Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 15-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Armco Metals Holdings, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | -19 | |
Entity Common Stock, Shares Outstanding | 6,267,699 | |
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-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Consolidated_Balance_Sheets_Cu
Consolidated Balance Sheets (Current Period Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash | $177,840 | $1,884,887 |
Pledged deposits | 10,565 | 498,615 |
Marketable securities | 27,087 | 73,943 |
Accounts receivable, net | 32,619,810 | 43,202,886 |
Inventories | 10,614,121 | 9,154,463 |
Advance on purchases | 6,718,859 | 1,093,402 |
Prepayments and other current assets | 973,309 | 1,164,603 |
Total Current Assets | 51,141,591 | 57,072,799 |
Property, plant and equipment, net | 32,071,949 | 32,563,929 |
Land use rights, net | 6,114,352 | 6,108,283 |
Deferred tax assets | 938,424 | 279,563 |
Total Assets | 90,266,316 | 96,024,574 |
CURRENT LIABILITIES: | ||
Loans payable | 12,700,108 | 17,011,843 |
Banker's acceptance notes payable and letters of credit | 1,778,467 | 1,767,790 |
Current maturities of capital lease obligation | 0 | 720,819 |
Accounts payable | 6,152,761 | 5,497,866 |
Due to related parties | 534,940 | 717,703 |
Customer deposits | 1,478,018 | 1,467,281 |
Corporate income tax payable | 817,185 | 815,073 |
Value added tax and other taxes payable | 4,906,614 | 5,747,470 |
Deferred tax liabilities | 3,529,990 | 2,965,196 |
Accrued expenses and other current liabilities | 2,839,214 | 3,850,095 |
Total Current Liabilities | 35,713,663 | 41,438,212 |
Total Liabilities | 35,713,663 | 41,438,212 |
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, 5,973,749 and 5,615,088 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively | 5,974 | 5,615 |
Additional paid-in capital | 46,476,490 | 45,968,908 |
Retained earnings | 3,459,113 | 4,491,948 |
Accumulated other comprehensive income | 4,611,076 | 4,119,891 |
Total Stockholders' Equity | 54,552,653 | 54,586,362 |
Total Liabilities and Stockholders' Equity | 90,266,316 | 96,024,574 |
Chairman and CEO [Member] | ||
CURRENT LIABILITIES: | ||
Advances received from Chairman and CEO | $976,366 | $877,076 |
Consolidated_Balance_Sheets_Cu1
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | 5,973,749 | 5,615,088 |
Common stock, shares outstanding | 5,973,749 | 5,615,088 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
NET REVENUES | $43,070,014 | $9,918,651 |
COST OF GOODS SOLD | 46,960,716 | 11,082,455 |
GROSS PROFIT | -3,890,702 | -1,163,804 |
OPERATING EXPENSES: | ||
Selling expenses | 9,537 | 100,855 |
Professional fees | 77,204 | 214,454 |
General and administrative expenses | 888,212 | 1,438,126 |
Operating cost of idle manufacturing facility | 455,547 | 534,972 |
Total operating expenses | 1,430,500 | 2,288,407 |
LOSS FROM OPERATIONS | -5,321,202 | -3,452,211 |
OTHER (INCOME) EXPENSE: | ||
Interest income | -95 | -98,268 |
Interest expense | 282,873 | 672,942 |
Investment loss | 158,999 | |
Change in fair value of derivative liabilities | 15,427 | -477,909 |
Loan guarantee expense | 13,002 | |
Gain on forgiveness of short-term debt | -4,074,448 | |
Other (income) expense | -561,314 | 58,303 |
Total other (income) expense | -4,178,558 | 168,070 |
LOSS BEFORE INCOME TAX PROVISION | -1,142,644 | -3,620,281 |
INCOME TAX BENEFIT | -109,809 | |
NET LOSS | -1,032,835 | -3,620,281 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||
Change in unrealized income (loss) on marketable securities | 148,302 | 21,938 |
Foreign currency translation gain (loss) | 342,883 | -408,558 |
COMPREHENSIVE LOSS | ($541,650) | ($4,006,901) |
NET LOSS PER COMMON SHARE - BASIC AND DILUTED: | ||
Net loss per common share - basic and diluted (in Dollars per share) | ($0.18) | ($1.20) |
Weighted Average Common Shares Outstanding - basic and diluted (in Shares) | 5,753,642 | 3,005,279 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Net Unrealized Investment Gain (Loss) [Member] | Accumulated Translation Adjustment [Member] | All Bright [Member] | Total |
All Bright [Member] | All Bright [Member] | Shares Before Split [Member] | Shares After Split [Member] | All Bright [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
Shares Before Split [Member] | Shares After Split [Member] | USD ($) | USD ($) | ||||||||
USD ($) | |||||||||||
Balance, December 31, 2014 at Dec. 31, 2014 | $5,615 | $45,968,908 | $4,491,948 | ($429,142) | $4,549,033 | $54,586,362 | |||||
Balance, December 31, 2014 (in Shares) at Dec. 31, 2014 | 5,615,088 | 5,615,088 | |||||||||
Issuance of common shares for employees | 179 | 251,170 | 251,349 | ||||||||
Issuance of common shares for employees (in Shares) | 179,215 | ||||||||||
Issuance of common stock for services | 13 | 24 | 14,237 | 27,526 | 14,250 | 27,550 | |||||
Issuance of common stock for services (in Shares) | 12,500 | 24,167 | |||||||||
Issuance of common stock in conversion of debt and accrued interest | 143 | 103,924 | 104,067 | ||||||||
