Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Apr. 04, 2014 | Jun. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'CleanTech Innovations, Inc. | ' | ' |
Document Type | '10-K | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 24,982,822 | ' |
Entity Public Float | ' | ' | $3,777,139 |
Amendment Flag | 'false | ' | ' |
Entity Central Index Key | '0001382219 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
CURRENT ASSETS: | ' | ' |
Cash and equivalents | $8,178 | $42,996 |
Restricted cash | 244,427 | 267,689 |
Accounts receivable, net | 2,000,914 | 2,548,834 |
Other receivables and deposits, net | 2,758,253 | 233,570 |
Retentions receivable, net | 1,051,227 | 3,297,533 |
Advances to suppliers, net | 466,878 | 10,727,685 |
Taxes receivable | 0 | 1,790 |
Inventories, net | 6,061,974 | 8,117,227 |
Due from shareholder | 0 | 89,336 |
Notes receivable | 738,080 | 850,529 |
Total current assets | 13,329,931 | 26,177,189 |
NONCURRENT ASSETS: | ' | ' |
Long term investment | 0 | 95,458 |
Advance for equipment purchase | 336,822 | 0 |
Prepayments | 321,248 | 318,609 |
Construction in progress | 0 | 1,894,400 |
Property and equipment, net | 11,853,575 | 10,626,245 |
Land use right and patents, net | 4,162,058 | 4,078,260 |
Total non current assets | 16,673,703 | 17,012,972 |
TOTAL ASSETS | 30,003,634 | 43,190,161 |
CURRENT LIABILITIES: | ' | ' |
Accounts payable | 2,720,996 | 2,376,229 |
Accrued expenses and other payables | 4,353,402 | 1,109,748 |
Advance from customers | 243,171 | 1,385,976 |
Tax payable | 68,234 | 0 |
Short term loans | 12,952,396 | 13,295,565 |
Short term payable, net of unamortized interest | 442,827 | 87,172 |
Total current liabilities | 20,781,026 | 18,254,690 |
Long term payables, net of unamortized interest | 0 | 283,099 |
Total Liabilities | 20,781,026 | 18,537,789 |
CONTINGENCIES AND COMMITMENTS | ' | ' |
STOCKHOLDERS' EQUITY: | ' | ' |
Preferred stock, $0.00001 par value, 100,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.00001 par value, 100,000,000 shares authorized, 24,982,822 shares issued and outstanding | 250 | 250 |
Additional paid in capital | 20,649,092 | 20,649,092 |
Statutory reserve fund | 1,104,138 | 1,104,138 |
Accumulated other comprehensive income | 4,105,963 | 3,104,407 |
Accumulated deficit | -16,636,835 | -205,515 |
Total stockholders' equity | 9,222,608 | 24,652,372 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $30,003,634 | $43,190,161 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 24,982,822 | 24,982,822 |
Common stock, shares outstanding | 24,982,822 | 24,982,822 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Net sales | $5,894,264 | $4,821,340 |
Cost of goods sold | 8,062,625 | 3,972,934 |
Gross profit (loss) | -2,168,361 | 848,406 |
Operating expenses | ' | ' |
Selling | 840,239 | 336,712 |
General and administrative | 2,018,818 | 2,495,498 |
Bad debt | 7,911,884 | 4,203,145 |
Total operating expenses | 10,770,941 | 7,035,355 |
Loss from operations | -12,939,302 | -6,186,949 |
Non-operating income (expenses) | ' | ' |
Interest income | 730 | 6,073 |
Interest expense | -3,635,046 | -1,322,278 |
Subsidy income | 0 | 171,089 |
Other income | 610,759 | 290,830 |
Other expenses | -468,461 | -259,576 |
Total non-operating expenses, net | -3,492,018 | -1,113,862 |
Loss before income tax | -16,431,320 | -7,300,811 |
Income tax expense | 0 | 0 |
Net loss | -16,431,320 | -7,300,811 |
Foreign currency translation gain | 1,001,556 | 76,076 |
Comprehensive loss | ($15,429,764) | ($7,224,735) |
Basic and diluted weighted average shares outstanding (in Shares) | 24,982,822 | 24,982,822 |
Basic and diluted loss per share (in Dollars per share) | ($0.66) | ($0.29) |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Statutory Reserves [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2011 | $250 | $20,649,092 | $1,104,138 | $3,028,331 | $7,095,296 | $31,877,107 |
Balance (in Shares) at Dec. 31, 2011 | 24,982,822 | ' | ' | ' | ' | ' |
Net income (loss) | ' | ' | ' | ' | -7,300,811 | -7,300,811 |
Foreign currency translation gain | ' | ' | ' | 76,076 | ' | 76,076 |
Balance at Dec. 31, 2012 | 250 | 20,649,092 | 1,104,138 | 3,104,407 | -205,515 | 24,652,372 |
Balance (in Shares) at Dec. 31, 2012 | 24,982,822 | ' | ' | ' | ' | 24,982,822 |
Net income (loss) | ' | ' | ' | ' | -16,431,320 | -16,431,320 |
Foreign currency translation gain | ' | ' | ' | 1,001,556 | ' | 1,001,556 |
Balance at Dec. 31, 2013 | $250 | $20,649,092 | $1,104,138 | $4,105,963 | ($16,636,835) | $9,222,608 |
Balance (in Shares) at Dec. 31, 2013 | 24,982,822 | ' | ' | ' | ' | 24,982,822 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($16,431,320) | ($7,300,811) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 672,907 | 676,531 |
Gain on disposal of fixed assets | -6,115 | 0 |
Amortization of interest | 59,949 | 82,293 |
Increase in bad debt allowance | 7,911,884 | 4,203,145 |
Provision for inventory impairment | 3,343,809 | 208,457 |
(Increase) decrease in assets: | ' | ' |
Restricted cash | 30,945 | 1,027,806 |
Accounts receivable | 1,184,858 | 786,124 |
Retentions receivable | 641,121 | -98,862 |
Notes receivable | 136,140 | -285,782 |
Other receivables, deposits and prepayments | 265,710 | 375,355 |
Advances to suppliers | 1,105,264 | 1,001,669 |
Inventories | -1,080,995 | -1,970,829 |
Increase (decrease) in liabilities: | ' | ' |
Accounts payable | 268,430 | -517,492 |
Accrued expenses | 3,236,456 | 952,183 |
Advance from customers | -1,163,297 | 1,193,339 |
Taxes payable | -16,105 | -67,417 |
Net cash provided by operating activities | 159,641 | 265,709 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Construction in process | 0 | -25,030 |
Acquisition of property & equipment | -51,329 | -3,151 |
Intangible assets | -50,146 | 0 |
Prepayment for construction | 0 | -579,406 |
Long term investment receipt | 96,553 | 0 |
Net cash used in investing activities | -4,922 | -607,587 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from credit line | 638,951 | 0 |
Payments on long term payable | 0 | -381,782 |
Due from shareholder | 90,311 | 72,631 |
Advance from shareholder | 0 | -282,659 |
Repayment of short term loans | -1,062,084 | -95,050 |
Net cash used in financing activities | -332,822 | -686,860 |
EFFECT OF EXCHANGE RATE CHANGE ON CASH & EQUIVALENTS | 143,285 | -1,324 |
NET DECREASE IN CASH & EQUIVALENTS | -34,818 | -1,030,062 |
CASH & EQUIVALENTS, BEGINNING OF YEAR | 42,996 | 1,073,058 |
CASH & EQUIVALENTS, END OF YEAR | 8,178 | 42,996 |
Supplemental Cash flow data: | ' | ' |
Income tax paid | 0 | 69,254 |
Interest paid | $287,434 | $360,123 |
1_ORGANIZATION_AND_DESCRIPTION
1. ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2013 | |
Disclosure Text Block [Abstract] | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' |
1. ORGANIZATION AND DESCRIPTION OF BUSINESS | |
CleanTech Innovations, Inc., formerly known as Everton Capital Corporation (the “Company” or “CleanTech”), was incorporated on May 9, 2006, in the State of Nevada. Through its wholly owned operating subsidiaries in China, the Company designs, manufactures tests and sells structural towers for on-land and off-shore wind turbines. The Company also manufactures specialty metal products that require advanced manufacturing and engineering capabilities, including bellows expansion joints and connecting bend pipes used for waste heat recycling in steel production, in ultra-high-voltage electricity transmission grids and in industrial pressure vessels. | |
The Company acquired Liaoning Creative Bellows Co., Ltd. (“Creative Bellows”) pursuant to the terms of a Share Exchange Agreement and Plan of Reorganization, dated July 2, 2010, as amended. Under the terms of the Share Exchange Agreement, on July 2, 2010, the Company issued 15,122,000 shares of common stock to the three owners of Creative Bellows and two of their designees to enter into a series of transactions, described below, by which the Company acquired 100% of Creative Bellows. Concurrently with the Share Exchange Agreement and as a condition thereof, the Company entered into an agreement with Jonathan Woo, the Company’s former Chief Executive Officer and Director, pursuant to which he returned 40,000,000 shares of the Company’s common stock for cancellation. Mr. Woo received $40,000 from the Company for the cancellation of his shares of common stock, which was charged to additional paid-in capital. The $40,000 payment reflected the fair value “FV” of the shares in the Company, which was a non-operating public shell with no trading market for its common stock prior to the Share Exchange Agreement. The cancelled shares were retired and, for accounting purposes, it were treated as not having been outstanding for any period presented. Upon completion of the foregoing transactions, the Company had 19,130,000 shares of its common stock issued and outstanding. | |
On July 15, 2010, the State Administration of Industry and Commerce (“SAIC”) of the People’s Republic of China (“PRC”) issued a Sino-foreign joint venture business license to Creative Bellows, indicating a capital injection by Wonderful Limited, a British Virgin Islands company, was approved and registering its ownership of a 4.999% equity interest in Creative Bellows. On August 18, 2010, the SAIC issued an approval registration of the Company’s capital injection of $23.3 million in cash for 87% of Creative Bellows. Finally, on October 15, 2010, the Company obtained PRC government approval to acquire the remaining minority interest in Creative Bellows held by its original shareholders and Wonderful Limited for $6 million. On October 27, 2010, pursuant to waiver and release agreements, the selling minority shareholders of Creative Bellows waived their rights to receive cash for their equity interests for a mutual release of claims. As a result of these transactions, Creative Bellows became a 100% owned subsidiary of the Company effective October 15, 2010. | |
For accounting purposes, the Share Exchange Agreement and subsequent transactions described above were treated as a reverse acquisition and recapitalization of Creative Bellows because, prior to the transactions, the Company was a non-operating public shell and, subsequent to the transactions, the shareholders of Creative Bellows owned a majority of the outstanding common stock of the Company and exercise significant influence over the operating and financial policies of the consolidated entity. Pursuant to Securities and Exchange Commission (“SEC”) rules, the merger or acquisition of a private operating company into a non-operating public shell with nominal net assets is considered a capital transaction. | |
Liaoning Creative Bellows Co., Ltd. (“Creative Bellows”) was incorporated in the PRC province of Liaoning on September 17, 2007. Creative Bellows designs and manufactures bellows expansion joints, pressure vessels, wind tower components for wind turbines and other fabricated metal specialty products. On May 26, 2009, the three individual shareholders of Creative Bellows established Liaoning Creative Wind Power Equipment Co., Ltd. (“Creative Wind Power”). During 2009, the three shareholders transferred their Creative Wind Power shares to Creative Bellows at cost; as a result of the transfer of ownership, Creative Bellows owned 100% of Creative Wind Power. Creative Wind Power markets and sells wind tower components designed and manufactured by Creative Bellows. | |
2_SUMMARY_OF_SIGNIFICANT_ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Significant Accounting Policies [Text Block] | ' | ||||||||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||
Basis of Presentation | |||||||||
The accompanying consolidated financial statements were prepared in conformity with U.S. GAAP. The Company’s functional currency is the Chinese Yuan Renminbi (“RMB”); however, the accompanying consolidated financial statements were translated and presented in United States Dollars (“USD”). The accompanying consolidated financial statements present the historical financial condition, results of operations and cash flows of the operating companies. | |||||||||
Going Concern | |||||||||
The Company incurred a net loss of $16.43 million for the year ended December 31, 2013. In addition, the Company had loans of $2.26 million and promissory notes of $10 million and $50,000 that are past due. Through a new Line of Credit Agreement entered with the same lender on August 17, 2013, the default promissory note of $10 million became payable upon Note-holder’s request (See Note 14). As of December 31, 2013, the Company had an outstanding balance of $645,348 including accrued interest under this credit line and $442,827 under short term payable currently in default. The Company has been unable to raise funds from the U.S. markets to pay off these obligations. These conditions raise a substantial doubt as to whether the Company may continue as a going concern. The Company is seeking to obtain additional financing from local banks in the PRC. The Company will also seek to improve its cash flows from operations by implementing cost control measures and reducing inventory purchases. | |||||||||
Principles of Consolidation | |||||||||
The consolidated financial statements include the accounts of CleanTech and its wholly owned subsidiaries, Creative Bellows and Creative Wind Power. All intercompany transactions and account balances were eliminated in consolidation. | |||||||||
Use of Estimates | |||||||||
In preparing financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates include the recoverability of long-lived assets and the valuation of inventories. Actual results could differ from those estimates. | |||||||||
Cash and Equivalents | |||||||||
Cash and equivalents include cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of this purchase date | |||||||||
Restricted Cash | |||||||||
Restricted cash consists of a percentage of sales deposited by the Company into its bank accounts according to contract terms, which serves as a contract execution and product delivery guarantee. The restriction is released upon customer acceptance of the product. | |||||||||
Accounts and Retentions Receivable | |||||||||
The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Past due receivables are determined based on contractual payment terms specified in the contract. Based on its historical collection activity, the Company had allowances for bad debts of $4,523,084 and $4,350,671 at December 31, 2013 and 2012, respectively. | |||||||||
At December 31, 2013 and 2012, the Company had gross retentions receivable for product quality assurance of $2,746,082 and $3,297,533, respectively. The retention generally is 10% of the sales price with a one-year term, but no later than the termination of the warranty period. The Company had allowances for retentions receivable of $1,694,855 and $0 at December 31, 2013 and 2012, respectively. | |||||||||
Inventories | |||||||||
The Company’s inventories are valued at the lower of cost or market, with cost determined on a weighted average basis. The Company compares the cost of inventories with market value and an allowance is made to write down the inventories to their market value, if lower. | |||||||||
Property and Equipment | |||||||||
Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with 5% salvage value and estimated lives as follows: | |||||||||
Buildings | 40 | Years | |||||||
Machinery | 5 | - | 15 | Years | |||||
Vehicles | 5 | Years | |||||||
Office equipment | 5 | Years | |||||||
Testing equipment | 10 | Years | |||||||
Land Use Rights | |||||||||
Right to use land is stated at cost less accumulated amortization. Amortization is provided using the straight-line method over 50 years. | |||||||||
Impairment of Long-Lived Assets | |||||||||
Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, but at least annually. | |||||||||
Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the FV of the assets. FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that as of December 31, 2013 and 2012, there were no significant impairments of its long-lived assets. | |||||||||
Income Taxes | |||||||||
The Company utilizes Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes,” codified in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740, which requires recognition of deferred tax assets and liabilities for expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. | |||||||||
The Company follows FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), codified in FASB ASC Topic 740. When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. At December 31, 2013 and 2012, the Company did not take any uncertain positions that would necessitate recording a tax-related liability. | |||||||||
Revenue Recognition | |||||||||
