Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2015 |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation - Unaudited Interim Financial Information |
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The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2014 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2015. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation |
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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. |
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The Company's consolidated subsidiaries and/or entities as of March 31, 2015 are as follows: |
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Name of consolidated subsidiary or entity | State or other jurisdiction of incorporation or organization | Date of incorporation or formation | Attributable interest | | | | | | | | | | | | | |
(date of acquisition, if applicable) | | | | | | | | | | | | | |
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Armco Metal International Limited (“Armco HK”) | Hong Kong SAR | 13-Jul-01 | 100% | | | | | | | | | | | | | |
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Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) | PRC | 6-Jun-02 | 100% | | | | | | | | | | | | | |
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Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”) | PRC | 9-Jan-07 | 100% | | | | | | | | | | | | | |
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Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”) | PRC | 4-Jun-09 | 100% | | | | | | | | | | | | | |
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Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) | PRC | 16-Jul-10 | 100% | | | | | | | | | | | | | |
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The consolidated financial statements include all accounts of the Company and the consolidated subsidiaries and/or entities as of reporting period ending dates(s) and for the reporting period(s) then ended. |
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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 |
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The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (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. Management makes its best estimate of the outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates. |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value of Financial Instruments |
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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 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: |
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Level 1 | | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. | | | | | | | | | | | | | | |
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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. | | | | | | | | | | | | | | |
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Level 3 | | Pricing inputs that are generally observable inputs and not corroborated by market data. | | | | | | | | | | | | | | |
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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. |
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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. |
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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. |
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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 March 31, 2015 and December 31, 2014. |
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The Company’s Level 3 financial liabilities consist of convertible notes with embedded conversion feature issued in September 2013, November 2013, and January through March 2014, 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. |
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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. |
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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. |
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Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis |
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Level 1 Financial Assets – Marketable Securities |
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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. |
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Level 3 Financial Liabilities – Derivative Liabilities |
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The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liabilities 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. |
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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 March 31, 2015, and December 31, 2014: |
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Recurring Fair Value Measures | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
31-Mar-15 | | | | | | | | | | | | | | | | |
Derivative liability | | | - | | | | - | | | $ | - | | | $ | - | |
Available-for-sale securities | | $ | 27,087 | | | | - | | | | - | | | $ | 27,087 | |
31-Dec-14 | | | | | | | | | | | | | | | | |
Derivative liability | | | - | | | | - | | | $ | - | | | $ | - | |
Available-for-sale securities | | $ | 73,943 | | | | - | | | | - | | | $ | 73,943 | |
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Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis |
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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. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation |
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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. |
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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. |
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Unless otherwise noted, the rate presented below per U.S. $1.00 was the bid 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: |
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| | 31-Mar-15 | | | 31-Dec-14 | | | 31-Mar-14 | | | | | |
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Balance sheets | | | 6.1091 | | | | 6.146 | | | | 6.1632 | | | | | |
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Statements of operations and comprehensive income (loss) | | | 6.1358 | | | | 6.1457 | | | | 6.1178 | | | | | |
Earnings Per Share, Policy [Policy Text Block] | Net Income (Loss) per Common Share |
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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 non-vested shares. |
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For the periods presented, the computation of diluted 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. |
Reclassification, Policy [Policy Text Block] | Reclassification |
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Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassification had no impact on net earnings and financial position |