Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 27, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Armco Metals Holdings, Inc. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 6,077,218 | ||
Entity Public Float | $12,203,336 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1410711 | ||
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-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS: | ||
Cash | $1,884,887 | $596,557 |
Pledged deposits | 498,615 | 4,652,222 |
Marketable securities | 73,943 | 519,129 |
Accounts receivable, net | 43,202,886 | 25,595,516 |
Inventories | 9,154,463 | 20,456,920 |
Advance on purchases | 1,093,402 | 733,285 |
Prepayments and other current assets | 1,164,603 | 1,181,371 |
Total Current Assets | 57,072,799 | 53,735,000 |
Property, plant and equipment, net | 32,563,929 | 35,495,678 |
Land use rights, net | 6,108,283 | 6,265,301 |
Deferred tax assets | 279,563 | |
Total Assets | 96,024,574 | 95,495,979 |
CURRENT LIABILITIES: | ||
Loans payable | 17,011,843 | 27,415,638 |
Banker's acceptance notes payable and letters of credit | 1,767,790 | 8,473,217 |
Current maturities of capital lease obligation | 720,819 | 904,990 |
Accounts payable | 5,497,866 | 10,062,463 |
Due to related parties | 717,703 | 403,141 |
Customer deposits | 1,467,281 | 649,488 |
Corporate income tax payable | 815,073 | 822,207 |
Value added tax and other taxes payable | 5,747,470 | 2,202,331 |
Deferred tax liabilities | 2,965,196 | |
Accrued expenses and other current liabilities | 3,850,095 | 1,228,753 |
Total Current Liabilities | 41,438,212 | 52,891,989 |
Total Liabilities | 41,438,212 | 52,891,989 |
STOCKHOLDERS' EQUITY: | ||
Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.001 par value, 200,000,000 shares authorized, 5,615,088 and 2,987,633 shares issued and outstanding as of December 31, 2014 and 2013, respectively | 5,615 | 2,988 |
Additional paid-in capital | 45,968,908 | 35,817,794 |
Retained earnings | 4,491,948 | 2,625,287 |
Accumulated other comprehensive income (loss): | ||
Change in unrealized loss on marketable securities | -429,142 | -694,512 |
Foreign currency translation gain | 4,549,033 | 4,852,433 |
Total Stockholders' Equity | 54,586,362 | 42,603,990 |
Total Liabilities and Stockholders' Equity | 96,024,574 | 95,495,979 |
Warrant [Member] | ||
CURRENT LIABILITIES: | ||
Derivative liabilities | 61,429 | |
Chairman and CEO [Member] | ||
CURRENT LIABILITIES: | ||
Advances received from Chairman and CEO | $877,076 | $668,332 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Preferred stock par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
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 | 200,000,000 | 200,000,000 |
Common stock, shares issued | 5,615,088 | 2,987,633 |
Common stock, shares outstanding | 5,615,088 | 2,987,633 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
NET REVENUES | $124,186,989 | $128,738,194 |
COST OF GOODS SOLD | 109,651,864 | 125,426,672 |
GROSS PROFIT | 14,535,125 | 3,311,522 |
OPERATING EXPENSES: | ||
Selling expenses | 307,289 | 177,118 |
Professional fees | 607,513 | 512,474 |
General and administrative expenses | 3,429,182 | 3,397,191 |
Operating cost of idle manufacturing facility | 1,692,476 | 1,840,967 |
Total operating expenses | 6,036,460 | 5,927,750 |
INCOME (LOSS) FROM OPERATIONS | 8,498,665 | -2,616,228 |
OTHER (INCOME) EXPENSE: | ||
Interest income | -99,637 | -325,256 |
Interest expense | 3,460,820 | 2,157,156 |
Investment loss | 394,565 | |
Change in fair value of derivative liabilities | 107,378 | -929,883 |
Loan guarantee expense | 13,002 | 45,733 |
Other expense | 70,112 | 145,849 |
Total other expense | 3,946,240 | 1,093,599 |
INCOME (LOSS) BEFORE INCOME TAX PROVISION | 4,552,425 | -3,709,827 |
INCOME TAX PROVISION | 2,685,764 | 421,585 |
NET INCOME (LOSS) | 1,866,661 | -4,131,412 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||
Change in unrealized income (loss) on marketable securities | 265,370 | -694,512 |
Foreign currency translation gain (loss) | -303,400 | 1,367,863 |
COMPREHENSIVE INCOME (LOSS) | $1,828,631 | ($3,458,061) |
NET INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED: | ||
Net income (loss) per common share - basic and diluted (in Dollars per share) | $0.39 | ($1.66) |
Weighted Average Common Shares Outstanding - basic and diluted (in Shares) | 4,785,073 | 2,488,662 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Net Unrealized Investment Gain (Loss) [Member] | Accumulated Translation Adjustment [Member] | Employee [Member] | Chief Executive Officer [Member] | Director [Member] | Chaoyang Steel [Member] | All Bright [Member] | Hebang {Member] | Broad Max Holding [Member] | Chaoyang Steel B [Member] | Broad Max Steel 2 [Member] | Chaoyang Steel C [Member] | CDII [Member] | Chaoyang Steel E [Member] | Total |
Employee [Member] | Employee [Member] | Employee [Member] | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Director [Member] | Director [Member] | Director [Member] | Chaoyang Steel [Member] | Chaoyang Steel [Member] | Chaoyang Steel [Member] | All Bright [Member] | All Bright [Member] | All Bright [Member] | Hebang {Member] | Hebang {Member] | Hebang {Member] | Broad Max Holding [Member] | Broad Max Holding [Member] | Broad Max Holding [Member] | Chaoyang Steel B [Member] | Chaoyang Steel B [Member] | Chaoyang Steel B [Member] | Broad Max Steel 2 [Member] | Broad Max Steel 2 [Member] | Broad Max Steel 2 [Member] | Chaoyang Steel C [Member] | Chaoyang Steel C [Member] | Chaoyang Steel C [Member] | CDII [Member] | CDII [Member] | CDII [Member] | Chaoyang Steel E [Member] | Chaoyang Steel E [Member] | Chaoyang Steel E [Member] | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Employee [Member] | Chief Executive Officer [Member] | Director [Member] | Chaoyang Steel [Member] | All Bright [Member] | Hebang {Member] | Broad Max Holding [Member] | Chaoyang Steel B [Member] | Broad Max Steel 2 [Member] | Chaoyang Steel C [Member] | CDII [Member] | Chaoyang Steel E [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | Shares Before Split [Member] | Shares After Split [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||||||||||||
Balance at Dec. 31, 2012 | $2,033 | $31,560,370 | $6,756,699 | $3,484,570 | $41,803,672 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance (in Shares) at Dec. 31, 2012 | 20,319,698 | 2,031,970 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for services | 3 | 8 | 75 | 5 | 3 | 3 | 3 | 25 | 3 | 325 | 12,497 | 28,117 | 281,175 | 18,745 | 10,330 | 10,330 | 12,664 | 76,725 | 10,230 | 1,621,031 | 12,500 | 28,125 | 281,250 | 18,750 | 10,333 | 10,333 | 12,667 | 76,750 | 10,233 | 1,621,356 | ||||||||||||||||||||||||||||||||||||||
Issuance of common stock for services (in Shares) | 33,333 | 3,333 | 75,000 | 7,500 | 750,000 | 75,000 | 50,000 | 5,000 | 33,333 | 3,333 | 33,333 | 3,333 | 33,333 | 3,333 | 250,000 | 25,000 | 33,333 | 3,333 | 3,242,712 | 324,271 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in conversion | 201 | 157 | 1,045,168 | 816,436 | 1,045,369 | 816,593 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in conversion (in Shares) | 2,010,327 | 201,033 | 1,570,371 | 157,039 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation | 3 | 276,028 | 276,031 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation (in Shares) | 31,250 | 3,125 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (loss) | -4,131,412 | -4,131,412 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on marketable securities | -694,512 | -694,512 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation gain (loss) | 1,367,863 | 1,367,863 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares for financing cost | 5 | 21,150 | 21,155 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares for financing cost (in Shares) | 47,022 | 4,702 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock to employees pursuant to the 2009 Stock Incentive Plan for services valued at $0.47 per share granted on November 5, 2013 | 136 | 640,607 | 640,743 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock to employees pursuant to the 2009 Stock Incentive Plan for services valued at $0.47 per share granted on November 5, 2013 (in Shares) | 1,363,282 | 136,328 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of derivative liabilities | -623,809 | -623,809 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2013 | 2,988 | 35,817,794 | 2,625,287 | -694,512 | 4,852,433 | 42,603,990 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance (in Shares) at Dec. 31, 2013 | 29,876,327 | 2,987,633 | 2,987,633 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for services | 3 | 38 | 75 | 6 | 12,999 | 80,887 | 202,425 | -6 | 13,002 | 80,925 | 202,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for services (in Shares) | 33,338 | 3,334 | 375,000 | 37,500 | 750,000 | 75,000 | 60,000 | 6,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in conversion | 2,269 | 6,638,627 | 6,640,896 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in conversion (in Shares) | 22,694,997 | 2,269,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation | 236 | 1,096,555 | 1,096,791 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation (in Shares) | 2,361,208 | 236,121 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (loss) | 1,866,661 | 1,866,661 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on marketable securities | 265,370 | 265,370 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation gain (loss) | -303,400 | -303,400 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of derivative liabilities | 2,119,627 | 2,119,627 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2014 | $5,615 | $45,968,908 | $4,491,948 | ($429,142) | $4,549,033 | $54,586,362 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance (in Shares) at Dec. 31, 2014 | 56,150,870 | 5,615,088 | 5,615,088 |
Consolidated_Statements_of_Sto1
Consolidated Statements of Stockholders' Equity (Parentheticals) (Common Stock [Member], USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Issuance of common stock, per share | $0.50 |
Employee [Member] | |
Issuance of common stock, per share | $0.47 |
Shares Before Split [Member] | |
Shares from warrants (in Shares) | 1,031,715 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $1,866,661 | ($4,131,412) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation expense | 2,800,253 | 2,847,606 |
Amortization expense | 122,821 | 145,499 |
Allowance for doubtful accounts | 188,644 | |
Deferred income taxes | 2,685,764 | |
Change in fair value of derivative liabilities | 107,378 | -929,883 |
Loss on sales of marketable securities | 394,565 | |
Amortization of debt discount | 2,003,611 | 8,004 |
Stock based compensation | 1,096,791 | 1,377,715 |
Stock issued for third-party services | 296,427 | |
Shares issued for financing cost | 21,155 | |
Changes in operating assets and liabilities: | ||
Bank acceptance notes receivable | -8,072 | |
Accounts receivable | -17,742,468 | -9,319,280 |
Inventories | 11,190,448 | -6,546,757 |
Advance on purchases | -447,153 | 1,556,395 |
Prepayments and other current assets | -83,560 | -780,339 |
Banker's acceptance notes payable and letters of credit | -6,659,154 | -422,970 |
Accounts payable | -4,591,815 | 8,690,406 |
Customer deposits | 821,405 | -957,536 |
Taxes payable | 3,552,224 | 92,685 |
Accrued expenses and other current liabilities | 2,946,943 | -1,163,596 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 549,785 | -9,520,380 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from release of pledged deposits | 5,944,745 | 21,162,708 |
Payment made towards pledged deposits | -1,816,491 | -21,077,956 |
Purchase of property, plant and equipment | -341 | -167,962 |
Cash received from sales of marketable securities | 315,991 | |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 4,443,904 | -83,210 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from loans payable | 20,706,925 | 49,611,412 |
Repayment of loans payable | -24,705,403 | -39,959,898 |
Repayment of capital lease obligation | -179,102 | -3,552,805 |
Advances from (repayment to) Chairman and CEO | 204,071 | 754,740 |
Advances from (repayment to) related parties | 316,795 | 368,081 |
Proceeds from convertible notes | 678,500 | |
Proceeds from sales of common stock | 1,621,356 | |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | -2,978,214 | 8,842,886 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | -727,145 | -9,910 |
NET CHANGE IN CASH | 1,288,330 | -770,614 |
Cash at beginning of the year | 596,557 | 1,367,171 |
Cash at end of the year | 1,884,887 | 596,557 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||
Interest paid | 429,546 | 1,951,630 |
Income taxes paid | 5,197 | 12,615 |
NON CASH FINANCING AND INVESTING ACTIVITIES: | ||
Reclassification of derivative liability from equity | 2,119,627 | 623,809 |
Reclassification from short-term debt to convertible debt | 5,554,468 | |
Reclassification from other payable to short-term debt | 104,133 | |
Debt discount due to convertible feature | 1,950,820 | 60,795 |
Short-term Debt [Member] | ||
NON CASH FINANCING AND INVESTING ACTIVITIES: | ||
Common shares issued for conversion | 6,640,896 | 816,593 |
Chairman and CEO [Member] | ||
NON CASH FINANCING AND INVESTING ACTIVITIES: | ||
Common shares issued for conversion | $1,045,369 |
Note_1_Organization_and_Operat
Note 1 - Organization and Operations | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1 – Organization and Operations |
Armco Metals Holdings, Inc. (formerly China Armco Metals, Inc. and Cox Distributing, Inc.) | |
Armco Metals Holdings, Inc. (“Armco Metals Holdings” or the “Company”) was incorporated under the laws of the State of Nevada as Cox Distributing, Inc. on April 6, 2007. On June 27, 2008, the Company changed its name to China Armco Metals, Inc. (“Armco Metals”) upon the acquisition of Armco Metals International Limited (formerly “Armco & Metawise (H.K) Limited” or “Armco HK”) and Subsidiaries to better identify the Company with the business conducted, through its wholly owned subsidiaries in China, import, export and distribution of ferrous and non-ferrous ores and metals, and processing and distribution of scrap steel. On July 3, 2013, the Company changed its name from “China Armco Metals, Inc.” to “Armco Metals Holdings, Inc.”. | |
Armco Metals International Limited (formerly Armco & Metawise (H.K) Limited) and Subsidiaries | |
Armco Metals International Limited (formerly Armco & Metawise (H.K) Limited) | |
Armco & Metawise (H.K) Limited was incorporated on July 13, 2001 under the laws of the Hong Kong Special Administrative Region (“HK SAR”) of the People’s Republic of China (“PRC”). Armco HK engages in the import, export and distribution of ferrous and non-ferrous ore and metals. | |
On March 22, 2011, Armco & Metawise (H.K) Limited amended its Memorandum and Articles of Association, and changed its name to Armco Metals International Limited (“Armco HK”). | |
Formation of Henan Armco and Metawise Trading Co., Ltd. | |
Henan Armco and Metawise Trading Co., Ltd. (“Henan”) was incorporated on June 6, 2002 in the City of Zhengzhou, Henan Province, PRC. Henan engages in the import, export and distribution of ferrous and non-ferrous ores and metals. | |
Formation of Armco (Lianyungang) Renewable Metals, Inc. | |
On January 9, 2007, Armco HK formed Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”), a wholly- owned foreign enterprise (“WOFE”) subsidiary in the City of Lianyungang, Jiangsu Province, PRC. Renewable Metals engages in the processing and distribution of scrap metal. | |
On December 1, 2008, Armco HK transferred its 100% equity interest in Renewable Metals to Armco Metals. | |
Merger of Henan with Renewable Metals, Companies under Common Control | |
On December 28, 2007, Armco HK entered into a Share Transfer Agreement with Renewable Metals, whereby Armco HK transferred to Renewable Metals all of its equity interest in Henan, a company under common control of Armco HK. | |
The acquisition of Henan has been recorded on the purchase method of accounting at historical amounts as Renewable Metals and Henan were under common control since June 2002. The consolidated financial statements have been presented as if the acquisition of Henan had occurred as of the first date of the first period presented. | |
Acquisition of Armco Metal International Limited and Subsidiaries (“Armco HK”) Recognized as a Reverse Acquisition | |
On June 27, 2008, the Company entered into and consummated a share purchase agreement (the “Share Purchase Agreement”) with Armco HK and Feng Gao (“Ms. Gao”), who owned 100% of the issued and outstanding shares of Armco HK. In connection with the consummation of the Share Purchase Agreement, (i) Stephen Cox surrendered 769,400 common shares, representing his controlling interest in the Company for cancellation and resigned as an officer and director; (ii) the Company purchased from the Armco HK Shareholder 100% of the issued and outstanding shares of Armco HK’s capital stock for $6,890,000 by delivery of the Company’s purchase money promissory note; (iii) issued to Ms. Gao (a) a stock option entitling Ms. Gao to purchase 530,000 shares of the Company’s common stock, par value $.001 per share (the “Common Stock”) with an exercise price of $13.0 per share expiring on December 31, 2008 and (b) a stock option entitling Ms. Gao to purchase 200,000 shares of the Company’s common stock with an exercise price of $50.00 per share expiring two (2) years from the date of issuance on June 27, 2010 (the “Gao Options”). On August 12, 2008, Ms. Gao exercised her option to purchase and the Company issued 530,000 shares of its common stock in exchange for the $6,890,000 note owed to Ms. Gao. The shares issued represented approximately 69.7% of the issued and outstanding common stock immediately after the consummation of the Share Purchase and exercise of the option to purchase 530,000 shares of the Company’s common stock at $13.0 per share. | |
As a result of the controlling financial interest of the former stockholder of Armco HK, for financial statement reporting purposes, the merger between the Company and Armco HK has been treated as a reverse acquisition with Armco HK deemed the accounting acquirer and the Company deemed the accounting acquiree under the acquisition method of accounting in accordance with section 805-10-55 of the FASB Accounting Standards Codification. The reverse acquisition is deemed a capital transaction and the net assets of Armco HK (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the acquisition. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of Armco HK which are recorded at their historical cost. The equity of the Company is the historical equity of Armco HK retroactively restated to reflect the number of shares issued by the Company in the transaction. | |
Formation of Armco (Lianyungang) Holdings, Inc. | |
On June 4, 2009, the Company formed Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”), a WOFE subsidiary in the City of Lianyungang, Jiangsu Province, PRC. Lianyungang Armco intends to engage in marketing and distribution of the recycled scrap steel. | |
Formation of Armco Metals (Shanghai) Holdings, Ltd. | |
On July 16, 2010, the Company formed Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) as a WOFE subsidiary in Shanghai, China. Armco Shanghai serves as the headquarters for the Company’s China operations and oversees the activities of the Company in financing and international trading. |
Note_2_Significant_and_Critica
Note 2 - Significant and Critical Accounting Policies and Practices | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Significant Accounting Policies [Text Block] | Note 2 - Significant and Critical Accounting Policies and Practices | ||||||||||||||||
Basis of Presentation | |||||||||||||||||
The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). | |||||||||||||||||
Principles of Consolidation | |||||||||||||||||
The Company applies the guidance of Topic 810 “Consolidation” of the FASB Accounting Standards Codification to determine whether and how to consolidate another entity. Pursuant to ASC Paragraph 810-10-15-10 all majority-owned subsidiaries—all entities in which a parent has a controlling financial interest—shall be consolidated except (1) when control does not rest with the parent, the majority owner; (2) if the parent is a broker-dealer within the scope of Topic 940 and control is likely to be temporary; (3) consolidation by an investment company within the scope of Topic 946 of a non-investment- company investee. Pursuant to ASC Paragraph 810-10-15-8 the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree. The Company consolidates all less-than-majority-owned subsidiaries, if any, in which the parent’s power to control exists. | |||||||||||||||||
The Company's consolidated subsidiaries are as follows as of December 31, 2014: | |||||||||||||||||
Name of consolidated subsidiary | State or other jurisdiction of incorporation or organization | Date of incorporation or formation | Attributable interest | ||||||||||||||
(date of acquisition, if applicable) | |||||||||||||||||
Armco Metal International Limited (“Armco HK”) | Hong Kong SAR | July 13, 2001 | 100% | ||||||||||||||
Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) | PRC | June 6, 2002 | 100% | ||||||||||||||
Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”) | PRC | January 9, 2007 | 100% | ||||||||||||||
Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”) | PRC | June 4, 2009 | 100% | ||||||||||||||
Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) | PRC | July 16, 2010 | 100% | ||||||||||||||
All inter-company balances and transactions have been eliminated. | |||||||||||||||||
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions | |||||||||||||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. | |||||||||||||||||
The Company’s significant estimates and assumptions include the fair value of financial instruments; allowance for doubtful accounts; normal production capacity, inventory valuation and obsolescence; recoverability and impairment, if any, of long- lived assets, including the values assigned to and the estimated useful lives of property, plant and equipment, and land use rights; interest rate; revenue recognized or recognizable, sales returns and allowances; valued added tax rate; expected term of share options and similar instruments, expected volatility of the entity’s shares and the method used to estimate it, expected annual rate of quarterly dividends, and risk free rates; income tax rate and related income tax provision; reporting currency, functional currency of the PRC subsidiaries and foreign currency exchange rate. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. | |||||||||||||||||
Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. | |||||||||||||||||
Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. | |||||||||||||||||
Actual results could differ from those estimates. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting U.S.GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: | |||||||||||||||||
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. | ||||||||||||||||
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. | ||||||||||||||||
Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. | ||||||||||||||||
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. | |||||||||||||||||
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. | |||||||||||||||||
The carrying amounts of the Company’s financial assets and liabilities, such as cash, pledged deposits, accounts receivable, advance on purchases, prepayments and other current assets, accounts payable, customer deposits, corporate income/VAT tax payable, accrued expenses and other current liabilities approximate their fair values because of the short maturity of these instruments. | |||||||||||||||||
The Company’s loans payable, banker’s acceptance notes payable, and capital lease obligation approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at December 31, 2014 and 2013. | |||||||||||||||||
The Company’s Level 3 financial liabilities consist of the derivative warrant issued in July 2008 and convertible note with embedded conversion feature issued in November 2013, for which there are no current market for these securities such that the determination of fair value requires significant judgment or estimation. The Company valued the automatic conditional conversion, re-pricing/down-round, change of control; default and follow-on offering provisions using a lattice model, with the assistance of a valuation specialist, for which management understands the methodologies. These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date. | |||||||||||||||||
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's- length transactions unless such representations can be substantiated. | |||||||||||||||||
It is not, however, practical to determine the fair value of advances from significant stockholder and lease arrangement with the significant stockholder, if any, due to their related party nature. | |||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | |||||||||||||||||
Level 1 Financial Assets – Marketable Securities | |||||||||||||||||
The Company uses Level 1 of the fair value hierarchy to measure the fair value of the marketable securities and marks the available for sale marketable securities at fair value in the statement of financial position at each balance sheet date and reports the unrealized holding gains and losses for available-for-sale securities in other comprehensive income (loss) until realized provided the unrealized holding gains and losses is temporary. If the fair value of an investment is less than its cost basis at the balance sheet date of the reporting period for which impairment is assessed, and it is determined that the impairment is other than temporary, then an impairment loss is recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period. | |||||||||||||||||
Level 3 Financial Liabilities – Derivative Liabilities | |||||||||||||||||
The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative warrant liabilities and derivative convertible debt liability at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable to the change in the fair value of the derivative liabilities. | |||||||||||||||||
The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of December 31, 2014 and 2013: | |||||||||||||||||
Recurring Fair Value Measures | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
31-Dec-14 | |||||||||||||||||
Derivative liability | $ | - | $ | - | $ | - | $ | - | |||||||||
Available-for-sale securities | $ | 73,943 | $ | - | $ | - | $ | 73,943 | |||||||||
31-Dec-13 | |||||||||||||||||
Derivative liability | $ | - | $ | - | $ | 61,429 | $ | 61,429 | |||||||||
Available-for-sale securities | $ | 519,129 | $ | - | $ | - | $ | 519,129 | |||||||||
Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis | |||||||||||||||||
The Company’s non-financial assets include inventories. The Company identifies potentially excess and slow-moving inventories by evaluating turn rates, inventory levels and other factors. Excess quantities are identified through evaluation of inventory aging, review of inventory turns and historical sales experiences. The Company provides lower of cost or market reserves for such identified excess and slow-moving inventories. The Company establishes a reserve for inventory shrinkage, if any, based on the historical results of physical inventory cycle counts. | |||||||||||||||||
Carrying Value, Recoverability and Impairment of Long-Lived Assets | |||||||||||||||||
The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include property, plant and equipment and land use rights are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | |||||||||||||||||
The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. When long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. | |||||||||||||||||
The Company considers the following to be some examples of important indicators that may trigger an impairment review: | |||||||||||||||||
(i) significant under-performance or losses of assets relative to expected historical or projected future operating results; | |||||||||||||||||
(ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. | |||||||||||||||||
The key assumptions used in management’s estimates of projected cash flow deal largely with forecasts of sales levels, gross margins, and operating costs of the manufacturing facilities. These forecasts are typically based on historical trends and take into account recent developments as well as management’s plans and intentions. Any difficulty in manufacturing or sourcing raw materials on a cost effective basis would significantly impact the projected future cash flows of the Company’s manufacturing facilities and potentially lead to an impairment charge for long-lived assets. Other factors, such as increased competition or a decrease in the desirability of the Company’s products, could lead to lower projected sales levels, which would adversely impact cash flows. A significant change in cash flows in the future could result in an impairment of long lived assets. | |||||||||||||||||
The impairment charges, if any, is included in operating expenses in the accompanying consolidated statements of operations and comprehensive income (loss). | |||||||||||||||||
CashEquivalents | |||||||||||||||||
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. | |||||||||||||||||
Pledged Deposits | |||||||||||||||||
Pledged deposits consist of cash held in financial institutions for (a) outstanding letters of credit, (b) open banker’s acceptance notes payable and (c) capital lease obligation. | |||||||||||||||||
The Company uses letters of credit in connection with its purchases of ferrous and non-ferrous ores and metals, and scrap metal for processing and distribution. The issuing financial institutions of those letters of credit require the Company to deposit and pledge certain percentage of the maximum amount stipulated under those letters of the credit as collateral. The pledged deposits are either released to the Company in the event of vendors' non-performance or to be released to the Company as part of the payment toward the letters of credit when vendors delivers the goods under those letters of credit on or before maturity date. | |||||||||||||||||
The Company satisfies certain accounts payable, through banker’s acceptance notes issued by financial institutions to certain of the Company’s vendors. The issuing financial institutions of those banker’s acceptance notes require the Company to deposit and pledge certain percentage of the amount stipulated under those banker’s acceptance notes as collateral. The pledged deposits are released to the Company as part of the payment toward banker’s acceptance notes upon maturity. | |||||||||||||||||
Marketable Debt and Equity Securities, Available for Sale | |||||||||||||||||
The Company accounts for marketable debt and equity securities, available for sale, in accordance with sub-topic 320-10 of the FASB Accounting Standards Codification (“Sub-topic 320-10”). | |||||||||||||||||
Pursuant to Paragraph 320-10-35-1, investments in debt securities that are classified as available for sale and equity securities that have readily determinable fair values that are classified as available for sale shall be measured subsequently at fair value in the consolidated balance sheets at each balance sheet date. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized except an available-for-sale security that is designated as being hedged in a fair value hedge, from which all or a portion of the unrealized holding gain and loss of shall be recognized in earnings during the period of the hedge, pursuant to paragraphs 815-25-35-1 through 815-25-35-4. | |||||||||||||||||
The Company follows Paragraphs 320-10-35-17 through 34E and assess whether an investment is impaired in each reporting period. An investment is impaired if the fair value of the investment is less than its cost. Impairment indicators include, but are not limited to the following: a. a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; b. a significant adverse change in the regulatory, economic, or technological environment of the investee; c. a significant adverse change in the general market condition of either the geographic area or the industry in | |||||||||||||||||
which the investee operates; d. a bona fide offer to purchase (whether solicited or unsolicited), an offer by the investee to sell, or a completed auction process for the same or similar security for an amount less than the cost of the investment; e. factors that raise significant concerns about the investee's ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. If the fair value of an investment is less than its cost basis at the balance sheet date of the reporting period for which impairment is assessed, the impairment is either temporary or other than temporary. Pursuant to Paragraph 320-10-35-34, if it is determined that the impairment is other than temporary, then an impairment loss shall be recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The measurement of the impairment shall not include partial recoveries after the balance sheet date. The fair value of the investment would then become the new basis of the investment and shall not be adjusted for subsequent recoveries in fair value. For presentation purpose, the entity shall recognize and present the total other-than-temporary impairment in the statement of earnings with an offset for the amount of the total other-than-temporary impairment that is recognized in other comprehensive income, in accordance with paragraph 320-10-35-34D, if any, pursuant to Paragraph 320- 10-45-8A; and separately present, in the financial statement in which the components of accumulated other comprehensive income are reported, amounts recognized therein related to held-to-maturity and available-for-sale debt securities for which a portion of an other-than-temporary impairment has been recognized in earnings pursuant to Paragraph 320-10-45-9A. Pursuant to Paragraphs 320-10-35-36 and 37 the entire change in the fair value of foreign-currency-denominated available- for-sale debt securities shall be reported in other comprehensive income and An entity holding a foreign-currency- denominated available-for-sale debt security is required to consider, among other things, changes in market interest rates and foreign exchange rates since acquisition in determining whether an other-than-temporary impairment has occurred. | |||||||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | |||||||||||||||||
Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the FASB Accounting Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions. | |||||||||||||||||
Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification and determine when receivables are past due or delinquent based on how recently payments have been received. | |||||||||||||||||
Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses, if any. | |||||||||||||||||
The Company does not have any off-balance-sheet credit exposure to its customers. | |||||||||||||||||
Advance on Purchases | |||||||||||||||||
Advance on purchases primarily represent amounts paid to vendors for future delivery of products, which are fully or partially refundable depending upon the terms and conditions of the purchase agreements. | |||||||||||||||||
Inventories | |||||||||||||||||
InventoryValuation | |||||||||||||||||
The Company values inventories, consisting of raw materials, consumables, packaging material, finished goods, and purchased merchandise for resale, at the lower of cost or market. Cost is determined on the first-in and first-out (“FIFO”) method for raw materials and packaging materials and the weighted average cost method for finished goods. Cost of finished goods comprises direct labor, direct materials, direct production cost and an allocated portion of production overhead. The Company reduces inventories for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market value. Factors utilized in the determination of estimated market value include (i) current sales data and historical return rates, (ii) estimates of future demand, (iii) competitive pricing pressures, (iv) new product introductions, (v) product expiration dates, and (vi) component and packaging obsolescence. | |||||||||||||||||
Normal Capacity and Period Costs of Underutilized or Idle Capacity of the Production Facilities | |||||||||||||||||
The Company follows paragraph 330-10-30-3 of the FASB Accounting Standards Codification for the allocation of production costs and charges to inventories. The Company allocates fixed production overhead to inventories based on the normal capacity of the production facilities expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. Judgment is required to determine when a production level is abnormally low (that is, outside the range of expected variation in production). Factors that might be anticipated to cause an abnormally low production level include significantly reduced demand, labor and materials shortages, and unplanned facility or equipment down time. The actual level of production may be used if it approximates normal capacity. In periods of abnormally high production, the amount of fixed overhead allocated to each unit of production is decreased so that inventories are not measured above cost. The amount of fixed overhead allocated to each unit of production is not increased as a consequence of abnormally low production or idle plant and unallocated overheads of underutilized or idle capacity of the production facilities are recognized as period costs in the period in which they are incurred rather than as a portion of the inventory cost. | |||||||||||||||||
Inventory Obsolescence and Markdowns | |||||||||||||||||
The Company evaluates its current level of inventories considering historical sales and other factors and, based on this evaluation, classify inventory markdowns in the income statement as a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting Standards Codification to adjust inventories to net realizable value. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. Other significant estimates include the allocation of variable and fixed production overheads. While variable production overheads are allocated to each unit of production on the basis of actual use of production facilities, the allocation of fixed production overhead to the costs of conversion is based on the normal capacity of the Company’s production facilities, and recognizes abnormal idle facility expenses as current period charges. Certain costs, including categories of indirect materials, indirect labor and other indirect manufacturing costs which are included in the overhead pools are estimated. The management of the Company determines its normal capacity based upon the amount of operating hours of the manufacturing machinery and equipment in a reporting period. | |||||||||||||||||
Property, Plant and Equipment | |||||||||||||||||
Property, plant and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property, plant and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives ranging from five (5) years to twenty (20) years. Upon sale or retirement of property, plant and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of income and comprehensive income. Leasehold improvements, if any, are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts. | |||||||||||||||||
Leasehold improvements | |||||||||||||||||
Leasehold improvements, if any, are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts. | |||||||||||||||||
Construction in Progress | |||||||||||||||||
Construction in progress represents direct costs of construction or the acquisition cost of long-lived assets. Under U.S. GAAP, all costs associated with construction of long-lived assets should be reflected as long-term as part of construction-in- progress. Capitalization of these costs ceases and the construction in progress is transferred to property, plant and equipment when substantially all of the activities necessary to prepare the long-lived assets for their intended use are completed. No depreciation is provided until the construction of the long-lived assets is complete and ready for their intended use. | |||||||||||||||||
Land Use Rights | |||||||||||||||||
Land use rights represent the cost to obtain the right to use certain parcels of land in the City of Lianyungang, Jiangsu Province, PRC. Land use rights are carried at cost and amortized on a straight-line basis over the lives of the rights of fifty (50) years. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts. | |||||||||||||||||
Banker’s Acceptance Notes Payable | |||||||||||||||||
The Company satisfies certain accounts payable, through the issuance of banker’s acceptance notes issued by financial institutions to certain of the Company’s vendors. These notes are usually of a short term nature, three (3) to six (6) months in length. They are non-interest bearing, are due upon maturity, and are paid by the Company’s banks directly to the vendors upon presentation on the date of maturity and the Company is obliged to repay the note in full to the financial institutions. In the event of insufficient funds to repay these notes, the Company's bank will convert them to loans on demand with interest at a predetermined rate per annum payable monthly. | |||||||||||||||||
Customer Deposits | |||||||||||||||||
Customer deposits primarily represent amounts received from customers for future delivery of products, which are fully or partially refundable depending upon the terms and conditions of the sales agreements. | |||||||||||||||||
Leases | |||||||||||||||||
Lease agreements are evaluated to determine whether they are capital leases or operating leases in accordance with paragraph 840-10-25-1 of the FASB Accounting Standards Codification (“Paragraph 840-10-25-1”). When substantially all of the risks and benefits of property ownership have been transferred to the Company, as determined by the test criteria in Paragraph 840-10-25-1, the lease then qualifies as a capital lease. Capital lease assets are depreciated on a straight line method, over the capital lease assets estimated useful lives consistent with the Company’s normal depreciation policy for tangible fixed assets. Interest charges are expensed over the period of the lease in relation to the carrying value of the capital lease obligation. | |||||||||||||||||
Rent expense for operating leases, which may include free rent or fixed escalation amounts in addition to minimum lease payments, is recognized on a straight-line basis over the duration of each lease term. | |||||||||||||||||
Derivative Instruments and Hedging Activities | |||||||||||||||||
The Company accounts for derivative instruments and hedging activities in accordance with paragraph 810-10-05-4 of the FASB Accounting Standards Codification (“Paragraph 810-10-05-4”). Paragraph 810-10-05-4 requires companies to recognize all derivative instruments as either assets or liabilities in the balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends upon: (i) whether the derivative has been designated and qualifies as part of a hedging relationship, and (ii) the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument based upon the exposure being hedged as either a fair value hedge, cash flow hedge or hedge of a net investment in a foreign operation. | |||||||||||||||||
From time to time, the Company employs foreign currency forward contracts to convert unforeseeable foreign currency exchange rates to fixed foreign currency exchange rates. The Company does not use derivatives for speculation or trading purposes. Changes in the fair value of derivatives are recorded each period in current earnings or through other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction. The ineffective portion of all hedges is recognized in current earnings. The Company has sales and purchase commitments denominated in foreign currencies. Foreign currency forward contracts are used to hedge against the risk of change in the fair value of these commitments attributable to fluctuations in exchange rates (“Fair Value Hedges”). Changes in the fair value of the derivative instrument are generally offset in the income statement by changes in the fair value of the item being hedged. | |||||||||||||||||
The Company did not employ foreign currency forward contracts to convert unforeseeable foreign currency exchange rates to fixed foreign currency exchange rates for the reporting period ended December 31, 2014 or 2013. | |||||||||||||||||
Derivative Liabilities | |||||||||||||||||
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a Lattice model, in accordance with ASC 815-15 “Derivative and Hedging” to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. | |||||||||||||||||
Related Parties | |||||||||||||||||
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. | |||||||||||||||||
Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. | |||||||||||||||||
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. | |||||||||||||||||
Commitment and Contingencies | |||||||||||||||||
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. | |||||||||||||||||
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. | |||||||||||||||||
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, an (iv) collectability is reasonably assured. | |||||||||||||||||
The Company derives its revenues from sales contracts with customers with revenues being generated upon the shipment of merchandise. Persuasive evidence of an arrangement is demonstrated via sales invoice or contract; product delivery is evidenced by warehouse shipping log as well as a signed bill of lading from the vessel or rail company and title transfers upon shipment, based on free on board (“FOB”) warehouse terms; the sales price to the customer is fixed upon acceptance of the signed purchase order or contract and there is no separate sales rebate, discount, or volume incentive. When the Company recognizes revenue, no provisions are made for returns because, historically, there have been very few sales returns and adjustments that have impacted the ultimate collection of revenues. | |||||||||||||||||
Net sales of products represent the invoiced value of goods, net of value added taxes (“VAT”). The Company is subject to VAT which is levied on the majority of the Company’s products at the rate of 13% on the invoiced value of sales prior to December 31, 2008 and 17% on the invoiced value of sales as of January 1, 2009 and forward. Sales or Output VAT is borne by customers in addition to the invoiced value of sales and Purchase or Input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales. | |||||||||||||||||
Shipping and Handling Costs | |||||||||||||||||
The Company accounts for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of goods sold as incurred. | |||||||||||||||||
Advertising | |||||||||||||||||
The Company expenses advertising costs as incurred. Advertising is included in selling expenses for financial reporting. The Company spent $140,318 and $5,478 for the years ended December 31, 2014 and 2013, respectively, on advertising expenses. | |||||||||||||||||
Foreign Currency Transactions | |||||||||||||||||
The Company applies the guidelines as set out in Section 830-20-35 of the FASB Accounting Standards Codification (“Section 830-20-35”) for foreign currency transactions. Pursuant to Section 830-20-35 of the FASB Accounting Standards Codification, foreign currency transactions are transactions denominated in currencies other than U.S. Dollar, the Company’s reporting currency or Chinese Yuan or Renminbi, the Company’s Chinese operating subsidiaries' functional currency. Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. A change in exchange rates between the functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction. That increase or decrease in expected functional currency cash flows is a foreign currency transaction gain or loss that generally shall be included in determining net income for the period in which the exchange rate changes. Likewise, a transaction gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later) realized upon settlement of a foreign currency transaction generally shall be included in determining net income for the period in which the transaction is settled. The exceptions to this requirement for inclusion in net income of transaction gains and losses pertain to certain intercompany transactions and to transactions that are designated as, and effective as, economic hedges of net investments and foreign currency commitments. Pursuant to Section 830-20-25 of the FASB Accounting Standards Codification, the following shall apply to all foreign currency transactions of an enterprise and its investees: (a) at the date the transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction shall be measured and recorded in the functional currency of the recording entity by use of the exchange rate in effect at that date as defined in section 830-10-20 of the FASB Accounting Standards Codification; and (b) at each balance sheet date, recorded balances that are denominated in currencies other than the functional currency or reporting currency of the recording entity shall be adjusted to reflect the current exchange rate. | |||||||||||||||||
Stock-Based Compensation for Obtaining Employee Services | |||||||||||||||||
The Company accounts for stock-based compensation in accordance with FASB Accounting Standards Codification (“ASC”) 718, “Compensation-Stock Compensation”. ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on the grant-date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period. | |||||||||||||||||
Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services | |||||||||||||||||
The Company accounts for stock-based compensation in accordance with the provision of ASC 505, “Equity Based Payments to Non-Employees” (“ASC 505”), Share Based Payments to Non-Employees, and ASC 505 which requires that such equity instruments are recorded at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instruments vest. | |||||||||||||||||
Investment Credit - Government | |||||||||||||||||
Certain Chinese local governments provide non-refundable investment credits to encourage enterprises to invest in local communities. Investment credits from local governments are credited to other income – investment credit – government, upon receipt. | |||||||||||||||||
Income Tax Provision | |||||||||||||||||
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Income and Comprehensive Income in the period that includes the enactment date. | |||||||||||||||||
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. | |||||||||||||||||
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. | |||||||||||||||||
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. | |||||||||||||||||
Foreign Currency Translation | |||||||||||||||||
The Company follows Section 830-10-45 of the FASB Accounting Standards Codification (“Section 830-10-45”) for foreign currency translation to translate the financial statements of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars. Section 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. Pursuant to Section 830-10-45, the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash. | |||||||||||||||||
The functional currency of each foreign subsidiary is determined based on management’s judgment and involves consideration of all relevant economic facts and circumstances affecting the subsidiary. Generally, the currency in which the subsidiary transacts a majority of its transactions, including billings, financing, payroll and other expenditures, would be considered the functional currency, but any dependency upon the parent and the nature of the subsidiary’s operations must also be considered. If a subsidiary’s functional currency is deemed to be the local currency, then any gain or loss associated with the translation of that subsidiary’s financial statements is included in accumulated other comprehensive income. However, if the functional currency is deemed to be the U.S. Dollar, then any gain or loss associated with the re-measurement of these financial statements from the local currency to the functional currency would be included in the consolidated statements of income and comprehensive income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into the consolidated statements of income and comprehensive income (loss). If the Company determines that there has been a change in the functional currency of a subsidiary to the U.S. Dollar, any translation gains or losses arising after the date of change would be included within the statement of income and comprehensive income (loss). | |||||||||||||||||
Based on an assessment of the factors discussed above, the management of the Company determined the relevant subsidiaries’ local currencies to be their respective functional currencies. | |||||||||||||||||
The financial records of the Company's Chinese operating subsidiaries are maintained in their local currency, the Renminbi (“RMB”), which is the functional currency. Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial statements. Foreign currency translation gain (loss) resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the consolidated statement of stockholders’ equity. | |||||||||||||||||
RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. Commencing July 21, 2005, China adopted a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies. The exchange rate of the US dollar against the RMB was adjusted from approximately RMB 8.28 per U.S. dollar to approximately RMB 8.11 per U.S. dollar on July 21, 2005. Since then, the PBOC administers and regulates the exchange rate of the U.S. dollar against the RMB taking into account demand and supply of RMB, as well as domestic and foreign economic and financial conditions. | |||||||||||||||||
Unless otherwise noted, the rate presented below per U.S. $1.00 was the midpoint of the interbank rate as quoted by OANDA Corporation (www.oanda.com) contained in its consolidated financial statements. Management believes that the difference between RMB vs. U.S. dollar exchange rate quoted by the PBOC and RMB vs. U.S. dollar exchange rate reported by OANDA Corporation were immaterial. Translations do not imply that the RMB amounts actually represent, or have been or could be converted into, equivalent amounts in U.S. dollars. Translation of amounts from RMB into U.S. dollars has been made at the following exchange rates for the respective periods: | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Balance sheets | 6.146 | 6.1122 | |||||||||||||||
Statements of operations and comprehensive income (loss) | 6.1457 | 6.1943 | |||||||||||||||
Comprehensive Income (Loss) | |||||||||||||||||
The Company has applied section 220-10-45 of the FASB Accounting Standards Codification. This statement establishes rules for the reporting of comprehensive income and its components. Comprehensive income (loss), for the Company, consists of net income (loss), change in unrealized loss of marketable securities and foreign currency translation adjustments and is presented in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) and Stockholders’ Equity. | |||||||||||||||||
Net Income (Loss) per Common Share | |||||||||||||||||
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options, warrants and nonvested shares. | |||||||||||||||||
For the periods presented, the computation of diluted income (loss) per share equaled basic loss per share as the inclusion of any dilutive instruments would have had an antidilutive effect on the earnings per share calculation in the periods presented. | |||||||||||||||||
Cash Flows Reporting | |||||||||||||||||
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification. | |||||||||||||||||
Subsequent Events | |||||||||||||||||
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements are issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. | |||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||
In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.” The ASU states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although “major” is not defined, the standard provides examples of when a disposal qualifies as a discontinued operation. The ASU also requires additional disclosures about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The ASU is effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years. The adoption of ASU 2014 -08 is not expected to have a material impact on the Company’s consolidated financial statements. | |||||||||||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from contracts with Customers (Topic 606)”. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchanged for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements. | |||||||||||||||||
In June 2014, the FASB issued ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period”. The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation – Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. | |||||||||||||||||
In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. The amendment in the ASU provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements | |||||||||||||||||
Reclassification | |||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current period presentation. The reclassification had no impact on net earnings and financial position. |
Note_3_Pledged_Deposits
Note 3 - Pledged Deposits | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Transfers and Servicing [Abstract] | |||||||||
Transfers and Servicing of Financial Assets [Text Block] | Note 3 – Pledged Deposits | ||||||||
Pledged deposits consist of cash held in financial institutions for (a) outstanding letters of credit, (b) open banker’s acceptance notes payable maturing between three (3) to six (6) months from the date of issuance, and (c) capital lease obligation. | |||||||||
Pledged deposits consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Deposit for bank acceptance notes payable | $ | - | $ | 1,636,072 | |||||
Deposit for letters of credit | 10,492 | 2,525,327 | |||||||
Deposit for capital lease obligation (i) | 488,123 | 490,823 | |||||||
$ | 498,615 | $ | 4,652,222 | ||||||
(i) | $488,123 is to be released to the Company as part of the payment towards capital lease installment payment when the capital lease agreement matures on December 15, 2014. | ||||||||
Note_4_Marketable_Equity_Secur
Note 4 - Marketable Equity Securities, Available for Sale | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | Note 4 – Marketable Equity Securities, Available for Sale | ||||||||||||||||||||
On June 8, 2010, China Armco Metals, Inc. (the “Company”) entered into a Subscription Agreement (the “Subscription Agreement”) with Apollo Minerals Limited (“Apollo Minerals”), an Australian iron ore exploration company listed on the Australian Securities Exchange (ASX: AON). Under the terms of the Subscription Agreement, the Company agreed to acquire up to a 19.9% stake in Apollo for $3,396,658 in cash. On July 19, 2010, Apollo Minerals issued 29,250,000 shares of its common stock to the Company. Pursuant to the Subscription Agreement, the Company received a seat on Apollo Minerals’ Board of Directors in July 2010. The board representation continues as long as the Company maintains a minimum 12% stake in Apollo Minerals. | |||||||||||||||||||||
The Company has the right to name one member to Apollo Mineral’s board of directors for as long as it maintains at least a 12% stake in Apollo Minerals. Apollo Minerals intends to use the cash infusion to advance its exploration activities, to carry out processing, option studies and to evaluate opportunities to access local infrastructure and other project opportunities. | |||||||||||||||||||||
Apollo Minerals also issued to the Company, five (5) year options to purchase an additional 5 million shares of common stock at AUD0.25 (approximately $0.20) per share, half of which will vest on the first anniversary of the initial issuance with the balance vesting on the second anniversary of the initial issuance. The options may only be exercised in order for the Company to maintain its 19.9% stake should Apollo Minerals issue additional common shares in the future. | |||||||||||||||||||||
The Company’s available for sale securities are carried at fair value with resulting unrealized gains and losses reported as a component of accumulated other comprehensive income (loss). | |||||||||||||||||||||
As of December 31, 2013, the Company’s available for sale marketable securities were marked to market to its fair value of $519,129 and the Company reported a $694,512 change in unrealized loss on marketable securities as other comprehensive income (loss) in its Stockholders’ Equity. | |||||||||||||||||||||
The Company sold 20,183,956 shares during the year of 2014 for $316,048, with a realized loss on sales $394,565. As of December 31, 2014, the Company’s available for sale marketable securities were marked to market to its fair value of $73,943 and the Company reported a $265,370 change in unrealized loss on marketable securities as other comprehensive income (loss) in its Stockholders’ Equity. | |||||||||||||||||||||
The table below provides a summary of the changes in the fair value of marketable securities, available for sale measured at fair value on a recurring basis using Level 1 of the fair value hierarchy to measure the fair value. | |||||||||||||||||||||
Fair Value Measurement Using Level 1 Inputs | |||||||||||||||||||||
Original | Impairment- | Accumulated | Other | Fair Value | |||||||||||||||||
cost | other than | Foreign Currency | Comprehensive | ||||||||||||||||||
Temporary | Transaction- | Income (loss)- | |||||||||||||||||||
Gain (loss) | Change in | ||||||||||||||||||||
Unrealized gain (loss) | |||||||||||||||||||||
Balance as of December 31, 2012 | $ | 3,396,658 | $ | (2,366,941 | ) | $ | 183,924 | $ | - | $ | 1,213,641 | ||||||||||
Total gain or losses (realized/unrealized) included in: | |||||||||||||||||||||
Other comprehensive income (loss): Changes in unrealized gain (loss) | (694,512 | ) | (694,512 | ) | |||||||||||||||||
Balance as of December 31, 2013 | 3,396,658 | (2,366,941 | ) | 183,924 | (694,512 | ) | 519,129 | ||||||||||||||
Sales of the securities | (710,556 | ) | (710,556 | ) | |||||||||||||||||
Total gain or losses (realized/unrealized) included in: | |||||||||||||||||||||
Other comprehensive income (loss): Changes in unrealized gain (loss) | 265,370 | 265,370 | |||||||||||||||||||
Balance as of December 31, 2014 | $ | 2,686,102 | $ | (2,366,941 | ) | $ | 183,924 | $ | (429,142 | ) | $ | 73,943 | |||||||||
Note_5_Accounts_Receivable
Note 5 - Accounts Receivable | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Receivables [Abstract] | |||||||||||||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 5 – Accounts Receivable | ||||||||||||||||
Accounts receivable consisted of the following: | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Accounts receivable | $ | 43,257,621 | $ | 25,638,666 | |||||||||||||
Allowance for doubtful accounts | (54,735 | ) | (43,150 | ) | |||||||||||||
$ | 43,202,886 | $ | 25,595,516 | ||||||||||||||
Movement of allowance for doubtful accounts is as follows: | |||||||||||||||||
Balance at | Balance at | ||||||||||||||||
beginning of | Charged during | end of the | |||||||||||||||
the year | the year | Written-off | year | ||||||||||||||
2013 | $ | 43,150 | $ | - | $ | - | $ | 43,150 | |||||||||
2014 | $ | 43,150 | $ | 11,585 | $ | - | $ | 54,735 | |||||||||
Note_6_Inventories
Note 6 - Inventories | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventory Disclosure [Text Block] | Note 6 - Inventories | ||||||||
Inventories consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials - Scrap metal | $ | 2,602,983 | $ | 4,390,811 | |||||
Finished goods - processed scrap metal | 7,684,154 | 12,421,088 | |||||||
Purchased merchandise for resale | 697,217 | 5,936,936 | |||||||
Write-down of inventories | (1,829,891 | ) | (2,291,915 | ) | |||||
$ | 9,154,463 | $ | 20,456,920 | ||||||
Renewable Metals raw materials and finished goods are collateralized for loans from the Bank of Communications Limited Lianyungang Branch. Raw materials consisted of scrap metals to be processed and finished goods were comprised of all of the processed scrap metal at Renewable Metals. Due to the short duration time for the processing of its scrap metal, there was no material work-in-process inventory at December 31, 2014 or December 31, 2013. | |||||||||
Slow-Moving or Obsolescence Markdowns | |||||||||
The Company recorded no inventory obsolescence adjustments for the year ended December 31, 2014 or 2013. | |||||||||
Lower of Cost or Market Adjustments | |||||||||
There were $1,829,891 and $2,291,915 of lower of cost or market adjustments for the years ended December 31, 2014 and 2013, respectively. |
Note_7_Property_Plant_and_Equi
Note 7 - Property, Plant and Equipment | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||
Property, Plant and Equipment Disclosure [Text Block] | Note 7 – Property, Plant and Equipment | ||||||||||||
Property, plant and equipment, stated at cost, less accumulated depreciation consisted of the following: | |||||||||||||
Estimated Useful | December 31, | December 31, | |||||||||||
Life (Years) | 2014 | 2013 | |||||||||||
Buildings and leasehold improvements (i) | 20 | $ | 24,969,460 | $ | 25,054,912 | ||||||||
Construction in progress | 4,680,989 | 4,706,875 | |||||||||||
Machinery and equipment | 7 | 12,519,116 | 12,588,003 | ||||||||||
Vehicles | 5 | 2,144,680 | 2,152,379 | ||||||||||
Office equipment | 8-May | 347,877 | 354,442 | ||||||||||
44,662,122 | 44,856,611 | ||||||||||||
Less accumulated depreciation (ii) | (12,098,193 | ) | (9,360,933 | ) | |||||||||
$ | 32,563,929 | $ | 35,495,678 | ||||||||||
(i) | CapitalizedInterest | ||||||||||||
The Company did not capitalize any of interest to fixed assets for the year ended December 31, 2014 or 2013. | |||||||||||||
(ii) | DepreciationandAmortizationExpense | ||||||||||||
Depreciation expense was $2,800,253 and $2,847,606 for the years ended December 31, 2014 and 2013, respectively. | |||||||||||||
(iii) | CollateralizationofProperty,PlantandEquipment | ||||||||||||
Both Renewable Metals and Lianyungang Armco’s property, plant and equipment representing substantially all of the Company’s property, plant and equipment are collateralized for loans from the Bank of China Lianyungang Branch. | |||||||||||||
(iv) | Impairment | ||||||||||||
The Company completed the annual impairment test of property, plant and equipment and determined that there was no impairment as the future undiscounted net cash flows of the property, plant and equipment exceeded their carrying values at December 31, 2014. |
Note_8_Land_Use_Rights
Note 8 - Land Use Rights | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Intangible Assets Disclosure [Text Block] | Note 8 – Land Use Rights | ||||||||
Renewable Metals | |||||||||
On September 28, 2007, Renewable Metals entered into an agreement with the Chinese government, whereby the Company paid RMB 14,384,002 to acquire the right to use 129,585.60 square meters of land for approximate 50 years. In November 2007, the Company expended additional RMB 1,076,300 in aggregate in land survey, transfer agent fees and land use right transfer tax in connection with the acquisition of the land use right and obtained the land use right certificate (Certificate No. 017158277) expiring December 30, 2058 on November 20, 2007. The purchase price and related acquisition costs are being amortized over the term of the right of approximately fifty (50) years. | |||||||||
Lianyungang Armco | |||||||||
On September 2, 2010, the Company entered into an agreement with the Chinese government, whereby the Company made a deposit of RMB 8,160,000 in aggregate towards the acquisition of the right to use 199,999 square meters of land for RMB 40,800,000. On April 13, 2011, the Company paid an additional RMB16,320,000 to acquire the temporary land use right to use 100,045 square meters of land and obtained the related certificate of the land use right (Certificate No. (L) LUR (2011) Y003218) expiring September 9, 2060. On October 25, 2011 and on July 19, 2012, the Company acquired the formal land certificate of the land use right (Certificate No.: (L) LUR (2012) LY 002394). The Company expended an additional RMB 900,067 in aggregate in land survey, transfer agent fees and land use right transfer tax in connection with the acquisition of the land use right. In addition, Lianyungang Armco expended an additional RMB 20, 674,830 to level the land as of December 31, 2011. The purchase price and related acquisition costs shall be amortized over the term of the right of approximately fifty (50) years when the land is ready to be used in the intended purpose. | |||||||||
The short term plan for this parcel of land is for warehouse of raw materials and products when Renewable Metals’ space becomes scarce for future expansion and the long term plan for the land is to construct automobile dismantling production line or build a scrap metal trading market center, depending on the Company’s progress on obtaining necessary license and permits and market conditions. | |||||||||
Land use rights, stated at cost, less accumulated amortization consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Land use right | $ | 6,645,033 | $ | 6,681,779 | |||||
Accumulated amortization (i) | (536,750 | ) | (416,478 | ) | |||||
$ | 6,108,283 | $ | 6,265,301 | ||||||
