||||||||
Based on the Company’s evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. | |||||||||||||||||
Shareholders_Equity
Shareholders' Equity | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Shareholders' Equity [Abstract] | ' | ||||||||
Shareholders' Equity | ' | ||||||||
-8 | Shareholders’ Equity | ||||||||
General Reserve Fund | |||||||||
In accordance with the PRC Regulations on Enterprises with Foreign Investment, an enterprise established in the PRC with foreign investment is required to provide for certain statutory reserves, namely (i) General Reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff Welfare and Bonus Fund, which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A Wholly Foreign-Owned Enterprise (“WFOE”) is required to allocate at least 10% of its annual after-tax profit to the General Reserve Fund until the balance of such fund has reached 50% of its respective registered capital. A non-wholly-owned foreign invested enterprise is permitted to provide for the above allocation at the discretion of its board of directors. Appropriations to the Enterprise Expansion Fund and Staff Welfare and Bonus Fund are at the discretion of the board of directors for all foreign invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. As a result, a total amount of $496,396 has been appropriated to the accumulated statutory reserves (included in the retained earnings) by the Company as of September 30, 2013 and December 31, 2012 and the balance represents a fully funded General Reserve Fund: | |||||||||
Following is an analysis of the general fund by subsidiary as of September 30, 2013 and December 31, 2012: | |||||||||
Registered | General | ||||||||
Capital | Reserve Fund | ||||||||
Jiangmen Huiyuan | $ | - | $ | - | |||||
Jiangmen Wealth Water | 61,981 | 38,801 | |||||||
Guizhou Yufeng | 61,981 | 39,211 | |||||||
Shangxi Wealth | 619,806 | 418,384 | |||||||
$ | 743,768 | $ | 496,396 | ||||||
Preferred Stock | |||||||||
During the nine months ended September 30, 2013, the Company paid $12,240 in preferred stock dividends, all of these dividends were paid in-kind at $15 per preferred share based on the pricing of the subscription agreement dated on December 15, 2010 for the total issuance of 816 shares of preferred stock with each of the preferred shares convertible into five common shares. | |||||||||
The cumulative dividends on preferred stock was $43,227 and $100,081 for the three months ended September 30, 2013 and 2012, and $129,560 and $300,243 for the nine months ended September 30, 2013 and 2012. | |||||||||
Common Stock | |||||||||
During the nine months ended September 30, 2013, 7,484 preferred shares were converted into 37,420 common shares per subscription agreement. | |||||||||
During the nine months ended September 30, 2013, the Company issued 1,330,000 shares of common stock to independent consultants and legal representatives in exchange for services rendered to the Company. These shares were valued at $6,650,000 based on the market price of the common stock issued on the date of the grant and are included in general and administrative expenses in the accompanying condensed consolidated statements of income. |
Related_Party_Balances_and_Tra
Related Party Balances and Transactions | 9 Months Ended | |
Sep. 30, 2013 | ||
Related Party Balances and Transactions [Abstract] | ' | |
Related Party Balances and Transactions | ' | |
-9 | Related Party Balances and Transactions | |
On August 28, 2013, the Company extended the $13.04 million (RMB80,000,000) short-term note with Industrial Bank Co., Limited (“IB”) for another 12 months, which are personally guaranteed by Mr. Ming Zhou Tan, CEO of the Company (“Mr. Tan”) and Ms. Hong Yu Du, Director (“Ms. Du”), and contains no financial maintenance covenants. The interest rate under the short-term note is based on the base rate, the interest rate set by the People’s Bank of China (6% as of September 30, 2013 and as of December 31, 2012). Interest under the short term note is paid monthly at the end of each month. As of September 30, 2013, all interest was fully paid. | ||
On December 3, 2012, the Company entered into a $6.52 million (RMB40,000,000) short-term note agreement with IB with a one year maturity, which are personally guaranteed by Mr. Tan and Ms. Du, and contains no financial maintenance covenants. The interest rate under the short-term note agreement is based on the base rate, the interest rate set by the People’s Bank of China (6% as of September 30, 2013). Interest under the short term note is paid monthly at the end of each month. As of September 30, 2013, all interest was fully paid. | ||
During the year ended December 31, 2010, the Company executed a lease agreement for its corporate office space owned by Mr. Tan. The lease is for a term of 5 years from January 1, 2011 to December 31, 2015 with monthly lease payments of $12,696. The Company incurred rent expense of approximately $38,000 and $114,000 related to this lease during the three and nine months ended September 30, 2013 and 2012. |
Segment_Information
Segment Information | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Segment Information [Abstract] | ' | ||||||||||||||||||||||||
Segment Information | ' | ||||||||||||||||||||||||
-10 | Segment Information | ||||||||||||||||||||||||
The Company follows FASB ASC 280-Segment Reporting, which requires that companies disclose segment data based on how management makes decisions about allocating resources to segments and evaluating their performance. The Company has three operating segments identified by manufacturing facility and each segment is operated in a separate subsidiary. The Company primarily evaluates performance based on income before income taxes and excludes non-recurring items. The operations and product produced by the Company’s various segments are as follows: | |||||||||||||||||||||||||
● | Guangdong Huixin produces water purification agents for specific industrial uses such as the treatment of waste water from paper mills, decolorization agents to treat waste water that contains active dyes, acid dyes and direct dyes produced in the textile and printing industry, and other industry specific water purification applications. The Company uses HAC powder produced by the Guizhou Yefeng segment in the production of its water purification agents. | ||||||||||||||||||||||||
● | Guizhou Yefeng produces HAC powder from calcium and aluminum derived from its limestone and bauxite mines. The HAC powder is used by Guangdong Huixin in the production of its water purification agents and is also sold to outside customers for waste water treatment. | ||||||||||||||||||||||||
● | Shanxi Wealth produces HAC powder from calcium and aluminum derived from its limestone and bauxite mines. The HAC powder is sold to outside customers for waste water treatment. | ||||||||||||||||||||||||
● | Other represents the cost of corporate activities and eliminations. | ||||||||||||||||||||||||
The segment data presented below was prepared on the same basis as the Company’s consolidated financial statements: | |||||||||||||||||||||||||
For the three months ended September 30, 2013 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 11,159,189 | $ | 4,151,771 | $ | 8,519,507 | $ | - | $ | (2,469,136 | ) | $ | 21,361,331 | ||||||||||||