The Company’s revenue recognition policies are in compliance with SEC Staff Accounting Bulletin (“SAB”) 104 (codified in FASB ASC Topic 605). Sales revenue, including the final 10% of the purchase price, is recognized after delivery is complete, customer acceptance of the product occurs and collectability is reasonably assured. Customer acceptance occurs after the customer puts the product through a quality inspection, which normally is completed within one to two weeks from customer receipt of the product. In case of sales contracts with FOB shipping terms, the customer is responsible for cost of freight and insurance and revenue is recognized when products are delivered to the carrier. In case of sales contracts with FOB destination terms, the Company is responsible for the cost of freight and insurance and revenue is recognized when customer acceptance is received. The customer is responsible for installation and integration of our component products into its end products. Payments received before satisfaction of all relevant criteria for revenue recognition are recorded as unearned revenue or advances from customers. Unearned revenue or advances from customers consists of payments received from customers prior to customer acceptance of the product. | |||||||||
The Company’s standard payment terms with its wind tower customers generally provide that 10% of the purchase price is due upon the Company’s deposit of restricted cash into a bank account as a contract guarantee, 20% upon the Company’s purchase of raw material for the order, 10% upon delivery of the base ring component of the wind towers, 30% upon delivery of the wind tower tube sections and 20% upon customer inspection and acceptance of the product, which customers normally complete within 1-2 weeks after delivery. As a common practice in the manufacturing business in PRC, payment of the final 10% of the purchase price is due no later than the termination date of the product warranty, which can be up to 12 months from the customer acceptance date. The final 10% of the purchase price (retentions receivable) is recognized as revenue upon customer acceptance of the product. For the Company’s bellows expansion joints and pressure vessels, payment terms are negotiated on a case-by-case basis and these payment percentages and terms may differ for each customer. | |||||||||
Sales revenue is the invoiced value of goods, net of value-added tax (“VAT”). The Company’s products sold and services provided in China are subject to VAT of 17% of the sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing the finished product. The Company recorded VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables. | |||||||||
Warranties | |||||||||
The Company offers a product warranty to its customers of up to 12 months depending on the terms negotiated with each customer. During the warranty period, the Company will repair or replace defective products free of charge. The Company commenced production in 2009 and as of December 31, 2013, the Company accrued $8,188 in warranty expense. The Company implemented internal manufacturing protocols designed to ensure product quality beginning from the receipt of raw materials to the final inspection at the time products are shipped. The Company monitors warranty claims and accrues for warranty expense accordingly, using ASC Topic 450 to account for its standard warranty. | |||||||||
The Company provides its warranty to all customers and does not consider it an additional service; rather, the warranty is considered an integral part of the product’s sale. There is no general right of return indicated in the contracts or purchase orders. If a product under warranty is defective or malfunctions, the Company is responsible for fixing it or replacing it with a new product. The Company’s products are its only deliverables. | |||||||||
The Company’s warranty reserve activity for the years ended December 31, 2013 and 2012 is as follows: | |||||||||
2013 | 2012 | ||||||||
Balance at beginning of period | $ | 9,790 | $ | 11,094 | |||||
Foreign currency translation loss | (1,602 | ) | (1,304 | ) | |||||
Actual costs incurred | - | ||||||||
Ending balance (accrued expense) | $ | 8,188 | $ | 9,790 | |||||
After the warranty period, the Company charges for after-sales services on its products. Such revenue is recognized when the service is provided. For the years ended December 31, 2013 and 2012, the Company had no after-sales services income. The warranty reserve is included in accrued expense (Note 13). | |||||||||
Cost of Goods Sold | |||||||||
Cost of goods sold (“COGS”) consists primarily of material, labor and related overhead, which are attributable to the products, and other indirect costs that benefit all products. Write-down of inventory to lower of cost or market is also recorded in COGS. | |||||||||
Research and Development | |||||||||
Research and development (“R&D”) costs are related primarily to the Company’s development and testing of its new technologies used to manufacture its bellows-related products. R&D costs are expensed as incurred. For the years ended December 31, 2013 and 2012, R&D was $179,745 and $387,486, respectively, and was included in general and administrative expenses. | |||||||||
Subsidy Income | |||||||||
For the years ended December 31, 2013 and 2012, subsidy income was $0 and $171,089, respectively. For the year ended December 31, 2012, the subsidy income included $161,584 government support for developing the advance technology for pressure vessels and $9,505 as Development Zone Reward. The Company was not under any obligation and there were no conditions attached to the subsidy income. | |||||||||
Shipping and Handling Costs | |||||||||
Shipping and handling costs for delivery of finished goods are included in selling expenses. During the years ended December 31, 2013 and 2012, shipping and handling costs were $515,185 and $163,109, respectively. | |||||||||
Basic and Diluted Earnings per Share (“EPS”) | |||||||||
Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and warrants, and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). | |||||||||
2013 | 2012 | ||||||||
Net loss | $ | (16,431,320 | ) | $ | (7,300,811 | ) | |||
Weighted average shares outstanding – basic | 24,982,822 | 24,982,822 | |||||||
Effect of dilutive securities: | |||||||||
Unexercised warrants and options | - | - | |||||||
Weighted average shares outstanding – diluted | 24,982,822 | 24,982,822 | |||||||
Loss per share – basic | $ | -0.66 | $ | (0.29 | ) | ||||
Loss per share – diluted | $ | -0.66 | $ | (0.29 | ) | ||||
The warrants and options to purchase up to 1,987,500 and 2,821,310 shares of common stock were anti-dilutive during the years ended December 31, 2013 and 2012, respectively. | |||||||||
Concentration of Credit Risk | |||||||||
Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables and advances to suppliers. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of its clients’ financial condition and customer payment practices to minimize collection risk on accounts receivable. | |||||||||
Cash includes cash on hand and demand deposits in bank accounts maintained within China. Cash balances at financial institutions within China are not covered by insurance. The Company has not experienced any losses in such accounts. | |||||||||
The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC, as well as by the general state of the PRC economy. | |||||||||
Statement of Cash Flows | |||||||||
In accordance with SFAS No. 95, “Statement of Cash Flows,” codified in FASB ASC Topic 230, cash flows from the Company’s operations are calculated based upon local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet. | |||||||||
Fair Value of Financial Instruments | |||||||||
Certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, other receivables, accounts payable, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the “FV” of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines FV and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: | |||||||||
· | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||||||||
· | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | ||||||||
· | Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement. | ||||||||
As of December 31, 2013 and 2012, the Company did not identify any assets and liabilities required to be presented on the balance sheet at FV. | |||||||||
Stock-Based Compensation | |||||||||
The Company accounts for its stock-based compensation in accordance with SFAS No. 123R, “Share-Based Payment, an Amendment of FASB Statement No. 123” (codified in FASB ASC Topics 718 and 505). The Company recognizes in the income statement the grant-date fair value (“FV”) of stock options and other equity-based compensation issued to employees and non-employees. | |||||||||
Foreign Currency Translation and Transactions | |||||||||
The accompanying consolidated financial statements are presented in USD. The Company’s functional currency is RMB, which is translated into USD for balance sheet accounts using the current exchange rates in effect as of the balance sheet date and for revenue and expense accounts using the average exchange rate during the period. The translation adjustments are recorded as a separate component of stockholders’ equity, captioned accumulated other comprehensive income (loss). Gains and losses resulting from transactions denominated in foreign currencies are included in other income (expense) in the consolidated statements of operations. | |||||||||
The RMB to USD exchange rates in effect as of December 31, 2013 and 2012, were $1 =MB 6.0969 and $1 =MB 6.2855, respectively. The average RMB to USD exchange rates in effect for the years ended December 31, 2013 and 2012, were $1 =MB 6.2142 and $1 =MB 6.3125, respectively. The exchange rates used in translation from RMB to USD were published by the People’s Bank of China. | |||||||||
Comprehensive Income (Loss) | |||||||||
The Company uses SFAS No. 130 “Reporting Comprehensive Income” (codified in FASB ASC Topic 220). Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Comprehensive loss for the years ended December 31, 2013 and 2012, included net loss and foreign currency translation adjustments. | |||||||||
Segment Reporting | |||||||||
SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” (codified in FASB ASC Topic 280), requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure or any other manner in which management disaggregates a company. | |||||||||
Management determined the Company’s product lines – wind towers, bellows expansion joints and pressure vessels – constitute a single reportable segment under ASC 280. The Company operates exclusively in one business: the design and manufacture of highly engineered metal components for heavy industry. The manufacturing processes for each of the Company’s products, principally the rolling and welding of raw steel materials, make uses of the same pool of production workers and engineering talent for design, fabrication, assembly and testing. The Company’s products are characterized and marketed by their ability to withstand temperature, pressure, structural load and other environmental factors. The Company’s products are used by major electrical utilities and large-scale industrial companies in China specializing in heavy industry, and the Company’s sales force sells its products directly to these companies, which utilize the Company’s components in their finished products. All of the Company’s long-lived assets for production are located in its facilities in Tieling, Liaoning Province, China, and operate within the same environmental, safety and quality regulations governing industrial component manufacturing companies. The Company established its subsidiary, Creative Wind Power, solely to market and sell the Company’s wind towers, which constitute the structural support cylinder for an industrial wind turbine installation. Management believes that the economic characteristics of the Company’s product lines, specifically costs and gross margin, will be similar as production increases and labor continues to be shared across products. | |||||||||
As a result, management views the Company’s business and operations for all product lines as a blended gross margin when determining future growth, return on investment and cash flows. Accordingly, management concluded the Company had one reportable segment under ASC 280 because: (i) all of the Company’s products are created with similar production processes, in the same facilities, under the same regulatory environment and sold to similar customers using similar distribution systems; and (ii) gross margins of all product lines have been converging and should continue to converge. | |||||||||
Following is a summary of sales by products for the years ended December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Bellows expansion joints and related | $ | 845,839 | $ | 824,328 | |||||
Pressure vessels | 3,318,976 | 3,579,954 | |||||||
Wind towers | 1,060,983 | 165 | |||||||
Other - resale of raw materials | 668,466 | 416,893 | |||||||
$ | 5,894,264 | $ | 4,821,340 | ||||||
New Accounting Pronouncements | |||||||||
In February 2013, the FASB issued ASU 2013-2, Comprehensive Income (ASC Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, the new ASU requires entities to disclose in a single location (either on the face of the financial statement that reports net income or in the notes) the effects of reclassifications out of accumulated other comprehensive income (AOCI). For items reclassified out of AOCI and into net income in their entirety, entities must disclose the effect of the reclassification on each affected net income item. For AOCI reclassification items that are not reclassified in their entirety into net income, entities must provide a cross-reference to other required U.S. GAAP disclosures. There is no change in the requirement to present the components of net income and other comprehensive income in either a single continuous statement or two separate consecutive statements. The ASU does not change the items currently reported in other comprehensive income. | |||||||||
For public entities, the new disclosure requirements are effective for annual reporting periods beginning after December 15, 2012, and interim periods within those years. The ASU applies prospectively, and early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. | |||||||||
As of December 31, 2013, there is no recently issued accounting standards not yet adopted that would have a material effect on the Company’s consolidated financial statements. | |||||||||
3_OTHER_RECEIVABLES_NET_AND_DE
3. OTHER RECEIVABLES (NET) AND DEPOSITS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Receivables [Abstract] | ' | ||||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ' | ||||||||
3. OTHER RECEIVABLES (NET) AND DEPOSITS | |||||||||
Other receivables and deposits consisted of the following at December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Deposits for contract bids | $ | 97,603 | $ | 132,008 | |||||
Advance to employees | 87,943 | 51,453 | |||||||
Advance to unrelated party company | 295,232 | - | |||||||
Deposit for land use right bid | 328,036 | - | |||||||
Other | 2,462,948 | 50,109 | |||||||
Less: bad debt allowance | (513,509 | ) | - | ||||||
Total | $ | 2,758,253 | $ | 233,570 | |||||
As of December 31, 2013, other of $2,462,948 mainly consisted of receivable of $607,040 from sales of equipment, retainers for legal expense of $270,000, and the receivables of $993,808 from suppliers, which the Company previously prepaid for raw material purchases but the purchase orders were later cancelled by the Company. The Company expected to collect the full payments in 2014. Advance to unrelated party company of $295,232 was a short-term loan, bore no interest, and payable upon demand. Deposit of $328,036 was an initial deposit for company to bid for a land use right; however, this deposit will be refunded to the Company if the Company failed the bidding for the purchase. The Company made the deposit for land use right bid in July 2013, and is currently waiting for the bidding result. | |||||||||
4_ADVANCES_TO_SUPPLIERS
4. ADVANCES TO SUPPLIERS | 12 Months Ended |
Dec. 31, 2013 | |
Advance To Suppliers Disclosure [Abstract] | ' |
Advance To Suppliers Disclosure | ' |
4. ADVANCES TO SUPPLIERS | |
Advances to suppliers mainly consisted of prepayments to suppliers for raw materials which were mainly comprised of steel. | |
5_INVENTORIES
5. INVENTORIES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventory Disclosure [Text Block] | ' | ||||||||
5. INVENTORIES | |||||||||
Inventories consisted of the following at December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Raw materials | $ | 2,988,859 | $ | 1,472,427 | |||||
Finished goods | 1,649,209 | 3,709,225 | |||||||
Work in process | 5,047,877 | 3,144,928 | |||||||
Less: allowance for inventory impairment | (3,623,971 | ) | (209,353 | ) | |||||
Total | $ | 6,061,974 | $ | 8,117,227 | |||||