(i) | AmortizationExpense | ||||||||
Amortization expense was $122,821 and $145,499 for the years ended December 31, 2014 and 2013, respectively. | |||||||||
(ii) | Collateralization of Land Use Rights | ||||||||
Both Renewable Metals and Lianyungang Armco’s land use rights representing all of the Company’s land use rights were collateralized for bank loans of RMB 50,000,000 (approximately $8,135,373) with the Bank of China Lianyungang Branch. On December 25, 2014, China Orient Asset Management Corporation, an organization authorized by the People’s Bank of China to dispose of bad assets from banks, mainly from Bank of China, transferred the loan to Lianyungang Chaoyang Investment Construction Development Co., Ltd, and the related collateral was released as of December 31, 2014. |
Note_9_Loans_Payable
Note 9 - Loans Payable | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Loans Payable [Abstract] | |||||||||
Loans Payable [Text Block] | Note 9 – Loans Payable | ||||||||
Loans payable consisted of the following as of December 31, 2014 and 2013: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Bank loans – secured (i) | $ | 2,485,649 | $ | 16,169,543 | |||||
Third party loans (ii) | 14,347,694 | 10,782,386 | |||||||
Convertible notes payable (iii) | 178,500 | 463,709 | |||||||
$ | 17,011,843 | $ | 27,415,638 | ||||||
(i)Bank loans | |||||||||
The Company obtained the short term loans from RZB Austria Finance (Hong Kong) Limited, DBS, Bank of Communications, Bank of China, Shanghai Pudong Development Bank, Industrial and Commercial Bank of China and Guanhutun Credit Union, respectively. Interest rates for the loans ranged from 2.47% to 9.77% per annum. The maturity dates of the loans ranged from March 16, 2015 to April 9, 2015. On March 16, 2015, the Company paid off the loans of $162,707 from Guanhutun Credit Union. | |||||||||
Corporate or personal guarantees were provided for the bank loans as follows: | |||||||||
$162,707 loans from Guanhutun Credit Union, collateralized by Henan Armco’s building and leasehold improvement; | |||||||||
$2,322,942 loans from Shanghai Pudong Development Bank, collateralized by Renewable Metals inventories and guaranteed by the Company’s Chairman and Chief Executive Officer | |||||||||
(ii)Third party loans | |||||||||
Among third party loans, $699,577 bears no interest and $13,648,119 bears interest rates ranging from 6.0% to 8.0% per annum. The maturity dates of the loans ranged from July 20, 2015 to December 31, 2015. | |||||||||
As of September 30, 2014, Armco Metals Holdings had three loans with principal amount of $550,000, $35,000 and $10,000, respectively, plus interest accrual of $39,967, in aggregate of $634,967 to Metawise Group, Inc. and its subsidiary, Draco Resources Inc, respectively. As of September 30, 2014, Armco Metals Holdings’ subsidiary, Henan Armco, prepaid Draco Resources Inc of $792,000 for commodity plan to purchase. On September 30, 2014, Armco Metals Holdings, Henan Armco, Metawise Group, Inc. and its subsidiary, Draco Resources Inc., entered into an agreement that the four parties agreed to use Henan Armco’s prepayment of $792,000 to Draco resources Inc to repay Armco Metals Holdings’ loans payable plus interest totaling $634,967 to Metawise Group, Inc., which leaving Henan Armco’s prepayment to Draco Resources Inc $157,033. The Company also had borrowing from Kelson Management Inc. for amount of $500,000 from prior year, and during the year ended December 31, 2014, the Company repaid $260,000, leaving a remaining balance of $240,000. The interest amount accrued for the loan balance was $24,575. During the fourth quarter of 2014, Draco Resources and its associated parties made advances to the Company for $3,031. Under agreements among the parties, the $157,033 prepayment outstanding as of September 30, 2014 was applied to offset with the Kelson note and accrued interest, and the advances from Draco and its associated parties. As of the December 31, 2014, the outstanding balance for loan payable to Kelson Management Inc. was $110,573. | |||||||||
(iii)Convertible notes payable | |||||||||
During 2013, the Company’s subsidiary borrowed an aggregate of approximately RMB 32.9 million from 15 non-U.S. lenders who are not its affiliates under the terms of loan contracts. In January and February 2014, the Company and its subsidiary entered into note exchange agreements with each of these lenders pursuant to which the Company exchanged the loan contracts for 8% convertible notes in the aggregate amount of RMB 33,927,240 (approximately $5.5 million net of discount of $1.3 million), which represented the remaining principal balance due under the loan contracts. The convertible notes bear interest at the rate of 8% per annum, mature nine months from the date of issuance, and are convertible at any time at the option of the holder into shares of the Company’s common stock at a conversion price of $3.17 per share. All the notes were converted on April 7, 2014. | |||||||||
The Company analyzed the modification of the term under ASC 470-60 “Trouble Debt Restructurings” and ASC 470-50 “Extinguishment of Debt”. The Company determined the modification is substantial and the transaction should be accounted for as an extinguishment with the old debt written off and the new debt initially recorded at fair value with a new effective interest rate. The Company also determined that the fair value of the new debt is the same as the fair value of the old debt. Thus no gain or loss was recognized upon the extinguishment. | |||||||||
See Note 13 for all other convertible debt occurred during the year ended December 31, 2014. |
Note_10_Bankers_Acceptance_Not
Note 10 - Banker's Acceptance Notes Payable and Letters of Credit | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Short-term Debt [Text Block] | Note 10 – Banker’s Acceptance Notes Payable and Letters of Credit | ||||||||
Banker’s acceptance notes payable consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Renewable Metals | |||||||||
Banker’s acceptance notes payable maturing on March 27, 2014 | $ | - | $ | 3,272,144 | |||||
Letters of credit maturing on August 2, 2015 | 1,767,790 | 5,201,073 | |||||||
$ | 1,767,790 | $ | 8,473,217 | ||||||
Note_11_Related_Party_Transact
Note 11 - Related Party Transactions | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Related Party Transactions Disclosure [Text Block] | Note 11 – Related Party Transactions | ||||||||
The related parties consist of the following: | |||||||||
Kexuan Yao | The Company’s Chairman, Chief Executive Officer and principal stockholder | ||||||||
Keli Yao | Kexuan Yao’s brother | ||||||||
Yi Chu | Kexuan Yao’s wife | ||||||||
Advances from Chairman and CEO | |||||||||
From time to time, Mr. Yao advances funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and due on demand. As of December 31, 2014 and 2013, the advance balance was $877,076 and $668,332, respectively. | |||||||||
Promissory Note from Chairman and CEO | |||||||||
On March 29, 2013, the Company executed a promissory note in the amount of RMB 6,300,000 (approximately $1,000,000) payable to Mr. Yao. The note, which is due one year from the date of issuance, accrues interest at 8% per annum. The proceeds are used for working capital purposes. The note was subsequently converted into shares of common stock of the Company on October 28, 2013. See more details in Note 15. | |||||||||
Operating Lease from Chairman and CEO | |||||||||
On January 1, 2006, Henan entered into a non-cancellable operating lease for its 176.37 square meters commercial office space in the City of Zhengzhou, Henan Province, PRC from Mr. Yao for RMB 10, 000 per month. The lease expired on December 31, 2008 and has been extended through December 31, 2015. Rental expense incurred for the years ended December 31, 2014 and 2013 was RMB 120,000 (approximately $19,526) and RMB 120,000 (approximately $19,300), respectively. As of December 31, 2015, future minimum lease commitment required under the related party lease is RMB 120,000 (approximately $19,525) in year 2015. | |||||||||
Due to Other Related Parties | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Keli Yao | $ | - | $ | 116,828 | |||||
Yi Chu | 717,703 | 286,313 | |||||||
Total | $ | 717,703 | $ | 403,141 | |||||
The balance due to related party represents the loan owed to the related parties, which is interest free, unsecured and repayable on demand. |
Note_12_Capital_Lease_Obligati
Note 12 - Capital Lease Obligation | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Leases, Capital [Abstract] | |||||||||
Capital Leases in Financial Statements of Lessee Disclosure [Text Block] | Note 12 – Capital Lease Obligation | ||||||||
Capital lease obligation consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Total capital lease obligation | $ | 720,819 | $ | 904,990 | |||||
Less current maturities | (720,819 | ) | (904,990 | ) | |||||
Total Capital lease obligation, net of current maturities | $ | - | $ | - | |||||
On December 12, 2011, the Company entered into a leasing agreement with China Financial Leasing Co., Ltd., for a term of three years and an interest rate of 11.0% per annum, payable quarterly in arrears. The lease agreement is collateralized by certain of Renewable Metals' machinery and equipment. The leasing agreement was amended on September 15, 2012 to change the interest rate to 10.17% per annum. The capital lease obligation obtained by the Company is RMB 37,500,000 (approximately $5,935,517) and the Company is required to maintain a security deposit of RMB 3,000,000 (approximately $488,122). The leasing agreement expired on December 15, 2014. There was no extra interest charged for the overdue capital lease obligation of $560,988. | |||||||||
On November 18, 2010, the Company entered into a leasing agreement with Jiangsu Financial Leasing Co., Ltd., for a term of three years and an interest rate of 11.8% per annum, payable monthly in arrears. The lease agreement is collateralized by certain of Renewable Metals' machinery and equipment. The leasing agreement was amended on September 17, 2013 to change the lease term to 46 months and the monthly payment was adjusted. The capital lease obligation obtained by the Company is RMB 15,000,000 (approximately $2,261,284). The leasing agreement expired on September 23, 2014. There was no extra interest charged for the overdue capital lease obligation of $159,831. |
Note_13_Derivative_Instruments
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Disclosure Text Block [Abstract] | ||||||||||||||||||||||||||||
Derivatives and Fair Value [Text Block] | Note 13– Derivative Instruments and the Fair Value of Financial Instruments | |||||||||||||||||||||||||||
(i) | Warrants Issued in April 2010 (“2010 Warrants) | |||||||||||||||||||||||||||
Description of Warrants | ||||||||||||||||||||||||||||
In connection with the sale of 153,847 shares of its common stock at $65.0 per share or $10,000,016 in gross proceeds to nine (9) accredited and institutional investors on April 20, 2010, the Company issued warrants to purchase an additional 153,846 shares of its common stock with an exercise price of $75.0 per share (“2010 Warrants”) expiring five (5) years from date of grant exercisable commencing 181 days following the date of issuance. At the closing of the private offering, the Company paid Rodman & Renshaw, LLC, a FINRA member firm that served as placement agent for the Company in the offering, (i) a fee of $500,000 as compensation for their services and (ii) a warrant to purchase 7,692 shares of the Company’s common stock with an exercise price of $75.0 per share expiring five (5) years from date of grant exercisable commencing 181 days following the date of issuance, as well as a $15,000 non-accountable expense allowance to one of the nine (9) investors in the offering. | ||||||||||||||||||||||||||||
Derivative Analysis | ||||||||||||||||||||||||||||
Since the Asher and Hanover notes bear derivative feature, as discussed below, the warrants were tainted under ASC 815-15 “Derivatives and Hedging”. The tainting terminated upon full conversion of the Asher and Hanover notes. As of December 31, 2014, there was no derivative liability associated with the warrants. | ||||||||||||||||||||||||||||
2010 Warrants Outstanding | ||||||||||||||||||||||||||||
As of December 31, 2014, 2010 warrants to purchase 161,539 shares of its common stock remain outstanding. | ||||||||||||||||||||||||||||
The table below summarizes the Company’s 2010 non-derivative warrant activities through December 31, 2014: | ||||||||||||||||||||||||||||
Number of Warrant Shares | Exercise Price Range Per Share | Weighted Average Exercise Price | Fair Value at Date of Issuance | Aggregate Intrinsic Value | ||||||||||||||||||||||||
Balance, December 31, 2012 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Granted | - | - | - | - | - | |||||||||||||||||||||||
Canceled for cashless exercise | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised (Cashless) | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised | (- | ) | - | - | - | - | ||||||||||||||||||||||
Expired | - | - | - | - | - | |||||||||||||||||||||||
Balance, December 31, 2013 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Granted | - | - | - | - | - | |||||||||||||||||||||||
Canceled for cashless exercise | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised (Cashless) | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised | (- | ) | - | - | - | - | ||||||||||||||||||||||
Expired | (- | ) | - | - | - | - | ||||||||||||||||||||||
Balance, December 31, 2014 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Earned and exercisable, December 31, 2014 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Unvested, December 31, 2014 | - | - | - | - | - | |||||||||||||||||||||||
The following table summarizes information concerning outstanding and exercisable 2010 warrants as of December 31, 2014: | ||||||||||||||||||||||||||||
Warrants | Warrants | |||||||||||||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||||||||||||
Range of | Number | Weighted | Number | Average Remaining | Weighted | |||||||||||||||||||||||
Exercise Prices | Outstanding | Average | Average Exercise Price | Exercisable | Contractual Life | Average Exercise Price | ||||||||||||||||||||||
Remaining Contractual Life | (in years) | |||||||||||||||||||||||||||
(in years) | ||||||||||||||||||||||||||||
$ | 75 | 161,539 | 0.3 | $ | 75 | 161,539 | 0.3 | $ | 75 | |||||||||||||||||||
$ | 75 | 161,539 | 0.3 | $ | 75 | 161,539 | 0.3 | $ | 75 | |||||||||||||||||||
(ii) | Convertible Note | |||||||||||||||||||||||||||
On November 8, 2013, the Company signed a purchase agreement with Hanover Holdings I, LLC, a New York limited liability company, or Hanover, with an initial principal amount of $450,000, or the Initial Convertible Note, for a purchase price of $300,000. The outstanding principal of initial note is subject to filing date reduction and effective date reduction. Filing date reduction will reduce the outstanding principal of initial note by $50,000 if the Company files the S-1registration statement per the purchase agreement within 45 days of the note date. The Company failed to meet this filing date reduction term, and accordingly, the initial principal amount was not reduced by the $50,000. Effective date reduction will reduce the outstanding principal of the initial note by another $100,000 if the S-1 registration statement takes effective within 120 days of the note date. On December 26, 2013, the Company filed an S-1 registration statement pursuant to the purchase agreement which was effective on February 14, 2014. Thus, we successfully met the effective date reduction term. As a result, the principal amount of the note was reduced to $350,000 of which $50,000 was recorded as accrued liabilities as of December 31, 2013. Additionally, the Company has the right to require Hanover to purchase, on the 10th trading day after the effective date of the Registration Statement, or the Additional Closing Date, an additional senior convertible note with an initial principal amount of $500,000, or the Additional Convertible Note, for a purchase price of $500,000. The Initial Convertible Note matures on November 8, 2014 (subject to extension as provided in the Initial Convertible Note) and accrues interest at the rate of 4.0% per annum. On March 3, 2014, the Additional Convertible Note was issued and it will mature on the date that is the one-year anniversary of the date of issuance of the Additional Convertible Note (subject to extension as provided in the Initial Convertible Note) and will accrue interest at the rate of 4.0% per annum. The Initial Convertible Note and the Additional Convertible Note are convertible at any time, in whole or in part, at Hanover’s option, into shares of common stock, at a conversion price equal to the Variable Conversion Price. “Variable Conversion Price” means, as of any date of determination, the product of (A) the lowest volume weighted average price of the common stock of any of the five consecutive trading days ending and including the trading day immediately preceding such date of determination (subject to adjustment) , or the Variable Conversion Base Price; and (B) the applicable Variable Percentage. “Variable Percentage” means (i) if the applicable Variable Conversion Base Price is less than or equal to $4.5 (subject to adjustment), 85% or (ii) if the applicable Variable Conversion Base Price is greater than $4.5 (subject to adjustment), 80%. | ||||||||||||||||||||||||||||
On September 23, 2013 and December 10, 2013, the Company issued Notes (“Asher Notes”) to Asher Enterprises, Inc. (the “Holder”) which are convertible in 180 days (at which time they will require derivative treatment), in the amounts of $153,500 (1st tranche included no deferred financing cost or legal fees) and $63,000 (2nd tranche included no deferred financing cost or legal fees) (the “Convertible Note” or the “Note”). The 9/23/13 and 12/10/13 Asher Convertible Notes are convertible at 58% of the average 3 lowest closing bid prices for the last 10 trading days and contains a full ratchet reset. The holders have the right after 180 days following the Date of Issuance (on 3/22/14 the 9/23/13 note became convertible, and on 6/8/14 the 12/10/13 note became convertible), and until any time until the Convertible Note is fully paid, to convert any outstanding and unpaid principal portion of the Convertible Note, and accrued interest, into fully paid and non-assessable shares of Common Stock. The Holder was not issued warrants with the Convertible Note. The Convertible Note: (a) bears interest at 8% per annum; (b) the principal and accrued interest is due and payable on 6/25/14 and 9/12/14; (c) is convertible optionally by the Holder at any time after 180 days; (d) bears 22% interest on default with a 150% payment penalty under specific default provisions; (e) redeemable at 115% through 140% for days 0-180; (f) and is subject to dilutive adjustments for share issuances (full ratchet reset feature). The Company analyzed the conversion option of all the convertible notes for derivative accounting consideration under ASC 815-15 “Derivative and Hedging” and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The embedded conversion feature was measured at fair value at the date of inception and at the end of each reporting period or termination of the instrument with the change in fair value recorded to earnings. | ||||||||||||||||||||||||||||
On January 13, 2014, the Company issued convertible notes for a total of $2,472,127 to four foreign investors. The notes will mature on October 13, 2014. On February 4, 2014, the Company issued convertible notes for a total of $3,082,340 to another eleven foreign investors. The notes will mature on October 31, 2014. All these notes bear interest at 8% per annum, and convertible optionally by the holders at any time at a conversion price of $3.17. The derivative features of the Asher and Hanover Notes taint (due to the indeterminate number of shares) the convertible notes issued on January 13, and February 4, 2014. See more details in Note 9. | ||||||||||||||||||||||||||||
On August 27, 2014, the Company issued a convertible note which is convertible after 180 days from the issuance date at 58% of the average of the three lowest daily trading price of the Company’s common stock of any of the ten consecutive trading days and including the trading day immediately preceding conversion, in the amount of $100,000. The note bears an interest rate of 8% per annum, and matures on August 27, 2015. The note was still outstanding as of December 31, 2014, and the note was not convertible as of December 31, 2014. | ||||||||||||||||||||||||||||
On October 29, 2014, the Company issued a convertible note which is convertible after 180 days from the issuance date at 63% of the average of the lowest three trading prices for the common stock during the ten trading day period prior to conversion, in the amount of $78,500. The note bears an interest rate of 8% per annum, and matures on July 31, 2015. The note was still outstanding as of December 31, 2014, and the note was not convertible as of December 31, 2014. | ||||||||||||||||||||||||||||
Conversions to Common Stock | ||||||||||||||||||||||||||||
On February 27, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $25,000 plus interest of $4,628 of the note into 9,600 shares of the Company's common stock, at a conversion price of $3.08635 per share. | ||||||||||||||||||||||||||||
On March 5, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $75,000 of the note due November 1, 2014 into23, 430 shares of the Company's common stock, at a conversion price of $3.2011 per share. | ||||||||||||||||||||||||||||
On March 14, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $50,000 of the note due November 1, 2014 into 15,509 shares of the Company's common stock, at a conversion price of $3.22405 per share. | ||||||||||||||||||||||||||||
On March 24, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $50,000 of the note due November 1, 2014 into 14,535 shares of the Company's common stock, at a conversion price of $3.43995 per share. | ||||||||||||||||||||||||||||
On March 26, 2014, the Company received a conversion notice from its convertible note holder, Hanover, to convert $100,000 of the note due November 1, 2014 into 28,849 shares of the Company's common stock, at a conversion price of $3.4663 per share. | ||||||||||||||||||||||||||||
On March 28, 2014, $80,000 of principal under the Asher Note issued on September 23, 2013 was converted to 35,508 shares of the Company’s common stock. | ||||||||||||||||||||||||||||
On April 7, 2014, $73,500 of principal under Asher Note issued on September 23, 2013 and accrual interest of $6,140 was converted to 36,365 shares of the Company’s common stock and the remaining principal balance under the note is $0. | ||||||||||||||||||||||||||||
On April 7, 2014, the Company received conversion notices from its 15 foreign convertible notes holders to convert $5,554,468 of the note into 1,752,198 shares of the Company's common stock, at a conversion price of $ 3.17 per share. | ||||||||||||||||||||||||||||
On April 16, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $100,000 of the note and accrual interest of $1,525 into 37,443 shares of the Company's common stock, at a conversion price of $ 2.7115 per share. | ||||||||||||||||||||||||||||
On May 7, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $25,000 of the note and accrual interest of $278 into 10,576 shares of the Company's common stock, at a conversion price of $ 2.3902 per share. | ||||||||||||||||||||||||||||
On May 14, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $25,000 of the note and accrual interest of $78 into 10,992 shares of the Company's common stock, at a conversion price of $ 2.2814 per share. | ||||||||||||||||||||||||||||
On May 22, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $25,000 of the note and accrual interest of $58 into 13,431 shares of the Company's common stock, at a conversion price of $1.86575 per share. | ||||||||||||||||||||||||||||
On May 30, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $25,000 of the note and accrual interest of $44 into 13,572 shares of the Company's common stock, at a conversion price of $ 1.84535 per share. | ||||||||||||||||||||||||||||
On June 4, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $25,000 of the note and accrual interest of $11 into 15,090 shares of the Company's common stock, at a conversion price of $ 1,6575 per share | ||||||||||||||||||||||||||||
On June 12, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $100,000 plus interest of $3,756 of the note into 59,632 shares of the Company's common stock, at a conversion price of $ 1.73995 per share. | ||||||||||||||||||||||||||||
On June 16, 2014, $63,000 of principal under the Asher Note issued on December 10, 2013 and accrual interest of $2,520 were converted into 57,727 shares of the Company’s common stock, at a conversion price of $1.135 per share. | ||||||||||||||||||||||||||||
On June 18, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $50,000 plus interest of $150 of the note into 24,441 shares of the Company's common stock, at a conversion price of $ 2.0519 per share. | ||||||||||||||||||||||||||||
On June 25, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $50,000 plus interest of $136 of the note into 23,958 shares of the Company's common stock, at a conversion price of $ 2.0927 per share. | ||||||||||||||||||||||||||||
On June 27, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $36,392 plus interest of $28 of the note into 17,403 shares of the Company's common stock, at a conversion price of $ 2.0927 per share. | ||||||||||||||||||||||||||||
On July 15, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $23,608 plus interest of $108 of the note into 13,396 shares of the Company's common stock, at a conversion price of $ 1.7704 per share. | ||||||||||||||||||||||||||||
On July 25, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $10,000 plus interest of $101 of the note into 5,632 shares of the Company's common stock, at a conversion price of $ 1.7935 per share. | ||||||||||||||||||||||||||||
On August 11, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $25,000 plus interest of $106 of the note into 17,003 shares of the Company's common stock, at a conversion price of $ 1.47645 per share. | ||||||||||||||||||||||||||||
On October 29, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $30,000 plus interest of $261 of the note into 33,210 shares of the Company's common stock, at a conversion price of $ 0.9112 per share. | ||||||||||||||||||||||||||||
Valuation Methodology | ||||||||||||||||||||||||||||
The Company analyzed the conversion feature within the Convertible Note and has utilized a third party valuation consultant to assist the Company to fair value the compound embedded derivatives using a multinomial lattice models that values the derivative liabilities within the convertible notes based on a probability weighted discount cash flow model. | ||||||||||||||||||||||||||||
Valuation Assumptions – Initial valuation and Change in Fair Value of Derivative Liability Related to Convertible Notes | ||||||||||||||||||||||||||||
The following assumptions were used for the valuation of the derivative liability related to November 8, 2013 (issuance dates) and December 31, 2013: | ||||||||||||||||||||||||||||
● | The underlying stock price $ 4.48, and $3.07 was used as the fair value of the common stock; | |||||||||||||||||||||||||||
● | The note face amounts as of issuance 11/8/2013 and 12/31/2013 are $300,000, and effectively convert at a discount of 15% after 0 days from issuance. | |||||||||||||||||||||||||||
● | An event of default would occur 5% of the time, increasing 1.00% per month to a maximum of 10% – to-date the 1 note is not in default and has not been converted by the holder nor redeemed by the Company; | |||||||||||||||||||||||||||
● | Capital raising events of $1,000,000 would occur in each quarter at 75% of market generating dilutive reset events at prices below $3.812 and $2.626 for the Notes; | |||||||||||||||||||||||||||
● | The projected volatility for each valuation period was based on the historical volatility of the Company which has been actively trading for the last 3 years: | |||||||||||||||||||||||||||
1 year | ||||||||||||||||||||||||||||
11/8/2013 | 99% | |||||||||||||||||||||||||||
12/31/2013 | 100% | |||||||||||||||||||||||||||
● | The Holder would redeem through maturity based on availability of alternative financing, 10% of the time increasing 1.0% monthly to a maximum of 20%; and | |||||||||||||||||||||||||||
● | The Holder would automatically convert the note at maturity if the registration was effective and the company was not in default. | |||||||||||||||||||||||||||
Valuation Assumptions – Initial valuation, Conversion and Change in Fair Value of Derivative Liability Related to Convertible Notes | ||||||||||||||||||||||||||||
The following assumptions were used for the valuation of the derivative liability related to issuance date, conversions, and the period ending December 31, 2014: | ||||||||||||||||||||||||||||
- | Volatility for each valuation period is 3-month to 12-month historical volatility of the Company’s weekly continuously compounded returns. | |||||||||||||||||||||||||||
- | Risk-free rate assumption is interpolated treasury rate as of the valuation date with maturity identical to the note. | |||||||||||||||||||||||||||
- | Conversion is assumed to occur at maturity, as earlier conversion would be suboptimal. | |||||||||||||||||||||||||||
- | Default would occur 0% of the time. | |||||||||||||||||||||||||||
The following table summarizes the change of fair value of the derivative debt liabilities: | ||||||||||||||||||||||||||||
Balance at December 31, 2012 | $ | - | ||||||||||||||||||||||||||
To record derivative liabilities as debt discount | 60,795 | |||||||||||||||||||||||||||
Change in fair value of derivative liabilities | 634 | |||||||||||||||||||||||||||
Balance at December 31, 2013 | $ | 61,429 | ||||||||||||||||||||||||||
To record derivative liabilities as debt discount | 1,950,820 | |||||||||||||||||||||||||||
Change in fair value of derivative liabilities | 107,378 | |||||||||||||||||||||||||||
Settlement of derivative liability due to conversion of related notes | (2,119,627 | ) | ||||||||||||||||||||||||||
Balance at December 31, 2014 | $ | - | ||||||||||||||||||||||||||
Note_14_Commitments_and_Contin
Note 14 - Commitments and Contingencies | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||
Commitments and Contingencies Disclosure [Text Block] | Note 14 – Commitments and Contingencies | |||||||||||||
Litigation | ||||||||||||||
The Company and its directors are a party to a lawsuit filed on March 29, 2013 by Albert Perron, derivatively on behalf of the Company, in the District Court for Clark County, Nevada (Case No. A-13-679151-C), which seeks a declaratory judgment, rescission, unspecified damages, equitable and injunctive relief, and attorney's fees. The Plaintiff's complaint alleges that the directors breached their fiduciary duties to the Company by exceeding their authority under the Company's Amended and Restated 2009 Stock Incentive Plan (the “Plan”), as further amended, by issuing shares to Mr. Kexuan Yao (“Mr. Yao”) under the February 2012 employment agreement (“Employment Agreement”) that exceeded the amount allowed under the Plan. William Thomson (“Mr. Thomson”), Mr. Yao, Jimping (K.P.) Chan (“Mr. Chan”), Tao Pang (“Mr. Pang”) and Weiping Shen (“Mr. Shen”) (The “Director Defendants”) have filed an answer to this lawsuit in which they have denied the claims being made. The Company and Director Defendants' position is that the shares at issue in this matter were granted to Mr. Yao in accordance with the Plan. Mr. Thomson and Mr. Yao moved for summary judgment (“Defendants' MSJ”) on the Plaintiff's meritless claims on July 18, 2014. Mr. Chan, Mr. Pang, and Mr. Shen joined Defendant' MSJ on August 20, 2014. Plaintiff filed his own Motion for Summary Judgment (“Plaintiff's MSJ) on August 18, 2014, and his response in opposition to Defendants' MSJ on August 22, 2014. A hearing on Defendants' MSJ and Plaintiff's MSJ was held on September 18 2014, wherein the Court denied Plaintiff's MSJ and granted Defendant's MSJ in part holding that the Employment Agreement with Mr. Yao did not violate the terms of the Plan. However, in denying Defendants' MSJ in part, the Court, Sua sponte, found that an issue of material fact remained as to whether the Company's board approved each issuance subsequent to 2012 in accordance with the vesting dates contained the Employment Agreement to ensure that Mr. Yao did not receive an excess of shares in any one (1) year period in violation of the Plan. On October 29, 2014, the Director Defendants filed a Motion for Reconsideration of Partial Denial of Motion for Summary Judgment. The Company joined the Motion for Reconsideration of Partial Denial of Motion for Summary Judgment on October 30, 2014. On or about November 5, 2014, Plaintiff filed Plaintiff's Motion for Reconsideration, essentially rearguing Plaintiff's MSJ. The Court held a hearing on both motions for reconsideration on December 19, 2014, and denies both motions. The Directors Defendants plan to conduct one more deposition, aimed at addressing the Court's remaining concerns, and then move for summary judgment again after that deposition. The Company and Director Defendants continue to believe that Plaintiff's claims have no merit and will continue to defend this case vigorously. | ||||||||||||||
See Note 19 for discussion of lawsuit related Draco Resources, Inc. | ||||||||||||||
Uncommitted Trade Credit Facilities | ||||||||||||||
The Company entered into uncommitted trade credit facilities with certain financial institutions. Substantially all of the uncommitted trade credit facilities were guaranteed by Mr. Yao. | ||||||||||||||
The uncommitted trade credit facilities at December 31, 2014 were as follows: | ||||||||||||||
Date of Expiration | Total Facilities | Facilities Used | Facilities Available | |||||||||||
Armco HK | ||||||||||||||
DBS (Hong Kong) Limited (i) | 9-Oct-15 | $ | 20,000,000 | $ | - | $ | 20,000,000 | |||||||
RZB (Beijing) Branch (ii) | 24-Mar-15 | 7,000,000 | - | 7,000,000 | ||||||||||
Sub-total - Armco HK | 27,000,000 | - | 27,000,000 | |||||||||||
Henan Armco | ||||||||||||||
Bank of China (iii) | 23-May-14 | 4,881,462 | 4,881,462 | - | ||||||||||
ICBC (iv) | 29-Aug-15 | 3,254,308 | - | 3,254,308 | ||||||||||
Guangdong Development Bank Zhengzhou Branch (v) | 15-May-15 | 15,620,678 | - | 15,620,678 | ||||||||||
China Citic Bank Zhengzhou Branch (vi) | 19-Jun-15 | 6,508,616 | - | 6,508,616 | ||||||||||