Cost of revenue | 6,797,757 | 2,556,186 | 4,690,425 | - | (2,469,136 | ) | 11,575,232 | ||||||||||||||||||
Gross profit | 4,361,432 | 1,595,585 | 3,829,082 | - | - | 9,786,099 | |||||||||||||||||||
Selling and marketing | 292,626 | 81,034 | 370,923 | - | - | 744,583 | |||||||||||||||||||
General and administrative | 646,792 | 199,986 | 338,018 | 198,086 | - | 1,382,882 | |||||||||||||||||||
Research and development | 170,423 | 9,009 | - | - | - | 179,432 | |||||||||||||||||||
Income from operations | $ | 3,251,591 | $ | 1,305,556 | $ | 3,120,141 | $ | (198,086 | ) | $ | - | $ | 7,479,202 | ||||||||||||
For the three months ended September 30, 2012 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 11,510,345 | $ | 4,596,526 | $ | 9,024,816 | $ | - | $ | (2,724,358 | ) | $ | 22,407,329 | ||||||||||||
Cost of revenue | 7,307,167 | 2,459,220 | 5,266,179 | - | (2,724,358 | ) | 12,308,208 | ||||||||||||||||||
Gross profit | 4,203,178 | 2,137,306 | 3,758,637 | - | - | 10,099,121 | |||||||||||||||||||
Selling and marketing | 331,546 | 85,957 | 380,171 | - | - | 797,674 | |||||||||||||||||||
General and administrative | 734,084 | 159,289 | 318,260 | 279,309 | - | 1,490,942 | |||||||||||||||||||
Research and development | 142,394 | 8,782 | - | - | - | 151,176 | |||||||||||||||||||
Income from operations | $ | 2,995,154 | $ | 1,883,278 | $ | 3,060,206 | $ | (279,309 | ) | $ | - | $ | 7,659,329 | ||||||||||||
For the nine months ended September 30, 2013 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 34,726,702 | $ | 13,438,658 | $ | 23,720,626 | $ | - | $ | (7,883,432 | ) | $ | 64,002,554 | ||||||||||||
Cost of revenue | 20,974,974 | 8,223,217 | 13,560,255 | - | (7,883,432 | ) | 34,875,014 | ||||||||||||||||||
Gross profit | 13,751,728 | 5,215,441 | 10,160,371 | - | - | 29,127,540 | |||||||||||||||||||
Selling and marketing | 823,511 | 259,935 | 1,078,157 | - | - | 2,161,603 | |||||||||||||||||||
General and administrative | 7,054,360 | 541,125 | 1,002,373 | 1,992,293 | - | 10,590,151 | |||||||||||||||||||
Research and development | 506,989 | 26,798 | - | - | - | 533,787 | |||||||||||||||||||
Income from operations | $ | 5,366,868 | $ | 4,387,583 | $ | 8,079,841 | $ | (1,992,293 | ) | $ | - | $ | 15,841,999 | ||||||||||||
For the nine months ended September 30, 2012 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 32,700,226 | $ | 12,667,891 | $ | 23,460,362 | $ | - | $ | (7,529,939 | ) | $ | 61,298,540 | ||||||||||||
Cost of revenue | 20,791,108 | 6,782,660 | 13,702,699 | - | (7,529,939 | ) | 33,746,528 | ||||||||||||||||||
Gross profit | 11,909,118 | 5,885,231 | 9,757,663 | - | - | 27,552,012 | |||||||||||||||||||
Selling and marketing | 918,796 | 240,411 | 1,059,061 | - | - | 2,218,268 | |||||||||||||||||||
General and administrative | 1,665,657 | 463,650 | 921,164 | 776,176 | - | 3,826,647 | |||||||||||||||||||
Research and development | 443,853 | 26,869 | - | - | - | 470,722 | |||||||||||||||||||
Income from operations | $ | 8,880,812 | $ | 5,154,301 | $ | 7,777,438 | $ | (776,176 | ) | $ | - | $ | 21,036,375 | ||||||||||||
As of September 30, 2013 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Current assets | $ | 60,651,315 | $ | 8,277,251 | $ | 34,122,174 | $ | 5,359,923 | $ | (68,237,441 | ) | $ | 40,173,222 | ||||||||||||
Property, plant and equipment, | |||||||||||||||||||||||||
land use and mining rights | 2,591,964 | 84,979,745 | 5,962,278 | - | - | 93,533,987 | |||||||||||||||||||
Total assets | $ | 63,243,279 | $ | 93,256,996 | $ | 40,084,452 | $ | 5,359,923 | $ | (68,237,441 | ) | $ | 133,707,209 | ||||||||||||
As of December 31, 2012 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Current assets | $ | 15,217,117 | $ | 16,443,580 | $ | 26,699,097 | $ | 5,697,282 | $ | (25,976,962 | ) | $ | 38,080,114 | ||||||||||||
Property, plant and equipment, | |||||||||||||||||||||||||
land use and mining rights | 2,707,170 | 4,608,247 | 6,302,665 | - | - | 13,618,082 | |||||||||||||||||||
Deposit for mining | |||||||||||||||||||||||||
right acquisition | 63,480,677 | - | - | - | 63,480,677 | ||||||||||||||||||||
Total assets | $ | 81,404,964 | $ | 21,051,827 | $ | 33,001,762 | $ | 5,697,282 | $ | (25,976,962 | ) | $ | 115,178,873 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Principles of Consolidation | ' | ||||||||||||||||
Principles of Consolidation | |||||||||||||||||
These condensed consolidated financial statements present the consolidated accounts of WEP and its subsidiaries, Wealth Technology, Jiangmen Huiyan, and its variable interest entities, Guangdong Huixin, Guizhou Yunfeng and Shanxi Wealth, which are collectively referred to as the “Company”. This presentation is based upon the retroactive treatment of series of agreements and restructurings of companies under common control as described in Note (1). | |||||||||||||||||
All inter-company transactions and balances have been eliminated in preparation of the condensed consolidated financial statements. | |||||||||||||||||
Use of Estimates | ' | ||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses in the condensed consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s condensed consolidated financial statements include collectability of accounts receivable, useful lives and impairment of property and equipment, mineral reserves available for mining production, total expected use of mineral reserves and value and realizability of intangible assets. Actual results could differ from those estimates. | |||||||||||||||||
Segments | ' | ||||||||||||||||
Segments | |||||||||||||||||
For the three and nine months ended September 30, 2013 and 2012, the Company’s operations have been broken down into 3 segments based on production facility, consistent with the manner that management reviews operations on a regular basis. All our operations revolve around the production of water purification agents made to similar specifications. All of the Company’s segments have similar assets, customers and distribution methods, and their economic characteristics are similar with regard to their gross margin percentages. | |||||||||||||||||
Currency Reporting | ' | ||||||||||||||||
Currency Reporting | |||||||||||||||||
The Company’s operations in the PRC use the local currency, Renminbi (“RMB”), as their functional currency, whereas amounts reported in the accompanying condensed consolidated financial statements and disclosures are stated in U.S. dollars, the reporting currency of the Company, unless stated otherwise. As such, the condensed consolidated balance sheets of the Company have been translated into U.S. dollars at the current rates as of September 30, 2013 and December 31, 2012 and the condensed consolidated statements of income have been translated into U.S. dollars at the weighted average rates during the periods the transactions were recognized. | |||||||||||||||||