6_DUE_FROM_SHAREHOLDER
6. DUE FROM SHAREHOLDER | 12 Months Ended |
Dec. 31, 2013 | |
Due From Shareholder [Abstract] | ' |
Due From Shareholder [Text Block] | ' |
6. DUE FROM SHAREHOLDER | |
As of December 31, 2013 and 2012, the Company advanced $0 and $89,336, respectively, to the Company’s CEO, who is also a shareholder of the Company, for her to negotiate and purchase certain raw materials, pay the expenses of biding the contracts on Company’s behalf, as well as the advance for the CEO’s business trip. | |
7_NOTES_RECEIVABLE_BANK_ACCEPT
7. NOTES RECEIVABLE - BANK ACCEPTANCES | 12 Months Ended |
Dec. 31, 2013 | |
Receivables [Abstract] | ' |
Financing Receivables [Text Block] | ' |
7. NOTES RECEIVABLE – BANK ACCEPTANCES | |
The Company sold goods to its customers and received commercial notes (bank acceptances) from them in lieu of payment for accounts receivable. The Company discounted these notes with a bank or endorsed notes to vendors for payment of its obligations or to get cash from third parties. Most of the commercial notes have a maturity of less than six months. These notes receivable are with recourse and the Company is contingently liable to make the payment to the endorsee in case of a default. As of December 31, 2013, the Company had notes receivable of $590,000 that were endorsed to vendors as payments for the Company’s obligation (contingent liability). | |
8_LONGTERM_INVESTMENT
8. LONG-TERM INVESTMENT | 12 Months Ended |
Dec. 31, 2013 | |
Table Text Block [Abstract] | ' |
Marketable Securities [Table Text Block] | ' |
8. LONG-TERM INVESTMENT | |
On June 10, 2009, Creative Bellows made an investment with a credit union and purchased 600,000 credit union shares for $95,000 (RMB 600,000). As a result of this investment, Creative Bellows became a 0.57% shareholder in the credit union. The Company accounted for this investment using the cost method. During the quarter ended June 30, 2013, the Company cancelled the investment, and received the full refund of $95,000 (RMB 600,000). | |
9_PREPAYMENTS
9. PREPAYMENTS | 12 Months Ended |
Dec. 31, 2013 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | ' |
9. PREPAYMENTS | |
Long-termprepayments mainly was a prepaid land occupancy fee paid to the inhabitants of the land on which the Company plans to construct a manufacturing plant. Currently, the Company amortizes prepaid rental over 50 years according to the terms of the lease agreement. | |
10_CONSTRUCTION_IN_PROGRESS
10. CONSTRUCTION IN PROGRESS | 12 Months Ended |
Dec. 31, 2013 | |
Disclosure Text Block Supplement [Abstract] | ' |
Other Assets Disclosure [Text Block] | ' |
10. CONSTRUCTION IN PROGRESS | |
At December 31, 2013 and 2012, the Company had construction in progress of $0 and $1,894,400, respectively, forrebuilding and improvingits workshop ground and road and to build wind test towers. Total construction cost of the workshop and road project was approximately $1.94 million. As of December 31, 2013, the Company completed the construction and transferred into fixed assets. | |
11_PROPERTY_AND_EQUIPMENT_NET
11. PROPERTY AND EQUIPMENT, NET | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | ||||||||
11. PROPERTY AND EQUIPMENT, NET | |||||||||
Property and equipment consisted of the following at December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Buildings | $ | 10,657,514 | $ | 8,443,329 | |||||
Equipment and machinery | 2,770,675 | 3,335,885 | |||||||
Vehicle | 37,232 | 52,025 | |||||||
Office equipment | 109,933 | 103,706 | |||||||
Total | 13,575,354 | 11,934,945 | |||||||
Accumulated depreciation | (1,721,779 | ) | (1,308,700 | ) | |||||
Net value | $ | 11,853,575 | $ | 10,626,245 | |||||
Depreciation for the years ended December 31, 2013 and 2012 was $581,203 and $569,828, respectively. | |||||||||
12_INTANGIBLE_ASSETS
12. INTANGIBLE ASSETS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Intangible Assets Disclosure [Text Block] | ' | ||||||||
12. INTANGIBLE ASSETS | |||||||||
Intangible assets consisted of land use right and patents. All land in the PRC is government-owned and cannot be sold to any individual or company. However, the government grants the user a “land use right” to use the land. The Company has the right to use the land for 50 years and amortizes the right on a straight-line basis over 50 years. | |||||||||
The Company was granted an exclusive license to use a production method patent until December 31, 2016, for lead-free soft solder with mischmetal from the Shenyang Industry University. The Company paid a one-time use of technology fee of RMB 100,000 ($15,887). | |||||||||
Intangible assets as of December 31, 2013 and 2012 were as follows: | |||||||||
2013 | 2012 | ||||||||
Land use right | $ | 4,634,762 | $ | 4,446,116 | |||||
Patents | 16,401 | 15,910 | |||||||
Total | 4,651,163 | 4,462,026 | |||||||
Accumulated amortization | (489,105 | ) | (383,766 | ) | |||||
Net | $ | 4,162,058 | $ | 4,078,260 | |||||
Amortization of intangible assets for the years ended December 31, 2013 and 2012 was $91,704 and $106,703, respectively. At December 31, 2013, annual amortization for the next five years was expected to be as follows: | |||||||||
Year | Amount | ||||||||
2014 | $ | 94,644 | |||||||
2015 | 94,644 | ||||||||
2016 | 94,644 | ||||||||
2017 | 94,644 | ||||||||
2018 | 94,644 | ||||||||
Thereafter | 3,688,838 | ||||||||
Total | $ | 4,162,058 | |||||||
As of December 31, 2013, the Company is in the process of acquiring a land use right in the Liaoning Province Tieling Economic and Technological Development Zone for which a land use right deposit of $0.4 million was made to Tieling Yinzhou Industrial Park Management Committee and Teiling Economic Development Zone Non-Tax Revenue Bureau. The deposit of the land use right was transferred into intangible assets during the first quarter of 2012; however, the Company has not obtained the land use right as of this report date. | |||||||||
13_ACCRUED_EXPENSES_AND_OTHER_
13. ACCRUED EXPENSES AND OTHER PAYABLES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | ' | ||||||||
13. ACCRUED EXPENSES AND OTHER PAYABLES | |||||||||
Accrued expenses and other payables at December 31, 2013 and 2012 were as follows: | |||||||||
2013 | 2012 | ||||||||
Payroll-related | $ | 111,800 | $ | 34,634 | |||||
Warranty (note 2) | 8,188 | 9,790 | |||||||
Other | 95,210 | 110,928 | |||||||
Accrued interest | 3,737,396 | 499,495 | |||||||
Accrued outsourcing labor cost | - | 54,093 | |||||||
Accrued legal expense | 400,808 | 400,808 | |||||||
Total | $ | 4,353,402 | $ | 1,109,748 | |||||
As of December 31, 2013, the Company had $400,808 accrued legal expense and $66,315 accrued interest for unpaid legal fees to a law firm in connection with the representation of the Company in its lawsuit against the NASDAQ Stock Market, LLC and NASDAQ OMX Group (See Note 24). | |||||||||
Accrued interest included interest on promissory notes, line of credit and credit union loans and interest on amount owed to legal expenses (See Note 14 & 24). | |||||||||
14_SHORTTERM_LOANS
14. SHORT-TERM LOANS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Short-term Debt [Text Block] | ' | ||||||||
14. SHORT-TERM LOANS | |||||||||
On September 13, 2010, the Company borrowed $1,827,050, $953,243 and $556,059 from three different credit unions. Each loan bore interest of 7.2% and was to mature on September 12, 2011. The Company extended the maturity date of the loans through an agreement with one of the credit unions. Pursuant to this agreement, the Company was required to pay $317,415 (RMB 2,000,000) by October 2011, with the remaining balance to be paid by June 2012. However, the Company did not make the payment of $317,415 (RMB 2,000,000), as per the agreement and, as such, the extension of maturity date was not granted. As of December 31, 2013, the Company repaidone of the three loans and the othertwo loans (which were paid in full in the first quarter 2014) were in default and an additional 3.6% interest on the remaining principal amount of the loans was charged for the overdue period. These loans were collateralized by one of the Company’s buildings and its land use right. During the year ended December 31, 2013, the Company repaid $1.08 million. | |||||||||
On December 13, 2010, the Company entered into a loan with a lender for $10 million. At the Lender’s option, the principal amount of the note and all interest thereon shall be paid in either USD or RMB at an exchange rate of RMB 6.90 to USD 1.00 if paid on or before March 1, 2012, and thereafter at an exchange rate of RMB 6.30 to USD 1.00 to the Lender or any designee of Lender as provided to the Company in writing by Lender. The loan bore interest of 10% payable in advance at the beginning of each quarter with a maturity of March 1, 2012. The loan was amended to mature on March 1, 2013, and to decrease the interest rate to 8.5%, effective March 1, 2012, which interest shall be payable quarterly in advance. From March 1, 2012 through August 13, 2013, the Company was in default on interest payment that was required to pay in advance; the Company was also in default in payment of $10 million loan due on March 1, 2013. The interest, from the date of the Default, was at the lesser of 24% or the maximum applicable legal rate. The Company used 24% as default interest rate from March 1, 2012 through August 13, 2013. After August 13, 2013, the interest rate on the $10 million loan was 8.5% according to the Line of Credit Agreement descried below. The Company had interest payable of $3.63 million as of December 31, 2013. | |||||||||
Through a new Line of Credit Agreement entered with the same lender on August 17, 2013, this default loan became payable upon Note-holder’s request and the interest rate at 8.5% after August 13, 2013. The Promissory Note entered on August 17, 2013 along with an Escrow Agreement was for a Line of Credit available to the Company of up to $10 million. The lender deposited the loan amount into an escrow account, and the escrow agent shall disburse some or all of the deposit from time to time as directed in writing by the lender for advancing the Company to pay expenses that are approved by the lender. The applicable interest rate for the amount borrowed under this line of credit is 3% during the first six months following each advance, and 0% thereafter, to be paid on the first day of each month, with maturity upon Note-holder’s request. The promissory note has a default rate of 24%. As of December 31, 2013, the Company borrowed $0.64 million from the credit line and accrued interest of $6,367. | |||||||||
On December 14, 2011, the Company entered into a 3% promissory note with a lender for $50,000, maturing on February 1, 2012, for the payment of its legal expenses. As of December 31, 2013, the Company had accrued interest of $5,951 on this note. The note is past due with default interest at 6% to be accrued subsequent to February 1, 2012. | |||||||||
At December 31, 2013 and 2012, the short-term loans consisted of the following: | |||||||||
2013 | 2012 | ||||||||
Credit Union 1, China subsidiary | $ | 1,426,955 | $ | 1,734,150 | |||||
Credit Union 2, China subsidiary | 836,490 | 954,578 | |||||||
Credit Union 3, China subsidiary | - | 556,837 | |||||||
Promissory Note of US parent | 50,000 | 50,000 | |||||||
Loan of U.S. Parent | 10,000,000 | 10,000,000 | |||||||
Credit line payable of U.S. Parent | 638,951 | - | |||||||
Total short term loan | $ | 12,952,396 | $ | 13,295,565 | |||||
15_TAXES_PAYABLE_RECEIVABLE
15. TAXES PAYABLE (RECEIVABLE) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Taxes Payable Receivable Disclosure [Abstract] | ' | ||||||||
Taxes Payable Receivable Disclosure [Text Block] | ' | ||||||||
15. TAXES PAYABLE (RECEIVABLE) | |||||||||
Taxes payable (receivable) consisted of the following at December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Value-added tax | $ | 23,543 | $ | (54,727 | ) | ||||
Income tax | (8,218 | ) | (7,971 | ) | |||||
Other | 52,909 | 60,908 | |||||||
Total | $ | 68,234 | $ | (1,790 | ) | ||||
16_SHORTTERM_PAYABLE
16. SHORT-TERM PAYABLE | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Debt Disclosure [Abstract] | ' | ||||
Debt Disclosure [Text Block] | ' | ||||
16. SHORT-TERM PAYABLE | |||||
On September 21, 2009, the Company entered into a construction contract with a local authority, the Administration Committee for Liaoning Special Vehicle Production Base (“LSVPB”), to build a plant. LSVPB was responsible for the construction of the main body of the plant and the Company was responsible for the construction of certain infrastructure for the plant, including plumbing, heating and electrical systems. The plant is 9,074 square meters with construction costs of RMB 1,350 ($214) per square meter. | |||||
LSVPB was responsible for hiring a qualified construction team according to the Company’s approved design and the Company needed to approve any material changes to the design during construction. LSVPB was also responsible for site survey, quality supervision and completion of inspection, as well as the transfer of all construction completion records to the Company. Upon completion of the Company’s ownership registration, the Company was required to pledge the plant as collateral for payment by the Company to LSVPB of $1,944,151 (RMB 12,249,900). The pledge will terminate upon payment in full by the Company. | |||||
The Company is to pay LSVPB for the cost of the project in five equal annual installments in October of each year beginning in October 2010. The Company is not required to pay interest, and ownership of the plant will transfer to the Company upon payment in full. The default penalty is 0.5% of the amount outstanding, compounded daily, in the event of a default. LSVPB has the right to foreclose on the plant if payments are in arrears for more than two years, in which case all prior payments made by the Company will be treated as liquidated damages by LSVPB. | |||||
The Company recorded the cost of construction at the present value of the five annual payments by imputing interest of 9% from when the Company started using the plant. Depreciation of the construction cost and amortization of the unamortized interest commenced on the date of occupation and use. The Company started using the plant on August 30, 2010. The certificate of the property ownership was received in the third quarter of 2011. | |||||
In the fourth quarter of 2011, the Company received a subsidy from LSVPB of $1.11 million (RMB 7,000,000) against the outstanding payment. In the first quarter of 2012, the Company repaid $382,886 (RMB 2,410,000). During 2013, the Company did not make any payments and is currently in default as of December 31, 2013.The Company expects to pay the remaining amount by the due date of October 2014. | |||||
At December 31, 2013, the short-term payable consisted of the following: | |||||
Short-term payable | $ | 465,794 | |||
Less: unamortized interest | (22,967 | ) | |||
Net | 442,827 | ||||
As of December 31, 2013, future minimum payments for the next year until maturity are as follows: | |||||
Year | |||||
2014 | $ | 442,827 | |||
17_MAJOR_CUSTOMERS_AND_VENDORS
17. MAJOR CUSTOMERS AND VENDORS | 12 Months Ended |
Dec. 31, 2013 | |
Risks and Uncertainties [Abstract] | ' |
Concentration Risk Disclosure [Text Block] | ' |
17. MAJOR CUSTOMERS AND VENDORS | |
Three customers accounted for 72% of sales for the year ended December 31, 2013, and each customer accounted for 36%, 18%, and 18% of total sales, respectively. At December 31, 2013, total receivables from these customers were $5,219,337 ($880,776, $819,363 and $3,519,198, respectively). | |
Three customers accounted for 89% of sales for the year ended December 31, 2012, and each customer accounted for 43%, 31% and 15% of total sales, respectively. At December 31, 2012, total receivables from these customers were $2,185,563 ($433,555, $1,679,061 and $72,947, respectively). | |
One vendor accounted for 10% of total purchases for the year ended December 31, 2013. At December 31, 2013, the total payable to these vendors was $0. | |
One vendor accounted for 27% of total purchases for the year ended December 31, 2012. At December 31, 2012, the total payable to the vendor was $1,098. | |
18_DEFERRED_TAX_ASSET_LIABILIT
18. DEFERRED TAX ASSET (LIABILITY) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Deferred Tax Assets Liabilities Net Disclosure [Abstract] | ' | ||||||||
Deferred Tax Assets Liabilities Net Disclosure [Text Block] | ' | ||||||||
18. DEFERRED TAX ASSET (LIABILITY) | |||||||||
Deferred tax asset (liability) represented differences between the bad debt allowance and provision of inventory impairment booked by the Company which was not allowed per tax purpose, and net operating loss for income tax purpose. As of December 31, 2013 and 2012, deferred tax asset (liability) consisted of the following: | |||||||||