Sub-total – Henan Armco | 30,265,064 | 4,881,462 | 25,383,602 | |||||||||||
Renewable Metals | ||||||||||||||
Bank of China Lianyungang Branch (vii) | 27-Dec-15 | 8,135,770 | - | 8,135,770 | ||||||||||
Shanghai Pudong Development Bank (viii) | 9-Apr-15 | 2,440,731 | 2,323,055 | 117,676 | ||||||||||
Bank of Communications Lianyungang Branch (ix) | 2-Aug-15 | 11,715,508 | 1,767,876 | 9,947,632 | ||||||||||
Sub-total – Renewable Metals | 22,292,009 | 4,090,931 | 18,201,078 | |||||||||||
$ | 79,557,073 | $ | 8,972,393 | $ | 70,584,680 | |||||||||
(i) | On December 21, 2011, Armco HK entered into a Banking Facilities Agreement with DBS Bank (Hong Kong) Limited of $20,000,000 for issuance of commercial letters of credit in connection with the Company’s purchase of metal ore. The Company pays interest at LIBOR or DBS Bank’s cost of funds plus 2.50% per annum on issued letters of credit in addition to an export bill collection commission equal to 12.5% of the first $50,000 and 6.25% of the balance and an opening commission of 25% on the first $50,000 and 6.25% of the balance for each issuance. Amounts advanced under this facility are repaid from the proceeds of the sale of metal ore. The lender may terminate the facility at anytime at its sole discretion. The facility is secured by the charge on cash deposit of the borrower, the borrower’s restricted pledged deposit in the minimum amount of 3% of the letter of credit amount, the Company’s letter of comfort and the guarantee of Mr. Yao. | |||||||||||||
(ii) | On March 12, 2014, Armco HK entered into Amendment No. 5 to the March 25, 2009 uncommitted Trade Finance Facility with RZB Austria Finance (Hong Kong) Limited. The amendment indicates that the total facilities amount shall be decreased from $15,000,000 to $7,000,000. The Company pays interest at 200 basis points per annum plus the lender’s cost of funds per annum on issued letters of credit in addition to fees upon issuance of the letter of credit of 6.25% for issuance commissions, negotiation commissions, commission-in-lieu and collection commissions. Amounts advanced under this facility are repaid from the proceeds of the sale of metal ore. The lender may, however, terminate the facility at any time or at its sole discretion upon the occurrence of any event which causes a material market disruption in respect of unusual movement in the level of funding costs to the lender or the unusual loss of liquidity in the funding market. The lender has the sole discretion to decide whether or not such event has occurred. The facility is secured by restricted cash deposits held by the lender, the personal guarantee of Mr. Yao, the Company’s guarantee, and a security interest in the contract for the purchase of the ore for which the letter of credit has been issued and the contract for the sale of the ore. | |||||||||||||
(iii) | On June 8, 2013, Henan Armco obtained a RMB 30,000,000 (approximately $4.9 million) line of credit from Bank of China for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring May 23, 2014. The facility is secured by the guarantee provided by Renewable Metals and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore. Since the accounts of Bank of China have been closed, the line of credit from this bank was terminated when it expired on May 23, 2014. | |||||||||||||
(iv) | On September 10, 2013, Henan Armco obtained a RMB 20,000,000 (approximately $3.2 million) line of credit from ICBC, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring August 29, 2015. The facility is guaranteed by Renewable Metals and Mr. Yao, the Company’s Chairman and Chief Executive Officer. | |||||||||||||
(v) | On May 16, 2014, Henan Armco obtained a RMB 96,000,000 (approximately $15.6 million) line of credit from Guangdong Development Bank Zhengzhou Branch for issuance of letters of credit to finance the purchase of metal ore. The Company pays interest at 120% of the applicable base rate for lending published by the People’s Bank of China (“PBC”) at the time the loan is made on issued letters of credit. The facility is secured by the guarantee provided by Mr. Yao and Renewable Metals jointly and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore. | |||||||||||||
(vi) | On June 19, 2013, Henan Armco obtained a RMB 40,000,000 (approximately $6.5 million) line of credit from Citic Bank, Zhengzhou Branch, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring two years from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Yao. | |||||||||||||
(vii) | On March 15, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB 50,000,000 (approximately $8.1 million) from Bank of China, Lianyungang Branch for the purchase of raw materials. The facility is expiring December 27, 2015 with interest at 7.872% per annum. The facility is secured by Renewable metals properties, machinery and equipment and land use rights, and guaranteed by Mr. Yao, Yi Chu, and Henan Armco, respectively. | |||||||||||||
(viii) | On September 10, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB 15,000,000 (approximately $2.4 million) from Shanghai Pudong Development Bank for the purchase of raw materials expiring April 9, 2015. The interest of the facility at 120% of the applicable base rate for lending published by the People’s Bank of China (“PBOC”) at the time the loan is drawn down per annum. The facility is secured by Armco machinery’s land use right and guarantees provided Armco Machinery, and Mr. Yao, | |||||||||||||
(ix) | On July 5, 2011, Renewable Metals obtained a RMB 72,000,000 (approximately $11.7 million) line of credit from Bank of Communications, Lianyungang Branch for issuance of letters of credit in connection with the purchase of scrap metal expiring August 2, 2015. The letters of credit require Renewable Metals to pledge cash deposit equal to 20% of the letter of credit for letters of credit at sight, or 30% for other domestic letters of credit and for extended domestic letters of credit, the collateral of inventory equal to 166% of the letter of credit. The facility is secured by Renewable Metals inventories and guarantee provided by Mr. Yao. | |||||||||||||
Employment with the Chairman and CEO | ||||||||||||||
On February 8, 2012, the Company and Mr. Yao entered into an Employment Agreement (the “Employment Agreement”), to employ Mr. Yao as the Company’s Chairman of the Board of Directors, President, and Chief Executive Officer. The initial term of employment under the agreement is from January 1, 2012 (the “Effective Date”) until December 31, 2014. On March 19, 2015, the Company entered a new Employment Agreement with Mr. Yao for the period of January 1, 2015 to December 31, 2015. Pursuant to the Employment Agreement, Mr. Yao is entitled to, among other, the following compensation and benefits: | ||||||||||||||
a. | Base Salary. The Company shall pay the Executive a salary of $250,000 per annum. | |||||||||||||
b. | Bonus. The Executive shall be entitled to an annual cash bonus in an amount equal to 50% of the Executive’s Base Salary for such year. Any such bonus shall be payable no later 2.5 months following the year with respect to which the Base Salary is payable. During the employment term, the Compensation Committee has the discretion to grant the Executive additional bonus at its sole discretion. | |||||||||||||
c. | Restricted Shares: The Executive received a restricted stock grant of 60,000 shares of common stocks under the Company’s Amended and Restated 2009 Stock Incentive Plan, as Amended, vesting in four equal quarterly installment beginning on April 1, 2015. | |||||||||||||
d. | Eligibility to participate in the Company’s benefit plans that are generally provided for executive employees. | |||||||||||||
e. | Paid Vacation: The Executive will have paid vacation of at least less than 25 business days per year, to be accredited accordance with the ordinary policies. | |||||||||||||
f. | Expenses Reimbursement: The Company agreed to pay or reimburse the Executive for any expenses, including reasonable attorney’s fees and expenses, actually incurred (and, in the case of reimbursement, paid) by him, up to a maximum of $10,000, in connection with : (i) obtaining the proper work permits and/or visa and/or United States Permanent Resident Card necessary for the Executive to provide services in the United States, and (ii) the preparation of his spouse’s (if applicable) United States income tax returns as required by law; and | |||||||||||||
g. | Life Insurance Benefit Premium payment: The Company agrees to reimburse the Executive the amount of the premium paid by him on a term life policy for benefit of his and his designated beneficiaries with a death benefit of $2 million. | |||||||||||||
Operating Leases | ||||||||||||||
(i) | Operating Lease - Office Space | |||||||||||||
On July 1, 2014, Armco Shanghai entered into a non-cancelable operating lease for office space that expires on July 31, 2016. The annual lease payment is RMB 674,933 (approximately $109,822). | ||||||||||||||
On December 17, 2010, Armco Metals Holdings entered into a non-cancelable operating lease for office space that expired on December 31, 2013. The monthly rental payment is $4,004 in 2013. After the contract expired, the Company continued the lease with the same landlord on a month by month basis. On October 1, 2014, the Company terminated the office lease and moved into a shared office space with a third party at no cost. | ||||||||||||||
Future minimum payments required under this non-cancelable operating lease were as follows: | ||||||||||||||
Year ending December 31: | ||||||||||||||
2015 | 129,347 | |||||||||||||
2016 | 64,063 | |||||||||||||
$ | 193,410 | |||||||||||||
Note_15_Stockholders_Equity
Note 15 - Stockholders' Equity | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Stockholders' Equity Note [Abstract] | |||||||||
Stockholders' Equity Note Disclosure [Text Block] | Note 15 – Stockholders’ Equity | ||||||||
Shares Authorized | |||||||||
The aggregate number of shares which the Corporation shall have authority to issue is two hundred and one million (201,000,000) shares, consisting of two classes to be designated, respectively, “Common Stock” and “Preferred Stock,” with all of such shares having a par value of $.001 per share. The total number of shares of Preferred Stock that the Corporation shall have authority to issue is one million (1,000,000) shares. The total number of shares of Common Stock that the Corporation shall have authority to issue is two hundred million (200,000,000) shares. | |||||||||
Reverse Stock Split | |||||||||
On January 9, 2015, the Company effectuated a 1:10 reverse stock split of the Company’s common stock. The Company accounted for the reverse stock split retrospectively and is presented accordingly in the Company’s financial statements as of December 31, 2014 and 2013. | |||||||||
Common Stock | |||||||||
January 2013 Offering | |||||||||
On January 28, 2013 (the “Closing Date”), the Company completed a public offering of an aggregate of 324,271 shares of the Company’s common stock in a registered direct public offering (the “January 2013 Offering”) for approximately $1.6 million proceeds in cash. The shares offered in this January 2013 Offering were sold by the Company directly to the investors. No underwriter or agents was involved in connection with this offering to solicit offers to purchase the shares. | |||||||||
On the Closing Date, the Company entered into Subscription Agreements (the “Subscription Agreements”) with certain investors (the “Investors”) in connection with the January 2013 Offering, pursuant to which the Company agreed to sell an aggregate of 324,271 shares of its common stock at a purchase price of $5 per share to the Investors for aggregate gross proceeds, before deducting the estimated offering expenses payable by the Company, of approximately $1,621,356. | |||||||||
The purchase and issuance of the securities in the Registered Direct Offering are completed on January 28, 2013. | |||||||||
The January 2013 Offering was effectuated as a takedown off the Company’s shelf registration statement on Form S-3, as amended (File No. 333-184354), which became effective on December 14, 2012 (the “Registration Statement”), pursuant to a prospectus supplement filed with the Securities and Exchange Commission (the “SEC”) on January 28, 2013. | |||||||||
Conversion of Loan from Chairman and CEO to Common Shares | |||||||||
On October 28, 2013, Mr. Yao proposed to the Company to convert the amount of unpaid Principals of the Loans owed him, into shares of common stock of the Company, at a conversation price equal to the current market price at which the Company's common stock trades on NYSE MKT; and the Board of the Directors of the Company considered that it is in the best interest of the Company and its stockholders for the Company to authorize the conversion of the amount of unpaid Principals of the Loans, into shares of common stock of the Company, at a conversation price equal to the average of the three (3) closing bid prices during the three (3) trading days immediately prior the date hereof at which the Company's common stock trades on NYSE MKT. Upon authorization by the Board of Directors of the Company, Mr. Yao converted unpaid Principals of the Loans and interest in the amount of $1,045,369 owed him, into common shares of the Company, at a conversation price of $5.2 per share, the average of the three (3) closing bid prices during the three (3) trading days immediately prior the date hereof at which the Company's common stock trades on NYSE MKT, or 201,033shares of the Company’s common stock. | |||||||||
Conversion of Short Term Loan to Common Shares | |||||||||
On October 28, 2013, a non-affiliated investor (the “Investor”) proposed to the Company to convert the amount of unpaid Principals of the Loans owed her in the amount of $816,593 into common shares of the Company, at a conversion price of $5.2 per share, or 157,039 share of the Company’s common stock. | |||||||||
Issuance of Common Stock to Parties Other Than Employees for Acquiring Goods or Services | |||||||||
Loan Guarantee - Henan Chaoyang Steel Co., Ltd. | |||||||||
On June 11, 2010 the Company entered into a Guaranty Cooperation Agreement with Henan Chaoyang Steel Co., Ltd. (“Henan Chaoyang”) to provide additional liquidity to meet anticipated working capital requirements of Renewable Metals’ scrap metal recycling facility. Under the terms of the guaranty, Henan Chaoyang agreed to provide loan guarantees to Renewable Metals’ existing and pending bank lines of credit of up to 300 million RMB in the aggregate (approximately $45,400,000) for five (5) years expiring June 30, 2015. As consideration for the guaranty, the Company issued a designee of Henan Chaoyang 50,000 shares of its common stock. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the guarantor. | |||||||||
Shares Earned during the Year Ending December 31, 2013 | |||||||||
3,333 common shares earned for the quarter ended March 31, 2013 were valued at $3.75 per share, or $12,500, which was recorded as loan guarantee expense. | |||||||||
3,333 common shares earned for the quarter ended June 30, 2013 were valued at $3.1 per share, or $10,333, which was recorded as loan guarantee expense. | |||||||||
3,333 common shares earned for the quarter ended September 30, 2013 were valued at $3.8 per share, or $12,667, which was recorded as loan guarantee expense. | |||||||||
3,333 common shares earned for the quarter ended December 31, 2013 were valued at $3.07 per share, or $10,233, which was recorded as loan guarantee expense. | |||||||||
Shares Earned during the Year Ending December 31, 2014 | |||||||||
3,334 common shares earned for the quarter ended March 31, 2014 were valued at $3.9 per share, which was the market price on quarter end date, or $13,002, which was recorded as loan guarantee expense. | |||||||||
Legal Services Agreement – All Bright Law Offices | |||||||||
On March 3, 2012, the Company entered into a Legal Services Agreement (“Legal Agreement”) with All Bright Law Office (“All Bright”), a PRC law firm located in Shanghai, China. Pursuant to the Legal Agreement, All Bright agreed to provide Chinese-law related legal counsel services from April 1, 2012 to March 31, 2013 in exchange for 30,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the All Bright. | |||||||||
On April 7, 2014, the Company entered into a Legal Services Agreement (“Legal Agreement”) with All Bright Law Office Pursuant to the Legal Agreement, All Bright agreed to provide Chinese-law related legal counsel services from April 1, 2013 to March 31, 2015 in exchange for 50,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the All Bright. | |||||||||
Shares Earned during the Year Ending December 31, 2013 | |||||||||
7,500 common shares earned for the quarter ended March 31, 2013 were valued at $3.75 per share, or $28,125, which was recorded as legal expenses. | |||||||||
Shares Earned during the Year Ending December 31, 2014 | |||||||||
12,500 common shares earned for the quarter ended June 30, 2014 were valued at $2.7 per share, which was the market price on quarter end date, or $33,750, which was recorded as legal expenses. | |||||||||
12,500 common shares earned for the quarter ended September 30, 2014 were valued at $1.5 per share, which was the market price on quarter end date, or $18,750, which was recorded as legal expenses. | |||||||||
12,500 common shares earned for the quarter ended December 31, 2014 were valued at $2.3 per share, which was the market price on quarter end date, or $28,425, which was recorded as legal expenses. | |||||||||
Consulting Services Agreement – Broad Max Holding | |||||||||
On December 1, 2012, the Company entered into a Consulting Services Agreement (“Consulting Agreement”) with Broad Max Holding (“Broad Max”), a HK firm located in Hong Kong, China. Pursuant to the Consulting Agreement, Broad Max agreed to provide consulting services from December 1, 2012 to May 31, 2013 in exchange for 10,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the Broad Max. | |||||||||
Shares Earned during the Year Ending December 31, 2013 | |||||||||
5,000 common shares earned for the quarter ended March 31, 2013 were valued at $3.75 per share, or $18,750, which was recorded as consulting fees. | |||||||||
3,333 common shares earned for the quarter ended June 30, 2013 were valued at $3.1 per share, or $10,333, which was recorded as consulting fees. | |||||||||
Facility and Equipment Lease Agreement – Hebang Renewable Resources Co., Ltd. | |||||||||
On April 13, 2012, the Company entered into a Facility and Equipment Leasing Agreement (“Leasing Agreement”) with Lianyungang Hebang Renewable Resources Co., Ltd. (“Hebang”), a PRC company located in the City of Lianyungang, Jiangsu Province, China. Pursuant to the Leasing Agreement, Hebang agreed to lease its entire facility and all of its equipment for the Company’s exclusive use and operation for a two-year term commencing on June 25, 2012, in consideration for the issuance of ten (10) thousand shares of common stock of the Company to Hebang and the payment of RMB one (1) million (approximately $159,000) in cash. Pursuant to the Leasing Agreement, the Company issued the Shares to a designee of Hebang on April 13, 2012 (the “Hebang Stock Issuance”). The cash amount is to be paid out to Hebang during the second year of the lease term. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by Hebang. | |||||||||
On March 31, 2013, Renewable Metals and Hebang terminated the Leasing Agreement ("Termination Agreement"). Under the terms and conditions of the Termination Agreement, Hebang agreed to forgive the cash amount to be paid under the amended Leasing Agreement and Renewable Metals agreed to let Hebang to keep the remaining unearned 62,500 common shares, which was valued at $3.75 per share or $234,375, which was recorded as facility leasing expenses. | |||||||||
Shares Earned during the Year Ending December 31, 2013 | |||||||||
12,500 common shares earned for the quarter ended March 31, 2013 were valued at $3.75 per share, or $46,875, which was recorded as facility leasing expenses. | |||||||||
Under the terms and conditions of the Termination Agreement, Hebang agreed to forgive the cash amount to be paid under the amended Leasing Agreement and Renewable Metals agreed to let Hebang to keep the remaining unearned 62,500 common shares, which was valued at $3.75 per share or $234,375 and recorded as facility leasing expenses. | |||||||||
Consulting Services Agreement – CD International Enterprise Inc | |||||||||
On November 8, 2013, the Company entered into a Consulting Services Agreement (“Consulting Agreement”) with CD International Enterprise Inc (“CDI”), a US company. Pursuant to the Consulting Agreement, CDI agreed to provide consulting services from November 1, 2013 to October 31, 2014 in exchange for 100,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the CDI. | |||||||||
Shares Earned during the Year Ending December 31, 2013 | |||||||||
25,000 common shares earned for the quarter ended December 31, 2013 were valued at $3.07 per share, or $76,750, which was recorded as consulting expenses. | |||||||||
Shares Earned during the Year Ending December 31, 2014 | |||||||||
25,000 common shares earned for the quarter ended March 31, 2014 were valued at $3.9 per share, which was the market price on quarter end date, or $97,500, which was recorded as consulting expenses. | |||||||||
25,000 common shares earned for the quarter ended June 30, 2014 were valued at $2.7 per share, which was the market price on quarter end date, or $67,500, which was recorded as consulting expenses. | |||||||||
25,000 common shares earned for the quarter ended September 30, 2014 were valued at $1.5 per share, which was the market price on quarter end date, or $37,500, which was recorded as consulting expenses | |||||||||
Financing Cost – Hanover | |||||||||
On November 8, 2013, the Company issued 4,702 shares of common stock to Hanover Holdings I, LLC, (“Hanover”), as commitment shares for entering into that certain securities purchase agreement dated November 4, 2013 by and between the Company and Hanover. The shares were valued at $4.50 per share, or $21,155, which was recorded as financing cost. | |||||||||
2009 Stock Incentive Plan as Amended | |||||||||
Adoption of 2009 Stock Incentive Plan | |||||||||
On October 26, 2009, the Board of Directors of the Company adopted the 2009 Stock Incentive Plan, whereby the Board of Directors authorized 120,000 shares of the Company’s common stock to be reserved for issuance (the “2009 Stock Incentive Plan”). The purpose of the 2009 Stock Incentive Plan is to advance the interests of the Company by providing an incentive to attract, retain and motivate highly qualified and competent persons who are important to us and upon whose efforts and judgment the success of the Company is largely dependent. Grants to be made under the 2009 Stock Incentive Plan are limited to the Company’s employees, including employees of the Company’s subsidiaries, the Company’s directors and consultants to the Company. The recipient of any grant under the 2009 Stock Incentive Plan, and the amount and terms of a specific grant, are determined by the Board of Directors of the Company. Should any option granted or stock awarded under the 2009 Stock Incentive Plan expire or become un-exercisable for any reason without having been exercised in full or fail to vest, the shares subject to the portion of the option not so exercised or lapsed will become available for subsequent stock or option grants. | |||||||||
2011 Amendment to the 2009 Stock Incentive Plan | |||||||||
On May 19, 2011, the Company’s Board of Directors adopted and approved the Amended and Restated 2009 Stock Incentive Plan to increase the number of shares of the Company’s common stock available for issuance there under by 100,000 shares to 220,000 shares of the Company’s common stock among other material terms, subject to stockholder approval at the Annual Meeting. At the 2011 Annual Meeting of Stockholders (the “2011 Annual Meeting”) of the Company held on July 9, 2011, the Company’s stockholders approved the amendment and restatement of the Company’s 2009 Stock Incentive Plan (the “Amended and Restated 2009 Stock Incentive Plan”). | |||||||||
Common shares | |||||||||
The Amended and Restated Incentive Plan contains limitations on the number of shares available for issuance with respect to specified types of awards as specified in Section 6.2 Limitation on Shares of Stock Subject to Awards and Cash Awards. During any time when the Company has a class of equity securities registered under Section 12 of the Securities Exchange Act: | |||||||||
● | the maximum number of shares of the Company’s common stock subject to stock options or SARs that may be granted under the Amended and Restated Incentive Plan in a calendar year to any person eligible for an award will be 130,000 shares; | ||||||||
● | the maximum number of shares of the Company’s common stock that may be granted under the Amended and Restated Incentive Plan, other than pursuant to stock options or SARs, in a calendar year to any person eligible for an award will be 130,000 shares; and | ||||||||
● | the maximum amount that may be paid as a cash-settled performance-based award will be $1,000,000 for a performance period of 12 months or less and $5,000,000 for a performance period of greater than 12 months. | ||||||||
The maximum number of shares available for issuance pursuant to incentive stock options granted under the Amended and Restated Incentive Plan will be the same as the number of shares available for issuance under the Amended and Restated Incentive Plan. | |||||||||
Options | |||||||||
Under the Amended and Restated Incentive Plan, the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, may grant both incentive stock options ("ISOs") intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), and options that are not qualified as incentive stock options ("NSOs"). ISOs may only be granted to persons who are employees of the Company or a subsidiary of the Company and the fair market value at the date of grant of the shares of stock with respect to which all ISO’s held by a particular grantee become exercisable for the first time during any calendar year does not exceed $100,000. ISOs and NSOs must be granted a an exercise price that is at least the fair market value of the common stock on the date of grant and the term of these options cannot exceed ten years from the date of grant. The exercise price of an ISO granted to a holder of more than 10% of the common stock of the Company must be at least 110% of the fair market value of the Common Stock on the date of grant, and the term of these options cannot exceed five years. All of the authorized shares of common stock under the Amended and Restated Incentive Plan are available for grant as ISOs. | |||||||||
Stock Appreciation Rights | |||||||||
Under the Amended and Restated Incentive Plan, the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, may grant stock appreciation rights (“SARs”), that confer on the grantee a right to receive, upon exercise thereof, the excess of (a) the fair market value of one share of common stock of the Company on the date of exercise over (b) the grant price of the SAR (which shall be at least the grant date fair market value of a share of common stock of the Company) as determined by the board of directors or the committee to which it grants authority under the Amended and Restated Incentive Plan. The term of each SAR is ten years from the date of grant of the SAR. | |||||||||
Stock Awards | |||||||||
Under the stock component of the Amended and Restated Incentive Plan, the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, may, in selected cases, grant to a plan participant a given number of shares of restricted stock, stock units or unrestricted stock. Restricted stock under the Amended and Restated Incentive Plan is common stock restricted as to sale pending fulfillment of such vesting schedule and requirements as the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, shall determine. Prior to the lifting of the restrictions, the participant will nevertheless be entitled to receive dividends on, and to vote the shares of, the restricted stock. Stock units are a right to be delivered shares of common stock upon fulfillment of such vesting schedule and requirements as the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, shall determine. Grantees of stock units will have no voting or dividend rights or other rights associated with stock ownership, although the board of directors or the committee may award dividend equivalent rights on such units. | |||||||||
2012 Amendment to the 2009 Stock Incentive Plan | |||||||||
At the 2012 Annual Meeting of Stockholders (the “2012 Annual Meeting”) of the Company held on July 13, 2012, the Company’s stockholders approved an amendment and restatement of the Company’s 2009 Stock Incentive Plan to increase the number of shares of the Company’s common stock available for issuance hereunder by 300,000 shares to 520,000 shares of the Company’s common stock. | |||||||||
Shares Awarded during 2012 | |||||||||
On February 8, 2012, the Company awarded 150,000 shares of its restricted common stock, par value $.001 per share, pursuant to the Amended and Restated 2009 Stock Incentive Plan, to Mr. Yao. The term of employment under the agreement is from January 1, 2012 (the “Effective Date”) until December 31, 2014, unless sooner terminated in accordance with the terms of the Employment Agreement. These shares were valued at $4.5 per share or $748,500 on the date of grant and are amortized over the vesting period, or $62,375 per quarter. During the year ended December 31, 2014, a total of $249,500 was recognized as stock-base compensation expense. | |||||||||
2013 Amendment to the 2009 Stock Incentive Plan | |||||||||
At the 2013 Annual Meeting of Stockholders (the “2013 Annual Meeting”) of the Company held on July 2, 2013, the Company’s stockholders approved an amendment and restatement of the Company’s 2009 Stock Incentive Plan to increase the number of shares of the Company’s common stock available for issuance hereunder by 300,000 shares to 820,000 shares of the Company’s common stock. | |||||||||
Shares Awarded during 2013 | |||||||||
On May 2, 2013, the Company agreed to pay Director Mr. Kam Ping Chan 625 shares of the Company’s restricted common stock in conjunction with his re-appointment to the Company's board of directors vesting 50% on June 30, 2013 and 50% on December 31, 2013, effectively January 1, 2013. The restricted stock vests only if Mr. Chan is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $3.30 per share or | |||||||||
$2,063 on the date of grant and are being amortized over the vesting period, or $516 per quarter in 2013. | |||||||||
On May 3, 2013, the Company agreed to pay Director Mr. Weiping Shen 5,000 shares of the Company’s restricted common stock in conjunction with his re-appointment to the Company's board of directors vesting 50% on September 30, 2013 and 50% on May 3, 2014. The restricted stock vests only if Mr. Shen is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $3.89 per share or $19,450 on the date of grant and are being amortized over the vesting period, or $4,863 per quarter. During the year ended December 31, 2014, a total of $6,487 was recognized as stock-base compensation expense. | |||||||||
On November 5, 2013, the Company granted 136,328 shares of its common stock to certain of its employees for the year of their 2013 service of approximately $640,743, in lieu of cash, which were recorded as compensation expense for the quarter ended December 31, 2013. | |||||||||
Shares Awarded during 2014 | |||||||||
On January 2, 2014, the Company agreed to pay Director Mr. Kam Ping Chan 625 shares of the Company’s restricted common stock in conjunction with his re-appointment to the Company's board of directors vesting 50% on June 30, 2014 and 50% on December 31, 2014, effectively January 1, 2014. The restricted stock vests only if Mr. Chan is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $3.23 per share or $2,019 on the date of grant and are being amortized over the vesting period, or $505 per quarter in 2014. During the year ended December 31, 2014, a total of $2,019 stock-base compensation expense was recognized. | |||||||||
On April 9, 2014, the Company granted 232,996 shares of its common stock to certain of its employees for the first quarter of their 2014 service of approximately $838,785, in lieu of cash, which were recorded as compensation expense for the quarter ended March 31, 2014. | |||||||||
Summary of the Company’s Amended and Restated 2009 Stock Incentive Plan Activities | |||||||||
The table below summarizes the Company’s Amended and Restated 2009 Stock Incentive Plan activities: | |||||||||
Number of | Fair Value at | ||||||||
Shares or Options | Date of Grant | ||||||||
Balance, December 31, 2012 | 419,888 | $ | 2,614,951 | ||||||
Options – granted | - | - | |||||||
Options – canceled | - | - | |||||||
Shares – granted | 141,953 | 662,256 | |||||||
Shares – canceled | (- | ) | (- | ) | |||||
Balance, December 31, 2013 | 561,841 | $ | 3,277,207 | ||||||
Vested, December 31, 2013 | 510,174 | 3,023,732 | |||||||
Unvested, December 31, 2013 | 51,667 | $ | 253,475 | ||||||
Options – granted | - | - | |||||||
Options – canceled | - | - | |||||||
Shares – granted | 233,621 | 840,805 | |||||||
Shares – canceled | (- | ) | (- | ) | |||||
Balance, December 31, 2014 | 795,462 | $ | 4,118,012 | ||||||
Vested, December 31, 2014 | 795,462 | 4,118,012 | |||||||
Unvested, December 31, 2014 | - | $ | - | ||||||
As of December 31, 2014, there were 24,538 shares of common stock remaining available for issuance under the Amended and Restated 2009 Stock Incentive Plan. | |||||||||
During the year ended December 31, 2014, the Company issued 6,000 adjustment shares to four investors pursuant to the anti-dilution provision of the Company’s 2008 Offering Subscription Agreement, which was triggered by the Company’s 2013 offering. Per the anti-dilution provision, the investors are entitled to an adjustment to the Purchase Price for such shares that they purchased in the 2008 Offering and have held the purchase from 2008 offering to January 28, 2013 (2013 Offering date). The Company debit additional paid in capital and credit to common stock of $60 to reflect this transaction. |
Note_16_Income_Taxes
Note 16 - Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income Tax Disclosure [Text Block] | Note 16 – Income Taxes | ||||||||