The resulting translation gain adjustments are recorded as other comprehensive income in the condensed consolidated statements of comprehensive income and as a separate component of equity in the condensed consolidated balance sheets and condensed consolidated statements of shareholders’ equity. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company’s main source of revenue is generated from sales of water purifying agents and HAC powder. The Company recognizes revenue when there is persuasive evidence of a sales arrangement, delivery and acceptance by the customer has occurred, the sales price is fixed or determinable, and collection is probable. Under the Company’s typical sales terms for both water purifying agents and HAC powder, the Company recognizes revenue when product is shipped from its production facilities because shipments are made FOB shipping point with the customer bearing all shipping costs and title and risk of loss transferring to the customer upon shipment. Sales terms for water purifying agents and HAC powder do not include customer acceptance provisions, the right of return (unless the product is proven to be defective) or other post-delivery obligations. The Company has not experienced any significant returns associated with defective product. | |||||||||||||||||
Major Customers | ' | ||||||||||||||||
Major Customers | |||||||||||||||||
During the three and nine months ended September 30, 2013 and 2012, there was no single customer which accounted for 10% or more of our net revenue. | |||||||||||||||||
Major Suppliers | ' | ||||||||||||||||
Major Suppliers | |||||||||||||||||
During the three and nine months ended September 30, 2013 and 2012, certain suppliers accounted for more than 10% of the Company’s total net purchases as follows, and none of the major suppliers are related parties to the Company. | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Supplier 1 | 16 | % | 12 | % | 15 | % | 12 | % | |||||||||
Supplier 2 | 12 | % | 18 | % | 13 | % | 11 | % | |||||||||
Supplier 3 | 12 | % | 12 | % | 11 | % | 16 | % | |||||||||
Value-Added Tax ("VAT") | ' | ||||||||||||||||
Value-Added Tax (“VAT”) | |||||||||||||||||
Value added taxes represent amounts collected on behalf of specific Chinese government agencies that require remittance of tax by specified dates. Value added taxes are collected at the time of sales and are detailed on invoices provided to customers. The Company accounts for value added taxes on a net basis. The Company recorded and paid sales related taxes based on a percentage of the value added taxes and reported the revenue net of the sales related taxes. | |||||||||||||||||
Enterprises or individuals, who sell commodities, engage in repair and maintenance or import or export goods in the PRC are subject to a value-added tax in accordance with the PRC laws. The value-added tax standard rate for sales made by the Company is 17% of the gross sales price and the Company records its revenue net of VAT. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used to offset the VAT due on the sales of the finished products. When the Company purchases raw materials, the VAT incurred by the Company, and subject to credit, generally varies from 6% to 17% depending on the type of materials or services purchased. There is a significant difference in the VAT that the Company incurs on purchases and the amount the Company bills to customers for sales of HAC powder and water purifying agents due to the fact that the Company converts raw materials from their mined state to finished product and is responsible for the substantial portion of increased value in its products. | |||||||||||||||||
Following is an analysis of VAT billed to the Company on purchases, VAT billed by the Company on sales and VAT remitted to PRC during the nine months ended September 30, 2013 and 2012, with information related to the liability for uncollected or unremitted VAT as of September 30, 2013 and December 31, 2012: | |||||||||||||||||
Nine Months | Nine Months | ||||||||||||||||
Ended | Ended | ||||||||||||||||
30-Sep-13 | 30-Sep-12 | ||||||||||||||||
VAT billed to customers for sales during the period | $ | 12,613,741 | $ | 12,017,833 | |||||||||||||
Less: VAT billed to the Company for purchases during the period | 4,627,436 | 4,780,061 | |||||||||||||||
Net VAT on transactions during the period | 7,986,305 | 7,237,772 | |||||||||||||||
Amount remitted to the PRC | (7,811,715 | ) | (6,970,630 | ) | |||||||||||||
VAT payable at beginning of period | 646,743 | 497,581 | |||||||||||||||
VAT payable at period end | $ | 821,333 | $ | 764,723 | |||||||||||||
As of | As of | ||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Liabilities for taxes collected but not remitted | $ | 367,694 | $ | 250,109 | |||||||||||||
Liabilities for taxes billed to customers but not collected | |||||||||||||||||
from the customers or remitted to PRC | 453,639 | 396,634 | |||||||||||||||
VAT payable at period end | $ | 821,333 | $ | 646,743 | |||||||||||||
Organization_Nature_of_Busines1
Organization, Nature of Business and Basis of Presentation (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Organization, Nature of Business and Basis of Presentation [Abstract] | ' | |||||||||
Summary of subsidiary information | ' | |||||||||
Domicile and | ||||||||||
Date of | Paid -In | Effective | ||||||||
Name and Location | Incorporation | Capital | Ownership | Activities | ||||||
Wealth Environmental Protection Group, Inc (“WEP”) | British Virgin Islands | $ | 7,000 | 100% Owned | Holding Company | |||||
3-Jun-10 | ||||||||||
Wealth Environmental Technology Holding Ltd. (“Wealth Technology”) | Hong Kong | $ | 1,299 | 100% Owned | Holding Company | |||||
Hong Kong | 18-Jun-10 | |||||||||
Jiangmen Huiyuan Environmental Protection Technology Consultancy Co. | People’s Republic Of China (“PRC”) | $ | 15,082 | 100% Owned - Wholly Foreign Owned Entity (“WFOE”) | Holding Company | |||||
(“Jiangmen Huiyuan”) | 22-Jul-10 | |||||||||
Jiangmen, Guandong Province | ||||||||||
Guangdong Huixin Environmental Protection Co., Ltd. (formerly “Jiangmen Wealth Water Purifying Agent Co., Ltd”) (“Guangdong Huixin”) | PRC | $ | 4,049,060 | 100% Control Through | Manufacturer of water purifying agents | |||||
Jiangmen, Guandong Province | 25-Apr-03 | Contractual Arrangements | ||||||||
Guizhou Yufeng Melt Co., Ltd. (“Guizhou Yufeng”) | PRC | $ | 4,233,854 | 100% Control Through | Manufacturer of HAC Powder (defined below) using bauxite and limestone from mines controlled under mining rights agreements | |||||
Guizhou Province | 25-Mar-05 | Contractual Arrangements | ||||||||
Shanxi Wealth Aluminate | PRC | $ | 6,786,056 | 100% Control Through | Manufacturer of HAC Powder (defined below) using bauxite | |||||
Materials Co., Ltd (“Shanxi Weath”) | 8-Apr-04 | Contractual Arrangements | and limestone from mines controlled under mining rights agreements | |||||||
Shanxi Province | ||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Summary of purchases from major suppliers | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Supplier 1 | 16 | % | 12 | % | 15 | % | 12 | % | |||||||||
Supplier 2 | 12 | % | 18 | % | 13 | % | 11 | % | |||||||||
Supplier 3 | 12 | % | 12 | % | 11 | % | 16 | % | |||||||||
Summary of billing and remittance of VAT by or to the company | ' | ||||||||||||||||
Nine Months | Nine Months | ||||||||||||||||
Ended | Ended | ||||||||||||||||
30-Sep-13 | 30-Sep-12 | ||||||||||||||||
VAT billed to customers for sales during the period | $ | 12,613,741 | $ | 12,017,833 | |||||||||||||
Less: VAT billed to the Company for purchases during the period | 4,627,436 | 4,780,061 | |||||||||||||||