2013 | 2012 | ||||||||
Deferred tax asset - current (bad debt allowance) | $ | 6,217,939 | $ | 4,350,671 | |||||
Deferred tax asset - current (inventory allowance) | 3,623,970 | 209,352 | |||||||
Deferred tax asset – current (allowance to other receivable) | 513,509 | - | |||||||
Deferred tax asset – current (allowance for advance to supplier) | 5,817,908 | - | |||||||
Deferred tax asset – noncurrent (NOL) | 1,276,569 | 598,990 | |||||||
Less: valuation allowance | (17,449,895 | ) | (5,159,013 | ) | |||||
Net | $ | - | $ | - | |||||
19_INCOME_TAX
19. INCOME TAX | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Tax Disclosure [Text Block] | ' | ||||||||
19. INCOME TAX | |||||||||
The Company is subject to income taxes by entity on income arising in or derived from the tax jurisdiction in which each entity is domiciled. | |||||||||
CleanTech, the U.S. parent company, was incorporated in the U.S. and has net operating losses (NOL) for income tax purposes. CleanTech has NOL of $7.78 million as of December 31, 2013, which may be available to reduce future years’ taxable income as NOL can be carried forward up to 20 years from the year the loss is incurred. Management believes the realization of benefits from these losses remains uncertain due to CleanTech’s, the U.S. parent company, has limited operating history and continuing losses. Accordingly, a 100% deferred tax asset valuation allowance was provided. | |||||||||
Creative Bellows and Creative Wind Power generated substantially all of their net income from their PRC operations and are governed by the Income Tax Law of the PRC for privately-run enterprises. According to this law, privately-run enterprises are generally subject to a tax rate of 25% on income reported in the privately-run enterprises’ financial statements, after appropriate tax adjustments. | |||||||||
According to the new income tax law that became effective January 1, 2008, new high-tech enterprises given special support by the PRC government are subject to an income tax rate of 15%. Creative Bellows was recognized as a new high-tech enterprise and registered its status with the tax bureau, providing it with an income tax rate of 15% from 2010 through 2012, and 25% for 2013 and the years after. | |||||||||
The following table reconciles the U.S. statutory rates to the Company’s consolidated effective tax rate for the years ended December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
U.S. statutory rates (benefit) | (34.0 | )% | (34 | )% | |||||
Tax rate difference | 6.8 | % | 7.2 | % | |||||
Other | - | % | - | % | |||||
Effective tax holiday | - | % | 1.7 | % | |||||
Valuation allowance | 27.2 | % | 25.1 | % | |||||
Effective income tax rate | - | % | - | % | |||||
There were no material temporary differences that resulted in deferred taxes as of December 31, 2013 and 2012. | |||||||||
20_STOCKHOLDERS_EQUITY
20. STOCKHOLDERS' EQUITY | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||||||||||||
20. STOCKHOLDERS’ EQUITY | |||||||||||||
Common Stock with Warrants Issued for Cash | |||||||||||||
On July 12, 2010, the Company completed a private placement in which it sold 3,333,322 units, consisting of one share of its common stock and a warrant to purchase 15% of one share of its common stock, at $3.00 per unit for $10,000,000. The warrants are immediately exercisable, expired on the third anniversary of their issuance and entitle the holders to purchase up to 499,978 shares of the Company’s common stock at $3.00 per share. The Company may call the warrants at any time after (i) the registration statement registering the common stock underlying the warrants becomes effective, (ii) the common stock is listed on a national securities exchange and (iii) the trading price of the common stock exceeds $4.00. The Company also issued warrants, having the same terms and conditions as the warrants issued in the private placement, to purchase 333,332 shares of its common stock to the placement agents in the private placement. The warrants issued in this private placement are exercisable for a fixed number of shares, solely redeemable by the Company and not redeemable by the warrant holders. Accordingly, such warrants are classified as equity instruments. The Company accounted for the warrants issued to the investors and placement agents based on the FV method under ASC Topic 505. The FV of the warrants was calculated using the Black-Scholes model and the following assumptions: estimated life of 3 years, volatility of 147%, risk-free interest rate of 1.89% and dividend yield of 0%. No estimate of forfeitures was made as the Company has a short history of granting options and warrants. The FV of the warrants at grant date was $5,903,228. The Company received net proceeds of $8.4 million from this private placement. The commission and legal cost associated with this offering was $1.6 million. During the year ended December 31, 2013, there were no warrants exercised into common stock. The unexercised warrants expired on July 11, 2013. | |||||||||||||
On December 13, 2010, the Company completed a closing of $20,000,000 in a combination of debt and equity offerings through accredited institutional investors. In a private placement of equity, the Company sold 2,500,000 units, consisting of one share of its common stock and a warrant to purchase 67.5% of one share of its common stock, at $4.00 per unit for $10,000,000. The warrants are immediately exercisable, expire on the fifth anniversary of their issuance and entitle the holders to purchase up to 1,687,500 shares of the Company’s common stock at $4.00 per share. For its assistance in the private placement of equity, the Company paid a placement agent $1,000,000 and issued it warrants to purchase 300,000 shares of the Company’s common stock under the same terms as the warrants issued in the private placement. The Company also paid the placement agent $100,000 for its assistance in arranging the loan. The FV of the warrants was calculated using the Black-Scholes model and the following assumptions: estimated life of five years, volatility of 88%, risk-free interest rate of 1.89% and dividend yield of 0%. No estimate of forfeitures was made as the Company has a short history of granting options and warrants. The FV of the warrants at grant date was $10,282,442. | |||||||||||||
Concurrently with the closing of the private placement on December 13, 2010, the Company entered into a long-term loan agreement with a lender for $10 million. The loan bore interest of 10% payable in advance at the beginning of each quarter with a maturity of March 1, 2013 (See Note 14). | |||||||||||||
Following is a summary of the warrant activity: | |||||||||||||
Number of | Weighted Average | Weighted | |||||||||||
Shares | Exercise | Average | |||||||||||
Price per Share | Remaining | ||||||||||||
Contractual | |||||||||||||
Term in Years | |||||||||||||
Outstanding at January 1, 2012 | 2,801,310 | $ | 3.71 | 3.25 | |||||||||
Exercisable at January 1, 2012 | 2,801,310 | $ | 3.71 | 3.25 | |||||||||
Granted | - | - | - | ||||||||||
Exercised | - | - | - | ||||||||||
Expired | - | - | - | ||||||||||
Outstanding at December31, 2012 | 2,801,310 | $ | 3.71 | 2.25 | |||||||||
Exercisable at December31, 2012 | 2,801,310 | $ | 3.71 | 2.25 | |||||||||
Granted | - | - | - | ||||||||||
Exercised | - | - | - | ||||||||||
Expired | 813,810 | 3 | - | ||||||||||
Outstanding at December 31, 2013 | 1,987,500 | $ | 4 | 1.95 | |||||||||
Exercisable at December 31, 2013 | 1,987,500 | $ | 4 | 1.95 | |||||||||
21_STOCKBASED_COMPENSATION_PLA
21. STOCK-BASED COMPENSATION PLAN | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | ||||||||||||
21. STOCK-BASED COMPENSATION PLAN | |||||||||||||
On July 13, 2010, the Company granted non-statutory stock options to its one independent U.S. director. The terms of the options are: 30,000 shares at an exercise price per share of $8.44, with a life of three years and vesting over two years with 10,000 shares vested on the grant date and the remainder to vest in increments of 10,000 shares on each subsequent anniversary of the grant date, subject in each case to the director continuing to be associated with the Company as a director. The options were valued using a volatility of 147%, risk-free interest rate of 1.89% and dividend yield of 0%. No estimate of forfeitures was made as the Company has a short history of granting options. The grant date FV of the options was $203,235. On November 16, 2011, the director voluntary relinquished his rights to 10,000 non-vested stock options; accordingly, the unvested 10,000 shares were forfeited. | |||||||||||||
Based on the FV method under SFAS No. 123 (Revised) “Share Based Payment” (“SFAS 123(R)”) (codified in FASB ASC Financial Instruments, Topic 718), the FV of each stock option granted is estimated on the date of the grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model has assumptions for risk-free interest rates, dividends, stock volatility and expected life of an option grant. The risk-free interest rate is based upon market yields for U.S. Treasury debt securities at a maturity near the term remaining on the option. Dividend rates are based on the Company’s dividend history. The stock volatility factor is based on the historical volatility of the Company’s stock price. The expected life of an option grant is based on management’s estimate. The FV of each option grant to independent directors is calculated by the Black-Scholes method and is recognized as compensation expense over the vesting period of each stock option award. | |||||||||||||
Following is a summary of the option activity: | |||||||||||||
Number of | Weighted | Weighted | |||||||||||
Shares | Average | Average | |||||||||||
Exercise | Remaining | ||||||||||||
Price per Share | Contractual | ||||||||||||
Term in Years | |||||||||||||
Outstanding at January 1, 2012 | 20,000 | $ | 8.44 | 1.53 | |||||||||
Exercisable at January 1, 2012 | 20,000 | $ | 8.44 | 1.53 | |||||||||
Granted | - | - | - | ||||||||||
Exercised | - | - | - | ||||||||||
Expired | - | - | - | ||||||||||
Outstanding at December31, 2012 | 20,000 | $ | 8.44 | 0.53 | |||||||||
Exercisable at December 31, 2012 | 20,000 | $ | 8.44 | 0.53 | |||||||||
Granted | - | - | - | ||||||||||
Exercised | - | - | - | ||||||||||
Expired | 20,000 | 8.44 | - | ||||||||||
Outstanding at December 31, 2013 | - | $ | - | - | |||||||||
Exercisable at December 31, 2013 | - | $ | - | - | |||||||||
There were no options exercised during the years ended December 31, 2013 and 2012. The Company recorded $0 as compensation expense for stock options for the years ended December 31, 2013 and 2012, respectively. The options expired July 12, 2013. | |||||||||||||
22_STATUTORY_RESERVES
22. STATUTORY RESERVES | 12 Months Ended |
Dec. 31, 2013 | |
Statutory Reserves [Abstract] | ' |
Statutory Reserves [Text Block] | ' |
22. STATUTORY RESERVES | |
Pursuant to the corporate law of the PRC effective January 1, 2006, PRC subsidiaries of the Company’s operating subsidiaries in China are required to maintain one statutory reserve by appropriating from its after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings. | |
Surplus reserve fund | |
The Company’s Chinese subsidiaries are required to transfer 10% of their net income, as determined under PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital. The Company’s Chinese subsidiaries are not required to make appropriation to other reserve funds and have no intentions to make appropriations to any other reserve funds. There are no legal requirements in the PRC to fund these reserves by transfer of cash to restricted accounts, and the Company’s Chinese subsidiaries do not do so. | |
The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. | |
Common welfare fund | |
Common welfare fund is a voluntary fund into which the Company can elect to transfer 5% to 10% of its net income. The Company did not make any contribution to this fund for the years ended December 31, 2013 and 2012. | |
This fund can only be utilized on capital items for the collective benefit of the Company’s employees, such as construction of dormitories, cafeteria facilities and other staff welfare facilities. This fund is non-distributable other than upon liquidation. | |
23_OPERATING_RISKS
23. OPERATING RISKS | 12 Months Ended |
Dec. 31, 2013 | |
Operating Risk [Abstract] | ' |
Operating Risk [Text Block] | ' |
23. OPERATING RISKS | |
The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. | |
The Company’s sales, purchases and expenses transactions are denominated in RMB and all of the Company’s assets and liabilities are also denominated in RMB. The RMB is not freely convertible into foreign currencies under current PRC law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation to affect the remittance. | |
24_CONTINGENCIES_AND_COMMITMEN
24. CONTINGENCIES AND COMMITMENTS | 12 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure [Text Block] | ' |
24. CONTINGENCIES AND COMMITMENTS | |
The Company was required to contribute $8.45 million as additional capital to Creative Bellows by July 2012. In May 2013, the Company applied and was approved for decreasing capital contribution to RMB 122.60 million (US$19.35 million), which is equivalent to Creative Bellows current capital contribution. | |
25_LITIGATION
25. LITIGATION | 12 Months Ended |
Dec. 31, 2013 | |
Disclosure Text Block Supplement [Abstract] | ' |
Legal Matters and Contingencies [Text Block] | ' |
25. LITIGATION | |
As of March 31, 2012, Creative Bellows had a case pending in arbitration for the recovery of approximately one million RMB. Creative Bellows filed the arbitration proceeding for a breach of contract by Dongbei Jincheng Construction Co., Ltd., a plant construction contractor. On March 14, 2013, Dongbei JinCheng filed a complaint in the Tieling Intermediate People's Court against the Company, alleging that the Company owes it construction costs in the amount of RMB 2,400,099.82 plus RMB 700,000 interest and RMB 28,176 arbitration expenses. On March 19, 2013, the company filed a counterclaim against Dongbei JinCheng, alleging that Dongbei JinCheng breached the contract by failing to complete the construction work according to quality specifications. The Company sought in RMB 2,197,131.53 monetary damages. On October 9, 2013, Dongbei JinCheng was ordered by the court to pay RMB 27,000 examination fee, RMB 77,413.89 repair costs and RMB 13,000 design and appraisal costs to the Company. On October 10, 2013, the Company filed an appeal against Dongbei JinCheng to Liaoning High People's Court in order to obtain higher damages. As of April 4, 2014, this case is under review by Liaoning High People's Court. | |
On January 5, 2012, the Company filed an amended complaint in the United States District Court for the Southern District of New York against the NASDAQ Stock Market, LLC and NASDAQ OMX Group, referred to collectively as NASDAQ. The Company alleged that NASDAQ’s actions resulted in a violation of the Company’s equal protection rights under the United States Constitution, amounted to selective prosecution and intentionally breached the Company’s attorney-client privilege. The Company sought a permanent injunction enjoining NASDAQ from using its discriminatory policies against the Company and also sought at least $300 million in monetary damages. On January 31, 2012, the amended complaint was dismissed on the basis of a lack of subject matter jurisdiction. The Company decided not to appeal to the Second Circuit Court of Appeals so it could focus on its appeal to the SEC of NASDAQ Listing Qualifications determination to delist the Company’s common stock. | |
The Company applied to the SEC for a review of the final delisting decision made by NASDAQ Listing Qualifications. Among other reasons for review, the Company claimed inherent procedural unfairness attendant to the decision to overturn a remand to NASDAQ’s Hearings Panel for further fact finding on the matter based on alleged “ex-parte communication.” The Company sought to have the delisting decision to be overturned. On July 11, 2013, the SEC reversed the 2011 delisting of the Company’s stock on the NASDAQ Stock Market, LLC, and ordered the Company’s stock listed on the NASDAQ Stock Market. | |
On March 21, 2012, Fensterstock & Partners LLP, filed a complaint in the Supreme Court of the State of New York against the Company, and others, seeking $400,808 in unpaid legal fees in connection with Fensterstock’s representation of the Company in its suit against the NASDAQ Stock Market, LLC and NASDAQ OMX Group. The Company filed an answer to the complaint, denying the material allegations of the complaint. Fensterstock filed a motion for partial summary judgment on its claim for “account stated" and the Company then filed papers in opposition to Fensterstock’s motion for partial summary judgment. On October 9, 2012, the court awarded a judgment in favor of Fensterstock & Partners LLP of 423,333.26 (original due of $400,808 plus accrued interest from March 1, 2012 through August 24, 2012) plus interest at 9% until paid in full, the Company accrued $66,315 interest expense as of December 31, 2013. | |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Basis of Accounting, Policy [Policy Text Block] | ' | ||||||||