Armco Metals Holdings is a non-operating holding company. Armco HK, the Company’s Hong Kong Subsidiary is subject to Hong Kong SAR income taxes. Henan Armco, Renewable Metals, Lianyungang Armco and Armco Shanghai, the Company’s PRC subsidiaries are subject to PRC income taxes, file income tax returns under the Income Tax Law of the People’s Republic of China concerning Foreign Investment Enterprises and Foreign Enterprises and local income tax laws (the “PRC Income Tax Law”) accordingly. Henan Armco, Renewable Metals, Lianyungang Armco and Armco Shanghai derive substantially all of their income (loss) before income taxed and related tax expenses from PRC sources. | |||||||||
United States Income Tax | |||||||||
Armco Metals Holdings is incorporated in the State of Nevada and is subjected to United Sates of America tax law. | |||||||||
No provision for U.S. federal and state incomes taxes has been made in our consolidated financial statements for those non-U.S. subsidiaries whose earnings are considered to be reinvested. A distribution of these non-U.S. earnings in the form of dividends, or otherwise, would subject the Company to both U.S. federal and state income taxes, as adjusted for non-U.S. tax credits, and withholding taxes payable to the various non-U.S. countries. Determination of the amount of any unrecognized deferred income tax liability on these undistributed earnings is not practicable. | |||||||||
Hong Kong SAR Income Tax | |||||||||
Armco HK is registered and operates in the Hong Kong Special Administrative Region (“HK SAR”) of the People’s Republic of China (“PRC”) and is subject to HK SAR tax law. Armco HK’s statutory income tax rate is 16.5%. | |||||||||
PRC Income Tax | |||||||||
Henan Armco, Renewable Metals, Lianyungang Armco and Armco Shanghai are governed by and file separate income tax returns under the PRC Income Tax Law, which, until January 2008, generally subject to tax at a statutory rate of 33% (30% state income tax plus 3% local income tax) on income reported in the statutory financial statements after appropriate tax adjustments. On March 16, 2007, the National People’s Congress of China approved the Corporate Income Tax Law of the People’s Republic of China (the “New CIT Law”), effective January 1, 2008. Under the New CIT Law, the corporate income tax rate applicable to all Companies, including both domestic and foreign-invested companies, will be 25%. However, tax concession granted to eligible companies prior to March 16, 2007 will be grand fathered in. | |||||||||
All of the Company’s PRC subsidiaries mentioned above are subject to the 25% corporate income tax rate since January 1, 2008 or date of their incorporation. | |||||||||
Income taxes are calculated on a separate entity basis. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. There currently is no tax benefit or burden recorded for the United States. The tax authority may examine the tax returns of the Company three years after the year ended. The provisions for income taxes for the years ended December 31, 2014 and 2013, respectively, are summarized as follows: | |||||||||
Year Ended | Year Ended | ||||||||
December 31, | December 31, | ||||||||
2014 | 2014 | ||||||||
Current taxes | $ | - | $ | 421,585 | |||||
Deferred taxes | 2,685,764 | - | |||||||
$ | 2,685,764 | $ | 421,585 | ||||||
The reconciliations between the statutory tax rate and the Company’s effective tax rate for the year ended December 31, 2014 and 2013 are as follows: | |||||||||
Year Ended | Year Ended | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
U.S. statutory rate | 34 | % | 34 | % | |||||
Foreign income not recognized in the U.S. | -34 | % | -34 | % | |||||
PRC enterprise income tax rate | 25 | % | 25 | % | |||||
Effect of expenses not deductible for tax purposes | 0.3 | % | -2.6 | % | |||||
Effect of valuation allowance on deferred income tax assets | 5.3 | % | -28.8 | % | |||||
Effect of income tax difference under different tax jurisdictions | 28.4 | % | -5.1 | % | |||||
Others | 0 | % | 0.1 | % | |||||
Effective tax rate | 59 | % | -11.4 | % | |||||
The principal components of the deferred income tax assets and liabilities as of December 31, 2014 and 2013 are as follows: | |||||||||
Decemeber 31, | Decemeber 31, | ||||||||
2014 | 2013 | ||||||||
Current deferred income tax assets | |||||||||
Cutoff adjustment - revenue and expense cutoff | $ | 53,893 | $ | - | |||||
Accrued processing cost | 211,325 | - | |||||||
Interest expense to be deducted | 140,542 | - | |||||||
Bad debt allowance and others to be deducted | 34,588 | - | |||||||
Write-down of inventories | - | 580,675 | |||||||
Operating cost of idle manufacturing facility | - | 63,520 | |||||||
Accrued interests | - | 164,333 | |||||||
440,348 | 808,528 | ||||||||
Less: valuation allowance, current portion | (53,893 | ) | (660,432 | ) | |||||
Total | $ | 386,455 | $ | 148,096 | |||||
Non-current deferred income tax assets | |||||||||
Net operating loss carryforwards | 1,405,411 | 983,609 | |||||||
Less: valuation allowance, non-current portion | (1,125,848 | ) | (983,609 | ) | |||||
Total | $ | 279,563 | $ | - | |||||
Current deferred income tax liabilities | |||||||||
Write-down of inventories | (143,993 | ) | - | ||||||
Deferred taxable loss | (3,159,165 | ) | (134,002 | ) | |||||
Operating cost of idle manufacturing facility | (48,493 | ) | - | ||||||
Others | - | (14,094 | ) | ||||||
Total | $ | (3,351,651 | ) | $ | (148,096 | ) | |||
Reported as: | |||||||||
Non-current deferred tax assets, net | $ | 279,563 | $ | - | |||||
Current deferred tax liabilities, net | $ | (2,965,196 | ) | $ | - | ||||
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or are utilized. | |||||||||
ASC 740 requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. The management evaluated the Company’s tax positions and considered that no provision for uncertainty in income taxes was necessary as of December 31, 2014 and 2013. |
Note_17_Concentrations_and_Cre
Note 17 - Concentrations and Credit Risk | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Risks and Uncertainties [Abstract] | |||||||||
Concentration Risk Disclosure [Text Block] | Note 17 – Concentrations and Credit Risk | ||||||||
Credit Risk Arising from Financial Instruments | |||||||||
Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. | |||||||||
As of December 31, 2014, substantially all of the Company’s cash and cash equivalents were held by major financial institutions located in the PRC, none of which are insured. However, the Company has not experienced losses on these accounts and management believes that the Company is not exposed to significant risks on such accounts. | |||||||||
Customers and Credit Concentrations | |||||||||
Customer concentrations and credit concentrations are as follows: | |||||||||
Net Sales | |||||||||
for the Year Ended | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Customer A | 47 | % | 35.6 | % | |||||
Customer B | 15 | % | 15.9 | % | |||||
Customer C | - | % | 10.5 | % | |||||
62 | % | 62 | % | ||||||
Accounts Receivable | |||||||||
at | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Customer A | 30.4 | % | 33.8 | % | |||||
Customer B | 24.1 | % | 25.1 | % | |||||
Customer C | 19.8 | % | 18.3 | % | |||||
74.3 | % | 77.2 | % | ||||||
A reduction in sales from or loss of such customers would have a material adverse effect on the Company’s results of operations and financial condition. | |||||||||
Vendor Concentrations | |||||||||
Vendor purchase concentrations and accounts payable concentration as follows: | |||||||||
Net Purchases | |||||||||
for the Year Ended | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Vendor A | 79.9 | % | 39.4 | % | |||||
Vendor B | - | % | 31 | % | |||||
Vendor C | - | % | 10 | % | |||||
79.9 | % | 80.4 | % | ||||||
Accounts Payable | |||||||||
at | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Vendor A | 49.2 | % | 86 | % | |||||
Vendor B | 29.6 | % | - | % | |||||
78.8 | % | 86 | % | ||||||
Note_18_Foreign_Operations
Note 18 - Foreign Operations | 12 Months Ended |
Dec. 31, 2014 | |
Foreign Operations [Abstract] | |
Foreign Operations [Text Block] | Note 18 - Foreign Operations |
Operations | |
Substantially all of the Company’s operations are carried out and all of its assets are located in the PRC, which may be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies since 1980, no assurance can be given that the PRC Government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC’s political, economic and social conditions; nor that the PRC government’s pursuit of economic reforms will be consistent or effective. | |
Interest Risk | |
Substantially all of the Company’s operations are carried out in the PRC. The tight monetary policy currently instituted by the PRC government and increases in interest rate would have a material adverse effect on the Company’s results of operations and financial condition. | |
Currency Convertibility Risk | |
Substantially all of the Company’s businesses are transacted in RMB, which is not freely convertible into foreign currencies. Under China’s Foreign Exchange Currency Regulation and Administration, the Company is permitted to exchange RMB for foreign currencies through banks authorized to conduct foreign exchange business. All foreign exchange transactions continue to take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other institutions requires submitting a payment application form together with invoices and signed contracts. | |
Foreign Currency Exchange Rate Risk | |
On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the RMB to U.S. Dollar. Under the new policy, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. While the international reaction to the RMB revaluation has generally been positive, there remains significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in a further and more significant volatility of the RMB against the U.S. Dollar. | |
Any significant revaluation of RMB may materially and adversely affect the cash flows, revenues, earnings and financial position reported in U.S. Dollar. | |
The Company had no foreign currency hedges in place to reduce such exposure for the year ended December 31, 2014 or 2013. | |
Dividends and Reserves | |
Under the laws of the PRC, net income after taxation can only be distributed as dividends after appropriation has been made for the following: (i) cumulative prior years’ losses, if any; (ii) allocations to the “Statutory Surplus Reserve” of at least 10% of net income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company’s registered capital; (iii) allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company’s “Statutory Common Welfare Fund”, which is established for the purpose of providing employee facilities and other collective benefits to employees in PRC; and (iv) allocations to any discretionary surplus reserve, if approved by stockholders. | |
As stipulated by the relevant laws and regulations for enterprises operating in the PRC, the subsidiaries of the Company are required to make annual appropriations to a statutory surplus reserve fund. Specifically, the subsidiaries of the Company are required to allocate 10% of their profits after taxes, as determined in accordance with the PRC accounting standards applicable to the subsidiaries of the Company, to a statutory surplus reserve until such reserve reaches 50% of the registered capital of the subsidiaries of the Company. As of December 31, 2014, the Company had no Statutory Surplus Reserve and the Statutory Common Welfare Fund established and segregated in retained earnings due to the loss position of China entities. |
Note_19_Acquisition_of_Equity_
Note 19 - Acquisition of Equity Interest of Draco Resources Inc. | 12 Months Ended |
Dec. 31, 2014 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Note 19 – Acquisition of Equity Interest of Draco Resources Inc. |
On April 15, 2014, the Company entered into a Share Exchange Agreement (the “Agreement”) with Draco Resources, Inc. and its shareholders (the “Draco Resources Shareholders”). Pursuant to the terms and conditions of the Agreement between the parties, the Company plans to acquire 100% of the issued and outstanding capital stock of Draco Resources in exchange for 13,950,000 shares of its post-split common stock (the “AMCO Shares”) and a Series C stock purchase warrant (the "Series C Warrant"). The Series C Warrant is exercisable for five years at any time, following a 1:10 reverse stock split of the Company’s common stock, into 3,000,000 shares of the Company’s post-split common stock at an exercise price of $3.40 per share. The parties made customary representations and warranties and agreed to customary covenants in the Agreement. Upon the completion of the acquisition, the number of shares which Draco Resources Shareholders will receive from the Company represents approximately 74.64% of the issued and outstanding common stock of the Company immediately after the consummation of the Agreement. | |
On August 25, 2014, the Company, Draco Resources Shareholders, and Metawise Group, Inc., the current sole shareholder of Draco Resources, Inc., amended the Agreement. Pursuant to the terms and conditions of the amended Agreement between the parties, upon the approval of the Amendment to the Company's articles of incorporation to increase the number of the Company’s authorized shares of common stock from 74,000,000 shares to 200,000,000 shares, the Company desires to acquire and Draco Shareholders desire to exchange a 40% of the Draco Resources Shares in exchange for 51,000,000 AMCO Shares. The Company acknowledges and agrees to pay China Direct Investments, Inc. and Shanghai Heqi Investment Center (Limited Partner) or their designees 2,400,000 shares each, or 4,800,000 shares in aggregate, of AMCO Shares in connection with the transaction contemplated by this Agreement as finder's fee. Upon the completion of the acquisition, the number of shares which Draco Resources Shareholders will receive from the Company represents approximately 46.05% of the issued and outstanding common stock of the Company immediately after the consummation of the Agreement. | |
On September 19, 2014, the Company, Draco Resources Shareholders, and Metawise Group, Inc. further amended the Agreement. Pursuant to the terms and conditions of the amended Agreement between the parties, upon the approval of the Amendment to the Company's articles of incorporation to increase the number of the Company's authorized shares of common stock from 74,000,000 shares to 200,000,000 shares, the Company desires to acquire and Draco Shareholders desire to exchange a 31.37% of the Draco Resources Shares in exchange for 40,000,000 AMCO Shares. The Company acknowledges and agrees to pay China Direct Investments, Inc. and Shanghai Heqi Investment Center (Limited Partner) or their designees 2,400,000 shares each, or 4,800,000 shares in aggregate, of AMCO Shares in connection with the transaction contemplated by this Agreement as finder's fee. Upon the completion of the acquisition, the number of shares which Draco Resources Shareholders will receive from the Company represents approximately 40% of the issued and outstanding common stock of the Company immediately after the consummation of the Agreement. The closing of the acquisition is subject to approvals by the Company’s shareholders, the New York Stock Exchange and any applicable governmental regulatory agencies. | |
On October 26, 2014, the Company was served with a lawsuit filed in Superior Court in the County of San Mateo, California styled Progressive Environmental Services, Inc. vs. Metawise Group, Inc., Draco Resources, Inc., Metamining, Inc., Songqiang Chen and Armco Metals Holdings, Inc. The complaint alleges various causes of actions against the parties other than the Company and with respect to the Company seeks declaratory relief from a temporary and permanent injunction to preclude the Company from acquiring a 31.37% interest in Draco from Metawise at the Company’s forthcoming annual meeting scheduled to be held on November 17, 2014. On November 13, 2014, Draco Resources, Inc. filed for bankruptcy protection and this proceeding was transferred to the United States Bankruptcy Court for the Northern District of California under Bankruptcy Case No 14-31652DM. As a result, the proposal for the approval of the acquisition of Draco Resources, Inc. was not voted in the Company’s 2014 annual meeting, nor was the nomination of its principal, Songqiang Chen, to the Company’s board of directors. | |
The Company subsequently filed a motion to dismiss the Company from the action which was granted by the Bankruptcy Court on January 12, 2015. Then the Company filed a motion to obtain a judgment against the plaintiff based on the Court’s order granting our motion to dismiss. On January 30, 2015, the Court, however, denied the Company’s request to obtain such judgment and the matter is now closed. | |
As a result, the proposed acquisition transaction will not occur. |
Note_20_Subsequent_Events
Note 20 - Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 20 – Subsequent Events |
At the special meeting of our stockholders held on March 27, 2014, the stockholders approved a 1:10 reverse stock split of our common stock. The effective date of the reverse stock split is January 9, 2015. | |
On March 9, 2015, the Company issued 150,000 share of its restricted common stock to one of its consultants, Shanghai Heqi Investment Center, as the total compensation for their consulting services from February 1, 2015 to January 31, 2016. | |
On March 3, 2015, the Company received a conversion notice from its convertible notes holder, Joshua Sason, to convert $100,000 of principal and $4,066.67 of interest of convertible note dated August 27, 2014 into 142,779 shares of the Company’s common stock, at a conversion price of $0.728867 per share. | |
On March 6, 2015, the Company received the response from Chaoyang Investing & Construction Company to waive 50% of the loan (RMB 25,000,000, approximately $4,060,617) the Company owed to them. The interest (RMB 3,141,048, approximately $511,097) of the loan for the year ended December 31, 2014 was not waived but won’t bear any further interest. The interest rate of the rest loan (RMB 25,000,000, approximately $4,060,617) is 6.42%. Till April 2015, Armco should make repayment no less than RMB 5,000,000 (approximately $812,123) and from May 2015, the Company should make monthly repayment no less than RMB 2,500,000 (approximately $406,062). All the loan and interest should be paid off by December 31, 2015. |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation | ||||||||||||||||
The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). | |||||||||||||||||
Consolidation, Policy [Policy Text Block] | Principles of Consolidation | ||||||||||||||||
The Company applies the guidance of Topic 810 “Consolidation” of the FASB Accounting Standards Codification to determine whether and how to consolidate another entity. Pursuant to ASC Paragraph 810-10-15-10 all majority-owned subsidiaries—all entities in which a parent has a controlling financial interest—shall be consolidated except (1) when control does not rest with the parent, the majority owner; (2) if the parent is a broker-dealer within the scope of Topic 940 and control is likely to be temporary; (3) consolidation by an investment company within the scope of Topic 946 of a non-investment- company investee. Pursuant to ASC Paragraph 810-10-15-8 the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree. The Company consolidates all less-than-majority-owned subsidiaries, if any, in which the parent’s power to control exists. | |||||||||||||||||
The Company's consolidated subsidiaries are as follows as of December 31, 2014: | |||||||||||||||||
Name of consolidated subsidiary | State or other jurisdiction of incorporation or organization | Date of incorporation or formation | Attributable interest | ||||||||||||||
(date of acquisition, if applicable) | |||||||||||||||||
Armco Metal International Limited (“Armco HK”) | Hong Kong SAR | July 13, 2001 | 100% | ||||||||||||||
Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) | PRC | June 6, 2002 | 100% | ||||||||||||||
Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”) | PRC | January 9, 2007 | 100% | ||||||||||||||
Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”) | PRC | June 4, 2009 | 100% | ||||||||||||||
Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) | PRC | July 16, 2010 | 100% | ||||||||||||||
All inter-company balances and transactions have been eliminated. | |||||||||||||||||
Use of Estimates, Policy [Policy Text Block] | Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions | ||||||||||||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. | |||||||||||||||||
The Company’s significant estimates and assumptions include the fair value of financial instruments; allowance for doubtful accounts; normal production capacity, inventory valuation and obsolescence; recoverability and impairment, if any, of long- lived assets, including the values assigned to and the estimated useful lives of property, plant and equipment, and land use rights; interest rate; revenue recognized or recognizable, sales returns and allowances; valued added tax rate; expected term of share options and similar instruments, expected volatility of the entity’s shares and the method used to estimate it, expected annual rate of quarterly dividends, and risk free rates; income tax rate and related income tax provision; reporting currency, functional currency of the PRC subsidiaries and foreign currency exchange rate. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. | |||||||||||||||||
Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. | |||||||||||||||||
Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. | |||||||||||||||||
Actual results could differ from those estimates. | |||||||||||||||||
Fair Value Measurement, Policy [Policy Text Block] | Fair Value of Financial Instruments | ||||||||||||||||
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting U.S.GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: | |||||||||||||||||
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. | ||||||||||||||||
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. | ||||||||||||||||
Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. | ||||||||||||||||
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. | |||||||||||||||||
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. | |||||||||||||||||
The carrying amounts of the Company’s financial assets and liabilities, such as cash, pledged deposits, accounts receivable, advance on purchases, prepayments and other current assets, accounts payable, customer deposits, corporate income/VAT tax payable, accrued expenses and other current liabilities approximate their fair values because of the short maturity of these instruments. | |||||||||||||||||
The Company’s loans payable, banker’s acceptance notes payable, and capital lease obligation approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at December 31, 2014 and 2013. | |||||||||||||||||
The Company’s Level 3 financial liabilities consist of the derivative warrant issued in July 2008 and convertible note with embedded conversion feature issued in November 2013, for which there are no current market for these securities such that the determination of fair value requires significant judgment or estimation. The Company valued the automatic conditional conversion, re-pricing/down-round, change of control; default and follow-on offering provisions using a lattice model, with the assistance of a valuation specialist, for which management understands the methodologies. These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date. | |||||||||||||||||
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's- length transactions unless such representations can be substantiated. | |||||||||||||||||
It is not, however, practical to determine the fair value of advances from significant stockholder and lease arrangement with the significant stockholder, if any, due to their related party nature. | |||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | |||||||||||||||||
Level 1 Financial Assets – Marketable Securities | |||||||||||||||||
The Company uses Level 1 of the fair value hierarchy to measure the fair value of the marketable securities and marks the available for sale marketable securities at fair value in the statement of financial position at each balance sheet date and reports the unrealized holding gains and losses for available-for-sale securities in other comprehensive income (loss) until realized provided the unrealized holding gains and losses is temporary. If the fair value of an investment is less than its cost basis at the balance sheet date of the reporting period for which impairment is assessed, and it is determined that the impairment is other than temporary, then an impairment loss is recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period. | |||||||||||||||||
Level 3 Financial Liabilities – Derivative Liabilities | |||||||||||||||||
The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative warrant liabilities and derivative convertible debt liability at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable to the change in the fair value of the derivative liabilities. | |||||||||||||||||
The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of December 31, 2014 and 2013: | |||||||||||||||||
Recurring Fair Value Measures | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
31-Dec-14 | |||||||||||||||||
Derivative liability | $ | - | $ | - | $ | - | $ | - | |||||||||
Available-for-sale securities | $ | 73,943 | $ | - | $ | - | $ | 73,943 | |||||||||
31-Dec-13 | |||||||||||||||||
Derivative liability | $ | - | $ | - | $ | 61,429 | $ | 61,429 | |||||||||
Available-for-sale securities | $ | 519,129 | $ | - | $ | - | $ | 519,129 | |||||||||
Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis | |||||||||||||||||
The Company’s non-financial assets include inventories. The Company identifies potentially excess and slow-moving inventories by evaluating turn rates, inventory levels and other factors. Excess quantities are identified through evaluation of inventory aging, review of inventory turns and historical sales experiences. The Company provides lower of cost or market reserves for such identified excess and slow-moving inventories. The Company establishes a reserve for inventory shrinkage, if any, based on the historical results of physical inventory cycle counts. | |||||||||||||||||
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Carrying Value, Recoverability and Impairment of Long-Lived Assets | ||||||||||||||||
The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include property, plant and equipment and land use rights are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | |||||||||||||||||
The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. When long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. | |||||||||||||||||
The Company considers the following to be some examples of important indicators that may trigger an impairment review: | |||||||||||||||||
(i) significant under-performance or losses of assets relative to expected historical or projected future operating results; | |||||||||||||||||
(ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. | |||||||||||||||||
The key assumptions used in management’s estimates of projected cash flow deal largely with forecasts of sales levels, gross margins, and operating costs of the manufacturing facilities. These forecasts are typically based on historical trends and take into account recent developments as well as management’s plans and intentions. Any difficulty in manufacturing or sourcing raw materials on a cost effective basis would significantly impact the projected future cash flows of the Company’s manufacturing facilities and potentially lead to an impairment charge for long-lived assets. Other factors, such as increased competition or a decrease in the desirability of the Company’s products, could lead to lower projected sales levels, which would adversely impact cash flows. A significant change in cash flows in the future could result in an impairment of long lived assets. | |||||||||||||||||
The impairment charges, if any, is included in operating expenses in the accompanying consolidated statements of operations and comprehensive income (loss). | |||||||||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | CashEquivalents | ||||||||||||||||
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. | |||||||||||||||||
Pledged Deposits [Policy Text Block] | Pledged Deposits | ||||||||||||||||
Pledged deposits consist of cash held in financial institutions for (a) outstanding letters of credit, (b) open banker’s acceptance notes payable and (c) capital lease obligation. | |||||||||||||||||
The Company uses letters of credit in connection with its purchases of ferrous and non-ferrous ores and metals, and scrap metal for processing and distribution. The issuing financial institutions of those letters of credit require the Company to deposit and pledge certain percentage of the maximum amount stipulated under those letters of the credit as collateral. The pledged deposits are either released to the Company in the event of vendors' non-performance or to be released to the Company as part of the payment toward the letters of credit when vendors delivers the goods under those letters of credit on or before maturity date. | |||||||||||||||||
The Company satisfies certain accounts payable, through banker’s acceptance notes issued by financial institutions to certain of the Company’s vendors. The issuing financial institutions of those banker’s acceptance notes require the Company to deposit and pledge certain percentage of the amount stipulated under those banker’s acceptance notes as collateral. The pledged deposits are released to the Company as part of the payment toward banker’s acceptance notes upon maturity. | |||||||||||||||||
Marketable Securities, Policy [Policy Text Block] | Marketable Debt and Equity Securities, Available for Sale | ||||||||||||||||
The Company accounts for marketable debt and equity securities, available for sale, in accordance with sub-topic 320-10 of the FASB Accounting Standards Codification (“Sub-topic 320-10”). | |||||||||||||||||
Pursuant to Paragraph 320-10-35-1, investments in debt securities that are classified as available for sale and equity securities that have readily determinable fair values that are classified as available for sale shall be measured subsequently at fair value in the consolidated balance sheets at each balance sheet date. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized except an available-for-sale security that is designated as being hedged in a fair value hedge, from which all or a portion of the unrealized holding gain and loss of shall be recognized in earnings during the period of the hedge, pursuant to paragraphs 815-25-35-1 through 815-25-35-4. | |||||||||||||||||
The Company follows Paragraphs 320-10-35-17 through 34E and assess whether an investment is impaired in each reporting period. An investment is impaired if the fair value of the investment is less than its cost. Impairment indicators include, but are not limited to the following: a. a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; b. a significant adverse change in the regulatory, economic, or technological environment of the investee; c. a significant adverse change in the general market condition of either the geographic area or the industry in | |||||||||||||||||
which the investee operates; d. a bona fide offer to purchase (whether solicited or unsolicited), an offer by the investee to sell, or a completed auction process for the same or similar security for an amount less than the cost of the investment; e. factors that raise significant concerns about the investee's ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. If the fair value of an investment is less than its cost basis at the balance sheet date of the reporting period for which impairment is assessed, the impairment is either temporary or other than temporary. Pursuant to Paragraph 320-10-35-34, if it is determined that the impairment is other than temporary, then an impairment loss shall be recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The measurement of the impairment shall not include partial recoveries after the balance sheet date. The fair value of the investment would then become the new basis of the investment and shall not be adjusted for subsequent recoveries in fair value. For presentation purpose, the entity shall recognize and present the total other-than-temporary impairment in the statement of earnings with an offset for the amount of the total other-than-temporary impairment that is recognized in other comprehensive income, in accordance with paragraph 320-10-35-34D, if any, pursuant to Paragraph 320- 10-45-8A; and separately present, in the financial statement in which the components of accumulated other comprehensive income are reported, amounts recognized therein related to held-to-maturity and available-for-sale debt securities for which a portion of an other-than-temporary impairment has been recognized in earnings pursuant to Paragraph 320-10-45-9A. Pursuant to Paragraphs 320-10-35-36 and 37 the entire change in the fair value of foreign-currency-denominated available- for-sale debt securities shall be reported in other comprehensive income and An entity holding a foreign-currency- denominated available-for-sale debt security is required to consider, among other things, changes in market interest rates and foreign exchange rates since acquisition in determining whether an other-than-temporary impairment has occurred. | |||||||||||||||||
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | Accounts Receivable and Allowance for Doubtful Accounts | ||||||||||||||||
Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the FASB Accounting Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions. | |||||||||||||||||
Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification and determine when receivables are past due or delinquent based on how recently payments have been received. | |||||||||||||||||
Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses, if any. | |||||||||||||||||
The Company does not have any off-balance-sheet credit exposure to its customers. | |||||||||||||||||
Advance on Purchases [Policy Text Block] | Advance on Purchases | ||||||||||||||||
Advance on purchases primarily represent amounts paid to vendors for future delivery of products, which are fully or partially refundable depending upon the terms and conditions of the purchase agreements. | |||||||||||||||||
Inventory, Policy [Policy Text Block] | Inventories | ||||||||||||||||
InventoryValuation | |||||||||||||||||