Net VAT on transactions during the period | 7,986,305 | 7,237,772 | |||||||||||||||
Amount remitted to the PRC | (7,811,715 | ) | (6,970,630 | ) | |||||||||||||
VAT payable at beginning of period | 646,743 | 497,581 | |||||||||||||||
VAT payable at period end | $ | 821,333 | $ | 764,723 | |||||||||||||
As of | As of | ||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Liabilities for taxes collected but not remitted | $ | 367,694 | $ | 250,109 | |||||||||||||
Liabilities for taxes billed to customers but not collected | |||||||||||||||||
from the customers or remitted to PRC | 453,639 | 396,634 | |||||||||||||||
VAT payable at period end | $ | 821,333 | $ | 646,743 | |||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Summary of components of basic and diluted earnings per share | ' | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net income attributable to common shareholders - Basic | $ | 5,355,490 | $ | 5,509,075 | $ | 11,091,986 | $ | 15,704,954 | |||||||||
Add: cumulative dividends attributable to convertible preferred stock | 43,227 | 100,081 | 129,560 | 300,243 | |||||||||||||
Net income attributable to common shareholders - Diluted | $ | 5,398,717 | $ | 5,609,156 | $ | 11,221,546 | $ | 16,005,197 | |||||||||
Weighted average number of common shares outstanding - Basic | 22,456,695 | 19,600,305 | 21,842,586 | 19,600,305 | |||||||||||||
Dilutive effect of preferred stock conversion | 883,570 | 2,224,020 | 884,401 | 2,224,020 | |||||||||||||
Weighted average number of common shares outstanding - Diluted | 23,340,265 | 21,824,325 | 22,726,987 | 21,824,325 | |||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.24 | $ | 0.28 | $ | 0.51 | $ | 0.8 | |||||||||
Diluted | $ | 0.23 | $ | 0.26 | $ | 0.49 | $ | 0.73 | |||||||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventories [Abstract] | ' | ||||||||
Summary of inventories | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Raw Materials | $ | 899,629 | $ | 949,111 | |||||
Work in progress | 40,225 | 33,228 | |||||||
Finished goods | 281,772 | 465,231 | |||||||
$ | 1,221,626 | $ | 1,447,570 | ||||||
Property_Plant_and_Equipment_a1
Property, Plant and Equipment and Land and Mining Rights (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Property, Plant and Equipment and Land and Mining Rights [Abstract] | ' | ||||||||||||||||
Summary of estimated useful lives of property, plant and equipment | ' | ||||||||||||||||
Estimated | |||||||||||||||||
Category | Useful Life | ||||||||||||||||
Land use rights | 43 to 48 years | ||||||||||||||||
Mining rights | 14 to 30 years | ||||||||||||||||
Leasehold improvements | 20 to 40 years | ||||||||||||||||
Production equipment | 5 to 30 years | ||||||||||||||||
Furniture and fixtures | 5 years | ||||||||||||||||
Automobiles | 5 years | ||||||||||||||||
Summary of property, plant and equipment and land and mining rights | ' | ||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Leasehold improvement | $ | 3,437,873 | $ | 3,348,013 | |||||||||||||
Production equipment | 7,003,348 | 6,777,072 | |||||||||||||||
Furniture and fixtures | 493,943 | 468,644 | |||||||||||||||
Automobiles | 624,211 | 572,900 | |||||||||||||||
Land use rights | 2,356,426 | 2,294,833 | |||||||||||||||
Mining rights | 91,095,311 | 9,045,997 | |||||||||||||||
105,011,112 | 22,507,459 | ||||||||||||||||
Less: Accumulated depreciation and amortization | 11,477,125 | 8,889,377 | |||||||||||||||
$ | 93,533,987 | $ | 13,618,082 | ||||||||||||||
Summary of breakdown of depreciation and amortization expenses | ' | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Depreciation of plant, equipment and improvements | $ | 199,994 | $ | 185,403 | $ | 594,444 | $ | 557,403 | |||||||||
Amortization of land use rights | 12,937 | 12,612 | 38,488 | 37,907 | |||||||||||||
Amortization of mining rights | 620,856 | 172,571 | 1,687,219 | 452,155 | |||||||||||||
Total | $ | 833,787 | $ | 370,586 | $ | 2,320,151 | $ | 1,047,465 | |||||||||
Summary of production from mines | ' | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Limestone | 27,837 | 24,211 | 78,520 | 74,598 | |||||||||||||
Bauxite | 67,045 | 79,504 | 186,524 | 200,981 | |||||||||||||
Shortterm_Debt_Tables
Short-term Debt (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Short Term Debt [Abstract] | ' | ||||||||
Summary of Short-term debt | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Short term note (a) | $ | 13,036,896 | $ | 12,696,135 | |||||
Short term note (b) | 6,518,448 | 6,348,068 | |||||||
Total | $ | 19,555,344 | $ | 19,044,203 | |||||
(a) | On August 28, 2013, the Company extended the $13.04 million (RMB80,000,000) short-term note with Industrial Bank Co., Limited (“IB”) for another 12 months, which are personally guaranteed by Mr. Ming Zhou Tan, CEO of the Company (“Mr. Tan”) and Ms. Hong Yu Du, Director (“Ms. Du”), and contains no financial maintenance covenants. The interest rate under the short-term note is based on the base rate, the interest rate set by the People’s Bank of China (6% as of September 30, 2013 and as of December 31, 2012). Interest under the short term note is paid monthly at the end of each month. As of September 30, 2013, all interest was fully paid. | ||||||||
(b) | On December 3, 2012, the Company entered into a $6.52 million (RMB40,000,000) short-term note agreement with IB with a one-year maturity, which are personally guaranteed by Mr. Tan and Ms. Du, and contains no financial maintenance covenants. The interest rate under the short-term note is based on the base rate, the interest rate set by the People’s Bank of China (6% as of September 30, 2013 and at December 31, 2012). Interest under the short term note is paid monthly at the end of each month. As of September 30, 2013, all interest was fully paid. |
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Income Taxes [Abstract] | ' | ||||||||||||||||
Reconciliation of income tax provision | ' | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Computed tax at the U.S. federal statutory rate of 34% | $ | 2,463,956 | $ | 2,553,673 | $ | 5,190,826 | $ | 7,296,453 | |||||||||
Tax rate difference between the US and PRC on foreign earnings | (652,224 | ) | (675,972 | ) | (1,374,042 | ) | (1,931,414 | ) | |||||||||
Change in valuation allowance | 12,401 | 32,563 | 267,590 | 122,215 | |||||||||||||
Other | (12,390 | ) | (8,618 | ) | (267,438 | ) | (32,296 | ) | |||||||||
$ | 1,811,743 | $ | 1,901,646 | $ | 3,816,936 | $ | 5,454,958 | ||||||||||
Differences between the basis of assets and liabilities reported | ' | ||||||||||||||||
As of | As of | ||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Deferred tax assets: | |||||||||||||||||
Net operating losses | $ | 1,507,946 | $ | 1,240,356 | |||||||||||||
Liability for social insurance premiums and provident housing funds | 75,000 | 75,000 | |||||||||||||||
Total deferred tax assets | 1,582,946 | 1,315,356 | |||||||||||||||
Deferred tax liabilities: | |||||||||||||||||
Difference between book and tax amortization on mining rights | (543,736 | ) | (386,425 | ) | |||||||||||||
Total deferred tax liabilities | (543,736 | ) | (386,425 | ) | |||||||||||||
Net deferred tax assets before valuation allowance | 1,039,210 | 928,931 | |||||||||||||||