Basis of Presentation | |||||||||
The accompanying consolidated financial statements were prepared in conformity with U.S. GAAP. The Company’s functional currency is the Chinese Yuan Renminbi (“RMB”); however, the accompanying consolidated financial statements were translated and presented in United States Dollars (“USD”). The accompanying consolidated financial statements present the historical financial condition, results of operations and cash flows of the operating companies. | |||||||||
Liquidity Disclosure [Policy Text Block] | ' | ||||||||
Going Concern | |||||||||
The Company incurred a net loss of $16.43 million for the year ended December 31, 2013. In addition, the Company had loans of $2.26 million and promissory notes of $10 million and $50,000 that are past due. Through a new Line of Credit Agreement entered with the same lender on August 17, 2013, the default promissory note of $10 million became payable upon Note-holder’s request (See Note 14). As of December 31, 2013, the Company had an outstanding balance of $645,348 including accrued interest under this credit line and $442,827 under short term payable currently in default. The Company has been unable to raise funds from the U.S. markets to pay off these obligations. These conditions raise a substantial doubt as to whether the Company may continue as a going concern. The Company is seeking to obtain additional financing from local banks in the PRC. The Company will also seek to improve its cash flows from operations by implementing cost control measures and reducing inventory purchases. | |||||||||
Consolidation, Policy [Policy Text Block] | ' | ||||||||
Principles of Consolidation | |||||||||
The consolidated financial statements include the accounts of CleanTech and its wholly owned subsidiaries, Creative Bellows and Creative Wind Power. All intercompany transactions and account balances were eliminated in consolidation. | |||||||||
Use of Estimates, Policy [Policy Text Block] | ' | ||||||||
Use of Estimates | |||||||||
In preparing financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates include the recoverability of long-lived assets and the valuation of inventories. Actual results could differ from those estimates. | |||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | ||||||||
Cash and Equivalents | |||||||||
Cash and equivalents include cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of this purchase date | |||||||||
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | ' | ||||||||
Restricted Cash | |||||||||
Restricted cash consists of a percentage of sales deposited by the Company into its bank accounts according to contract terms, which serves as a contract execution and product delivery guarantee. The restriction is released upon customer acceptance of the product. | |||||||||
Trade and Other Accounts Receivable, Policy [Policy Text Block] | ' | ||||||||
Accounts and Retentions Receivable | |||||||||
The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Past due receivables are determined based on contractual payment terms specified in the contract. Based on its historical collection activity, the Company had allowances for bad debts of $4,523,084 and $4,350,671 at December 31, 2013 and 2012, respectively. | |||||||||
At December 31, 2013 and 2012, the Company had gross retentions receivable for product quality assurance of $2,746,082 and $3,297,533, respectively. The retention generally is 10% of the sales price with a one-year term, but no later than the termination of the warranty period. The Company had allowances for retentions receivable of $1,694,855 and $0 at December 31, 2013 and 2012, respectively. | |||||||||
Inventory, Policy [Policy Text Block] | ' | ||||||||
Inventories | |||||||||
The Company’s inventories are valued at the lower of cost or market, with cost determined on a weighted average basis. The Company compares the cost of inventories with market value and an allowance is made to write down the inventories to their market value, if lower. | |||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | ||||||||
Property and Equipment | |||||||||
Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with 5% salvage value and estimated lives as follows: | |||||||||
Buildings | 40 | Years | |||||||
Machinery | 5 | - | 15 | Years | |||||
Vehicles | 5 | Years | |||||||
Office equipment | 5 | Years | |||||||
Testing equipment | 10 | Years | |||||||
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | ' | ||||||||
Land Use Rights | |||||||||
Right to use land is stated at cost less accumulated amortization. Amortization is provided using the straight-line method over 50 years. | |||||||||
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | ' | ||||||||
Impairment of Long-Lived Assets | |||||||||
Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, but at least annually. | |||||||||
Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the FV of the assets. FV is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that as of December 31, 2013 and 2012, there were no significant impairments of its long-lived assets. | |||||||||
Income Tax, Policy [Policy Text Block] | ' | ||||||||
Income Taxes | |||||||||
The Company utilizes Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes,” codified in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740, which requires recognition of deferred tax assets and liabilities for expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. | |||||||||
The Company follows FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), codified in FASB ASC Topic 740. When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. At December 31, 2013 and 2012, the Company did not take any uncertain positions that would necessitate recording a tax-related liability. | |||||||||
Revenue Recognition, Policy [Policy Text Block] | ' | ||||||||
Revenue Recognition | |||||||||
The Company’s revenue recognition policies are in compliance with SEC Staff Accounting Bulletin (“SAB”) 104 (codified in FASB ASC Topic 605). Sales revenue, including the final 10% of the purchase price, is recognized after delivery is complete, customer acceptance of the product occurs and collectability is reasonably assured. Customer acceptance occurs after the customer puts the product through a quality inspection, which normally is completed within one to two weeks from customer receipt of the product. In case of sales contracts with FOB shipping terms, the customer is responsible for cost of freight and insurance and revenue is recognized when products are delivered to the carrier. In case of sales contracts with FOB destination terms, the Company is responsible for the cost of freight and insurance and revenue is recognized when customer acceptance is received. The customer is responsible for installation and integration of our component products into its end products. Payments received before satisfaction of all relevant criteria for revenue recognition are recorded as unearned revenue or advances from customers. Unearned revenue or advances from customers consists of payments received from customers prior to customer acceptance of the product. | |||||||||
The Company’s standard payment terms with its wind tower customers generally provide that 10% of the purchase price is due upon the Company’s deposit of restricted cash into a bank account as a contract guarantee, 20% upon the Company’s purchase of raw material for the order, 10% upon delivery of the base ring component of the wind towers, 30% upon delivery of the wind tower tube sections and 20% upon customer inspection and acceptance of the product, which customers normally complete within 1-2 weeks after delivery. As a common practice in the manufacturing business in PRC, payment of the final 10% of the purchase price is due no later than the termination date of the product warranty, which can be up to 12 months from the customer acceptance date. The final 10% of the purchase price (retentions receivable) is recognized as revenue upon customer acceptance of the product. For the Company’s bellows expansion joints and pressure vessels, payment terms are negotiated on a case-by-case basis and these payment percentages and terms may differ for each customer. | |||||||||
Sales revenue is the invoiced value of goods, net of value-added tax (“VAT”). The Company’s products sold and services provided in China are subject to VAT of 17% of the sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing the finished product. The Company recorded VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables. | |||||||||
Standard Product Warranty, Policy [Policy Text Block] | ' | ||||||||
Warranties | |||||||||
The Company offers a product warranty to its customers of up to 12 months depending on the terms negotiated with each customer. During the warranty period, the Company will repair or replace defective products free of charge. The Company commenced production in 2009 and as of December 31, 2013, the Company accrued $8,188 in warranty expense. The Company implemented internal manufacturing protocols designed to ensure product quality beginning from the receipt of raw materials to the final inspection at the time products are shipped. The Company monitors warranty claims and accrues for warranty expense accordingly, using ASC Topic 450 to account for its standard warranty. | |||||||||
The Company provides its warranty to all customers and does not consider it an additional service; rather, the warranty is considered an integral part of the product’s sale. There is no general right of return indicated in the contracts or purchase orders. If a product under warranty is defective or malfunctions, the Company is responsible for fixing it or replacing it with a new product. The Company’s products are its only deliverables. | |||||||||
The Company’s warranty reserve activity for the years ended December 31, 2013 and 2012 is as follows: | |||||||||
2013 | 2012 | ||||||||
Balance at beginning of period | $ | 9,790 | $ | 11,094 | |||||
Foreign currency translation loss | (1,602 | ) | (1,304 | ) | |||||
Actual costs incurred | - | ||||||||
Ending balance (accrued expense) | $ | 8,188 | $ | 9,790 | |||||
After the warranty period, the Company charges for after-sales services on its products. Such revenue is recognized when the service is provided. For the years ended December 31, 2013 and 2012, the Company had no after-sales services income. The warranty reserve is included in accrued expense (Note 13). | |||||||||
Cost of Sales, Policy [Policy Text Block] | ' | ||||||||
Cost of Goods Sold | |||||||||
Cost of goods sold (“COGS”) consists primarily of material, labor and related overhead, which are attributable to the products, and other indirect costs that benefit all products. Write-down of inventory to lower of cost or market is also recorded in COGS. | |||||||||
Research and Development Expense, Policy [Policy Text Block] | ' | ||||||||
Research and Development | |||||||||
Research and development (“R&D”) costs are related primarily to the Company’s development and testing of its new technologies used to manufacture its bellows-related products. R&D costs are expensed as incurred. For the years ended December 31, 2013 and 2012, R&D was $179,745 and $387,486, respectively, and was included in general and administrative expenses. | |||||||||
Subsidy Income, Revenue Recognition [Policy Text Block] | ' | ||||||||
Subsidy Income | |||||||||
For the years ended December 31, 2013 and 2012, subsidy income was $0 and $171,089, respectively. For the year ended December 31, 2012, the subsidy income included $161,584 government support for developing the advance technology for pressure vessels and $9,505 as Development Zone Reward. The Company was not under any obligation and there were no conditions attached to the subsidy income. | |||||||||
Shipping and Handling Cost, Policy [Policy Text Block] | ' | ||||||||
Shipping and Handling Costs | |||||||||
Shipping and handling costs for delivery of finished goods are included in selling expenses. During the years ended December 31, 2013 and 2012, shipping and handling costs were $515,185 and $163,109, respectively. | |||||||||
Earnings Per Share, Policy [Policy Text Block] | ' | ||||||||
Basic and Diluted Earnings per Share (“EPS”) | |||||||||
Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted EPS are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and warrants, and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). | |||||||||
2013 | 2012 | ||||||||
Net loss | $ | (16,431,320 | ) | $ | (7,300,811 | ) | |||
Weighted average shares outstanding – basic | 24,982,822 | 24,982,822 | |||||||
Effect of dilutive securities: | |||||||||
Unexercised warrants and options | - | - | |||||||
Weighted average shares outstanding – diluted | 24,982,822 | 24,982,822 | |||||||
Loss per share – basic | $ | -0.66 | $ | (0.29 | ) | ||||
Loss per share – diluted | $ | -0.66 | $ | (0.29 | ) | ||||
The warrants and options to purchase up to 1,987,500 and 2,821,310 shares of common stock were anti-dilutive during the years ended December 31, 2013 and 2012, respectively. | |||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' | ||||||||
Concentration of Credit Risk | |||||||||
Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables and advances to suppliers. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of its clients’ financial condition and customer payment practices to minimize collection risk on accounts receivable. | |||||||||
Cash includes cash on hand and demand deposits in bank accounts maintained within China. Cash balances at financial institutions within China are not covered by insurance. The Company has not experienced any losses in such accounts. | |||||||||
The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC, as well as by the general state of the PRC economy. | |||||||||
Statement of Cash Flows [Policy Text Block] | ' | ||||||||
Statement of Cash Flows | |||||||||
In accordance with SFAS No. 95, “Statement of Cash Flows,” codified in FASB ASC Topic 230, cash flows from the Company’s operations are calculated based upon local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet. | |||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | ||||||||
Fair Value of Financial Instruments | |||||||||
Certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, other receivables, accounts payable, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the “FV” of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines FV and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: | |||||||||
· | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||||||||
· | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | ||||||||
· | Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement. | ||||||||
As of December 31, 2013 and 2012, the Company did not identify any assets and liabilities required to be presented on the balance sheet at FV. | |||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | ||||||||
Stock-Based Compensation | |||||||||
The Company accounts for its stock-based compensation in accordance with SFAS No. 123R, “Share-Based Payment, an Amendment of FASB Statement No. 123” (codified in FASB ASC Topics 718 and 505). The Company recognizes in the income statement the grant-date fair value (“FV”) of stock options and other equity-based compensation issued to employees and non-employees. | |||||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' | ||||||||
Foreign Currency Translation and Transactions | |||||||||
The accompanying consolidated financial statements are presented in USD. The Company’s functional currency is RMB, which is translated into USD for balance sheet accounts using the current exchange rates in effect as of the balance sheet date and for revenue and expense accounts using the average exchange rate during the period. The translation adjustments are recorded as a separate component of stockholders’ equity, captioned accumulated other comprehensive income (loss). Gains and losses resulting from transactions denominated in foreign currencies are included in other income (expense) in the consolidated statements of operations. | |||||||||
The RMB to USD exchange rates in effect as of December 31, 2013 and 2012, were $1 =MB 6.0969 and $1 =MB 6.2855, respectively. The average RMB to USD exchange rates in effect for the years ended December 31, 2013 and 2012, were $1 =MB 6.2142 and $1 =MB 6.3125, respectively. The exchange rates used in translation from RMB to USD were published by the People’s Bank of China. | |||||||||