The Company values inventories, consisting of raw materials, consumables, packaging material, finished goods, and purchased merchandise for resale, at the lower of cost or market. Cost is determined on the first-in and first-out (“FIFO”) method for raw materials and packaging materials and the weighted average cost method for finished goods. Cost of finished goods comprises direct labor, direct materials, direct production cost and an allocated portion of production overhead. The Company reduces inventories for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market value. Factors utilized in the determination of estimated market value include (i) current sales data and historical return rates, (ii) estimates of future demand, (iii) competitive pricing pressures, (iv) new product introductions, (v) product expiration dates, and (vi) component and packaging obsolescence. | |||||||||||||||||
Normal Capacity and Period Costs of Underutilized or Idle Capacity of the Production Facilities | |||||||||||||||||
The Company follows paragraph 330-10-30-3 of the FASB Accounting Standards Codification for the allocation of production costs and charges to inventories. The Company allocates fixed production overhead to inventories based on the normal capacity of the production facilities expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. Judgment is required to determine when a production level is abnormally low (that is, outside the range of expected variation in production). Factors that might be anticipated to cause an abnormally low production level include significantly reduced demand, labor and materials shortages, and unplanned facility or equipment down time. The actual level of production may be used if it approximates normal capacity. In periods of abnormally high production, the amount of fixed overhead allocated to each unit of production is decreased so that inventories are not measured above cost. The amount of fixed overhead allocated to each unit of production is not increased as a consequence of abnormally low production or idle plant and unallocated overheads of underutilized or idle capacity of the production facilities are recognized as period costs in the period in which they are incurred rather than as a portion of the inventory cost. | |||||||||||||||||
Inventory Obsolescence and Markdowns | |||||||||||||||||
The Company evaluates its current level of inventories considering historical sales and other factors and, based on this evaluation, classify inventory markdowns in the income statement as a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting Standards Codification to adjust inventories to net realizable value. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. Other significant estimates include the allocation of variable and fixed production overheads. While variable production overheads are allocated to each unit of production on the basis of actual use of production facilities, the allocation of fixed production overhead to the costs of conversion is based on the normal capacity of the Company’s production facilities, and recognizes abnormal idle facility expenses as current period charges. Certain costs, including categories of indirect materials, indirect labor and other indirect manufacturing costs which are included in the overhead pools are estimated. The management of the Company determines its normal capacity based upon the amount of operating hours of the manufacturing machinery and equipment in a reporting period. | |||||||||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | Property, Plant and Equipment | ||||||||||||||||
Property, plant and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property, plant and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives ranging from five (5) years to twenty (20) years. Upon sale or retirement of property, plant and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of income and comprehensive income. Leasehold improvements, if any, are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts. | |||||||||||||||||
Leasehold improvements | |||||||||||||||||
Leasehold improvements, if any, are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts. | |||||||||||||||||
Construction in Progress | |||||||||||||||||
Construction in progress represents direct costs of construction or the acquisition cost of long-lived assets. Under U.S. GAAP, all costs associated with construction of long-lived assets should be reflected as long-term as part of construction-in- progress. Capitalization of these costs ceases and the construction in progress is transferred to property, plant and equipment when substantially all of the activities necessary to prepare the long-lived assets for their intended use are completed. No depreciation is provided until the construction of the long-lived assets is complete and ready for their intended use. | |||||||||||||||||
Land Use Rights [Policy Text Block] | Land Use Rights | ||||||||||||||||
Land use rights represent the cost to obtain the right to use certain parcels of land in the City of Lianyungang, Jiangsu Province, PRC. Land use rights are carried at cost and amortized on a straight-line basis over the lives of the rights of fifty (50) years. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts. | |||||||||||||||||
Banker's Acceptance Notes Payable [Policy Text Block] | Banker’s Acceptance Notes Payable | ||||||||||||||||
The Company satisfies certain accounts payable, through the issuance of banker’s acceptance notes issued by financial institutions to certain of the Company’s vendors. These notes are usually of a short term nature, three (3) to six (6) months in length. They are non-interest bearing, are due upon maturity, and are paid by the Company’s banks directly to the vendors upon presentation on the date of maturity and the Company is obliged to repay the note in full to the financial institutions. In the event of insufficient funds to repay these notes, the Company's bank will convert them to loans on demand with interest at a predetermined rate per annum payable monthly. | |||||||||||||||||
Deposit Contracts, Policy [Policy Text Block] | Customer Deposits | ||||||||||||||||
Customer deposits primarily represent amounts received from customers for future delivery of products, which are fully or partially refundable depending upon the terms and conditions of the sales agreements. | |||||||||||||||||
Finance, Loans and Leases Receivable, Policy [Policy Text Block] | Leases | ||||||||||||||||
Lease agreements are evaluated to determine whether they are capital leases or operating leases in accordance with paragraph 840-10-25-1 of the FASB Accounting Standards Codification (“Paragraph 840-10-25-1”). When substantially all of the risks and benefits of property ownership have been transferred to the Company, as determined by the test criteria in Paragraph 840-10-25-1, the lease then qualifies as a capital lease. Capital lease assets are depreciated on a straight line method, over the capital lease assets estimated useful lives consistent with the Company’s normal depreciation policy for tangible fixed assets. Interest charges are expensed over the period of the lease in relation to the carrying value of the capital lease obligation. | |||||||||||||||||
Rent expense for operating leases, which may include free rent or fixed escalation amounts in addition to minimum lease payments, is recognized on a straight-line basis over the duration of each lease term. | |||||||||||||||||
Derivatives, Policy [Policy Text Block] | Derivative Instruments and Hedging Activities | ||||||||||||||||
The Company accounts for derivative instruments and hedging activities in accordance with paragraph 810-10-05-4 of the FASB Accounting Standards Codification (“Paragraph 810-10-05-4”). Paragraph 810-10-05-4 requires companies to recognize all derivative instruments as either assets or liabilities in the balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends upon: (i) whether the derivative has been designated and qualifies as part of a hedging relationship, and (ii) the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument based upon the exposure being hedged as either a fair value hedge, cash flow hedge or hedge of a net investment in a foreign operation. | |||||||||||||||||
From time to time, the Company employs foreign currency forward contracts to convert unforeseeable foreign currency exchange rates to fixed foreign currency exchange rates. The Company does not use derivatives for speculation or trading purposes. Changes in the fair value of derivatives are recorded each period in current earnings or through other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction. The ineffective portion of all hedges is recognized in current earnings. The Company has sales and purchase commitments denominated in foreign currencies. Foreign currency forward contracts are used to hedge against the risk of change in the fair value of these commitments attributable to fluctuations in exchange rates (“Fair Value Hedges”). Changes in the fair value of the derivative instrument are generally offset in the income statement by changes in the fair value of the item being hedged. | |||||||||||||||||
The Company did not employ foreign currency forward contracts to convert unforeseeable foreign currency exchange rates to fixed foreign currency exchange rates for the reporting period ended December 31, 2014 or 2013. | |||||||||||||||||
Derivative Warrant Liability, Policy [Policy Text Block] | Derivative Liabilities | ||||||||||||||||
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a Lattice model, in accordance with ASC 815-15 “Derivative and Hedging” to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. | |||||||||||||||||
Related Parties [Policy Text Block] | Related Parties | ||||||||||||||||
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. | |||||||||||||||||
Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. | |||||||||||||||||
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. | |||||||||||||||||
Commitments and Contingencies, Policy [Policy Text Block] | Commitment and Contingencies | ||||||||||||||||
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. | |||||||||||||||||
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. | |||||||||||||||||
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. | |||||||||||||||||
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition | ||||||||||||||||
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, an (iv) collectability is reasonably assured. | |||||||||||||||||
The Company derives its revenues from sales contracts with customers with revenues being generated upon the shipment of merchandise. Persuasive evidence of an arrangement is demonstrated via sales invoice or contract; product delivery is evidenced by warehouse shipping log as well as a signed bill of lading from the vessel or rail company and title transfers upon shipment, based on free on board (“FOB”) warehouse terms; the sales price to the customer is fixed upon acceptance of the signed purchase order or contract and there is no separate sales rebate, discount, or volume incentive. When the Company recognizes revenue, no provisions are made for returns because, historically, there have been very few sales returns and adjustments that have impacted the ultimate collection of revenues. | |||||||||||||||||
Net sales of products represent the invoiced value of goods, net of value added taxes (“VAT”). The Company is subject to VAT which is levied on the majority of the Company’s products at the rate of 13% on the invoiced value of sales prior to December 31, 2008 and 17% on the invoiced value of sales as of January 1, 2009 and forward. Sales or Output VAT is borne by customers in addition to the invoiced value of sales and Purchase or Input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales. | |||||||||||||||||
Shipping and Handling Cost, Policy [Policy Text Block] | Shipping and Handling Costs | ||||||||||||||||
The Company accounts for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of goods sold as incurred. | |||||||||||||||||
Advertising Costs, Policy [Policy Text Block] | Advertising | ||||||||||||||||
The Company expenses advertising costs as incurred. Advertising is included in selling expenses for financial reporting. The Company spent $140,318 and $5,478 for the years ended December 31, 2014 and 2013, respectively, on advertising expenses. | |||||||||||||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Transactions | ||||||||||||||||
The Company applies the guidelines as set out in Section 830-20-35 of the FASB Accounting Standards Codification (“Section 830-20-35”) for foreign currency transactions. Pursuant to Section 830-20-35 of the FASB Accounting Standards Codification, foreign currency transactions are transactions denominated in currencies other than U.S. Dollar, the Company’s reporting currency or Chinese Yuan or Renminbi, the Company’s Chinese operating subsidiaries' functional currency. Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. A change in exchange rates between the functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction. That increase or decrease in expected functional currency cash flows is a foreign currency transaction gain or loss that generally shall be included in determining net income for the period in which the exchange rate changes. Likewise, a transaction gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later) realized upon settlement of a foreign currency transaction generally shall be included in determining net income for the period in which the transaction is settled. The exceptions to this requirement for inclusion in net income of transaction gains and losses pertain to certain intercompany transactions and to transactions that are designated as, and effective as, economic hedges of net investments and foreign currency commitments. Pursuant to Section 830-20-25 of the FASB Accounting Standards Codification, the following shall apply to all foreign currency transactions of an enterprise and its investees: (a) at the date the transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction shall be measured and recorded in the functional currency of the recording entity by use of the exchange rate in effect at that date as defined in section 830-10-20 of the FASB Accounting Standards Codification; and (b) at each balance sheet date, recorded balances that are denominated in currencies other than the functional currency or reporting currency of the recording entity shall be adjusted to reflect the current exchange rate. | |||||||||||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation for Obtaining Employee Services | ||||||||||||||||
The Company accounts for stock-based compensation in accordance with FASB Accounting Standards Codification (“ASC”) 718, “Compensation-Stock Compensation”. ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on the grant-date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period. | |||||||||||||||||
Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services [Policy Text Block] | Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services | ||||||||||||||||
The Company accounts for stock-based compensation in accordance with the provision of ASC 505, “Equity Based Payments to Non-Employees” (“ASC 505”), Share Based Payments to Non-Employees, and ASC 505 which requires that such equity instruments are recorded at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instruments vest. | |||||||||||||||||
Income Tax, Policy [Policy Text Block] | Investment Credit - Government | ||||||||||||||||
Certain Chinese local governments provide non-refundable investment credits to encourage enterprises to invest in local communities. Investment credits from local governments are credited to other income – investment credit – government, upon receipt. | |||||||||||||||||
Income Tax Provision | |||||||||||||||||
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Income and Comprehensive Income in the period that includes the enactment date. | |||||||||||||||||
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. | |||||||||||||||||
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. | |||||||||||||||||
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. | |||||||||||||||||
Foreign Currency Translation [Policy Text Block] | Foreign Currency Translation | ||||||||||||||||
The Company follows Section 830-10-45 of the FASB Accounting Standards Codification (“Section 830-10-45”) for foreign currency translation to translate the financial statements of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars. Section 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. Pursuant to Section 830-10-45, the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash. | |||||||||||||||||
The functional currency of each foreign subsidiary is determined based on management’s judgment and involves consideration of all relevant economic facts and circumstances affecting the subsidiary. Generally, the currency in which the subsidiary transacts a majority of its transactions, including billings, financing, payroll and other expenditures, would be considered the functional currency, but any dependency upon the parent and the nature of the subsidiary’s operations must also be considered. If a subsidiary’s functional currency is deemed to be the local currency, then any gain or loss associated with the translation of that subsidiary’s financial statements is included in accumulated other comprehensive income. However, if the functional currency is deemed to be the U.S. Dollar, then any gain or loss associated with the re-measurement of these financial statements from the local currency to the functional currency would be included in the consolidated statements of income and comprehensive income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into the consolidated statements of income and comprehensive income (loss). If the Company determines that there has been a change in the functional currency of a subsidiary to the U.S. Dollar, any translation gains or losses arising after the date of change would be included within the statement of income and comprehensive income (loss). | |||||||||||||||||
Based on an assessment of the factors discussed above, the management of the Company determined the relevant subsidiaries’ local currencies to be their respective functional currencies. | |||||||||||||||||
The financial records of the Company's Chinese operating subsidiaries are maintained in their local currency, the Renminbi (“RMB”), which is the functional currency. Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial statements. Foreign currency translation gain (loss) resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the consolidated statement of stockholders’ equity. | |||||||||||||||||
RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. Commencing July 21, 2005, China adopted a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies. The exchange rate of the US dollar against the RMB was adjusted from approximately RMB 8.28 per U.S. dollar to approximately RMB 8.11 per U.S. dollar on July 21, 2005. Since then, the PBOC administers and regulates the exchange rate of the U.S. dollar against the RMB taking into account demand and supply of RMB, as well as domestic and foreign economic and financial conditions. | |||||||||||||||||
Unless otherwise noted, the rate presented below per U.S. $1.00 was the midpoint of the interbank rate as quoted by OANDA Corporation (www.oanda.com) contained in its consolidated financial statements. Management believes that the difference between RMB vs. U.S. dollar exchange rate quoted by the PBOC and RMB vs. U.S. dollar exchange rate reported by OANDA Corporation were immaterial. Translations do not imply that the RMB amounts actually represent, or have been or could be converted into, equivalent amounts in U.S. dollars. Translation of amounts from RMB into U.S. dollars has been made at the following exchange rates for the respective periods: | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Balance sheets | 6.146 | 6.1122 | |||||||||||||||
Statements of operations and comprehensive income (loss) | 6.1457 | 6.1943 | |||||||||||||||
Comprehensive Income, Policy [Policy Text Block] | Comprehensive Income (Loss) | ||||||||||||||||
The Company has applied section 220-10-45 of the FASB Accounting Standards Codification. This statement establishes rules for the reporting of comprehensive income and its components. Comprehensive income (loss), for the Company, consists of net income (loss), change in unrealized loss of marketable securities and foreign currency translation adjustments and is presented in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) and Stockholders’ Equity. | |||||||||||||||||
Earnings Per Share, Policy [Policy Text Block] | Net Income (Loss) per Common Share | ||||||||||||||||
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options, warrants and nonvested shares. | |||||||||||||||||
For the periods presented, the computation of diluted income (loss) per share equaled basic loss per share as the inclusion of any dilutive instruments would have had an antidilutive effect on the earnings per share calculation in the periods presented. | |||||||||||||||||
Cash Flow Reporting Policy [Policy Text Block] | Cash Flows Reporting | ||||||||||||||||
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification. | |||||||||||||||||
Subsequent Events, Policy [Policy Text Block] | Subsequent Events | ||||||||||||||||
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements are issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. | |||||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements | ||||||||||||||||
In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.” The ASU states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although “major” is not defined, the standard provides examples of when a disposal qualifies as a discontinued operation. The ASU also requires additional disclosures about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The ASU is effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years. The adoption of ASU 2014 -08 is not expected to have a material impact on the Company’s consolidated financial statements. | |||||||||||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from contracts with Customers (Topic 606)”. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchanged for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements. | |||||||||||||||||
In June 2014, the FASB issued ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period”. The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation – Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. | |||||||||||||||||
In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. The amendment in the ASU provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements | |||||||||||||||||
Reclassification, Policy [Policy Text Block] | Reclassification | ||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current period presentation. The reclassification had no impact on net earnings and financial position. |
Note_2_Significant_and_Critica1
Note 2 - Significant and Critical Accounting Policies and Practices (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Schedule of Variable Interest Entities [Table Text Block] | Name of consolidated subsidiary | State or other jurisdiction of incorporation or organization | Date of incorporation or formation | Attributable interest | |||||||||||||
(date of acquisition, if applicable) | |||||||||||||||||
Armco Metal International Limited (“Armco HK”) | Hong Kong SAR | July 13, 2001 | 100% | ||||||||||||||
Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) | PRC | June 6, 2002 | 100% | ||||||||||||||
Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”) | PRC | January 9, 2007 | 100% | ||||||||||||||
Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”) | PRC | June 4, 2009 | 100% | ||||||||||||||
Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) | PRC | July 16, 2010 | 100% | ||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Recurring Fair Value Measures | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
31-Dec-14 | |||||||||||||||||
Derivative liability | $ | - | $ | - | $ | - | $ | - | |||||||||
Available-for-sale securities | $ | 73,943 | $ | - | $ | - | $ | 73,943 | |||||||||
31-Dec-13 | |||||||||||||||||
Derivative liability | $ | - | $ | - | $ | 61,429 | $ | 61,429 | |||||||||
Available-for-sale securities | $ | 519,129 | $ | - | $ | - | $ | 519,129 | |||||||||
Schedule of Foreign Exchange Contracts, Statement of Financial Position [Table Text Block] | December 31, | December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||||
Balance sheets | 6.146 | 6.1122 | |||||||||||||||
Statements of operations and comprehensive income (loss) | 6.1457 | 6.1943 |
Note_3_Pledged_Deposits_Tables
Note 3 - Pledged Deposits (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Transfers and Servicing [Abstract] | |||||||||
Schedule of Financial Instruments Owned and Pledged as Collateral [Table Text Block] | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Deposit for bank acceptance notes payable | $ | - | $ | 1,636,072 | |||||
Deposit for letters of credit | 10,492 | 2,525,327 | |||||||
Deposit for capital lease obligation (i) | 488,123 | 490,823 | |||||||
$ | 498,615 | $ | 4,652,222 |
Note_4_Marketable_Equity_Secur1
Note 4 - Marketable Equity Securities, Available for Sale (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis [Table Text Block] | |||||||||||||||||||||
Fair Value Measurement Using Level 1 Inputs | |||||||||||||||||||||
Original | Impairment- | Accumulated | Other | Fair Value | |||||||||||||||||
cost | other than | Foreign Currency | Comprehensive | ||||||||||||||||||
Temporary | Transaction- | Income (loss)- | |||||||||||||||||||
Gain (loss) | Change in | ||||||||||||||||||||
Unrealized gain (loss) | |||||||||||||||||||||
Balance as of December 31, 2012 | $ | 3,396,658 | $ | (2,366,941 | ) | $ | 183,924 | $ | - | $ | 1,213,641 | ||||||||||
Total gain or losses (realized/unrealized) included in: | |||||||||||||||||||||
Other comprehensive income (loss): Changes in unrealized gain (loss) | (694,512 | ) | (694,512 | ) | |||||||||||||||||
Balance as of December 31, 2013 | 3,396,658 | (2,366,941 | ) | 183,924 | (694,512 | ) | 519,129 | ||||||||||||||
Sales of the securities | (710,556 | ) | (710,556 | ) | |||||||||||||||||
Total gain or losses (realized/unrealized) included in: | |||||||||||||||||||||
Other comprehensive income (loss): Changes in unrealized gain (loss) | 265,370 | 265,370 | |||||||||||||||||||
Balance as of December 31, 2014 | $ | 2,686,102 | $ | (2,366,941 | ) | $ | 183,924 | $ | (429,142 | ) | $ | 73,943 |
Note_5_Accounts_Receivable_Tab
Note 5 - Accounts Receivable (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Receivables [Abstract] | |||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | December 31, | December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||||
Accounts receivable | $ | 43,257,621 | $ | 25,638,666 | |||||||||||||
Allowance for doubtful accounts | (54,735 | ) | (43,150 | ) | |||||||||||||
$ | 43,202,886 | $ | 25,595,516 | ||||||||||||||
Allowance for Doubtful Accounts [Table Text Block] | Balance at | Balance at | |||||||||||||||
beginning of | Charged during | end of the | |||||||||||||||
the year | the year | Written-off | year | ||||||||||||||
2013 | $ | 43,150 | $ | - | $ | - | $ | 43,150 | |||||||||
2014 | $ | 43,150 | $ | 11,585 | $ | - | $ | 54,735 |
Note_6_Inventories_Tables
Note 6 - Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of Inventory, Current [Table Text Block] | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Raw materials - Scrap metal | $ | 2,602,983 | $ | 4,390,811 | |||||
Finished goods - processed scrap metal | 7,684,154 | 12,421,088 | |||||||
Purchased merchandise for resale | 697,217 | 5,936,936 | |||||||
Write-down of inventories | (1,829,891 | ) | (2,291,915 | ) | |||||
$ | 9,154,463 | $ | 20,456,920 |
Note_7_Property_Plant_and_Equi1
Note 7 - Property, Plant and Equipment (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||
Property, Plant and Equipment [Table Text Block] | Estimated Useful | December 31, | December 31, | ||||||||||
Life (Years) | 2014 | 2013 | |||||||||||
Buildings and leasehold improvements (i) | 20 | $ | 24,969,460 | $ | 25,054,912 | ||||||||
Construction in progress | 4,680,989 | 4,706,875 | |||||||||||
Machinery and equipment | 7 | 12,519,116 | 12,588,003 | ||||||||||
Vehicles | 5 | 2,144,680 | 2,152,379 | ||||||||||
Office equipment | 8-May | 347,877 | 354,442 | ||||||||||
44,662,122 | 44,856,611 | ||||||||||||
Less accumulated depreciation (ii) | (12,098,193 | ) | (9,360,933 | ) | |||||||||
$ | 32,563,929 | $ | 35,495,678 |
Note_8_Land_Use_Rights_Tables
Note 8 - Land Use Rights (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Land use right | $ | 6,645,033 | $ | 6,681,779 | |||||
Accumulated amortization (i) | (536,750 | ) | (416,478 | ) | |||||
$ | 6,108,283 | $ | 6,265,301 |
Note_9_Loans_Payable_Tables
Note 9 - Loans Payable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Loans Payable [Abstract] | |||||||||
Loans Payable [Table Text Block] | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Bank loans – secured (i) | $ | 2,485,649 | $ | 16,169,543 | |||||
Third party loans (ii) | 14,347,694 | 10,782,386 | |||||||
Convertible notes payable (iii) | 178,500 | 463,709 | |||||||
$ | 17,011,843 | $ | 27,415,638 |
Note_10_Bankers_Acceptance_Not1
Note 10 - Banker's Acceptance Notes Payable and Letters of Credit (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Schedule of Short-term Debt [Table Text Block] | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Renewable Metals | |||||||||
Banker’s acceptance notes payable maturing on March 27, 2014 | $ | - | $ | 3,272,144 | |||||
Letters of credit maturing on August 2, 2015 | 1,767,790 | 5,201,073 | |||||||
$ | 1,767,790 | $ | 8,473,217 |
Note_11_Related_Party_Transact1
Note 11 - Related Party Transactions (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Schedule of Related Party Transactions [Table Text Block] | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Keli Yao | $ | - | $ | 116,828 | |||||
Yi Chu | 717,703 | 286,313 | |||||||
Total | $ | 717,703 | $ | 403,141 |
Note_12_Capital_Lease_Obligati1
Note 12 - Capital Lease Obligation (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Leases, Capital [Abstract] | |||||||||
Schedule of Capital Leased Assets [Table Text Block] | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Total capital lease obligation | $ | 720,819 | $ | 904,990 | |||||
Less current maturities | (720,819 | ) | (904,990 | ) | |||||
Total Capital lease obligation, net of current maturities | $ | - | $ | - |
Note_13_Derivative_Instruments1
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Tables) | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Disclosure Text Block [Abstract] | ||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Activity [Table Text Block] | Number of Warrant Shares | Exercise Price Range Per Share | Weighted Average Exercise Price | Fair Value at Date of Issuance | Aggregate Intrinsic Value | |||||||||||||||||||||||
Balance, December 31, 2012 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Granted | - | - | - | - | - | |||||||||||||||||||||||
Canceled for cashless exercise | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised (Cashless) | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised | (- | ) | - | - | - | - | ||||||||||||||||||||||
Expired | - | - | - | - | - | |||||||||||||||||||||||
Balance, December 31, 2013 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Granted | - | - | - | - | - | |||||||||||||||||||||||
Canceled for cashless exercise | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised (Cashless) | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised | (- | ) | - | - | - | - | ||||||||||||||||||||||
Expired | (- | ) | - | - | - | - | ||||||||||||||||||||||
Balance, December 31, 2014 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Earned and exercisable, December 31, 2014 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Unvested, December 31, 2014 | - | - | - | - | - | |||||||||||||||||||||||
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | Warrants | Warrants | ||||||||||||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||||||||||||
Range of | Number | Weighted | Number | Average Remaining | Weighted | |||||||||||||||||||||||
Exercise Prices | Outstanding | Average | Average Exercise Price | Exercisable | Contractual Life | Average Exercise Price | ||||||||||||||||||||||
Remaining Contractual Life | (in years) | |||||||||||||||||||||||||||
(in years) | ||||||||||||||||||||||||||||
$ | 75 | 161,539 | 0.3 | $ | 75 | 161,539 | 0.3 | $ | 75 | |||||||||||||||||||
$ | 75 | 161,539 | 0.3 | $ | 75 | 161,539 | 0.3 | $ | 75 | |||||||||||||||||||
Convertible Note Volatility [Table Text Block] | 1 year | |||||||||||||||||||||||||||
11/8/2013 | 99% | |||||||||||||||||||||||||||
12/31/2013 | 100% | |||||||||||||||||||||||||||
Schedule of Derivative Liabilities at Fair Value [Table Text Block] | Balance at December 31, 2012 | $ | - | |||||||||||||||||||||||||
To record derivative liabilities as debt discount | 60,795 | |||||||||||||||||||||||||||
Change in fair value of derivative liabilities | 634 | |||||||||||||||||||||||||||
Balance at December 31, 2013 | $ | 61,429 | ||||||||||||||||||||||||||
To record derivative liabilities as debt discount | 1,950,820 | |||||||||||||||||||||||||||
Change in fair value of derivative liabilities | 107,378 | |||||||||||||||||||||||||||
Settlement of derivative liability due to conversion of related notes | (2,119,627 | ) | ||||||||||||||||||||||||||
Balance at December 31, 2014 | $ | - |
Note_14_Commitments_and_Contin1
Note 14 - Commitments and Contingencies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||
Schedule of Line of Credit Facilities [Table Text Block] | Date of Expiration | Total Facilities | Facilities Used | Facilities Available | ||||||||||
Armco HK | ||||||||||||||
DBS (Hong Kong) Limited (i) | 9-Oct-15 | $ | 20,000,000 | $ | - | $ | 20,000,000 | |||||||
RZB (Beijing) Branch (ii) | 24-Mar-15 | 7,000,000 | - | 7,000,000 | ||||||||||
Sub-total - Armco HK | 27,000,000 | - | 27,000,000 | |||||||||||
Henan Armco | ||||||||||||||
Bank of China (iii) | 23-May-14 | 4,881,462 | 4,881,462 | - | ||||||||||
ICBC (iv) | 29-Aug-15 | 3,254,308 | - | 3,254,308 | ||||||||||
Guangdong Development Bank Zhengzhou Branch (v) | 15-May-15 | 15,620,678 | - | 15,620,678 | ||||||||||
China Citic Bank Zhengzhou Branch (vi) | 19-Jun-15 | 6,508,616 | - | 6,508,616 | ||||||||||
Sub-total – Henan Armco | 30,265,064 | 4,881,462 | 25,383,602 | |||||||||||
Renewable Metals | ||||||||||||||
Bank of China Lianyungang Branch (vii) | 27-Dec-15 | 8,135,770 | - | 8,135,770 | ||||||||||