Valuation allowance | (1,507,946 | ) | (1,240,356 | ) | |||||||||||||
Net deferred tax liabilities | $ | (468,736 | ) | $ | (311,425 | ) | |||||||||||
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Shareholders' Equity [Abstract] | ' | ||||||||
Summary of analysis of general fund by subsidiary | ' | ||||||||
Registered | General | ||||||||
Capital | Reserve Fund | ||||||||
Jiangmen Huiyuan | $ | - | $ | - | |||||
Jiangmen Wealth Water | 61,981 | 38,801 | |||||||
Guizhou Yufeng | 61,981 | 39,211 | |||||||
Shangxi Wealth | 619,806 | 418,384 | |||||||
$ | 743,768 | $ | 496,396 | ||||||
Segement_Information_Tables
Segement Information (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Segment Information [Abstract] | ' | ||||||||||||||||||||||||
Segment Reporting Information, Profit (Loss) | ' | ||||||||||||||||||||||||
For the three months ended September 30, 2013 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 11,159,189 | $ | 4,151,771 | $ | 8,519,507 | $ | - | $ | (2,469,136 | ) | $ | 21,361,331 | ||||||||||||
Cost of revenue | 6,797,757 | 2,556,186 | 4,690,425 | - | (2,469,136 | ) | 11,575,232 | ||||||||||||||||||
Gross profit | 4,361,432 | 1,595,585 | 3,829,082 | - | - | 9,786,099 | |||||||||||||||||||
Selling and marketing | 292,626 | 81,034 | 370,923 | - | - | 744,583 | |||||||||||||||||||
General and administrative | 646,792 | 199,986 | 338,018 | 198,086 | - | 1,382,882 | |||||||||||||||||||
Research and development | 170,423 | 9,009 | - | - | - | 179,432 | |||||||||||||||||||
Income from operations | $ | 3,251,591 | $ | 1,305,556 | $ | 3,120,141 | $ | (198,086 | ) | $ | - | $ | 7,479,202 | ||||||||||||
For the three months ended September 30, 2012 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 11,510,345 | $ | 4,596,526 | $ | 9,024,816 | $ | - | $ | (2,724,358 | ) | $ | 22,407,329 | ||||||||||||
Cost of revenue | 7,307,167 | 2,459,220 | 5,266,179 | - | (2,724,358 | ) | 12,308,208 | ||||||||||||||||||
Gross profit | 4,203,178 | 2,137,306 | 3,758,637 | - | - | 10,099,121 | |||||||||||||||||||
Selling and marketing | 331,546 | 85,957 | 380,171 | - | - | 797,674 | |||||||||||||||||||
General and administrative | 734,084 | 159,289 | 318,260 | 279,309 | - | 1,490,942 | |||||||||||||||||||
Research and development | 142,394 | 8,782 | - | - | - | 151,176 | |||||||||||||||||||
Income from operations | $ | 2,995,154 | $ | 1,883,278 | $ | 3,060,206 | $ | (279,309 | ) | $ | - | $ | 7,659,329 | ||||||||||||
For the nine months ended September 30, 2013 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 34,726,702 | $ | 13,438,658 | $ | 23,720,626 | $ | - | $ | (7,883,432 | ) | $ | 64,002,554 | ||||||||||||
Cost of revenue | 20,974,974 | 8,223,217 | 13,560,255 | - | (7,883,432 | ) | 34,875,014 | ||||||||||||||||||
Gross profit | 13,751,728 | 5,215,441 | 10,160,371 | - | - | 29,127,540 | |||||||||||||||||||
Selling and marketing | 823,511 | 259,935 | 1,078,157 | - | - | 2,161,603 | |||||||||||||||||||
General and administrative | 7,054,360 | 541,125 | 1,002,373 | 1,992,293 | - | 10,590,151 | |||||||||||||||||||
Research and development | 506,989 | 26,798 | - | - | - | 533,787 | |||||||||||||||||||
Income from operations | $ | 5,366,868 | $ | 4,387,583 | $ | 8,079,841 | $ | (1,992,293 | ) | $ | - | $ | 15,841,999 | ||||||||||||
For the nine months ended September 30, 2012 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 32,700,226 | $ | 12,667,891 | $ | 23,460,362 | $ | - | $ | (7,529,939 | ) | $ | 61,298,540 | ||||||||||||
Cost of revenue | 20,791,108 | 6,782,660 | 13,702,699 | - | (7,529,939 | ) | 33,746,528 | ||||||||||||||||||
Gross profit | 11,909,118 | 5,885,231 | 9,757,663 | - | - | 27,552,012 | |||||||||||||||||||
Selling and marketing | 918,796 | 240,411 | 1,059,061 | - | - | 2,218,268 | |||||||||||||||||||
General and administrative | 1,665,657 | 463,650 | 921,164 | 776,176 | - | 3,826,647 | |||||||||||||||||||
Research and development | 443,853 | 26,869 | - | - | - | 470,722 | |||||||||||||||||||
Income from operations | $ | 8,880,812 | $ | 5,154,301 | $ | 7,777,438 | $ | (776,176 | ) | $ | - | $ | 21,036,375 | ||||||||||||
Segment Reporting Information, Assets (Liabilities) | ' | ||||||||||||||||||||||||
As of September 30, 2013 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Current assets | $ | 60,651,315 | $ | 8,277,251 | $ | 34,122,174 | $ | 5,359,923 | $ | (68,237,441 | ) | $ | 40,173,222 | ||||||||||||
Property, plant and equipment, | |||||||||||||||||||||||||
land use and mining rights | 2,591,964 | 84,979,745 | 5,962,278 | - | - | 93,533,987 | |||||||||||||||||||
Total assets | $ | 63,243,279 | $ | 93,256,996 | $ | 40,084,452 | $ | 5,359,923 | $ | (68,237,441 | ) | $ | 133,707,209 | ||||||||||||
As of December 31, 2012 | |||||||||||||||||||||||||
Guangdong | Guizhou | Shanxi | |||||||||||||||||||||||
Huixin | Yefeng | Wealth | Corporate | Eliminations | Total | ||||||||||||||||||||
Current assets | $ | 15,217,117 | $ | 16,443,580 | $ | 26,699,097 | $ | 5,697,282 | $ | (25,976,962 | ) | $ | 38,080,114 | ||||||||||||
Property, plant and equipment, | |||||||||||||||||||||||||
land use and mining rights | 2,707,170 | 4,608,247 | 6,302,665 | - | - | 13,618,082 | |||||||||||||||||||
Deposit for mining | |||||||||||||||||||||||||
right acquisition | 63,480,677 | - | - | - | 63,480,677 | ||||||||||||||||||||
Total assets | $ | 81,404,964 | $ | 21,051,827 | $ | 33,001,762 | $ | 5,697,282 | $ | (25,976,962 | ) | $ | 115,178,873 | ||||||||||||
Organization_Nature_of_Busines2
Organization, Nature of Business and Basis of Presentation (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Wealth Environmental Protection Group, Inc (WEP) [Member] | Wealth Environmental Technology Holding Ltd.(Wealth Technology) Hong Kong [Member] | Jiangmen Huiyuan Environmental Protection Technology Consultancy Co. (Jiangmen Huiyuan) Jiangmen, Guandong Province [Member] | Jiangmen Wealth Water Purifying Agent Co., Ltd (Jiangmen Wealth Water) Jiangmen, Guandong Province [Member] | Guizhou Yufeng Melt Co., Ltd. (Guizhou Yufeng) Guizhou Province [Member] | Shanxi Wealth Aluminate Materials Co., Ltd Shangxi Province [Member] | |||
Summary of subsidiary information | ' | ' | ' | ' | ' | ' | ' | ' |
Name and Location | ' | ' | 'Wealth Environmental Protection Group, Inc ("WEP") | 'Wealth Environmental Technology Holding Ltd. (''Wealth Technology'') Hong Kong | 'Jiangmen Huiyuan Environmental Protection Technology Consultancy Co. ("Jiangmen Huiyuan'') Jiangmen, Guandong Province | 'Guangdong Huixin Environmental Protection Co., Ltd. (formerly "Jiangmen Wealth Water Purifying Agent Co., Ltd'') ("Guangdong Huixin") Jiangmen, Guandong Province | 'Guizhou Yufeng Melt Co., Ltd. ("Guizhou Yufeng") Guizhou Province | 'Shanxi Wealth Aluminate Materials Co., Ltd ("Shanxi Weath") Shanxi Province |
Domicile and Date of Incorporation | ' | ' | 'British Virgin Islands June 3, 2010 | 'Hong Kong June 18, 2010 | 'People's Republic Of China ("PRC") July 22, 2010 | 'PRC April 25, 2003 | 'PRC March 25, 2005 | 'PRC April 8, 2004 |
Paid in Capital | $31,502,795 | $24,840,803 | $7,000 | $1,299 | $15,082 | $4,049,060 | $4,233,854 | $6,786,056 |
Effective ownership | ' | ' | '100% Owned | '100% Owned | '100% Owned - Wholly Foreign Owned Entity ("WFOE") | '100% Control Through Contractual Arrangements | '100% Control Through Contractual Arrangements | '100% Control Through Contractual Arrangements |