Comprehensive Income, Policy [Policy Text Block] | ' | ||||||||
Comprehensive Income (Loss) | |||||||||
The Company uses SFAS No. 130 “Reporting Comprehensive Income” (codified in FASB ASC Topic 220). Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Comprehensive loss for the years ended December 31, 2013 and 2012, included net loss and foreign currency translation adjustments. | |||||||||
Segment Reporting, Policy [Policy Text Block] | ' | ||||||||
Segment Reporting | |||||||||
SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” (codified in FASB ASC Topic 280), requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure or any other manner in which management disaggregates a company. | |||||||||
Management determined the Company’s product lines – wind towers, bellows expansion joints and pressure vessels – constitute a single reportable segment under ASC 280. The Company operates exclusively in one business: the design and manufacture of highly engineered metal components for heavy industry. The manufacturing processes for each of the Company’s products, principally the rolling and welding of raw steel materials, make uses of the same pool of production workers and engineering talent for design, fabrication, assembly and testing. The Company’s products are characterized and marketed by their ability to withstand temperature, pressure, structural load and other environmental factors. The Company’s products are used by major electrical utilities and large-scale industrial companies in China specializing in heavy industry, and the Company’s sales force sells its products directly to these companies, which utilize the Company’s components in their finished products. All of the Company’s long-lived assets for production are located in its facilities in Tieling, Liaoning Province, China, and operate within the same environmental, safety and quality regulations governing industrial component manufacturing companies. The Company established its subsidiary, Creative Wind Power, solely to market and sell the Company’s wind towers, which constitute the structural support cylinder for an industrial wind turbine installation. Management believes that the economic characteristics of the Company’s product lines, specifically costs and gross margin, will be similar as production increases and labor continues to be shared across products. | |||||||||
As a result, management views the Company’s business and operations for all product lines as a blended gross margin when determining future growth, return on investment and cash flows. Accordingly, management concluded the Company had one reportable segment under ASC 280 because: (i) all of the Company’s products are created with similar production processes, in the same facilities, under the same regulatory environment and sold to similar customers using similar distribution systems; and (ii) gross margins of all product lines have been converging and should continue to converge. | |||||||||
Following is a summary of sales by products for the years ended December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Bellows expansion joints and related | $ | 845,839 | $ | 824,328 | |||||
Pressure vessels | 3,318,976 | 3,579,954 | |||||||
Wind towers | 1,060,983 | 165 | |||||||
Other - resale of raw materials | 668,466 | 416,893 | |||||||
$ | 5,894,264 | $ | 4,821,340 | ||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | ||||||||
New Accounting Pronouncements | |||||||||
In February 2013, the FASB issued ASU 2013-2, Comprehensive Income (ASC Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, the new ASU requires entities to disclose in a single location (either on the face of the financial statement that reports net income or in the notes) the effects of reclassifications out of accumulated other comprehensive income (AOCI). For items reclassified out of AOCI and into net income in their entirety, entities must disclose the effect of the reclassification on each affected net income item. For AOCI reclassification items that are not reclassified in their entirety into net income, entities must provide a cross-reference to other required U.S. GAAP disclosures. There is no change in the requirement to present the components of net income and other comprehensive income in either a single continuous statement or two separate consecutive statements. The ASU does not change the items currently reported in other comprehensive income. | |||||||||
For public entities, the new disclosure requirements are effective for annual reporting periods beginning after December 15, 2012, and interim periods within those years. The ASU applies prospectively, and early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. | |||||||||
As of December 31, 2013, there is no recently issued accounting standards not yet adopted that would have a material effect on the Company’s consolidated financial statements. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU1
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) [Line Items] | ' | ||||||||
Schedule of Product Warranty Liability [Table Text Block] | 'The Company’s warranty reserve activity for the years ended December 31, 2013 and 2012 is as follows: | ||||||||
2013 | 2012 | ||||||||
Balance at beginning of period | $ | 9,790 | $ | 11,094 | |||||
Foreign currency translation loss | (1,602 | ) | (1,304 | ) | |||||
Actual costs incurred | - | ||||||||
Ending balance (accrued expense) | $ | 8,188 | $ | 9,790 | |||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | ||||||||
2013 | 2012 | ||||||||
Net loss | $ | (16,431,320 | ) | $ | (7,300,811 | ) | |||
Weighted average shares outstanding – basic | 24,982,822 | 24,982,822 | |||||||
Effect of dilutive securities: | |||||||||
Unexercised warrants and options | - | - | |||||||
Weighted average shares outstanding – diluted | 24,982,822 | 24,982,822 | |||||||
Loss per share – basic | $ | -0.66 | $ | (0.29 | ) | ||||
Loss per share – diluted | $ | -0.66 | $ | (0.29 | ) | ||||
Revenue from External Customers by Products and Services [Table Text Block] | 'Following is a summary of sales by products for the years ended December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
Bellows expansion joints and related | $ | 845,839 | $ | 824,328 | |||||
Pressure vessels | 3,318,976 | 3,579,954 | |||||||
Wind towers | 1,060,983 | 165 | |||||||
Other - resale of raw materials | 668,466 | 416,893 | |||||||
$ | 5,894,264 | $ | 4,821,340 | ||||||
Property, Plant and Equipment, Useful Lives [Member] | ' | ||||||||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) [Line Items] | ' | ||||||||
Property, Plant and Equipment [Table Text Block] | 'Depreciation of property and equipment is provided using the straight-line method for substantially all assets with 5% salvage value and estimated lives as follows: | ||||||||
Buildings | 40 | Years | |||||||
Machinery | 5 | - | 15 | Years | |||||
Vehicles | 5 | Years | |||||||
Office equipment | 5 | Years | |||||||
Testing equipment | 10 | Years |
3_OTHER_RECEIVABLES_NET_AND_DE1
3. OTHER RECEIVABLES (NET) AND DEPOSITS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Receivables [Abstract] | ' | ||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | 'Other receivables and deposits consisted of the following at December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
Deposits for contract bids | $ | 97,603 | $ | 132,008 | |||||
Advance to employees | 87,943 | 51,453 | |||||||
Advance to unrelated party company | 295,232 | - | |||||||
Deposit for land use right bid | 328,036 | - | |||||||
Other | 2,462,948 | 50,109 | |||||||
Less: bad debt allowance | (513,509 | ) | - | ||||||
Total | $ | 2,758,253 | $ | 233,570 |
5_INVENTORIES_Tables
5. INVENTORIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventory, Current [Table Text Block] | 'Inventories consisted of the following at December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
Raw materials | $ | 2,988,859 | $ | 1,472,427 | |||||
Finished goods | 1,649,209 | 3,709,225 | |||||||
Work in process | 5,047,877 | 3,144,928 | |||||||
Less: allowance for inventory impairment | (3,623,971 | ) | (209,353 | ) | |||||
Total | $ | 6,061,974 | $ | 8,117,227 |
11_PROPERTY_AND_EQUIPMENT_NET_
11. PROPERTY AND EQUIPMENT, NET (Tables) (Property, Plant and Equipment [Member]) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Member] | ' | ||||||||
11. PROPERTY AND EQUIPMENT, NET (Tables) [Line Items] | ' | ||||||||
Property, Plant and Equipment [Table Text Block] | 'Property and equipment consisted of the following at December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
Buildings | $ | 10,657,514 | $ | 8,443,329 | |||||
Equipment and machinery | 2,770,675 | 3,335,885 | |||||||
Vehicle | 37,232 | 52,025 | |||||||
Office equipment | 109,933 | 103,706 | |||||||
Total | 13,575,354 | 11,934,945 | |||||||
Accumulated depreciation | (1,721,779 | ) | (1,308,700 | ) | |||||
Net value | $ | 11,853,575 | $ | 10,626,245 |
12_INTANGIBLE_ASSETS_Tables
12. INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | 'Intangible assets as of December 31, 2013 and 2012 were as follows: | ||||||||
2013 | 2012 | ||||||||
Land use right | $ | 4,634,762 | $ | 4,446,116 | |||||
Patents | 16,401 | 15,910 | |||||||
Total | 4,651,163 | 4,462,026 | |||||||
Accumulated amortization | (489,105 | ) | (383,766 | ) | |||||
Net | $ | 4,162,058 | $ | 4,078,260 | |||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | 'At December 31, 2013, annual amortization for the next five years was expected to be as follows: | ||||||||
Year | Amount | ||||||||
2014 | $ | 94,644 | |||||||
2015 | 94,644 | ||||||||
2016 | 94,644 | ||||||||
2017 | 94,644 | ||||||||
2018 | 94,644 | ||||||||
Thereafter | 3,688,838 | ||||||||
Total | $ | 4,162,058 |
13_ACCRUED_EXPENSES_AND_OTHER_1
13. ACCRUED EXPENSES AND OTHER PAYABLES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Schedule of Accrued Liabilities [Table Text Block] | 'Accrued expenses and other payables at December 31, 2013 and 2012 were as follows: | ||||||||
2013 | 2012 | ||||||||
Payroll-related | $ | 111,800 | $ | 34,634 | |||||
Warranty (note 2) | 8,188 | 9,790 | |||||||
Other | 95,210 | 110,928 | |||||||
Accrued interest | 3,737,396 | 499,495 | |||||||
Accrued outsourcing labor cost | - | 54,093 | |||||||
Accrued legal expense | 400,808 | 400,808 | |||||||
Total | $ | 4,353,402 | $ | 1,109,748 |
14_SHORTTERM_LOANS_Tables
14. SHORT-TERM LOANS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Schedule of Short-term Debt [Table Text Block] | 'At December 31, 2013 and 2012, the short-term loans consisted of the following: | ||||||||
2013 | 2012 | ||||||||
Credit Union 1, China subsidiary | $ | 1,426,955 | $ | 1,734,150 | |||||
Credit Union 2, China subsidiary | 836,490 | 954,578 | |||||||
Credit Union 3, China subsidiary | - | 556,837 | |||||||
Promissory Note of US parent | 50,000 | 50,000 | |||||||
Loan of U.S. Parent | 10,000,000 | 10,000,000 | |||||||
Credit line payable of U.S. Parent | 638,951 | - | |||||||
Total short term loan | $ | 12,952,396 | $ | 13,295,565 |
15_TAXES_PAYABLE_RECEIVABLE_Ta
15. TAXES PAYABLE (RECEIVABLE) (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Taxes Payable Receivable Disclosure [Abstract] | ' | ||||||||
Schedule of Taxes Payable (Receivable) [Table Text Block] | 'Taxes payable (receivable) consisted of the following at December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
Value-added tax | $ | 23,543 | $ | (54,727 | ) | ||||
Income tax | (8,218 | ) | (7,971 | ) | |||||
Other | 52,909 | 60,908 | |||||||
Total | $ | 68,234 | $ | (1,790 | ) |
16_SHORTTERM_PAYABLE_Tables
16. SHORT-TERM PAYABLE (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Debt Disclosure [Abstract] | ' | ||||
Schedule of Debt [Table Text Block] | 'At December 31, 2013, the short-term payable consisted of the following: | ||||
Short-term payable | $ | 465,794 | |||
Less: unamortized interest | (22,967 | ) | |||
Net | 442,827 | ||||
Schedule of Maturities of Long-term Debt [Table Text Block] | 'As of December 31, 2013, future minimum payments for the next year until maturity are as follows: | ||||
Year | |||||
2014 | $ | 442,827 |
18_DEFERRED_TAX_ASSET_LIABILIT1
18. DEFERRED TAX ASSET (LIABILITY) (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Deferred Tax Assets Liabilities Net Disclosure [Abstract] | ' | ||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 'As of December 31, 2013 and 2012, deferred tax asset (liability) consisted of the following: | ||||||||
2013 | 2012 | ||||||||
Deferred tax asset - current (bad debt allowance) | $ | 6,217,939 | $ | 4,350,671 | |||||
Deferred tax asset - current (inventory allowance) | 3,623,970 | 209,352 | |||||||
Deferred tax asset – current (allowance to other receivable) | 513,509 | - | |||||||
Deferred tax asset – current (allowance for advance to supplier) | 5,817,908 | - | |||||||
Deferred tax asset – noncurrent (NOL) | 1,276,569 | 598,990 | |||||||
Less: valuation allowance | (17,449,895 | ) | (5,159,013 | ) | |||||
Net | $ | - | $ | - |
19_INCOME_TAX_Tables
19. INCOME TAX (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | 'The following table reconciles the U.S. statutory rates to the Company’s consolidated effective tax rate for the years ended December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
U.S. statutory rates (benefit) | (34.0 | )% | (34 | )% | |||||
Tax rate difference | 6.8 | % | 7.2 | % | |||||
Other | - | % | - | % | |||||
Effective tax holiday | - | % | 1.7 | % | |||||
Valuation allowance | 27.2 | % | 25.1 | % | |||||
Effective income tax rate | - | % | - | % |
20_STOCKHOLDERS_EQUITY_Tables
20. STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | 'Following is a summary of the warrant activity: | ||||||||||||
Number of | Weighted Average | Weighted | |||||||||||
Shares | Exercise | Average | |||||||||||
Price per Share | Remaining | ||||||||||||
Contractual | |||||||||||||
Term in Years | |||||||||||||
Outstanding at January 1, 2012 | 2,801,310 | $ | 3.71 | 3.25 | |||||||||
Exercisable at January 1, 2012 | 2,801,310 | $ | 3.71 | 3.25 | |||||||||
Granted | - | - | - | ||||||||||
Exercised | - | - | - | ||||||||||
Expired | - | - | - | ||||||||||
Outstanding at December31, 2012 | 2,801,310 | $ | 3.71 | 2.25 | |||||||||
Exercisable at December31, 2012 | 2,801,310 | $ | 3.71 | 2.25 | |||||||||
Granted | - | - | - | ||||||||||
Exercised | - | - | - | ||||||||||
Expired | 813,810 | 3 | - | ||||||||||
Outstanding at December 31, 2013 | 1,987,500 | $ | 4 | 1.95 | |||||||||
Exercisable at December 31, 2013 | 1,987,500 | $ | 4 | 1.95 |
21_STOCKBASED_COMPENSATION_PLA1
21. STOCK-BASED COMPENSATION PLAN (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | 'Following is a summary of the option activity: | ||||||||||||
Number of | Weighted | Weighted | |||||||||||
Shares | Average | Average | |||||||||||
Exercise | Remaining | ||||||||||||
Price per Share | Contractual | ||||||||||||
Term in Years | |||||||||||||
Outstanding at January 1, 2012 | 20,000 | $ | 8.44 | 1.53 | |||||||||
Exercisable at January 1, 2012 | 20,000 | $ | 8.44 | 1.53 | |||||||||
Granted | - | - | - | ||||||||||
Exercised | - | - | - | ||||||||||
Expired | - | - | - | ||||||||||
Outstanding at December31, 2012 | 20,000 | $ | 8.44 | 0.53 | |||||||||
Exercisable at December 31, 2012 | 20,000 | $ | 8.44 | 0.53 | |||||||||
Granted | - | - | - | ||||||||||
Exercised | - | - | - | ||||||||||
Expired | 20,000 | 8.44 | - | ||||||||||
Outstanding at December 31, 2013 | - | $ | - | - | |||||||||
Exercisable at December 31, 2013 | - | $ | - | - |
1_ORGANIZATION_AND_DESCRIPTION1
1. ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2010 | Dec. 31, 2010 | Dec. 31, 2010 |
Ownership of Creative Bellows Held by Wonderful Limited [Member] | Former Chief Executive Officer and Director [Member] | Creative Bellows [Member] | ||||
1. ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Acquisitions | ' | ' | ' | ' | ' | 15,122,000 |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | ' | ' | 100.00% |
Stock Repurchased and Retired During Period, Shares | ' | ' | ' | ' | 40,000,000 | ' |
Payments for Repurchase of Common Stock | ' | ' | ' | ' | $40,000 | ' |
Stock Repurchased and Retired During Period, Value | ' | ' | ' | ' | 40,000 | ' |
Common Stock, Shares, Issued | 24,982,822 | 24,982,822 | 19,130,000 | ' | ' | ' |
Common Stock, Shares, Outstanding | 24,982,822 | 24,982,822 | 19,130,000 | ' | ' | ' |
Equity Method Investment, Ownership Percentage | ' | ' | ' | 5.00% | ' | 87.00% |
Payments to Acquire Businesses, Gross | ' | ' | ' | $6,000,000 | ' | $23,300,000 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' |
Net Income (Loss) Attributable to Parent | ($16,431,320) | ($7,300,811) |
Line of Credit, Current | 645,348 | ' |
Short-term Non-bank Loans and Notes Payable | 442,827 | 87,172 |
Allowance for Doubtful Accounts Receivable | 4,523,084 | 4,350,671 |