Shanghai Pudong Development Bank (viii) | 9-Apr-15 | 2,440,731 | 2,323,055 | 117,676 | ||||||||||
Bank of Communications Lianyungang Branch (ix) | 2-Aug-15 | 11,715,508 | 1,767,876 | 9,947,632 | ||||||||||
Sub-total – Renewable Metals | 22,292,009 | 4,090,931 | 18,201,078 | |||||||||||
$ | 79,557,073 | $ | 8,972,393 | $ | 70,584,680 | |||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Year ending December 31: | |||||||||||||
2015 | 129,347 | |||||||||||||
2016 | 64,063 | |||||||||||||
$ | 193,410 |
Note_15_Stockholders_Equity_Ta
Note 15 - Stockholders' Equity (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Stockholders' Equity Note [Abstract] | |||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Number of | Fair Value at | |||||||
Shares or Options | Date of Grant | ||||||||
Balance, December 31, 2012 | 419,888 | $ | 2,614,951 | ||||||
Options – granted | - | - | |||||||
Options – canceled | - | - | |||||||
Shares – granted | 141,953 | 662,256 | |||||||
Shares – canceled | (- | ) | (- | ) | |||||
Balance, December 31, 2013 | 561,841 | $ | 3,277,207 | ||||||
Vested, December 31, 2013 | 510,174 | 3,023,732 | |||||||
Unvested, December 31, 2013 | 51,667 | $ | 253,475 | ||||||
Options – granted | - | - | |||||||
Options – canceled | - | - | |||||||
Shares – granted | 233,621 | 840,805 | |||||||
Shares – canceled | (- | ) | (- | ) | |||||
Balance, December 31, 2014 | 795,462 | $ | 4,118,012 | ||||||
Vested, December 31, 2014 | 795,462 | 4,118,012 | |||||||
Unvested, December 31, 2014 | - | $ | - |
Note_16_Income_Taxes_Tables
Note 16 - Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Year Ended | Year Ended | |||||||
December 31, | December 31, | ||||||||
2014 | 2014 | ||||||||
Current taxes | $ | - | $ | 421,585 | |||||
Deferred taxes | 2,685,764 | - | |||||||
$ | 2,685,764 | $ | 421,585 | ||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Year Ended | Year Ended | |||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
U.S. statutory rate | 34 | % | 34 | % | |||||
Foreign income not recognized in the U.S. | -34 | % | -34 | % | |||||
PRC enterprise income tax rate | 25 | % | 25 | % | |||||
Effect of expenses not deductible for tax purposes | 0.3 | % | -2.6 | % | |||||
Effect of valuation allowance on deferred income tax assets | 5.3 | % | -28.8 | % | |||||
Effect of income tax difference under different tax jurisdictions | 28.4 | % | -5.1 | % | |||||
Others | 0 | % | 0.1 | % | |||||
Effective tax rate | 59 | % | -11.4 | % | |||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Decemeber 31, | Decemeber 31, | |||||||
2014 | 2013 | ||||||||
Current deferred income tax assets | |||||||||
Cutoff adjustment - revenue and expense cutoff | $ | 53,893 | $ | - | |||||
Accrued processing cost | 211,325 | - | |||||||
Interest expense to be deducted | 140,542 | - | |||||||
Bad debt allowance and others to be deducted | 34,588 | - | |||||||
Write-down of inventories | - | 580,675 | |||||||
Operating cost of idle manufacturing facility | - | 63,520 | |||||||
Accrued interests | - | 164,333 | |||||||
440,348 | 808,528 | ||||||||
Less: valuation allowance, current portion | (53,893 | ) | (660,432 | ) | |||||
Total | $ | 386,455 | $ | 148,096 | |||||
Non-current deferred income tax assets | |||||||||
Net operating loss carryforwards | 1,405,411 | 983,609 | |||||||
Less: valuation allowance, non-current portion | (1,125,848 | ) | (983,609 | ) | |||||
Total | $ | 279,563 | $ | - | |||||
Current deferred income tax liabilities | |||||||||
Write-down of inventories | (143,993 | ) | - | ||||||
Deferred taxable loss | (3,159,165 | ) | (134,002 | ) | |||||
Operating cost of idle manufacturing facility | (48,493 | ) | - | ||||||
Others | - | (14,094 | ) | ||||||
Total | $ | (3,351,651 | ) | $ | (148,096 | ) | |||
Reported as: | |||||||||
Non-current deferred tax assets, net | $ | 279,563 | $ | - | |||||
Current deferred tax liabilities, net | $ | (2,965,196 | ) | $ | - |
Note_17_Concentrations_and_Cre1
Note 17 - Concentrations and Credit Risk (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Risks and Uncertainties [Abstract] | |||||||||
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | Net Sales | ||||||||
for the Year Ended | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Customer A | 47 | % | 35.6 | % | |||||
Customer B | 15 | % | 15.9 | % | |||||
Customer C | - | % | 10.5 | % | |||||
62 | % | 62 | % | ||||||
Accounts Receivable | |||||||||
at | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Customer A | 30.4 | % | 33.8 | % | |||||
Customer B | 24.1 | % | 25.1 | % | |||||
Customer C | 19.8 | % | 18.3 | % | |||||
74.3 | % | 77.2 | % | ||||||
Schedule of Vendor Purchase Concentrations [Table Text Block] | Net Purchases | ||||||||
for the Year Ended | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Vendor A | 79.9 | % | 39.4 | % | |||||
Vendor B | - | % | 31 | % | |||||
Vendor C | - | % | 10 | % | |||||
79.9 | % | 80.4 | % | ||||||
Accounts Payable | |||||||||
at | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Vendor A | 49.2 | % | 86 | % | |||||
Vendor B | 29.6 | % | - | % | |||||
78.8 | % | 86 | % |
Note_1_Organization_and_Operat1
Note 1 - Organization and Operations (Details) (USD $) | 0 Months Ended | 6 Months Ended | |||
Aug. 12, 2008 | Jun. 27, 2008 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 01, 2008 | |
Note 1 - Organization and Operations (Details) [Line Items] | |||||
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Options Issued | 530,000 | ||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $0.00 | $0.00 | |||
Investment Options, Exercise Price (in Dollars per share) | $13 | ||||
Renewable Metals [Member] | |||||
Note 1 - Organization and Operations (Details) [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 100.00% | ||||
Armco HK [Member] | |||||
Note 1 - Organization and Operations (Details) [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 69.70% | 100.00% | |||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 769,400 | ||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned (in Dollars) | $6,890,000 | ||||
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Options Issued | 530,000 | ||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $0.00 | ||||
Investment Options, Exercise Price (in Dollars per share) | $13 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 530,000 | ||||
Stock Issued During Period, Value, Stock Options Exercised (in Dollars) | $6,890,000 | ||||
Armco HK 2 [Member] | |||||
Note 1 - Organization and Operations (Details) [Line Items] | |||||
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Options Issued | 200,000 | ||||
Investment Options, Exercise Price (in Dollars per share) | $50 |
Note_2_Significant_and_Critica2
Note 2 - Significant and Critical Accounting Policies and Practices (Details) (USD $) | 12 Months Ended | 72 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2008 | Dec. 31, 2014 | Jul. 21, 2005 | Jul. 20, 2005 | |
Note 2 - Significant and Critical Accounting Policies and Practices (Details) [Line Items] | ||||||
Value Added Tax Rate | 13.00% | 17.00% | ||||
Advertising Expense (in Dollars) | $140,318 | $5,478 | ||||
China, Yuan Renminbi | ||||||
Note 2 - Significant and Critical Accounting Policies and Practices (Details) [Line Items] | ||||||
Foreign Currency Exchange Rate, Translation | 8.11 | 8.28 | ||||
Use Rights [Member] | ||||||
Note 2 - Significant and Critical Accounting Policies and Practices (Details) [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 50 years | |||||
Minimum [Member] | ||||||
Note 2 - Significant and Critical Accounting Policies and Practices (Details) [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 5 years | |||||
Maximum [Member] | ||||||
Note 2 - Significant and Critical Accounting Policies and Practices (Details) [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 20 years |
Note_2_Significant_and_Critica3
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Consolidation Information | 12 Months Ended |
Dec. 31, 2014 | |
Armco HK [Member] | |
Variable Interest Entity [Line Items] | |
Jurisdiction | Hong Kong SAR |
Attributable interest | 100.00% |
Henan Armco [Member] | |
Variable Interest Entity [Line Items] | |
Jurisdiction | PRC |
Attributable interest | 100.00% |
Renewable Metals [Member] | |
Variable Interest Entity [Line Items] | |
Jurisdiction | PRC |
Attributable interest | 100.00% |
Lianyungang Armco [Member] | |
Variable Interest Entity [Line Items] | |
Jurisdiction | PRC |
Attributable interest | 100.00% |
Armco Shanghai [Member] | |
Variable Interest Entity [Line Items] | |
Jurisdiction | PRC |
Attributable interest | 100.00% |
Note_2_Significant_and_Critica4
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Financial Assets and Liabilities Recurring Fair Value Measures (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Financial Assets and Liabilities Recurring Fair Value Measures [Line Items] | |||
Derivative liability | $61,429 | ||
Available-for-sale securities | 73,943 | 519,129 | |
Fair Value, Inputs, Level 1 [Member] | |||
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Financial Assets and Liabilities Recurring Fair Value Measures [Line Items] | |||
Available-for-sale securities | 73,943 | 519,129 | 1,213,641 |
Fair Value, Inputs, Level 3 [Member] | |||
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Financial Assets and Liabilities Recurring Fair Value Measures [Line Items] | |||
Derivative liability | $61,429 |
Note_2_Significant_and_Critica5
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Exchange Rates (RMB Into U.S. Dollars) | Dec. 31, 2014 | Dec. 31, 2013 |
Balance Sheet [Member] | ||
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Exchange Rates (RMB Into U.S. Dollars) [Line Items] | ||
Financial Statement | 6.146 | 6.1122 |
Statement of Operations and Comprehensive Income (Loss) [Member] | ||
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Exchange Rates (RMB Into U.S. Dollars) [Line Items] | ||
Financial Statement | 6.1457 | 6.1943 |
Note_3_Pledged_Deposits_Detail
Note 3 - Pledged Deposits (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||
Feb. 28, 2014 | Dec. 31, 2014 | Jun. 11, 2010 | Dec. 31, 2013 | |||
Note 3 - Pledged Deposits (Details) [Line Items] | ||||||
Debt Instrument, Term | 9 months | |||||
Pledged Assets, Not Separately Reported, Other (in Dollars) | 488,123 | [1] | $490,823 | [1] | ||
Bankers Acceptance [Member] | Minimum [Member] | ||||||
Note 3 - Pledged Deposits (Details) [Line Items] | ||||||
Debt Instrument, Term | 3 months | |||||
Bankers Acceptance [Member] | Maximum [Member] | ||||||
Note 3 - Pledged Deposits (Details) [Line Items] | ||||||
Debt Instrument, Term | 6 months | |||||
Renewable Metals [Member] | ||||||
Note 3 - Pledged Deposits (Details) [Line Items] | ||||||
Debt Instrument, Term | 5 years | |||||
Pledged Assets, Not Separately Reported, Other (in Dollars) | 488,123 | |||||
[1] | $488,123 is to be released to the Company as part of the payment towards capital lease installment payment when the capital lease agreement matures on December 15, 2014. |
Note_3_Pledged_Deposits_Detail1
Note 3 - Pledged Deposits (Details) - Pledged Deposits (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Pledged Deposits [Abstract] | ||||
Deposit for bank acceptance notes payable | $1,636,072 | |||
Deposit for letters of credit | 10,492 | 2,525,327 | ||
Deposit for capital lease obligation (i) | 488,123 | [1] | 490,823 | [1] |
$498,615 | $4,652,222 | |||
[1] | $488,123 is to be released to the Company as part of the payment towards capital lease installment payment when the capital lease agreement matures on December 15, 2014. |
Note_4_Marketable_Equity_Secur2
Note 4 - Marketable Equity Securities, Available for Sale (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||
Aug. 12, 2008 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 08, 2010 | Jul. 19, 2010 | Jun. 08, 2010 | Dec. 31, 2012 | |
Note 4 - Marketable Equity Securities, Available for Sale (Details) [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | 795,462 | 561,841 | 419,888 | ||||
Investment Options, Exercise Price (in Dollars per share) | $13 | ||||||
Available-for-sale Securities | $73,943 | $519,129 | |||||
Available-for-sale Securities, Change in Net Unrealized Holding Gain (Loss), Net of Tax | -265,370 | -694,512 | |||||
Marketable Securities Shares Sold (in Shares) | 20,183,956 | ||||||
Proceeds from Issuance or Sale of Equity | 316,048 | ||||||
Available-for-sale Securities, Gross Realized Losses | 394,565 | ||||||
Apollo Minerals [Member] | |||||||
Note 4 - Marketable Equity Securities, Available for Sale (Details) [Line Items] | |||||||
Equity Method Investment, Ownership Percentage | 19.90% | 19.90% | |||||
Payments to Acquire Marketable Securities | 3,396,658 | ||||||
Subsidiary or Equity Method Investee, Cumulative Number of Shares Issued for All Transactions (in Shares) | 29,250,000 | ||||||
Minimum Stake Board Representation | 12.00% | ||||||
Options to Purchase Common Stock, Contractual Term | 5 years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | 5,000,000 | 5,000,000 | |||||
Investment Options, Exercise Price (in Dollars per share) | $0.20 | ||||||
Estimate of Fair Value Measurement [Member] | |||||||
Note 4 - Marketable Equity Securities, Available for Sale (Details) [Line Items] | |||||||
Available-for-sale Securities | $519,129 |
Note_4_Marketable_Equity_Secur3
Note 4 - Marketable Equity Securities, Available for Sale (Details) - Fair Value of Marketable Securities, Available for Sale (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Note 4 - Marketable Equity Securities, Available for Sale (Details) - Fair Value of Marketable Securities, Available for Sale [Line Items] | |||
Available-for-sale securities at cost | $2,686,102 | $3,396,658 | $3,396,658 |
Accumulated Foreign Currency Transaction Gain (Loss) | 4,549,033 | 4,852,433 | |
Other Comp. Loss - Change in Unrealized Loss | -429,142 | -694,512 | |
Fair Value | 73,943 | 519,129 | |
Sales of the securities | -710,556 | ||
Sales of the securities | -315,991 | ||
Other Comp. Loss - Change in Unrealized Loss | 265,370 | -694,512 | |
Fair Value, Inputs, Level 1 [Member] | |||
Note 4 - Marketable Equity Securities, Available for Sale (Details) - Fair Value of Marketable Securities, Available for Sale [Line Items] | |||
Impairment b Other Than Temporary | -2,366,941 | -2,366,941 | -2,366,941 |
Accumulated Foreign Currency Transaction Gain (Loss) | 183,924 | 183,924 | 183,924 |
Other Comp. Loss - Change in Unrealized Loss | -429,142 | -694,512 | |
Fair Value | 73,943 | 519,129 | 1,213,641 |
Sales of the securities | -710,556 | ||
Other Comp. Loss - Change in Unrealized Loss | 265,370 | -694,512 | |
Fair Value | $265,370 | ($694,512) |
Note_5_Accounts_Receivable_Det
Note 5 - Accounts Receivable (Details) - Accounts Receivable (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts Receivable [Abstract] | ||
Accounts receivable | $43,257,621 | $25,638,666 |
Allowance for doubtful accounts | -54,735 | -43,150 |
$43,202,886 | $25,595,516 |
Note_5_Accounts_Receivable_Det1
Note 5 - Accounts Receivable (Details) - Movement of Allowance for Doubtful Accounts (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2012 | |
Movement of Allowance for Doubtful Accounts [Abstract] | ||
Allowance for doubful accounts | $43,150 | $43,150 |
Allowance for doubful accounts, charged during the year | 11,585 | |
Allowance for doubful accounts | $54,735 | $43,150 |
Note_6_Inventories_Details
Note 6 - Inventories (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Note 6 - Inventories (Details) [Line Items] | ||
Inventory, Work in Process, Gross | $0 | $0 |
Inventory Adjustments | 1,829,891 | 2,291,915 |
Inventory Valuation and Obsolescence [Member] | ||
Note 6 - Inventories (Details) [Line Items] | ||
Inventory Adjustments | 0 | 0 |
Lower of Cost or Market [Member] | ||
Note 6 - Inventories (Details) [Line Items] | ||
Inventory Adjustments | $1,829,891 | $2,291,915 |
Note_6_Inventories_Details_Inv
Note 6 - Inventories (Details) - Inventories (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Inventories [Abstract] | ||
Raw materials - Scrap metal | $2,602,983 | $4,390,811 |
Finished goods - processed scrap metal | 7,684,154 | 12,421,088 |
Purchased merchandise for resale | 697,217 | 5,936,936 |
Write-down of inventories | -1,829,891 | -2,291,915 |
$9,154,463 | $20,456,920 |
Note_7_Property_Plant_and_Equi2
Note 7 - Property, Plant and Equipment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | ||
Interest Costs Capitalized | $0 | $0 |
Depreciation, Depletion and Amortization | 2,800,253 | 2,847,606 |
Impairment of Long-Lived Assets Held-for-use | $0 |
Note_7_Property_Plant_and_Equi3
Note 7 - Property, Plant and Equipment (Details) - Property, Plant and Equipment (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Property, Plant and Equipment [Line Items] | ||||
Property Plant and Equipment | $44,662,122 | $44,856,611 | ||
Less accumulated depreciation (ii) | -12,098,193 | [1] | -9,360,933 | [1] |
32,563,929 | 35,495,678 | |||
Building and Building Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Life | 20 years | [2] | ||
Property Plant and Equipment | 24,969,460 | [2] | 25,054,912 | [2] |
Construction in Progress [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property Plant and Equipment | 4,680,989 | 4,706,875 | ||
Machinery and Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Life | 7 years | |||
Property Plant and Equipment | 12,519,116 | 12,588,003 | ||
Vehicles [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Life | 5 years | |||
Property Plant and Equipment | 2,144,680 | 2,152,379 | ||
Office Equipment [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Life | 5 years | |||
Office Equipment [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Life | 8 years | |||
Office Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property Plant and Equipment | $347,877 | $354,442 | ||
Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Life | 5 years | |||
Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Life | 20 years | |||
[1] | Depreciation expense was $2,800,253 and $2,847,606 for the years ended December 31, 2014 and 2013, respectively. | |||
[2] | The Company did not capitalize any of interest to fixed assets for the year ended December 31, 2014 or 2013. |
Note_8_Land_Use_Rights_Details
Note 8 - Land Use Rights (Details) | 12 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2007 | Sep. 28, 2007 | Apr. 13, 2011 | Sep. 02, 2010 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2014 | Sep. 02, 2010 | |
USD ($) | USD ($) | Use Rights [Member] | Use Rights [Member] | Use Rights [Member] | Use Rights [Member] | Use Rights [Member] | Use Rights [Member] | Use Rights [Member] | Lianyungang Armco [Member] | |
Renewable Metals [Member] | Renewable Metals [Member] | Lianyungang Armco [Member] | Lianyungang Armco [Member] | Lianyungang Armco [Member] | USD ($) | CNY | CNY | |||
CNY | CNY | CNY | CNY | CNY | ||||||
sqm | sqm | sqm | ||||||||
Note 8 - Land Use Rights (Details) [Line Items] | ||||||||||
Finite-lived Intangible Assets Acquired | 14,384,002 | 16,320,000 | 40,800,000 | |||||||
Area of Land (in Square Meters) | 129,585.60 | 100,045 | 199,999 | |||||||
Finite-Lived Intangible Asset, Useful Life | 50 years | 50 years | 50 years | 50 years | ||||||
Finite-Lived Intangible Assets, Cost Incurred to Renew or Extend | 1,076,300 | 900,067 | ||||||||
Deposits Assets | 8,160,000 | |||||||||
Construction in Progress, Gross | 20,674,830 | |||||||||
Amortization of Intangible Assets (in Dollars) | 122,821 | 145,499 | ||||||||
Financial Instruments, Owned and Pledged as Collateral, at Fair Value | $8,135,373 | 50,000,000 |
Note_8_Land_Use_Rights_Details1
Note 8 - Land Use Rights (Details) - Land Use Rights (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Land Use Rights [Abstract] | ||||
Land use right | $6,645,033 | $6,681,779 | ||
Accumulated amortization (i) | -536,750 | [1] | -416,478 | [1] |
$6,108,283 | $6,265,301 | |||
[1] | Amortization expense was $122,821 and $145,499 for the years ended December 31, 2014 and 2013, respectively. |
Note_9_Loans_Payable_Details
Note 9 - Loans Payable (Details) | 0 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Feb. 28, 2014 | Dec. 31, 2013 | Oct. 29, 2014 | Sep. 30, 2014 | Aug. 27, 2014 | Mar. 03, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
USD ($) | USD ($) | USD ($) | USD ($) | CNY | Henan Armco [Member] | Henan Armco [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Third Party Loans [Member] | Third Party Loans [Member] | Third Party Loans [Member] | Third Party Loans [Member] | Henan's Building and Leasehold Improvement [Member] | Renewable Metal's Inventories [Member] | Loan 1 [Member] | Loan 2 [Member] | Loan 3 [Member] | Metawise Group, Inc. [Member] | Draco Resources [Member] | Kelson Management Inc. [Member] | Kelson Management Inc. [Member] | ||||
After Agreement To Repay [Member] | Draco Resources [Member] | Minimum [Member] | Maximum [Member] | Bears No Interest [Member] | Bears Interest [Member] | Minimum [Member] | Maximum [Member] | USD ($) | USD ($) | Metawise Group, Inc. [Member] | Metawise Group, Inc. [Member] | Metawise Group, Inc. [Member] | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||
Draco Resources [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||||||||||
USD ($) | |||||||||||||||||||||||||
Note 9 - Loans Payable (Details) [Line Items] | |||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% | 4.00% | 8.00% | 8.00% | 2.47% | 9.77% | 6.00% | 8.00% | ||||||||||||||||
Guarantor Obligations, Maximum Exposure, Undiscounted | $162,707 | $2,322,942 | |||||||||||||||||||||||
Loans Payable | 157,033 | 699,577 | 13,648,119 | 110,573 | |||||||||||||||||||||
Number of Loans | 3 | ||||||||||||||||||||||||
Debt Instrument, Face Amount | 32,900,000 | 550,000 | 35,000 | 10,000 | 634,967 | 240,000 | 500,000 | ||||||||||||||||||
Accrued Liabilities | 39,967 | ||||||||||||||||||||||||
Prepaid Interest | 792,000 | ||||||||||||||||||||||||
Repayments of Debt | 260,000 | ||||||||||||||||||||||||
Interest Payable | 24,575 | ||||||||||||||||||||||||
Proceeds from Issuance of Debt | 3,031 | ||||||||||||||||||||||||
Number of Non-U.S. Lenders | 15 | ||||||||||||||||||||||||
Convertible Notes Payable | 78,500 | 100,000 | 5,500,000 | 33,927,240 | |||||||||||||||||||||
Debt Instrument, Unamortized Discount | $1,300,000 | ||||||||||||||||||||||||
Debt Instrument, Term | 9 months | ||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $3.17 |
Note_9_Loans_Payable_Details_L
Note 9 - Loans Payable (Details) - Loans Payable (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Loans Payable [Abstract] | ||||
Bank loans b secured (i) | $2,485,649 | [1] | $16,169,543 | [1] |
Third party loans (ii) | 14,347,694 | [2] | 10,782,386 | [2] |
Convertible notes payable (iii) | 178,500 | [3] | 463,709 | [3] |
$17,011,843 | $27,415,638 | |||
[1] | The Company obtained the short term loans from RZB Austria Finance (Hong Kong) Limited, DBS, Bank of Communications, Bank of China, Shanghai PudongDevelopment Bank, Industrial and Commercial Bank of China and Guanhutun Credit Union, respectively. Interest rates for the loans ranged from 2.47% to 9.77% perannum. The maturity dates of the loans ranged from March 16, 2015 to April 9, 2015. On March 16, 2015, the Company paid off the loans of $162,707 fromGuanhutun Credit Union. | |||
[2] | Among third party loans, $699,577 bears no interest and $13,648,119 bears interest rates ranging from 6.0% to 8.0% per annum. The maturity dates of the loansranged from July 20, 2015 to December 31, 2015.As of September 30, 2014, Armco Metals Holdings had three loans with principal amount of $550,000, $35,000 and $10,000, respectively, plus interest accrual of$39,967, in aggregate of $634,967 to Metawise Group, Inc. and its subsidiary, Draco Resources Inc, respectively. As of September 30, 2014, Armco Metals Holdings'subsidiary, Henan Armco, prepaid Draco Resources Inc of $792,000 for commodity plan to purchase. On September 30, 2014, Armco Metals Holdings, HenanArmco, Metawise Group, Inc. and its subsidiary, Draco Resources Inc., entered into an agreement that the four parties agreed to use Henan Armco's prepayment of$792,000 to Draco resources Inc to repay Armco Metals Holdings' loans payable plus interest totaling $634,967 to Metawise Group, Inc., which leaving HenanArmco's prepayment to Draco Resources Inc $157,033. The Company also had borrowing from Kelson Management Inc. for amount of $500,000 from prior year, andduring the year ended December 31, 2014, the Company repaid $260,000, leaving a remaining balance of $240,000. The interest amount accrued for the loan balancewas $24,575.During the fourth quarter of 2014, Draco Resources and its associated parties made advances to the Company for $3,031. Under agreements among theparties, the $157,033 prepayment outstanding as of September 30, 2014 was applied to offset with the Kelson note and accrued interest, and the advances fromDraco and its associated parties. As of the December 31, 2014, the outstanding balance for loan payable to Kelson Management Inc. was $110,573. | |||
[3] | During 2013, the Company's subsidiary borrowed an aggregate of approximately RMB 32.9 million from 15 non-U.S. lenders who are not its affiliates under theterms of loan contracts. In January and February 2014, the Company and its subsidiary entered into note exchange agreements with each of these lenderspursuant to which the Company exchanged the loan contracts for 8% convertible notes in the aggregate amount of RMB 33,927,240 (approximately $5.5 millionnet of discount of $1.3 million), which represented the remaining principal balance due under the loan contracts. The convertible notes bear interest at the rate of8% per annum, mature nine months from the date of issuance, and are convertible at any time at the option of the holder into shares of the Company's commonstock at a conversion price of $3.17 per share. All the notes were converted on April 7, 2014. |
Note_10_Bankers_Acceptance_Not2
Note 10 - Banker's Acceptance Notes Payable and Letters of Credit (Details) - Bankerbs Acceptance Notes Payable (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Short-term Debt [Line Items] | ||
Short-term debt | $1,767,790 | $8,473,217 |
Bankers Acceptance [Member] | Renewable Metals [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | 3,272,144 | |
Letter of Credit [Member] | Renewable Metals [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | 1,767,790 | 5,201,073 |
Renewable Metals [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | $1,767,790 | $8,473,217 |
Note_11_Related_Party_Transact2
Note 11 - Related Party Transactions (Details) | 0 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||||||
Feb. 28, 2014 | Dec. 31, 2014 | Oct. 29, 2014 | Aug. 27, 2014 | Mar. 03, 2014 | Feb. 28, 2014 | Dec. 31, 2013 | Mar. 29, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 29, 2013 | Mar. 29, 2013 | Jan. 01, 2006 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Jan. 01, 2006 | |
USD ($) | USD ($) | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Monthly Payment [Member] | Operating Lease From Related Party [Member] | Operating Lease From Related Party [Member] | Operating Lease From Related Party [Member] | Operating Lease From Related Party [Member] | Operating Lease From Related Party [Member] | ||||||
Notes Payable, Other Payables [Member] | USD ($) | USD ($) | USD ($) | CNY | Operating Lease From Related Party [Member] | USD ($) | CNY | USD ($) | CNY | sqm | ||||||||
CNY | ||||||||||||||||||
Note 11 - Related Party Transactions (Details) [Line Items] | ||||||||||||||||||
Due to Related Parties | $717,703 | $403,141 | $877,076 | $668,332 | ||||||||||||||
Notes Payable, Related Parties | 1,000,000 | 6,300,000 | ||||||||||||||||
Debt Instrument, Term | 9 months | 1 year | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% | 4.00% | 8.00% | 8.00% | |||||||||||||
Area of Land (in Square Meters) | 176.37 | |||||||||||||||||
Operating Leases, Rent Expense | 10,000 | 19,526 | 120,000 | 19,300 | 120,000 | |||||||||||||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $129,347 | $19,525 | 120,000 |
Note_11_Related_Party_Transact3
Note 11 - Related Party Transactions (Details) - Due to Other Related Parties (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | ||
Due to Related Parties | $717,703 | $403,141 |
Keli Yao [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | 116,828 | |
Yi Chu [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | $717,703 | $286,313 |
Note_12_Capital_Lease_Obligati2
Note 12 - Capital Lease Obligation (Details) | 0 Months Ended | |||||||||||
Sep. 17, 2013 | Sep. 15, 2012 | Dec. 12, 2011 | Nov. 18, 2010 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 17, 2013 | Sep. 17, 2013 | Sep. 15, 2012 | Sep. 15, 2012 | Sep. 17, 2013 | Sep. 15, 2012 | |
USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | Overdue Lease Obligation [Member] | Overdue Lease Obligation [Member] | |||||
USD ($) | USD ($) | |||||||||||
Note 12 - Capital Lease Obligation (Details) [Line Items] | ||||||||||||
Capital Lease Agreement Term | 46 months | 3 years | 3 years | |||||||||
Capital Lease Interest Rate | 10.17% | 11.00% | 11.80% | |||||||||
Capital Lease Obligations | $720,819 | $904,990 | $2,261,284 | 15,000,000 | $5,935,517 | 37,500,000 | $159,831 | $560,988 | ||||
Security Deposit | $488,122 | 3,000,000 |
Note_12_Capital_Lease_Obligati3
Note 12 - Capital Lease Obligation (Details) - Capital Lease Obligation | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 17, 2013 | Sep. 17, 2013 | Sep. 15, 2012 | Sep. 15, 2012 |
USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | |
Capital Lease Obligation [Abstract] | ||||||
Total capital lease obligation | $720,819 | $904,990 | $2,261,284 | 15,000,000 | $5,935,517 | 37,500,000 |
Less current maturities | ($720,819) | ($904,990) |
Note_13_Derivative_Instruments2
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Details) | 1 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jan. 28, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 29, 2014 | Aug. 27, 2014 | Mar. 03, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Nov. 08, 2013 | Dec. 31, 2013 | Nov. 08, 2013 | Nov. 08, 2013 | Sep. 23, 2013 | Sep. 23, 2013 | Sep. 23, 2013 | Dec. 31, 2013 | Sep. 23, 2013 | Dec. 31, 2013 | Oct. 29, 2014 | Aug. 11, 2014 | Jul. 25, 2014 | Jul. 15, 2014 | Jun. 27, 2014 | Jun. 25, 2014 | Jun. 18, 2014 | Jun. 12, 2014 | Jun. 04, 2014 | 30-May-14 | 22-May-14 | 14-May-14 | 7-May-14 | Apr. 16, 2014 | Mar. 26, 2014 | Mar. 24, 2014 | Mar. 14, 2014 | Mar. 05, 2014 | Feb. 27, 2014 | Nov. 08, 2013 | Oct. 29, 2014 | Aug. 11, 2014 | Jul. 25, 2014 | Jul. 15, 2014 | Jun. 27, 2014 | Jun. 25, 2014 | Jun. 18, 2014 | Jun. 12, 2014 | Jun. 04, 2014 | 30-May-14 | 22-May-14 | 14-May-14 | 7-May-14 | Apr. 16, 2014 | Mar. 26, 2014 | Mar. 24, 2014 | Mar. 14, 2014 | Mar. 05, 2014 | Feb. 27, 2014 | Feb. 04, 2014 | Jun. 16, 2014 | Apr. 07, 2014 | Mar. 28, 2014 | Jun. 16, 2014 | Apr. 07, 2014 | Apr. 07, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 04, 2014 | Dec. 10, 2013 | Sep. 23, 2013 | Nov. 08, 2013 | Nov. 08, 2013 | Dec. 31, 2013 | Dec. 26, 2013 | Nov. 08, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Apr. 20, 2010 | Apr. 20, 2010 | Nov. 08, 2013 | Jan. 13, 2014 | Feb. 04, 2014 | Apr. 07, 2014 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | CNY | Common Stock [Member] | Common Stock [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Filing S-1 Within 45 Days of Note Date [Member] | Filing S-1 Within 120 Days of Note Date [Member] | Filing S-1 Within 120 Days of Note Date [Member] | Filing S-1 Within 120 Days of Note Date [Member] | Right to Require Purchase on 10th Trading Day After Registration Statement or Additional Closing Date [Member] | Minimum [Member] | Maximum [Member] | 9 Investors [Member] | Rodman & Renshaw [Member] | Hanover Holdings I, LLC [Member] | Four Foreign Investors [Member] | Eleven Foreign Investors [Member] | Asher Enterprises, Inc [Member] | |||
Minimum [Member] | Maximum [Member] | Variable Conversion Base Price Less Than or Equal to $0.45 [Member] | Variable Conversion Base Price Greater Than $0.45 [Member] | Default Rate [Member] | Default Prepayment Rate [Member] | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | Asher and Hanover [Member] | Asher Enterprises, Inc [Member] | Asher Enterprises, Inc [Member] | Asher Enterprises, Inc [Member] | Asher Enterprises, Inc [Member] | Fifteen Foreign Investors [Member] | Fifteen Foreign Investors [Member] | USD ($) | USD ($) | USD ($) | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | USD ($) | USD ($) | Hanover Holdings I, LLC [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||
USD ($) | USD ($) | Hanover Holdings I, LLC [Member] | Hanover Holdings I, LLC [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||||||||||||||||||||
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 153,847 | 7,692 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sale of Stock, Price Per Share (in Dollars per share) | $65 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from Issuance of Common Stock | $1,621,356 | $10,000,016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues (in Shares) | 324,271 | 153,846 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $75 | $75 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants Term | 5 years | 5 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Management Fees | 500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Professional Fees | 607,513 | 512,474 | 15,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Outstanding (in Shares) | 161,539 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable | 78,500 | 100,000 | 5,500,000 | 33,927,240 | 350,000 | 500,000 | 450,000 | 2,472,127 | 3,082,340 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from Convertible Debt | 678,500 | 500,000 | 300,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable, Reduction Amount | 50,000 | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | 50,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% | 4.00% | 8.00% | 8.00% | 22.00% | 150.00% | 4.00% | 8.00% | 8.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Conversion Base Price (in Dollars per share) | $4.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Percentage | 85.00% | 80.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | 32,900,000 | 300,000 | 63,000 | 153,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 115.00% | 140.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $3.17 | $0.91 | $1.48 | $1.79 | $1.77 | $2.09 | $2.09 | $2.05 | $1.74 | $16,575 | $1.85 | $1.87 | $2.28 | $2.39 | $2.71 | $3.47 | $3.44 | $3.22 | $3.20 | $3.09 | $3.17 | $1.14 | $3.17 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Amount | 30,000 | 25,000 | 10,000 | 23,608 | 36,392 | 50,000 | 50,000 | 100,000 | 25,000 | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 | 100,000 | 50,000 | 50,000 | 75,000 | 25,000 | 63,000 | 73,500 | 80,000 | 5,554,468 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest on Convertible Debt, Net of Tax | 261 | 106 | 101 | 108 | 28 | 136 | 150 | 3,756 | 11 | 44 | 58 | 78 | 278 | 1,525 | 4,628 | 2,520 | 6,140 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 33,210 | 17,003 | 5,632 | 13,396 | 17,403 | 23,958 | 24,441 | 59,632 | 15,090 | 13,572 | 13,431 | 10,992 | 10,576 | 37,443 | 28,849 | 14,535 | 15,509 | 9,600 | 57,727 | 36,365 | 35,508 | 1,752,198 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Price (in Dollars per share) | $4.48 | $3.07 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Rate | 15.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Inputs, Probability of Default | 10.00% | 0.00% | 5.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Probability of Default Monthly Increase | 1.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Raising Event | $1,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of Market Generating Dilutive Reset Events | 75.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Market Generating Dilutive Reset Events Price (in Dollars per share) | $3.81 | $2.63 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of Debt Instrument Redemption | 10.00% | 20.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of Debt Instrument Redemption Monthly Increase | 1.00% |