Activities | ' | ' | 'Holding Company | 'Holding Company | 'Holding Company | 'Manufacturer of water purifying agents | 'Manufacturer of HAC Powder (defined below) using bauxite and limestone from mines controlled under mining rights agreements | 'Manufacturer of HAC Powder (defined below) using bauxite and limestone from mines controlled under mining rights agreements |
Organization_Nature_of_Busines3
Organization, Nature of Business and Basis of Presentation (Details Textual) (Wealth Environmental Protection Group, Inc (WEP) [Member]) | 9 Months Ended |
Sep. 30, 2013 | |
Wealth Environmental Protection Group, Inc (WEP) [Member] | ' |
Organization, Nature of Business and Basis of Presentation (Textual) | ' |
Effective Ownership | 100.00% |
Percentage of issued and outstanding capital stock of Shanxi Wealth held | 96.00% |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Supplier 1 [Member] | ' | ' | ' | ' |
Summary of purchases from major suppliers | ' | ' | ' | ' |
Purchases by major supplier percentage | 16.00% | 12.00% | 15.00% | 12.00% |
Supplier 2 [Member] | ' | ' | ' | ' |
Summary of purchases from major suppliers | ' | ' | ' | ' |
Purchases by major supplier percentage | 12.00% | 18.00% | 13.00% | 11.00% |
Supplier 3 [Member] | ' | ' | ' | ' |
Summary of purchases from major suppliers | ' | ' | ' | ' |
Purchases by major supplier percentage | 12.00% | 12.00% | 11.00% | 16.00% |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Summary of billing and remittance of VAT by or to the company | ' | ' | ' |
VAT billed to customers for sales during the period | $12,613,741 | $12,017,833 | ' |
Less: VAT billed to the Company for purchases during the period | 4,627,436 | 4,780,061 | ' |
Net VAT on transactions during the period | 7,986,305 | 7,237,772 | ' |
Amount remitted to the PRC | -7,811,715 | -6,970,630 | ' |
VAT payable at beginning of period | 646,743 | 497,581 | ' |
VAT payable at period end | 821,333 | 764,723 | ' |
Liability for taxes collected but not remitted | 367,694 | ' | 250,109 |
Liabilities for taxes billed to customers but not collected from the customers or remitted to PRC | 453,639 | ' | 396,634 |
VAT payable at period end | $821,333 | ' | $646,743 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details Textual) | 9 Months Ended |
Sep. 30, 2013 | |
Segement | |
Summary of Significant Accounting Policies (Textual) | ' |
Number of operating segments | 3 |
Percentage of Value added tax on sale | 17.00% |
Percentage of value added tax on purchases, Minimum | 6.00% |
Percentage of value added tax on purchases, Maximum | 17.00% |
Customers accounted for total revenue | 'No single customer which accounted for 10% or more of our net revenue |
Suppliers accounted for segment purchase | 'Certain suppliers accounted for more than 10% of the Company's total net purchases |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Summary of components of basic and diluted earnings per share | ' | ' | ' | ' |
Net income attributable to common shareholders - Basic | $5,355,490 | $5,509,075 | $11,091,986 | $15,704,954 |
Add: cumulative dividends attributable to convertible preferred stock | -43,227 | -100,081 | -129,560 | -300,243 |
Net income attributable to common shareholders - Diluted | $5,398,717 | $5,609,156 | $11,221,546 | $16,005,197 |
Weighted average number of common shares outstanding - Basic | 22,456,695 | 19,600,305 | 21,842,586 | 19,600,305 |
Dilutive effect of preferred stock conversion | 883,570 | 2,224,020 | 884,401 | 2,224,020 |
Weighted average number of common shares outstanding - Diluted | 23,340,265 | 21,824,325 | 22,726,987 | 21,824,325 |
Earnings per share: | ' | ' | ' | ' |
Basic | $0.24 | $0.28 | $0.51 | $0.80 |
Diluted | $0.23 | $0.26 | $0.49 | $0.73 |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Summary of inventories | ' | ' |
Raw Materials | $899,629 | $949,111 |
Work in progress | 40,225 | 33,228 |
Finished goods | 281,772 | 465,231 |
Inventories, Net | $1,221,626 | $1,447,570 |
Property_Plant_and_Equipment_a2
Property, Plant and Equipment and Land and Mining Rights (Details) | 9 Months Ended |
Sep. 30, 2013 | |
Land use rights [Member] | ' |
Summary of estimated useful lives of Property, plant and equipment | ' |
Estimated useful life | '43 to 48 years |
Mining rights [Member] | ' |
Summary of estimated useful lives of Property, plant and equipment | ' |
Estimated useful life | '14 to 30 years |
Leasehold Improvements [Member] | ' |
Summary of estimated useful lives of Property, plant and equipment | ' |
Estimated useful life | '20 to 40 years |
Production equipment [Member] | ' |
Summary of estimated useful lives of Property, plant and equipment | ' |
Estimated useful life | '5 to 30 years |
Furniture and fixtures [Member] | ' |
Summary of estimated useful lives of Property, plant and equipment | ' |
Estimated useful life | '5 years |
Automobiles [Member] | ' |
Summary of estimated useful lives of Property, plant and equipment | ' |
Estimated useful life | '5 years |
Property_Plant_and_Equipment_a3
Property, Plant and Equipment and Land and Mining Rights (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Summary of property, plant and equipment and land and mining rights | ' | ' |
Property, plant and equipment and land and mining rights, gross | $105,011,112 | $22,507,459 |
Less: Accumulated depreciation and amortization | 11,477,125 | 8,889,377 |
Property, plant and equipment and land and mining rights, net | 93,533,987 | 13,618,082 |
Leasehold Improvements [Member] | ' | ' |
Summary of property, plant and equipment and land and mining rights | ' | ' |
Property, plant and equipment and land and mining rights, gross | 3,437,873 | 3,348,013 |
Production equipment [Member] | ' | ' |
Summary of property, plant and equipment and land and mining rights | ' | ' |
Property, plant and equipment and land and mining rights, gross | 7,003,348 | 6,777,072 |
Furniture and Fixtures [Member] | ' | ' |
Summary of property, plant and equipment and land and mining rights | ' | ' |
Property, plant and equipment and land and mining rights, gross | 493,943 | 468,644 |
Automobiles [Member] | ' | ' |
Summary of property, plant and equipment and land and mining rights | ' | ' |
Property, plant and equipment and land and mining rights, gross | 624,211 | 572,900 |
Land use rights [Member] | ' | ' |
Summary of property, plant and equipment and land and mining rights | ' | ' |
Property, plant and equipment and land and mining rights, gross | 2,356,426 | 2,294,833 |
Mining rights [Member] | ' | ' |
Summary of property, plant and equipment and land and mining rights | ' | ' |
Property, plant and equipment and land and mining rights, gross | $91,095,311 | $9,045,997 |
Property_Plant_and_Equipment_a4
Property, Plant and Equipment and Land and Mining Rights (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Summary of breakdown of depreciation and amortization expenses | ' | ' | ' | ' |
Depreciation and amortization | $833,787 | $370,586 | $2,320,151 | $1,047,465 |
Plant, equipment and improvements [Member] | ' | ' | ' | ' |
Summary of breakdown of depreciation and amortization expenses | ' | ' | ' | ' |