Other Receivables, Net, Current | 2,746,082 | 3,297,533 |
Retention Receivable, Retention Description | '10% of the sales price with a one-year term, but no later than the termination of the warranty period | ' |
Allowance for Doubtful Other Receivables, Current | 1,694,855 | 0 |
Property, Plant and Equipment, Salvage Value, Percentage | 5.00% | ' |
Value added tax, PRC | 17.00% | ' |
Product Warranty Accrual | 8,188 | ' |
Research and Development Expense | 179,745 | 387,486 |
Revenue from Grants | 0 | 171,089 |
Shipping, Handling and Transportation Costs | 515,185 | 163,109 |
Foreign Exchange, Rate Description | '$1 =MB 6.0969 | '$1 =MB 6.2855 |
Foreign Exchange, Average Rate Description | '$1 =MB 6.2142 | '$1 =MB 6.3125 |
Number of Operating Segments | 1 | ' |
Number of Reportable Segments | 1 | ' |
Loan of U.S. Parent [Member] | ' | ' |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' |
Debt Default, Short-term Debt, Amount | 10,000,000 | 10,000,000 |
Promissory Note of US Parent [Member] | ' | ' |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' |
Debt Default, Short-term Debt, Amount | 50,000 | ' |
Warrants and Options [Member] | ' | ' |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 1,987,500 | 2,821,310 |
Advanced Technology for Pressure Vessels [Member] | ' | ' |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' |
Revenue from Grants | ' | 161,584 |
Development Zone Reward [Member] | ' | ' |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' |
Revenue from Grants | ' | 9,505 |
Land Use Right [Member] | ' | ' |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Amortization Method | 'straight-line method | ' |
Finite-Lived Intangible Asset, Useful Life | '50 years | ' |
Credit Union Loans [Member] | ' | ' |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' |
Debt Default, Short-term Debt, Amount | $2,260,000 | ' |
2_SUMMARY_OF_SIGNIFICANT_ACCOU3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Property, Plant and Equipment, Useful Lives | 12 Months Ended |
Dec. 31, 2013 | |
Building [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Useful life | '40 years |
Machinery and Equipment [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Useful life | '5 years |
Machinery and Equipment [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Useful life | '15 years |
Automobiles [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Useful life | '5 years |
Office Equipment [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Useful life | '5 years |
Testing Equipment [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Useful life | '10 years |
2_SUMMARY_OF_SIGNIFICANT_ACCOU4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Warranty Reserve (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Warranty Reserve [Abstract] | ' | ' |
Balance at beginning of period | $9,790 | $11,094 |
Foreign currency translation loss | -1,602 | -1,304 |
Actual costs incurred | 0 | 0 |
Ending balance (accrued expense) | $8,188 | $9,790 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Earnings Per Share, Basic and Diluted (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Earnings Per Share, Basic and Diluted [Abstract] | ' | ' |
Net loss (in Dollars) | ($16,431,320) | ($7,300,811) |
Weighted average shares outstanding b basic | 24,982,822 | 24,982,822 |
Effect of dilutive securities: | ' | ' |
Unexercised warrants and options | 0 | 0 |
Weighted average shares outstanding b diluted | 24,982,822 | 24,982,822 |
Loss per share b basic (in Dollars per share) | ($0.66) | ($0.29) |
Loss per share b diluted (in Dollars per share) | ($0.66) | ($0.29) |
2_SUMMARY_OF_SIGNIFICANT_ACCOU6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Sales by Product (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Revenue from External Customer [Line Items] | ' | ' |
Net Sales | $5,894,264 | $4,821,340 |
Bellows Expansion Joints and Related [Member] | ' | ' |
Revenue from External Customer [Line Items] | ' | ' |
Net Sales | 845,839 | 824,328 |
Pressure Vessels [Member] | ' | ' |
Revenue from External Customer [Line Items] | ' | ' |
Net Sales | 3,318,976 | 3,579,954 |
Wind Towers [Member] | ' | ' |
Revenue from External Customer [Line Items] | ' | ' |
Net Sales | 1,060,983 | 165 |
Other - Resale of Raw Materials [Member] | ' | ' |
Revenue from External Customer [Line Items] | ' | ' |
Net Sales | $668,466 | $416,893 |
3_OTHER_RECEIVABLES_NET_AND_DE2
3. OTHER RECEIVABLES (NET) AND DEPOSITS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Receivables [Abstract] | ' | ' |
Prepaid Expense and Other Assets, Current | $2,462,948 | $50,109 |
Receivable from Sale of Equipment | 607,040 | ' |
Prepaid Legal Fees | 270,000 | ' |
Prepaid Supplies | 993,808 | ' |
Other Receivables | 295,232 | 0 |
Deposit Assets | $328,036 | $0 |
3_OTHER_RECEIVABLES_NET_AND_DE3
3. OTHER RECEIVABLES (NET) AND DEPOSITS (Details) - Schedule of Other Receivables and Deposits (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Other Receivables and Deposits [Abstract] | ' | ' |
Deposits for contract bids | $97,603 | $132,008 |
Advance to employees | 87,943 | 51,453 |
Advance to unrelated party company | 295,232 | 0 |
Deposit for land use right bid | 328,036 | 0 |
Other | 2,462,948 | 50,109 |
Less: bad debt allowance | -513,509 | 0 |
Total | $2,758,253 | $233,570 |
5_INVENTORIES_Details_Schedule
5. INVENTORIES (Details) - Schedule of Inventory (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Inventory [Abstract] | ' | ' |
Raw materials | $2,988,859 | $1,472,427 |
Finished goods | 1,649,209 | 3,709,225 |
Work in process | 5,047,877 | 3,144,928 |
Less: allowance for inventory impairment | -3,623,971 | -209,353 |
Total | $6,061,974 | $8,117,227 |
6_DUE_FROM_SHAREHOLDER_Details
6. DUE FROM SHAREHOLDER (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
6. DUE FROM SHAREHOLDER (Details) [Line Items] | ' | ' |
Due from Related Parties, Current | $0 | $89,336 |
2011 Advances to Negotiate and Purchase Certain Raw Materials on Behalf of the Company [Member] | Chief Executive Officer [Member] | ' | ' |
6. DUE FROM SHAREHOLDER (Details) [Line Items] | ' | ' |
Due from Related Parties, Current | $0 | ' |
7_NOTES_RECEIVABLE_BANK_ACCEPT1
7. NOTES RECEIVABLE - BANK ACCEPTANCES (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
7. NOTES RECEIVABLE - BANK ACCEPTANCES (Details) [Line Items] | ' |
Accounts Receivable, Additional Narrative Disclosure | 'Most of the commercial notes have a maturity of less than six months |
Notes Receivable, Endorsed [Member] | ' |
7. NOTES RECEIVABLE - BANK ACCEPTANCES (Details) [Line Items] | ' |
Notes, Loans and Financing Receivable, Gross, Current | 590,000 |
8_LONGTERM_INVESTMENT_Details
8. LONG-TERM INVESTMENT (Details) | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2009 | Dec. 31, 2009 | |
USD ($) | USD ($) | Creative Bellows [Member] | Creative Bellows [Member] | Creative Bellows [Member] | Creative Bellows [Member] | |
Credit Union [Member] | Credit Union [Member] | Credit Union [Member] | Credit Union [Member] | |||
USD ($) | CNY | USD ($) | CNY | |||
8. LONG-TERM INVESTMENT (Details) [Line Items] | ' | ' | ' | ' | ' | ' |
Investment Owned, Balance, Shares | ' | ' | ' | ' | 600,000 | 600,000 |
Payments to Acquire Long-term Investments | ' | ' | ' | ' | $95,000 | 600,000 |
Cost Method Investment, Ownership Percentage | ' | ' | ' | ' | 0.57% | 0.57% |
Refund for Cancellation of Investment | $96,553 | $0 | $95,000 | 600,000 | ' | ' |
9_PREPAYMENTS_Details
9. PREPAYMENTS (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' |
Amortization period for rental property | '50 years |
10_CONSTRUCTION_IN_PROGRESS_De
10. CONSTRUCTION IN PROGRESS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Disclosure Text Block Supplement [Abstract] | ' | ' |
Construction in Progress, Gross | $0 | $1,894,400 |
Total Construction Cost of Project | $1,940,000 | ' |
11_PROPERTY_AND_EQUIPMENT_NET_1
11. PROPERTY AND EQUIPMENT, NET (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Abstract] | ' | ' |
Depreciation | $581,203 | $569,828 |
11_PROPERTY_AND_EQUIPMENT_NET_2
11. PROPERTY AND EQUIPMENT, NET (Details) - Schedule of Property, Plant and Equipment (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | $13,575,354 | $11,934,945 |
Accumulated depreciation | -1,721,779 | -1,308,700 |
Net value | 11,853,575 | 10,626,245 |
Building [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 10,657,514 | 8,443,329 |
Machinery and Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 2,770,675 | 3,335,885 |
Vehicles [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 37,232 | 52,025 |
Office Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | $109,933 | $103,706 |
12_INTANGIBLE_ASSETS_Details
12. INTANGIBLE ASSETS (Details) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
USD ($) | USD ($) | Land Use Right [Member] | License from Shenyang Industry University [Member] | License from Shenyang Industry University [Member] | |
USD ($) | USD ($) | CNY | |||
12. INTANGIBLE ASSETS (Details) [Line Items] | ' | ' | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | ' | ' | '50 years | ' | ' |
Payments to Acquire Intangible Assets | $50,146 | $0 | $400,000 | $15,887 | 100,000 |
Amortization of Intangible Assets | $91,704 | $106,703 | ' | ' | ' |
12_INTANGIBLE_ASSETS_Details_S
12. INTANGIBLE ASSETS (Details) - Schedule of Intangible Assets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, gross | $4,651,163 | $4,462,026 |
Accumulated amortization | -489,105 | -383,766 |
Net | 4,162,058 | 4,078,260 |
Land Use Right [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, gross | 4,634,762 | 4,446,116 |
Patents [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, gross | $16,401 | $15,910 |
12_INTANGIBLE_ASSETS_Details_S1
12. INTANGIBLE ASSETS (Details) - Scheudle of Expected Amortization (USD $) | Dec. 31, 2013 |
Scheudle of Expected Amortization [Abstract] | ' |
2014 | $94,644 |
2015 | 94,644 |
2016 | 94,644 |
2017 | 94,644 |
2018 | 94,644 |
Thereafter | 3,688,838 |
Total | $4,162,058 |
13_ACCRUED_EXPENSES_AND_OTHER_2
13. ACCRUED EXPENSES AND OTHER PAYABLES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
13. ACCRUED EXPENSES AND OTHER PAYABLES (Details) [Line Items] | ' | ' |
Accrued Professional Fees, Current | $400,808 | $400,808 |
Legal Fees [Member] | ' | ' |
13. ACCRUED EXPENSES AND OTHER PAYABLES (Details) [Line Items] | ' | ' |
Accrued Professional Fees, Current | 400,808 | ' |
Legal Fees, Interest [Member] | ' | ' |
13. ACCRUED EXPENSES AND OTHER PAYABLES (Details) [Line Items] | ' | ' |
Accrued Professional Fees, Current | $66,315 | ' |
13_ACCRUED_EXPENSES_AND_OTHER_3
13. ACCRUED EXPENSES AND OTHER PAYABLES (Details) - Schedule of Accrued Liabilities (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Accrued Liabilities [Abstract] | ' | ' |
Payroll-related | $111,800 | $34,634 |
Warranty (note 2) | 8,188 | 9,790 |
Other | 95,210 | 110,928 |
Accrued interest | 3,737,396 | 499,495 |
Accrued outsourcing labor cost | 0 | 54,093 |
Accrued legal expense | 400,808 | 400,808 |
Total | $4,353,402 | $1,109,748 |
14_SHORTTERM_LOANS_Details
14. SHORT-TERM LOANS (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2010 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2010 | |
Credit Union 1 [Member] | Credit Union 2 [Member] | Credit Union 3 [Member] | Loan of U.S. Parent [Member] | Loan of U.S. Parent [Member] | Loan of U.S. Parent [Member] | Credit Line Payable of U.S. Parent [Member] | Promissory Note of US Parent [Member] | Promissory Note of US Parent [Member] | Credit Union Loans [Member] | Credit Union Loans [Member] | |||
Credit Union Loans [Member] | Credit Union Loans [Member] | Credit Union Loans [Member] | |||||||||||
14. SHORT-TERM LOANS (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | $1,827,050 | $953,243 | $556,059 | ' | $10,000,000 | ' | ' | ' | $50,000 | ' | ' |
Debt Instrument, Issuer | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'three different credit unions |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | 8.50% | 10.00% | ' | ' | ' | 3.00% | ' | 7.20% |
Debt Instrument, Payment Terms | ' | ' | ' | ' | ' | ' | 'At the Lender's option, the principal amount of the note and all interest thereon shall be paid in either USD or RMB at an exchange rate of RMB 6.90 to USD 1.00 if paid on or before March 1, 2012, and thereafter at an exchange rate of RMB 6.30 to USD 1.00 to the Lender or any designee of Lender as provided to the Company in writing by Lender | ' | ' | ' | ' | ' | 'Company was required to pay $317,415 (RMB 2,000,000) by October 2011, with the remaining balance to be paid by June 2012. However, the Company did not make the payment of $317,415 (RMB 2,000,000), as per the agreement and, as such, the extension of maturity date was not granted. |
Debt Instrument, Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Company repaidone of the three loans and the othertwo loans (which were paid in full in the first quarter 2014) were in default and an additional 3.6% interest on the remaining principal amount of the loans was charged for the overdue period | ' |
Number of Notes in Default | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 |
Debt Instrument, Collateral | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'one of the Company's buildings and its land use right |
Repayments of Short-term Debt | 1,062,084 | 95,050 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,080,000 | ' |
Debt Instrument, Interest Rate Terms | ' | ' | ' | ' | ' | 'interest shall be payable quarterly in advance | 'loan bore interest of 10% payable in advance at the beginning of each quarter | ' | ' | 'default interest at 6% to be accrued subsequent to February 1, 2012 | ' | ' | ' |
Debt Instrument, Maturity Date | ' | ' | ' | ' | ' | 1-Mar-13 | 1-Mar-12 | ' | ' | ' | 1-Feb-12 | ' | ' |
Debt Default, Short-term Debt, Amount | ' | ' | ' | ' | ' | 10,000,000 | ' | 10,000,000 | ' | 50,000 | ' | 2,260,000 | ' |
Debt Default, Short-term Debt, Description of Violation or Event of Default | ' | ' | ' | ' | ' | 'The interest, from the date of the Default, was at the lesser of 24% or the maximum applicable legal rate. | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Short-Term Debt, Default Interest Rate | ' | ' | ' | ' | ' | 24.00% | ' | ' | 24.00% | ' | ' | ' | ' |
Interest Payable, Current | 3,737,396 | 499,495 | ' | ' | ' | 3,630,000 | ' | ' | 6,367 | 5,951 | ' | ' | ' |
Line of Credit Facility, Interest Rate at Period End | ' | ' | ' | ' | ' | ' | ' | ' | 8.50% | ' | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' |
Line of Credit Facility, Interest Rate Description | ' | ' | ' | ' | ' | ' | ' | ' | 'for the amount borrowed under this line of credit is 3% during the first six months following each advance, and 0% thereafter, to be paid on the first day of each month, with maturity upon Note-holder's request | ' | ' | ' | ' |
Proceeds from Lines of Credit | $638,951 | $0 | ' | ' | ' | ' | ' | ' | $640,000 | ' | ' | ' | ' |
14_SHORTTERM_LOANS_Details_Sch
14. SHORT-TERM LOANS (Details) - Schedule of Short-term Debt (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Short-term Debt [Line Items] | ' | ' |
Short term debt | $12,952,396 | $13,295,565 |
Credit Union 1 [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Short term debt | 1,426,955 | 1,734,150 |
Credit Union 2 [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Short term debt | 836,490 | 954,578 |
Credit Union 3 [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Short term debt | 0 | 556,837 |
Promissory Note of US Parent [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Short term debt | 50,000 | 50,000 |
Loan of U.S. Parent [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Short term debt | 10,000,000 | 10,000,000 |
Credit Line of U.S. Parent [Member] | ' | ' |
Short-term Debt [Line Items] | ' | ' |
Short term debt | $638,951 | $0 |
15_TAXES_PAYABLE_RECEIVABLE_De
15. TAXES PAYABLE (RECEIVABLE) (Details) - Schedule of Taxes Payable (Receivable) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Taxes Payable (Receivable) [Abstract] | ' | ' |
Value-added tax | $23,543 | ($54,727) |
Income tax | -8,218 | -7,971 |
Other | 52,909 | 60,908 |
Total | $68,234 | ($1,790) |
16_SHORTTERM_PAYABLE_Details
16. SHORT-TERM PAYABLE (Details) | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | |
USD ($) | USD ($) | Construction Contract with Administration Committee for Liaoning Special Vehicle Production Base [Member] | Construction Contract with Administration Committee for Liaoning Special Vehicle Production Base [Member] | Construction Contract with Administration Committee for Liaoning Special Vehicle Production Base [Member] | Construction Contract with Administration Committee for Liaoning Special Vehicle Production Base [Member] | Construction Contract with Administration Committee for Liaoning Special Vehicle Production Base [Member] | Construction Contract with Administration Committee for Liaoning Special Vehicle Production Base [Member] | |
USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | |||
sqm | ||||||||
16. SHORT-TERM PAYABLE (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Area of Real Estate Property | ' | ' | ' | ' | ' | ' | 9,074 | 9,074 |
Construction cost, per square meter | ' | ' | ' | ' | ' | ' | $214 | 1,350 |
Debt Instrument, Collateral | ' | ' | ' | ' | ' | ' | 'Company was required to pledge the plant as collateral for payment by the Company to LSVPB of $1,944,151 (RMB 12,249,900) | 'Company was required to pledge the plant as collateral for payment by the Company to LSVPB of $1,944,151 (RMB 12,249,900) |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | 1,944,151 | 12,249,900 |
Debt Instrument, Payment Terms | ' | ' | ' | ' | ' | ' | 'five equal annual installments in October of each year beginning in October 2010 | 'five equal annual installments in October of each year beginning in October 2010 |
Debt Instrument, Interest Rate Terms | ' | ' | ' | ' | ' | ' | 'Company is not required to pay interest | 'Company is not required to pay interest |
Debt Instrument, Default Penalty | ' | ' | ' | ' | ' | ' | 0.50% | 0.50% |
Debt Instrument, Debt Default, Description of Violation or Event of Default | ' | ' | ' | ' | ' | ' | 'LSVPB has the right to foreclose on the plant if payments are in arrears for more than two years, in which case all prior payments made by the Company will be treated as liquidated damages by LSVPB | 'LSVPB has the right to foreclose on the plant if payments are in arrears for more than two years, in which case all prior payments made by the Company will be treated as liquidated damages by LSVPB |
Debt Instrument, Imputed Interest Rate | ' | ' | ' | ' | ' | ' | 9.00% | 9.00% |
Proceeds from Subsidy | ' | ' | ' | ' | 1,110,000 | 7,000,000 | ' | ' |
Repayments of Long-term Debt | $0 | $381,782 | $382,886 | 2,410,000 | ' | ' | ' | ' |
16_SHORTTERM_PAYABLE_Details_S
16. SHORT-TERM PAYABLE (Details) - Schedule of Short-Term Payable (USD $) | Dec. 31, 2013 |
Schedule of Short-Term Payable [Abstract] | ' |
Short-term payable | $465,794 |
Less: unamortized interest | -22,967 |
Net | $442,827 |
16_SHORTTERM_PAYABLE_Details_S1
16. SHORT-TERM PAYABLE (Details) - Schedule of Maturities of Debt (USD $) | Dec. 31, 2013 |
Schedule of Maturities of Debt [Abstract] | ' |
2014 | $442,827 |
17_MAJOR_CUSTOMERS_AND_VENDORS1
17. MAJOR CUSTOMERS AND VENDORS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
17. MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | ' | ' |
Accounts Receivable, Net, Current | $2,000,914 | $2,548,834 |
Accounts Payable, Current | 2,720,996 | 2,376,229 |
Major Customer 1 [Member] | Customer Concentration Risk [Member] | Sales [Member] | ' | ' |
17. MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 36.00% | 43.00% |
Accounts Receivable, Net, Current | 880,776 | 433,555 |
Major Customer 2 [Member] | Customer Concentration Risk [Member] | Sales [Member] | ' | ' |
17. MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 18.00% | 31.00% |
Accounts Receivable, Net, Current | 819,363 | 1,679,061 |
Major Customer 3 [Member] | Customer Concentration Risk [Member] | Sales [Member] | ' | ' |
17. MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 18.00% | 15.00% |
Accounts Receivable, Net, Current | 3,519,198 | 72,947 |
Customer Concentration Risk [Member] | Sales [Member] | ' | ' |
17. MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | ' | ' |
Concentration Risk, Customer | 'Three customers | 'Three customers |
Concentration Risk, Percentage | 72.00% | 89.00% |
Accounts Receivable, Net, Current | 5,219,337 | 2,185,563 |
Supplier Concentration Risk [Member] | Cost of Goods, Total [Member] | ' | ' |
17. MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 10.00% | 27.00% |
Concentration Risk, Supplier | 'One vendor | 'One vendor |
Accounts Payable, Current | $0 | $1,098 |
18_DEFERRED_TAX_ASSET_LIABILIT2
18. DEFERRED TAX ASSET (LIABILITY) (Details) - Schedule of Deferred Tax Assets and Liabilities (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
18. DEFERRED TAX ASSET (LIABILITY) (Details) - Schedule of Deferred Tax Assets and Liabilities [Line Items] | ' | ' |
Deferred tax asset b noncurrent (NOL) | $1,276,569 | $598,990 |
Less: valuation allowance | -17,449,895 | -5,159,013 |
Net | 0 | 0 |
Bad Debt Allowance [Member] | ' | ' |
18. DEFERRED TAX ASSET (LIABILITY) (Details) - Schedule of Deferred Tax Assets and Liabilities [Line Items] | ' | ' |
Deferred tax asset - current | 6,217,939 | 4,350,671 |
Inventory Allowance [Member] | ' | ' |
18. DEFERRED TAX ASSET (LIABILITY) (Details) - Schedule of Deferred Tax Assets and Liabilities [Line Items] | ' | ' |
Deferred tax asset - current | 3,623,970 | 209,352 |
Other Receivable Allowance [Member] | ' | ' |
18. DEFERRED TAX ASSET (LIABILITY) (Details) - Schedule of Deferred Tax Assets and Liabilities [Line Items] | ' | ' |
Deferred tax asset - current | 513,509 | 0 |
Advance to Supplier Allowance [Member] | ' | ' |
18. DEFERRED TAX ASSET (LIABILITY) (Details) - Schedule of Deferred Tax Assets and Liabilities [Line Items] | ' | ' |
Deferred tax asset - current | $5,817,908 | $0 |
19_INCOME_TAX_Details
19. INCOME TAX (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
19. INCOME TAX (Details) [Line Items] | ' |
Operating Loss Carryforwards (in Dollars) | $7.78 |
Operating Loss Carryforwards, Years | '20 years |
Deferred Tax Valuation Allowance, Percent | 100.00% |
Creative Wind Power [Member] | ' |
19. INCOME TAX (Details) [Line Items] | ' |
Effective Tax Rate, PRC | 25.00% |
Creative Bellows [Member] | ' |
19. INCOME TAX (Details) [Line Items] | ' |
Preferential Income Tax Rate, PRC | 15.00% |
19_INCOME_TAX_Details_Schedule
19. INCOME TAX (Details) - Schedule of Reconciliation of Effective Income Tax Rate | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Reconciliation of Effective Income Tax Rate [Abstract] | ' | ' |
U.S. statutory rates (benefit) | -34.00% | -34.00% |
Tax rate difference | 6.80% | 7.20% |
Other | 0.00% | 0.00% |
Effective tax holiday | 0.00% | 1.70% |
Valuation allowance | 27.20% | 25.10% |
Effective income tax rate | 0.00% | 0.00% |
20_STOCKHOLDERS_EQUITY_Details
20. STOCKHOLDERS' EQUITY (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2010 | |
Warrants Issued to Placement Agents [Member] | Private Placement July 12, 2010 [Member] | ' | ' |
20. STOCKHOLDERS' EQUITY (Details) [Line Items] | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | 333,332 |
Warrants Issued to Placement Agents [Member] | Debt and Equity Offering December 13, 2010 [Member] | ' | ' |
20. STOCKHOLDERS' EQUITY (Details) [Line Items] | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | 300,000 |
Private Placement July 12, 2010 [Member] | ' | ' |
20. STOCKHOLDERS' EQUITY (Details) [Line Items] | ' | ' |
Units issued during period, number of units | ' | 3,333,322 |
Unit, description | ' | 'one share of its common stock and a warrant to purchase 15% of one share of its common stock, at $3.00 per unit for $10,000,000 |
Class of Warrant or Right, Description | ' | 'The warrants are immediately exercisable, expired on the third anniversary of their issuance |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | 499,978 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | ' | 3 |
Class of Warrants or Right, Call of Warrants Description | ' | 'The Company may call the warrants at any time after (i) the registration statement registering the common stock underlying the warrants becomes effective, (ii) the common stock is listed on a national securities exchange and (iii) the trading price of the common stock exceeds $4.00 |
Fair Value Assumptions, Expected Term | ' | '3 years |
Fair Value Assumptions, Expected Volatility Rate | ' | 147.00% |
Fair Value Assumptions, Risk Free Interest Rate | ' | 1.89% |
Fair Value Assumptions, Expected Dividend Rate | ' | 0.00% |
Class of Warrant or Right, Grant Date Fair Value | ' | $5,903,228 |
Proceeds from Issuance of Private Placement | ' | 8,400,000 |
Payments of Stock Issuance Costs | ' | 1,600,000 |
Class of Warrants or Right, Exercised | 0 | ' |
Debt and Equity Offering December 13, 2010 [Member] | ' | ' |
20. STOCKHOLDERS' EQUITY (Details) [Line Items] | ' | ' |
Units issued during period, number of units | ' | 2,500,000 |
Unit, description | ' | 'one share of its common stock and a warrant to purchase 67.5% of one share of its common stock, at $4.00 per unit for $10,000,000 |
Class of Warrant or Right, Description | ' | 'The warrants are immediately exercisable, expire on the fifth anniversary of their issuance |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | 1,687,500 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | ' | 4 |
Fair Value Assumptions, Expected Term | ' | '5 years |
Fair Value Assumptions, Expected Volatility Rate | ' | 88.00% |
Fair Value Assumptions, Risk Free Interest Rate | ' | 1.89% |
Fair Value Assumptions, Expected Dividend Rate | ' | 0.00% |
Class of Warrant or Right, Grant Date Fair Value | ' | 10,282,442 |
Payments of Stock Issuance Costs | ' | 1,000,000 |
Proceeds from Issuance or Sale of Equity | ' | 20,000,000 |
Debt Related Commitment Fees and Debt Issuance Costs | ' | $100,000 |
20_STOCKHOLDERS_EQUITY_Details1
20. STOCKHOLDERS' EQUITY (Details) - Schedule of Warrant Activity (USD $) | 12 Months Ended | ||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Number of Warrants[Member] | Number of Warrants[Member] | Weighted Average Exercise Price per Share [Member] | Weighted Average Exercise Price per Share [Member] | Weighted Average Remaining Contractual Term [Member] | Weighted Average Remaining Contractual Term [Member] | Weighted Average Remaining Contractual Term [Member] | |
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Warrants Outstanding (in Shares) | 2,801,310 | 2,801,310 | ' | ' | ' | ' | ' |
Warrants Outstanding | ' | ' | $3.71 | $3.71 | ' | ' | ' |
Warrants Outstanding | ' | ' | ' | ' | '1 year 346 days | '2 years 3 months | '3 years 3 months |
Warrants Exercisable (in Shares) | 2,801,310 | 2,801,310 | ' | ' | ' | ' | ' |
Warrants Exercisable | ' | ' | $3.71 | $3.71 | ' | ' | ' |
Warrants Exercisable | ' | ' | ' | ' | '1 year 346 days | '2 years 3 months | '3 years 3 months |
Warrants Granted (in Shares) | 0 | 0 | ' | ' | ' | ' | ' |
Warrants Granted | ' | ' | $0 | $0 | ' | ' | ' |
Warrants Exercised (in Shares) | 0 | 0 | ' | ' | ' | ' | ' |
Warrants Exercised | ' | ' | $0 | $0 | ' | ' | ' |
Warrants Expired (in Dollars) | $813,810 | $0 | ' | ' | ' | ' | ' |
Warrants Expired | ' | ' | $3 | $0 | ' | ' | ' |
Warrants Outstanding (in Shares) | 1,987,500 | 2,801,310 | ' | ' | ' | ' | ' |
Warrants Outstanding | ' | ' | $4 | $3.71 | ' | ' | ' |
Warrants Outstanding | ' | ' | ' | ' | '1 year 346 days | '2 years 3 months | '3 years 3 months |
Warrants Exercisable (in Shares) | 1,987,500 | 2,801,310 | ' | ' | ' | ' | ' |
Warrants Exercisable | ' | ' | $4 | $3.71 | ' | ' | ' |
Warrants Exercisable | ' | ' | ' | ' | '1 year 346 days | '2 years 3 months | '3 years 3 months |
21_STOCKBASED_COMPENSATION_PLA2
21. STOCK-BASED COMPENSATION PLAN (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | |
Employee Stock Option [Member] | Employee Stock Option [Member] | Employee Stock Option [Member] | Employee Stock Option [Member] | |||
Director [Member] | Director [Member] | |||||
21. STOCK-BASED COMPENSATION PLAN (Details) [Line Items] | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | ' | ' | ' | 30,000 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercise Price (in Dollars per share) | ' | ' | ' | $8.44 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | ' | ' | ' | 'life of three years and vesting over two years | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | ' | ' | ' | '2 years | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | ' | ' | ' | '10,000 shares vested on the grant date and the remainder to vest in increments of 10,000 shares on each subsequent anniversary of the grant date, subject in each case to the director continuing to be associated with the Company as a director. | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | ' | ' | ' | 147.00% | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | ' | ' | ' | 1.89% | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | ' | ' | ' | 0.00% | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | ' | ' | ' | $203,235 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | ' | ' | 10,000 | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | ' | ' | ' | ' |
Share-based Compensation (in Dollars) | ' | ' | ' | ' | $0 | $0 |
21_STOCKBASED_COMPENSATION_PLA3
21. STOCK-BASED COMPENSATION PLAN (Details) - Schedule of Share-based Compensation Stock Option Activity (USD $) | 12 Months Ended | |||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Number of Options [Member] | Number of Options [Member] | Weighted Average Exercise Price per Share [Member] | Weighted Average Exercise Price per Share [Member] | Weighted Average Remaining Contractual Term [Member] | Weighted Average Remaining Contractual Term [Member] | |||
21. STOCK-BASED COMPENSATION PLAN (Details) - Schedule of Share-based Compensation Stock Option Activity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Options Outstanding | ' | ' | 20,000 | 20,000 | ' | ' | ' | ' |
Options Outstanding | ' | ' | ' | ' | $8.44 | $8.44 | ' | ' |
Options Outstanding | ' | ' | ' | ' | ' | ' | '193 days | '1 year 193 days |
Options Exercisable | ' | ' | 20,000 | 20,000 | ' | ' | ' | ' |
Options Exercisable | ' | ' | ' | ' | $8.44 | $8.44 | ' | ' |
Options Exercisable | ' | ' | ' | ' | ' | ' | '193 days | '1 year 193 days |
Options Granted | ' | ' | 0 | 0 | ' | ' | ' | ' |
Options Granted | ' | ' | ' | ' | $0 | $0 | ' | ' |
Options Exercised | 0 | 0 | 0 | 0 | ' | ' | ' | ' |
Options Exercised | ' | ' | ' | ' | $0 | $0 | ' | ' |
Options Expired | ' | ' | 20,000 | 0 | ' | ' | ' | ' |
Options Expired | ' | ' | ' | ' | $8.44 | $0 | ' | ' |
Options Outstanding | ' | ' | 0 | 20,000 | ' | ' | ' | ' |
Options Outstanding | ' | ' | ' | ' | $0 | $8.44 | ' | ' |
Options Outstanding | ' | ' | ' | ' | ' | ' | '193 days | '1 year 193 days |
Options Exercisable | ' | ' | 0 | 20,000 | ' | ' | ' | ' |
Options Exercisable | ' | ' | ' | ' | $0 | $8.44 | ' | ' |
Options Exercisable | ' | ' | ' | ' | ' | ' | '193 days | '1 year 193 days |
22_STATUTORY_RESERVES_Details
22. STATUTORY RESERVES (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Statutory Reserves [Abstract] | ' |
Statutory reserve accounts, number | 1 |
Statutory reserve, percentage allocation of income after tax | 10.00% |
Statutory reserve, percentage of registered capital | 50.00% |
Statutory reserve, percentage of registered capital the fund cannot be less than | 25.00% |
Voluntary common welfare fund, percentage | '5% to 10% |
24_CONTINGENCIES_AND_COMMITMEN1
24. CONTINGENCIES AND COMMITMENTS (Details) (Additional Capital to Creative Bellows [Member]) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | USD ($) | |
24. CONTINGENCIES AND COMMITMENTS (Details) [Line Items] | ' | ' | ' |
Other Commitment | ' | ' | $8.45 |
Increase (Decrease) in Capital Contribution Requirement | ($19.35) | -122.6 | ' |
25_LITIGATION_Details
25. LITIGATION (Details) | 12 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | |
Construction Cost [Member] | Interest [Member] | Arbitration Expenses [Member] | Counterclaim, Breach of Contract [Member] | Examination Fee [Member] | Repair Costs [Member] | Design and Appraisal Costs [Member] | Creative Bellows v. Dongbei Jincheng Construction Co. Ltd. [Member] | Company v. NASDAQ [Member] | Fensterstock and Partners LLP v. Company [Member] | Fensterstock and Partners LLP v. Company [Member] | |
Dongbei Jincheng Construction Co., Ltd. Vs. Creative Bellows [Member] | Dongbei Jincheng Construction Co., Ltd. Vs. Creative Bellows [Member] | Dongbei Jincheng Construction Co., Ltd. Vs. Creative Bellows [Member] | Creative Bellows v. Dongbei Jincheng Construction Co. Ltd. [Member] | Creative Bellows v. Dongbei Jincheng Construction Co. Ltd. [Member] | Creative Bellows v. Dongbei Jincheng Construction Co. Ltd. [Member] | Creative Bellows v. Dongbei Jincheng Construction Co. Ltd. [Member] | CNY | USD ($) | USD ($) | USD ($) | |
CNY | CNY | CNY | CNY | CNY | CNY | CNY | |||||
25. LITIGATION (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss Contingency, Damages Sought, Value | 2,400,099.82 | 700,000 | 28,176 | 2,197,131.53 | ' | ' | ' | 1,000,000 | ' | $400,808 | ' |
Loss Contingency, Damages Awarded, Value | ' | ' | ' | ' | 27,000 | 77,413.89 | 13,000 | ' | ' | 423,333.26 | ' |
Gain Contingency, Unrecorded Amount (in Dollars) | ' | ' | ' | ' | ' | ' | ' | ' | 300,000,000 | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.00% | ' |
Interest Payable (in Dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $66,315 |