Note_13_Derivative_Instruments3
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities (Warrants 2010 [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities [Line Items] | |||
Number of Warrant Shares (in Shares) | 161,539 | 161,539 | 161,539 |
Exercise Price Per Share | $75 | $75 | $75 |
Number of Warrant Shares (in Shares) | 161,539 | 161,539 | 161,539 |
Exercise Price Per Share | $75 | $75 | $75 |
Earned and Exercisable [Member] | Weighted Average [Member] | |||
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities [Line Items] | |||
Exercise Price Per Share | $75 | ||
Exercise Price Per Share | $75 | ||
Earned and Exercisable [Member] | |||
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities [Line Items] | |||
Number of Warrant Shares (in Shares) | 161,539 | ||
Exercise Price Per Share | $75 | ||
Number of Warrant Shares (in Shares) | 161,539 | ||
Exercise Price Per Share | $75 | ||
Weighted Average [Member] | |||
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities [Line Items] | |||
Exercise Price Per Share | $75 | $75 | $75 |
Exercise Price Per Share | $75 | $75 | $75 |
Note_13_Derivative_Instruments4
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Outstanding and Exercisable Warrants (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number Outstanding (in Shares) | 161,539 |
Warrant [Member] | Minimum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices | 75 |
Weighted Average Exercise Price | 75 |
Warrant [Member] | Maximum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Average Remaining Contractual Life | 109 days |
Warrant [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices | 75 |
Number Outstanding (in Shares) | 161,539 |
Weighted Average Exercise Price | 75 |
Number Exercisable (in Shares) | 161,539 |
Average Remaining Contractual Life (in years) | 109 days |
Weighted Average Exercise Price | 75 |
Note_13_Derivative_Instruments5
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Convertible Note Volatility (Convertible Notes Payable [Member]) | 0 Months Ended | |
Dec. 31, 2013 | Nov. 08, 2013 | |
Convertible Notes Payable [Member] | ||
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Convertible Note Volatility [Line Items] | ||
Volatility rate | 100.00% | 99.00% |
Note_13_Derivative_Instruments6
Note 13 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Change of Fair Value of Derivative Debt Liabilities (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Change of Fair Value of Derivative Debt Liabilities [Abstract] | ||
To record derivative liability as debt discount | $1,950,820 | $60,795 |
Change in fair value of derivative liability | -107,378 | 929,883 |
Settlement of derivative liability due to conversion of related notes | -2,119,627 | -623,809 |
Balance at December 31, | $61,429 |
Note_14_Commitments_and_Contin2
Note 14 - Commitments and Contingencies (Details) | 1 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||||||||||||||||||||||||||||
Dec. 21, 2011 | Dec. 31, 2013 | Dec. 31, 2014 | Oct. 29, 2014 | Aug. 27, 2014 | Mar. 03, 2014 | Feb. 28, 2014 | Dec. 21, 2011 | Mar. 12, 2014 | Mar. 19, 2015 | Dec. 21, 2011 | Dec. 21, 2011 | Dec. 21, 2011 | Mar. 12, 2014 | Dec. 20, 2011 | Feb. 08, 2012 | Jun. 08, 2013 | Jun. 08, 2013 | Sep. 10, 2013 | Sep. 10, 2013 | 16-May-14 | 16-May-14 | 16-May-14 | Jun. 19, 2013 | Jun. 19, 2013 | Dec. 31, 2014 | Mar. 15, 2013 | Mar. 15, 2013 | Sep. 10, 2013 | Sep. 10, 2013 | Sep. 10, 2013 | Jul. 05, 2011 | Jul. 05, 2011 | Jul. 05, 2011 | Dec. 31, 2014 | Jun. 11, 2010 | Jun. 11, 2010 | Jul. 01, 2014 | Jul. 01, 2014 | Dec. 21, 2011 | Mar. 12, 2014 | Mar. 11, 2014 | |
USD ($) | USD ($) | Each Issuance [Member] | Each Issuance [Member] | Subsequent Event [Member] | Commission [Member] | Opening Commission [Member] | Balance Outstanding [Member] | Amendment [Member] | Commission [Member] | Yao [Member] | Henan Armco [Member] | Henan Armco [Member] | Henan Armco [Member] | Henan Armco [Member] | Henan Armco [Member] | Henan Armco [Member] | Henan Armco [Member] | Henan Armco [Member] | Henan Armco [Member] | Henan Armco [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Armco Shanghai [Member] | Armco Shanghai [Member] | DBS Hong Kong [Member] | RZB Hong Kong [Member] | RZB Hong Kong [Member] | ||||||
Opening Commission [Member] | Balance Outstanding [Member] | Yao [Member] | DBS Hong Kong [Member] | DBS Hong Kong [Member] | DBS Hong Kong [Member] | RZB Hong Kong [Member] | RZB Hong Kong [Member] | Bank of China [Member] | Bank of China [Member] | ICBC Bank [Member] | ICBC Bank [Member] | Guangdong Development Bank [Member] | Guangdong Development Bank [Member] | Guangdong Development Bank [Member] | China CITIC Bank [Member] | China CITIC Bank [Member] | USD ($) | Bank of China Lianyungang [Member] | Bank of China Lianyungang [Member] | Shanghai Pudong Development Banks [Member] | Shanghai Pudong Development Banks [Member] | Shanghai Pudong Development Banks [Member] | Bank of Communications Lianyungang [Member] | Bank of Communications Lianyungang [Member] | Bank of Communications Lianyungang [Member] | USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | ||||||||||
DBS Hong Kong [Member] | DBS Hong Kong [Member] | USD ($) | USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | ||||||||||||||||||||||||
USD ($) | ||||||||||||||||||||||||||||||||||||||||||
Note 14 - Commitments and Contingencies (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $7,000,000 | $4,900,000 | 30,000,000 | $3,200,000 | 20,000,000 | $15,600,000 | 96,000,000 | $6,500,000 | 40,000,000 | $8,100,000 | 50,000,000 | $2,400,000 | 15,000,000 | $11,700,000 | 72,000,000 | $20,000,000 | $15,000,000 | |||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | 2.00% | ||||||||||||||||||||||||||||||||||||||||
Export Bill Collection Commission | 6.25% | 12.50% | 25.00% | 6.25% | 6.25% | |||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 8,972,393 | 50,000 | 50,000 | 4,881,462 | 4,090,931 | 45,400,000 | 300,000,000 | |||||||||||||||||||||||||||||||||||
Pledged Deposits | 3.00% | |||||||||||||||||||||||||||||||||||||||||
undefined | 120.00% | 120.00% | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% | 4.00% | 8.00% | 7.87% | 7.87% | ||||||||||||||||||||||||||||||||||||
Cash Collateral Letters of Credit at Sight | 20.00% | |||||||||||||||||||||||||||||||||||||||||
Cash Collateral Other Domestic Letters of Credit | 30.00% | |||||||||||||||||||||||||||||||||||||||||
Inventory Collateral | 166.00% | |||||||||||||||||||||||||||||||||||||||||
Salaries, Wages and Officers' Compensation | 250,000 | |||||||||||||||||||||||||||||||||||||||||
Bonus Percentage of Base Salary | 50.00% | |||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures (in Shares) | 60,000 | 150,000 | ||||||||||||||||||||||||||||||||||||||||
Reimbursable Fees to Executive | 10,000 | |||||||||||||||||||||||||||||||||||||||||
Life Insurance Death Benefit | 2,000,000 | |||||||||||||||||||||||||||||||||||||||||
Operating Leases, Rent Expense, Net | 109,822 | 674,933 | ||||||||||||||||||||||||||||||||||||||||
Monthly Rental Payment | $4,004 |
Note_14_Commitments_and_Contin3
Note 14 - Commitments and Contingencies (Details) - Uncommitted Trade Credit Facilities | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Jun. 11, 2010 | Jun. 11, 2010 | |||||||||
USD ($) | DBS Hong Kong [Member] | RZB Beijing [Member] | Bank of China Lianyungang [Member] | Bank of China Lianyungang [Member] | ICBC Bank [Member] | Guangdong Development Bank [Member] | China CITIC Bank [Member] | Shanghai Pudong Development Banks [Member] | Bank of Communications Lianyungang [Member] | Armco HK [Member] | Henan Armco [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | ||||||||||
Armco HK [Member] | Armco HK [Member] | Henan Armco [Member] | Renewable Metals [Member] | Henan Armco [Member] | Henan Armco [Member] | Henan Armco [Member] | Renewable Metals [Member] | Renewable Metals [Member] | USD ($) | USD ($) | USD ($) | USD ($) | CNY | |||||||||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||||||||||
Date of Expiration | 9-Oct-15 | [1] | 24-Mar-15 | [2] | 23-May-14 | [3] | 27-Dec-15 | [4] | 29-Aug-15 | [5] | 15-May-15 | [6] | 19-Jun-15 | [7] | 9-Apr-15 | [8] | 2-Aug-15 | [9] | ||||||
Total Facilities | $79,557,073 | $20,000,000 | [1] | $7,000,000 | [2] | $4,881,462 | [3] | $8,135,770 | [4] | $3,254,308 | [5] | $15,620,678 | [6] | $6,508,616 | [7] | $2,440,731 | [8] | $11,715,508 | [9] | $27,000,000 | $30,265,064 | $22,292,009 | ||
Facilities Used | 8,972,393 | 4,881,462 | [3] | 2,323,055 | [8] | 1,767,876 | [9] | 4,881,462 | 4,090,931 | 45,400,000 | 300,000,000 | |||||||||||||
Facilities Available | $70,584,680 | $20,000,000 | [1] | $7,000,000 | [2] | $8,135,770 | [4] | $3,254,308 | [5] | $15,620,678 | [6] | $6,508,616 | [7] | $117,676 | [8] | $9,947,632 | [9] | $27,000,000 | $25,383,602 | $18,201,078 | ||||
[1] | On December 21, 2011, Armco HK entered into a Banking Facilities Agreement with DBS Bank (Hong Kong) Limited of $20,000,000 for issuance of commercial letters of credit in connection with the Company's purchase of metal ore. The Company pays interest at LIBOR or DBS Bank's cost of funds plus 2.50% per annum on issued letters of credit in addition to an export bill collection commission equal to 12.5% of the first $50,000 and 6.25% of the balance and an opening commission of 25% on the first $50,000 and 6.25% of the balance for each issuance. Amounts advanced under this facility are repaid from the proceeds of the sale of metal ore. The lender may terminate the facility at anytime at its sole discretion. The facility is secured by the charge on cash deposit of the borrower, the borrower's restricted pledged deposit in the minimum amount of 3% of the letter of credit amount, the Company's letter of comfort and the guarantee of Mr. Yao. | |||||||||||||||||||||||
[2] | On March 12, 2014, Armco HK entered into Amendment No. 5 to the March 25, 2009 uncommitted Trade Finance Facility with RZB Austria Finance (Hong Kong) Limited. The amendment indicates that the total facilities amount shall be decreased from $15,000,000 to $7,000,000. The Company pays interest at 200 basis points per annum plus the lender's cost of funds per annum on issued letters of credit in addition to fees upon issuance of the letter of credit of 6.25% for issuance commissions, negotiation commissions, commission-in-lieu and collection commissions. Amounts advanced under this facility are repaid from the proceeds of the sale of metal ore. The lender may, however, terminate the facility at any time or at its sole discretion upon the occurrence of any event which causes a material market disruption in respect of unusual movement in the level of funding costs to the lender or the unusual loss of liquidity in the funding market. The lender has the sole discretion to decide whether or not such event has occurred. The facility is secured by restricted cash deposits held by the lender, the personal guarantee of Mr. Yao, the Company's guarantee, and a security interest in the contract for the purchase of the ore for which the letter of credit has been issued and the contract for the sale of the ore. | |||||||||||||||||||||||
[3] | On June 8, 2013, Henan Armco obtained a RMB 30,000,000 (approximately $4.9 million) line of credit from Bank of China for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring May 23, 2014. The facility is secured by the guarantee provided by Renewable Metals and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore. Since the accounts of Bank of China have been closed, the line of credit from this bank was terminated when it expired on May 23, 2014. | |||||||||||||||||||||||
[4] | On March 15, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB 50,000,000 (approximately $8.1 million) from Bank of China, Lianyungang Branch for the purchase of raw materials. The facility is expiring December 27, 2015 with interest at 7.872% per annum. The facility is secured by Renewable metals properties, machinery and equipment and land use rights, and guaranteed by Mr. Yao, Yi Chu, and Henan Armco, respectively. | |||||||||||||||||||||||
[5] | On September 10, 2013, Henan Armco obtained a RMB 20,000,000 (approximately $3.2 million) line of credit from ICBC, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring August 29, 2015. The facility is guaranteed by Renewable Metals and Mr. Yao, the Company's Chairman and Chief Executive Officer. | |||||||||||||||||||||||
[6] | On May 16, 2014, Henan Armco obtained a RMB 96,000,000 (approximately $15.6 million) line of credit from Guangdong Development Bank Zhengzhou Branch for issuance of letters of credit to finance the purchase of metal ore. The Company pays interest at 120% of the applicable base rate for lending published by the People's Bank of China ("PBC") at the time the loan is made on issued letters of credit. The facility is secured by the guarantee provided by Mr. Yao and Renewable Metals jointly and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore. | |||||||||||||||||||||||
[7] | On June 19, 2013, Henan Armco obtained a RMB 40,000,000 (approximately $6.5 million) line of credit from Citic Bank, Zhengzhou Branch, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring two years from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Yao. | |||||||||||||||||||||||
[8] | On September 10, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB 15,000,000 (approximately $2.4 million) from Shanghai Pudong Development Bank for the purchase of raw materials expiring April 9, 2015. The interest of the facility at 120% of the applicable base rate for lending published by the People's Bank of China ("PBOC") at the time the loan is drawn down per annum. The facility is secured by Armco machinery's land use right and guarantees provided Armco Machinery, and Mr. Yao, | |||||||||||||||||||||||
[9] | On July 5, 2011, Renewable Metals obtained a RMB 72,000,000 (approximately $11.7 million) line of credit from Bank of Communications, Lianyungang Branch for issuance of letters of credit in connection with the purchase of scrap metal expiring August 2, 2015. The letters of credit require Renewable Metals to pledge cash deposit equal to 20% of the letter of credit for letters of credit at sight, or 30% for other domestic letters of credit and for extended domestic letters of credit, the collateral of inventory equal to 166% of the letter of credit. The facility is secured by Renewable Metals inventories and guarantee provided by Mr. Yao. |
Note_14_Commitments_and_Contin4
Note 14 - Commitments and Contingencies (Details) - Future Minimum Payments Under Non-Cancelable Operating Lease (USD $) | Dec. 31, 2014 |
Future Minimum Payments Under Non-Cancelable Operating Lease [Abstract] | |
2015 | $129,347 |
2016 | 64,063 |
$193,410 |
Note_15_Stockholders_Equity_De
Note 15 - Stockholders' Equity (Details) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Apr. 09, 2014 | Feb. 28, 2014 | Nov. 05, 2013 | Jul. 02, 2013 | 19-May-11 | Jan. 28, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 19, 2014 | Aug. 25, 2014 | Feb. 28, 2014 | Jul. 02, 2013 | Jul. 13, 2012 | 19-May-11 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 26, 2009 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Feb. 08, 2012 | Dec. 31, 2014 | Jan. 02, 2014 | 2-May-13 | Dec. 31, 2014 | 3-May-13 | Jan. 09, 2015 | Mar. 19, 2015 | Jan. 28, 2013 | Mar. 27, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Feb. 08, 2012 | Jan. 02, 2014 | 2-May-13 | 3-May-13 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Nov. 08, 2013 | Feb. 08, 2012 | Oct. 28, 2013 | Oct. 28, 2013 | Jan. 02, 2014 | 2-May-13 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | 3-May-13 | 3-May-14 | Sep. 30, 2013 | Nov. 08, 2013 | Dec. 31, 2014 | Jun. 11, 2010 | Dec. 31, 2014 | Jun. 11, 2010 | Jun. 11, 2010 | Jun. 11, 2010 | Apr. 07, 2014 | Mar. 03, 2012 | Dec. 01, 2012 | Apr. 13, 2012 | Apr. 13, 2012 | Jun. 30, 2013 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Employee Stock Option [Member] | ISO [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subscription Agreements [Member] | Reverse Stock Split [Member] | Restated 2009 Stock Incentive Plan [Member] | Less Than One Year [Member] | Greater than One Year [Member] | Quarterly [Member] | Quarterly [Member] | Quarterly [Member] | Per Quarter [Member] | Loan Gurantee Expense [Member] | Loan Gurantee Expense [Member] | Loan Gurantee Expense [Member] | Loan Gurantee Expense [Member] | Loan Gurantee Expense [Member] | Legal Expenses [Member] | Legal Expenses [Member] | Legal Expenses [Member] | Legal Expenses [Member] | Consulting Fees [Member] | Consulting Fees [Member] | Consulting Fees [Member] | Consulting Fees [Member] | Consulting Fees [Member] | Consulting Fees [Member] | Termination of Leasing Agreement [Member] | Facility Leasing Expenses [Member] | Financing Cost [Member] | Yao [Member] | Yao [Member] | Non-affiliated Investor [Member] | Kam Ping Chan [Member] | Kam Ping Chan [Member] | Kam Ping Chan [Member] | Kam Ping Chan [Member] | Kam Ping Chan [Member] | Kam Ping Chan [Member] | Weiping Shen [Member] | Weiping Shen [Member] | Weiping Shen [Member] | CD International Enterprise Inc [Member] | 4 Investors [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Chaoyang Steel [Member] | All Bright Law Offices [Member] | All Bright Law Offices [Member] | Broad Max Holding [Member] | Hebang {Member] | Hebang {Member] | Hebang {Member] | |||||||||
USD ($) | USD ($) | Yao [Member] | Yao [Member] | Kam Ping Chan [Member] | Kam Ping Chan [Member] | Kam Ping Chan [Member] | Weiping Shen [Member] | Weiping Shen [Member] | Reverse Stock Split [Member] | Yao [Member] | USD ($) | USD ($) | USD ($) | Yao [Member] | Kam Ping Chan [Member] | Kam Ping Chan [Member] | Weiping Shen [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Hanover Holdings I, LLC [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | |||||||||||||||||||||||||||||||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 15 - Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Shares Authorized | 201,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $0.00 | $0.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $0.00 | $0.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 74,000,000 | 74,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 10 | 10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 324,271 | 6,000 | 10,000 | 10,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from Issuance Initial Public Offering (in Dollars) | $1,600,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sale of Stock, Price Per Share (in Dollars per share) | $5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from Issuance of Common Stock (in Dollars) | 1,621,356 | 1,621,356 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Original Debt, Amount (in Dollars) | 1,045,369 | 816,593 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $3.17 | $5.20 | $5.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 157,039 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 8,972,393 | 4,090,931 | 45,400,000 | 300,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Term | 9 months | 5 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Goods and Nonemployee Services Transaction, Quantity of Securities Issued | 50,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 3,334 | 3,333 | 3,333 | 3,333 | 3,333 | 12,500 | 12,500 | 12,500 | 7,500 | 25,000 | 25,000 | 25,000 | 25,000 | 3,333 | 5,000 | 62,500 | 12,500 | 100,000 | 50,000 | 30,000 | 10,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Price (in Dollars per share) | $4.50 | $3.23 | $3.30 | $3.89 | $3.90 | $3.07 | $3.80 | $3.10 | $3.75 | $2.30 | $1.50 | $2.70 | $3.75 | $1.50 | $2.70 | $3.90 | $3.07 | $3.10 | $3.75 | $3.75 | $3.75 | $4.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, Issued for Services (in Dollars) | 13,002 | 10,233 | 12,667 | 10,333 | 12,500 | 28,425 | 18,750 | 33,750 | 28,125 | 37,500 | 67,500 | 97,500 | 76,750 | 10,333 | 18,750 | 234,375 | 46,875 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 2 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repayments of Long-term Capital Lease Obligations | 159,000 | 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Other | 4,702 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, Other (in Dollars) | 21,155 | 5 | 21,155 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, Capital Shares Reserved for Future Issuance | 120,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 300,000 | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 820,000 | 520,000 | 220,000 | 130,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum Amount of Cash-Settled Performance-Based Award (in Dollars) | 1,000,000 | 5,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum ISOs Exercisable Per Employee (in Dollars) | 100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | 5 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of Fair Value | 110.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 60,000 | 150,000 | 625 | 625 | 5,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures (in Dollars) | 62,375 | 505 | 516 | 4,863 | 748,500 | 2,019 | 2,063 | 19,450 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocated Share-based Compensation Expense (in Dollars) | 249,500 | 2,019 | 6,487 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock, Vested Percentage | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 232,996 | 136,328 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures (in Dollars) | 838,785 | 640,743 | 1,096,791 | 236 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 24,538 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustments to Additional Paid in Capital, Other (in Dollars) | $2,119,627 | ($623,809) | ($60) |
Note_15_Stockholders_Equity_De1
Note 15 - Stockholders' Equity (Details) - Amended and Restated 2009 Stock Incentive Plan Activities (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Amended and Restated 2009 Stock Incentive Plan Activities [Abstract] | ||
Number of Shares or Options | 561,841 | 419,888 |
Fair Value at Date of Grant | $3,277,207 | $2,614,951 |
Number of Shares or Options | 795,462 | 510,174 |
Fair Value at Date of Grant | 4,118,012 | 3,023,732 |
Number of Shares or Options | 51,667 | |
Fair Value at Date of Grant | 253,475 | |
Number of Shares or Options | 233,621 | 141,953 |
Fair Value at Date of Grant | 840,805 | 662,256 |
Number of Shares or Options | 795,462 | 561,841 |
Fair Value at Date of Grant | $4,118,012 | $3,277,207 |
Note_16_Income_Taxes_Details
Note 16 - Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Note 16 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 33.00% | |
State [Member] | ||
Note 16 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 30.00% | |
Local [Member] | ||
Note 16 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 3.00% | |
Armco HK [Member] | ||
Note 16 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 16.50% | |
Henan Armco [Member] | ||
Note 16 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | |
Renewable Metals [Member] | ||
Note 16 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | |
Lianyungang Armco [Member] | ||
Note 16 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | |
Armco Shanghai [Member] | ||
Note 16 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% |
Note_16_Income_Taxes_Details_P
Note 16 - Income Taxes (Details) - Provision for Income Taxes (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Provision for Income Taxes [Abstract] | ||
Current taxes | $421,585 | |
Deferred taxes | 2,685,764 | |
$2,685,764 | $421,585 |
Note_16_Income_Taxes_Details_E
Note 16 - Income Taxes (Details) - Effective Income Tax Rate Reconciliations | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Effective Income Tax Rate Reconciliations [Abstract] | ||
U.S. statutory rate | 34.00% | 34.00% |
Foreign income not recognized in the U.S. | -34.00% | -34.00% |
PRC enterprise income tax rate | 25.00% | 25.00% |
Effect of expenses not deductible for tax purposes | 0.30% | -2.60% |
Effect of valuation allowance on deferred income tax assets | 5.30% | -28.80% |
Effect of income tax difference under different tax jurisdictions | 28.40% | -5.10% |
Others | 0.00% | 0.10% |
Effective tax rate | 59.00% | -11.40% |
Note_16_Income_Taxes_Details_C
Note 16 - Income Taxes (Details) - Components of the Deferred Tax Assets and Liabilities (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current deferred income tax assets | ||
Cutoff adjustment - revenue and expense cutoff | $53,893 | |
Accrued processing cost | 211,325 | |
Interest expense to be deducted | 140,542 | |
Bad debt allowance and others to be deducted | 34,588 | |
Write-down of inventories | 580,675 | |
Operating cost of idle manufacturing facility | 63,520 | |
Accrued interests | 164,333 | |
440,348 | 808,528 | |
Less: valuation allowance, current portion | -53,893 | -660,432 |
Total | 386,455 | 148,096 |
Non-current deferred income tax assets | ||
Net operating loss carryforwards | 1,405,411 | 983,609 |
Less: valuation allowance, non-current portion | -1,125,848 | -983,609 |
Noncurrent deferred tax asset, net | 279,563 | |
Current deferred income tax liabilities | ||
Write-down of inventories | -143,993 | |
Deferred taxable loss | -3,159,165 | -134,002 |
Operating cost of idle manufacturing facility | -48,493 | |
Others | -14,094 | |
Total | -3,351,651 | -148,096 |
Reported as: | ||
Current deferred tax liabilities, net | ($2,965,196) |
Note_17_Concentrations_and_Cre2
Note 17 - Concentrations and Credit Risk (Details) - Customer and Credit Concentrations (Customer Concentration Risk [Member]) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Customer A [Member] | Sales Revenue, Net [Member] | ||
Revenue, Major Customer [Line Items] | ||
Customer | 47.00% | 35.60% |
Customer A [Member] | Accounts Receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Customer | 30.40% | 33.80% |
Customer B [Member] | Sales Revenue, Net [Member] | ||
Revenue, Major Customer [Line Items] | ||
Customer | 15.00% | 15.90% |
Customer B [Member] | Accounts Receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Customer | 24.10% | 25.10% |
Customer C [Member] | Sales Revenue, Net [Member] | ||
Revenue, Major Customer [Line Items] | ||
Customer | 10.50% | |
Customer C [Member] | Accounts Receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Customer | 19.80% | 18.30% |
Sales Revenue, Net [Member] | ||
Revenue, Major Customer [Line Items] | ||
Customer | 62.00% | 62.00% |
Accounts Receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Customer | 74.30% | 77.20% |
Note_17_Concentrations_and_Cre3
Note 17 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations (Supplier Concentration Risk [Member]) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Vendor A [Member] | Cost of Goods, Total [Member] | ||
Note 17 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | ||
Vendor | 79.90% | 39.40% |
Vendor A [Member] | Account Payable [Member] | ||
Note 17 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | ||
Vendor | 49.20% | 86.00% |
Vendor B [Member] | Cost of Goods, Total [Member] | ||
Note 17 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | ||
Vendor | 31.00% | |
Vendor B [Member] | Account Payable [Member] | ||
Note 17 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | ||
Vendor | 29.60% | |
Vendor C [Member] | Cost of Goods, Total [Member] | ||
Note 17 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | ||
Vendor | 10.00% | |
Cost of Goods, Total [Member] | ||
Note 17 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | ||
Vendor | 79.90% | 80.40% |
Account Payable [Member] | ||
Note 17 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | ||
Vendor | 78.80% | 86.00% |
Note_18_Foreign_Operations_Det
Note 18 - Foreign Operations (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Note 18 - Foreign Operations (Details) [Line Items] | ||
Foreign Currency Fair Value Hedge Asset at Fair Value (in Dollars) | $0 | $0 |
Retained Earnings Appropriated Surplus Reserve | 10.00% | |
Statutory Surplus Reserve PRC Requirement | 50.00% | |
Minimum [Member] | ||
Note 18 - Foreign Operations (Details) [Line Items] | ||
Statutory Common Welfare Fund Requirement | 5.00% | |
Maximum [Member] | ||
Note 18 - Foreign Operations (Details) [Line Items] | ||
Statutory Common Welfare Fund Requirement | 10.00% |
Note_19_Acquisition_of_Equity_1
Note 19 - Acquisition of Equity Interest of Draco Resources Inc. (Details) (USD $) | 0 Months Ended | ||||||||
Apr. 15, 2014 | Mar. 27, 2014 | Sep. 19, 2014 | Aug. 25, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Aug. 31, 2014 | Apr. 14, 2014 | |
Note 19 - Acquisition of Equity Interest of Draco Resources Inc. (Details) [Line Items] | |||||||||
Common Stock, Shares Authorized | 74,000,000 | 74,000,000 | 200,000,000 | 200,000,000 | |||||
Convertible Common Stock [Member] | Draco Resources [Member] | |||||||||
Note 19 - Acquisition of Equity Interest of Draco Resources Inc. (Details) [Line Items] | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 3,000,000 | ||||||||
Business Acquisition, Share Price (in Dollars per share) | $3.40 | ||||||||
Amendment [Member] | |||||||||
Note 19 - Acquisition of Equity Interest of Draco Resources Inc. (Details) [Line Items] | |||||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | |||||||
Reverse Stock Split [Member] | Draco Resources [Member] | |||||||||
Note 19 - Acquisition of Equity Interest of Draco Resources Inc. (Details) [Line Items] | |||||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 10 | ||||||||
Reverse Stock Split [Member] | |||||||||
Note 19 - Acquisition of Equity Interest of Draco Resources Inc. (Details) [Line Items] | |||||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 10 | ||||||||
Draco Resources [Member] | Finder's Fee [Member] | China Direct Investments Inc [Member] | |||||||||
Note 19 - Acquisition of Equity Interest of Draco Resources Inc. (Details) [Line Items] | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 2,400,000 | 2,400,000 | |||||||
Draco Resources [Member] | Finder's Fee [Member] | Shanghai Heqi Investment Center [Member] | |||||||||
Note 19 - Acquisition of Equity Interest of Draco Resources Inc. (Details) [Line Items] | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 2,400,000 | 2,400,000 | |||||||
Draco Resources [Member] | Finder's Fee [Member] | |||||||||
Note 19 - Acquisition of Equity Interest of Draco Resources Inc. (Details) [Line Items] | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 4,800,000 | 4,800,000 | |||||||
Draco Resources [Member] | |||||||||
Note 19 - Acquisition of Equity Interest of Draco Resources Inc. (Details) [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 100.00% | 31.37% | |||||||
Incremental Common Shares Attributable to Dilutive Effect of Equity Unit Purchase Agreements | 13,950,000 | ||||||||
Stock Warrant Exercise Term | 5 years | ||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 40,000,000 | 51,000,000 | |||||||
Percentage of Outstanding Common Stock After Acquisition | 74.64% | 46.05% | |||||||
Business Acquisition, Percentage of Voting Interests Acquired | 31.37% | 40.00% |
Note_20_Subsequent_Events_Deta
Note 20 - Subsequent Events (Details) | Oct. 29, 2014 | Aug. 27, 2014 | Mar. 03, 2014 | Feb. 28, 2014 | Jul. 02, 2013 | Jul. 13, 2012 | 19-May-11 | Jan. 31, 2016 | Mar. 06, 2015 | Mar. 06, 2015 | Mar. 06, 2015 | Mar. 06, 2015 | Jan. 09, 2015 | Mar. 03, 2015 | Mar. 03, 2015 | Mar. 06, 2015 | Mar. 06, 2015 | Mar. 06, 2015 | Mar. 06, 2015 | Mar. 27, 2014 |
USD ($) | Restricted Stock [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Reverse Stock Split [Member] | |||||||
Scenario, Forecast [Member] | Till April 2015 [Member] | Till April 2015 [Member] | From May 2015 [Member] | From May 2015 [Member] | Reverse Stock Split [Member] | Joshua Sason [Member] | Joshua Sason [Member] | Chaoyang Investing & Construction Company [Member] | Chaoyang Investing & Construction Company [Member] | Chaoyang Investing & Construction Company [Member] | Chaoyang Investing & Construction Company [Member] | |||||||||
Shanghai Heqi Investment Center [Member] | Chaoyang Investing & Construction Company [Member] | Chaoyang Investing & Construction Company [Member] | Chaoyang Investing & Construction Company [Member] | Chaoyang Investing & Construction Company [Member] | USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | ||||||||||
USD ($) | CNY | USD ($) | CNY | |||||||||||||||||
Note 20 - Subsequent Events (Details) [Line Items] | ||||||||||||||||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 10 | 10 | ||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | 820,000 | 520,000 | 220,000 | 150,000 | ||||||||||||||||
Debt Conversion, Original Debt, Amount | $100,000 | |||||||||||||||||||
Interest Accrued on Convertible Note | 4,066.67 | 511,097 | 3,141,048 | |||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 142,779 | |||||||||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $3.17 | $0.73 | ||||||||||||||||||
Percentage of Loan Waived by Lender | 50.00% | 50.00% | ||||||||||||||||||
Debt Instrument, Decrease, Forgiveness | 4,060,617 | 25,000,000 | ||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% | 4.00% | 8.00% | 6.42% | 6.42% | ||||||||||||||
Debt Instrument, Periodic Payment | $812,123 | 5,000,000 | $406,062 | 2,500,000 |