Depreciation | 199,994 | 185,403 | 594,444 | 557,403 |
Land use rights [Member] | ' | ' | ' | ' |
Summary of breakdown of depreciation and amortization expenses | ' | ' | ' | ' |
Amortization | 12,937 | 12,612 | 38,488 | 37,907 |
Mining rights [Member] | ' | ' | ' | ' |
Summary of breakdown of depreciation and amortization expenses | ' | ' | ' | ' |
Amortization | $620,856 | $172,571 | $1,687,219 | $452,155 |
Property_Plant_and_Equipment_a5
Property, Plant and Equipment and Land and Mining Rights (Details 3) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
T | T | T | T | |
Limestone [Member] | ' | ' | ' | ' |
Summary of production from mines | ' | ' | ' | ' |
Production from mines (in tons) | 27,837 | 24,211 | 78,520 | 74,598 |
Bauxite [Member] | ' | ' | ' | ' |
Summary of production from mines | ' | ' | ' | ' |
Production from mines (in tons) | 67,045 | 79,504 | 186,524 | 200,981 |
Property_Plant_and_Equipment_a6
Property, Plant and Equipment and Land and Mining Rights (Details Textual) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 0 Months Ended | |||||||||||
Feb. 04, 2013 | Feb. 04, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Aug. 28, 2012 | Aug. 28, 2012 | Aug. 28, 2012 | Aug. 28, 2012 | |
USD ($) | CNY | USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | Mining rights [Member] | Limestone [Member] | Limestone [Member] | Bauxite [Member] | Bauxite [Member] | Xiuwen County Longchang Town Ganba [Member] | Xiuwen County Longchang Town Ganba [Member] | Xiumen, Guizhou, PRC [Member] | Xiumen, Guizhou, PRC [Member] | |
T | T | Mine | T | USD ($) | CNY | USD ($) | CNY | ||||||||||
Mine | Mine | T | Mine | ||||||||||||||
Property Plant and Equipment and Land and Mining Rights (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of mining rights hold by company | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 2 | 2 | 2 | ' | ' | ' | ' |
Production allowed | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | 300,000 | 360,000 | 360,000 | ' | ' | ' | ' |
Consideration transferred aluminum bauxite mining right | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $80,000,000 | 502,000,000 | $2,870,000 | 18,000,000 |
Estimated useful life | ' | ' | ' | ' | ' | ' | ' | ' | '14 to 30 years | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization | ' | ' | 833,787 | 370,586 | 2,320,151 | ' | 1,047,465 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Paid deposit for the mining right acquisition, aluminum bauxite mine | $16,300,000 | 102,000,000 | ' | ' | $63,400,000 | 400,000,000 | ' | 400,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shortterm_Debt_Details
Short-term Debt (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Summary of Short-term debt | ' | ' |
Short term note (1) | $13,036,896 | $12,696,135 |
Short term note (2) | 6,518,448 | 6,348,068 |
Total | $19,555,344 | $19,044,203 |
Shortterm_Debt_Details_Textual
Short-term Debt (Details Textual) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Aug. 28, 2013 | Aug. 28, 2013 | Dec. 03, 2012 | Dec. 03, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Aug. 28, 2013 | Aug. 28, 2013 | Dec. 03, 2012 | Dec. 03, 2012 | |
USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | USD ($) | USD ($) | Industrial Bank Co., Limited [Member] | Industrial Bank Co., Limited [Member] | Industrial Bank Co., Limited [Member] | Industrial Bank Co., Limited [Member] | ||
CEO and Director [Member] | CEO and Director [Member] | CEO and Director [Member] | CEO and Director [Member] | ||||||||||
USD ($) | CNY | USD ($) | CNY | ||||||||||
Short-term Debt (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short term note agreement | $13.04 | 80,000,000 | $6,520,000 | 40,000,000 | ' | ' | ' | ' | ' | $13,040,000 | 80,000,000 | $6,480,000 | 40,000,000 |
Short term note agreement maturity period | '12 months | '12 months | '1 year | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate on short term note in addition to the base rate | ' | ' | ' | ' | ' | ' | 6.00% | ' | 6.00% | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | $298,621 | $228,123 | $882,000 | $284,243 | ' | ' | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Summary of Reconciliation of income tax provision | ' | ' | ' | ' |
Computed tax at the U.S. federal statutory rate of 34% | $2,463,956 | $2,553,673 | $5,190,826 | $7,296,453 |
Tax rate difference between the US and PRC on foreign earnings | -652,224 | -675,972 | -1,374,042 | -1,931,414 |
Change in valuation allowance | 12,401 | 32,563 | 267,590 | 122,215 |
Other | -12,390 | -8,618 | -267,438 | -32,296 |
Total | $1,811,743 | $1,901,646 | $3,816,936 | $5,454,958 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Deferred tax assets: | ' | ' |
Net operating losses | $1,507,946 | $1,240,356 |
Liability for social insurance premiums and provident housing funds | 75,000 | 75,000 |
Total deferred tax assets | 1,582,946 | 1,315,356 |
Deferred tax liabilities: | ' | ' |
Difference between book and tax amortization on mining rights | -543,736 | -386,425 |
Total deferred tax liabilities | -543,736 | -386,425 |
Net deferred tax assets before valuation allowance | 1,039,210 | 928,931 |
Valuation allowance | -1,507,946 | -1,240,356 |
Net deferred tax liabilities | ($468,736) | ($311,425) |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income Taxes (Textual) | ' | ' | ' | ' |
Income tax rate in accordance with the New CIT Law | ' | ' | 25.00% | ' |
Withholding income tax rate for dividends distributed | ' | ' | 10.00% | ' |
US statutory rate | ' | ' | 34.00% | ' |
Provision for income taxes | $1,811,743 | $1,901,646 | $3,816,936 | $5,454,958 |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Summary of analysis of general fund by subsidiary | ' | ' |
Registered Capital | $743,768 | $743,768 |
General Reserve Fund | 496,396 | 496,396 |
Jiangmen Huiyuan [Member] | ' | ' |
Summary of analysis of general fund by subsidiary | ' | ' |
Registered Capital | ' | ' |
General Reserve Fund | ' | ' |
Guangdong Huixin (formerly Jiangmen Wealth Water) [Member] | ' | ' |
Summary of analysis of general fund by subsidiary | ' | ' |
Registered Capital | 61,981 | 61,981 |
General Reserve Fund | 38,801 | 38,801 |
Guizhou Yufeng [Member] | ' | ' |
Summary of analysis of general fund by subsidiary | ' | ' |
Registered Capital | 61,981 | 61,981 |
General Reserve Fund | 39,211 | 39,211 |
Shanxi Wealth [Member] | ' | ' |
Summary of analysis of general fund by subsidiary | ' | ' |
Registered Capital | 619,806 | 619,806 |
General Reserve Fund | $418,384 | $418,384 |
Shareholders_Equity_Details_Te
Shareholders' Equity (Details Textual) (USD $) | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Common Stock [Member] | Preferred Stock [Member] | Preferred Stock [Member] | Preferred Stock [Member] | Preferred Stock [Member] | |||
Shareholders' Equity (Textual) | ' | ' | ' | ' | ' | ' | ' |
Preferred stock converted to common stock (Shares) | ' | ' | 37,420 | ' | ' | 7,484 | ' |
Shares issued in kind for the payment of preferred stock dividend (Shares) | ' | ' | ' | ' | ' | 816 | ' |
Common stock issued for services, (Shares) | ' | ' | 1,330,000 | ' | ' | ' | ' |
Common stock issued for services | $6,650,000 | ' | $6,650,000 | ' | ' | ' | ' |
Percentage of annual after-tax profit required to be allocated to General Reserve Fund | 10.00% | ' | ' | ' | ' | ' | ' |
Statutory general reserve fund in percentage of registered capital | 50.00% | ' | ' | ' | ' | ' | ' |
Restricted Portion of Retained Earnings | 496,396 | 496,396 | ' | ' | ' | ' | ' |
Dividend paid in-kind at per preferred share | $15 | ' | ' | ' | ' | ' | ' |
Preferred share convertible into ordinary shares | 5 | ' | ' | ' | ' | ' | ' |
Preferred stock dividend | 12,240 | ' | ' | ' | ' | ' | ' |
Amount of preferred dividends | ' | ' | ' | $43,227 | $100,081 | $129,560 | $300,243 |
Related_Party_Balances_and_Tra1
Related Party Balances and Transactions (Details) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Aug. 28, 2013 | Aug. 28, 2013 | Dec. 03, 2012 | Dec. 03, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | |
USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | |||
Related Party Balances and Transactions (Textual) | ' | ' | ' | ' | ' | ' | ' | ' |
Short term note agreement | $13.04 | 80,000,000 | $6,520,000 | 40,000,000 | ' | ' | ' | ' |
Short term note agreement maturity period | '12 months | '12 months | '1 year | '1 year | ' | ' | ' | ' |
Interest rate on short term note in addition to the base rate | ' | ' | ' | ' | ' | 6.00% | 6.00% | ' |
Lease term | ' | ' | ' | ' | ' | ' | ' | '5 years |
Monthly lease payments | ' | ' | ' | ' | ' | 12,696 | ' | ' |
Lease expiration date | ' | ' | ' | ' | ' | 31-Dec-15 | ' | ' |
Rent expense | ' | ' | ' | ' | $38,000 | $114,000 | ' | ' |
Segement_Information_Details
Segement Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Segment Reporting Information, Profit (Loss) | ' | ' | ' | ' | ' |
Net revenue | $21,361,331 | $22,407,329 | $64,002,554 | $61,298,540 | ' |
Cost of revenue | 11,575,232 | 12,308,208 | 34,875,014 | 33,746,528 | ' |
Gross profit | 9,786,099 | 10,099,121 | 29,127,540 | 27,552,012 | ' |
Selling and marketing | 744,583 | 797,674 | 2,161,603 | 2,218,268 | ' |
General and administrative | 1,382,882 | 1,490,942 | 10,590,151 | 3,826,647 | ' |
Research and development | 179,432 | 151,176 | 533,787 | 470,722 | ' |
Income/(loss) from operations | 7,479,202 | 7,659,329 | 15,841,999 | 21,036,375 | ' |
Segment Reporting Information, Assets (Liabilities) | ' | ' | ' | ' | ' |
Current assets | 40,173,222 | ' | 40,173,222 | ' | 38,080,114 |
Property, plant and equipment, land use and mining right | 93,533,987 | ' | 93,533,987 | ' | 13,618,082 |
Deposit for mining right acquisition | ' | ' | ' | ' | 63,480,677 |
Total assets | 133,707,209 | ' | 133,707,209 | ' | 115,178,873 |
Guangdong Huixin [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information, Profit (Loss) | ' | ' | ' | ' | ' |
Net revenue | 11,159,189 | 11,510,345 | 34,726,702 | 32,700,226 | ' |
Cost of revenue | 6,797,757 | 7,307,167 | 20,974,974 | 20,791,108 | ' |
Gross profit | 4,361,432 | 4,203,178 | 13,751,728 | 11,909,118 | ' |
Selling and marketing | 292,626 | 331,546 | 823,511 | 918,796 | ' |
General and administrative | 646,792 | 734,084 | 7,054,360 | 1,665,657 | ' |
Research and development | 170,423 | 142,394 | 506,989 | 443,853 | ' |
Income/(loss) from operations | 3,251,591 | 2,995,154 | 5,366,868 | 8,880,812 | ' |
Segment Reporting Information, Assets (Liabilities) | ' | ' | ' | ' | ' |
Current assets | 60,651,315 | ' | 60,651,315 | ' | 15,217,117 |
Property, plant and equipment, land use and mining right | 2,591,964 | ' | 2,591,964 | ' | 2,707,170 |
Deposit for mining right acquisition | ' | ' | ' | ' | 63,480,677 |
Total assets | 63,243,279 | ' | 63,243,279 | ' | 81,404,964 |
Guizhou Yefeng [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information, Profit (Loss) | ' | ' | ' | ' | ' |
Net revenue | 4,151,771 | 4,596,526 | 13,438,658 | 12,667,891 | ' |
Cost of revenue | 2,556,186 | 2,459,220 | 8,223,217 | 6,782,660 | ' |
Gross profit | 1,595,585 | 2,137,306 | 5,215,441 | 5,885,231 | ' |
Selling and marketing | 81,034 | 85,957 | 259,935 | 240,411 | ' |
General and administrative | 199,986 | 159,289 | 541,125 | 463,650 | ' |
Research and development | 9,009 | 8,782 | 26,798 | 26,869 | ' |
Income/(loss) from operations | 1,305,556 | 1,883,278 | 4,387,583 | 5,154,301 | ' |
Segment Reporting Information, Assets (Liabilities) | ' | ' | ' | ' | ' |
Current assets | 8,277,251 | ' | 8,277,251 | ' | 16,443,580 |
Property, plant and equipment, land use and mining right | 84,979,745 | ' | 84,979,745 | ' | 4,608,247 |
Deposit for mining right acquisition | ' | ' | ' | ' | ' |
Total assets | 93,256,996 | ' | 93,256,996 | ' | 21,051,827 |
Shanxi Wealth [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information, Profit (Loss) | ' | ' | ' | ' | ' |
Net revenue | 8,519,507 | 9,024,816 | 23,720,626 | 23,460,362 | ' |
Cost of revenue | 4,690,425 | 5,266,179 | 13,560,255 | 13,702,699 | ' |
Gross profit | 3,829,082 | 3,758,637 | 10,160,371 | 9,757,663 | ' |
Selling and marketing | 370,923 | 380,171 | 1,078,157 | 1,059,061 | ' |
General and administrative | 338,018 | 318,260 | 1,002,373 | 921,164 | ' |
Research and development | ' | ' | ' | ' | ' |
Income/(loss) from operations | 3,120,141 | 3,060,206 | 8,079,841 | 7,777,438 | ' |
Segment Reporting Information, Assets (Liabilities) | ' | ' | ' | ' | ' |
Current assets | 34,122,174 | ' | 34,122,174 | ' | 26,699,097 |
Property, plant and equipment, land use and mining right | 5,962,278 | ' | 5,962,278 | ' | 6,302,665 |
Deposit for mining right acquisition | ' | ' | ' | ' | ' |
Total assets | 40,084,452 | ' | 40,084,452 | ' | 33,001,762 |
Corporate [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information, Profit (Loss) | ' | ' | ' | ' | ' |
Net revenue | ' | ' | ' | ' | ' |
Cost of revenue | ' | ' | ' | ' | ' |
Gross profit | ' | ' | ' | ' | ' |
Selling and marketing | ' | ' | ' | ' | ' |
General and administrative | 198,086 | -279,309 | 1,992,293 | 776,176 | ' |
Research and development | ' | ' | ' | ' | ' |
Income/(loss) from operations | 198,086 | -279,309 | -1,992,293 | -776,176 | ' |
Segment Reporting Information, Assets (Liabilities) | ' | ' | ' | ' | ' |
Current assets | 5,359,923 | ' | 5,359,923 | ' | 5,697,282 |
Property, plant and equipment, land use and mining right | ' | ' | ' | ' | ' |
Deposit for mining right acquisition | ' | ' | ' | ' | ' |
Total assets | 5,359,923 | ' | 5,359,923 | ' | 5,697,282 |
Eliminations [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information, Profit (Loss) | ' | ' | ' | ' | ' |
Net revenue | -2,469,136 | -2,724,358 | -7,883,432 | -7,529,939 | ' |
Cost of revenue | -2,469,136 | -2,724,358 | -7,883,432 | -7,529,939 | ' |
Gross profit | ' | ' | ' | ' | ' |
Selling and marketing | ' | ' | ' | ' | ' |
General and administrative | ' | ' | ' | ' | ' |
Research and development | ' | ' | ' | ' | ' |
Income/(loss) from operations | ' | ' | ' | ' | ' |
Segment Reporting Information, Assets (Liabilities) | ' | ' | ' | ' | ' |
Current assets | -68,237,441 | ' | -68,237,441 | ' | -25,976,962 |
Property, plant and equipment, land use and mining right | ' | ' | ' | ' | ' |
Deposit for mining right acquisition | ' | ' | ' | ' | ' |
Total assets | ($68,237,441) | ' | ($68,237,441) | ' | ($25,976,962) |
Segment_Information_Details_Te
Segment Information (Details Textual) | 9 Months Ended |
Sep. 30, 2013 | |
Segement | |
Segment Information (Textual) | ' |
Number of Operating Segments | 3 |