Issuance of common stock in conversion of debt and accrued interest (in Shares) | 142,779 | ||||||||||
Reclassification of derivative liabilities due to conversion of convertible notes | 110,725 | 110,725 | |||||||||
Net Loss | -1,032,835 | -1,032,835 | |||||||||
Change in unrealized gain on marketable securities | 148,302 | 148,302 | |||||||||
Foreign currency translation gain | 342,883 | 342,883 | |||||||||
Balance, March 31, 2015 at Mar. 31, 2015 | $5,974 | $46,476,490 | $3,459,113 | ($280,840) | $4,891,916 | $54,552,653 | |||||
Balance, March 31, 2015 (in Shares) at Mar. 31, 2015 | 5,973,749 | 5,973,749 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($1,032,835) | ($3,620,281) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation expense | 684,252 | 706,766 |
Amortization expense | 17,962 | 30,782 |
Deferred income taxes | -109,810 | |
Gain on forgiveness of capital lease obligation | -125,371 | |
Gain on forgiveness of short-term debt | -4,074,448 | |
Change in fair value of derivative liabilities | 15,427 | -477,909 |
Loss on sales of marketable securities | 158,999 | |
Amortization of debt discount | 95,298 | 494,593 |
Stock based compensation | 251,349 | 1,017,031 |
Stock issued for third-party services | 41,800 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 10,781,952 | 8,777,149 |
Inventories | -1,397,929 | 3,526,376 |
Advance on purchases | -5,594,403 | 269,806 |
Prepayments and other current assets | 220,917 | -1,080,644 |
Banker's acceptance notes payable and letters of credit | -5,326,288 | |
Accounts payable | 655,231 | -4,898,046 |
Customer deposits | 1,866 | 501,493 |
Taxes payable | -894,388 | -354,926 |
Accrued expenses and other current liabilities | -1,044,813 | 152,365 |
NET CASH USED IN OPERATING ACTIVITIES | -1,348,944 | -281,733 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from release of pledged deposits | 5,409,660 | |
Payment made towards pledged deposits | -1,816,273 | |
Cash received from sales of marketable securities | 36,159 | |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 36,159 | 3,593,387 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from loans payable | 6,082,898 | |
Repayment of loans payable | -221,624 | -9,135,603 |
Repayment of capital lease obligation | -107,712 | |
Advances from (repayment to) Chairman and CEO | 103,756 | 77,918 |
Advances from (repayment to) related parties | -186,284 | 78 |
NET CASH USED IN FINANCING ACTIVITIES | -411,864 | -2,974,709 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 17,602 | 66,802 |
NET CHANGE IN CASH | -1,707,047 | 403,747 |
Cash at beginning of the year | 1,884,887 | 596,557 |
Cash at end of the period | 177,840 | 1,000,304 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||
Interest paid | 62,298 | 175,553 |
NON CASH FINANCING AND INVESTING ACTIVITIES: | ||
Debt discount due to convertible feature | 95,298 | 1,901,282 |
Change in fair value of marketable security | 148,302 | 21,938 |
Reclassification of derivative liability to additional paid-in capital | 117,267 | |
Reclassification of derivative liability from equity | 110,725 | |
Common shares issued for conversion of debt and accrued interest | 104,067 | 384,627 |
Capital lease obligation settled with pledge deposit | $488,934 |
Note_1_Organization_and_Operat
Note 1 - Organization and Operations | 3 Months Ended |
Mar. 31, 2015 | |
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 nonferrous 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, 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 7,694,000 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 5,300,000 shares of the Company’s common stock, par value $.001 per share (the “Common Stock”) with an exercise price of $1.30 per share expiring on December 31, 2008 and (b) a stock option entitling Ms. Gao to purchase 2,000,000 shares of the Company’s common stock with an exercise price of $5.00 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 5,300,000 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 5,300,000 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 | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Significant Accounting Policies [Text Block] | Note 2 - Significant and Critical Accounting Policies and Practices | ||||||||||||||||
Basis of Presentation - Unaudited Interim Financial Information | |||||||||||||||||
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. | |||||||||||||||||
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 and/or entities as of March 31, 2015 are as follows: | |||||||||||||||||
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) | |||||||||||||||||
Armco Metal International Limited (“Armco HK”) | Hong Kong SAR | 13-Jul-01 | 100% | ||||||||||||||
Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) | PRC | 6-Jun-02 | 100% | ||||||||||||||
Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”) | PRC | 9-Jan-07 | 100% | ||||||||||||||
Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”) | PRC | 4-Jun-09 | 100% | ||||||||||||||
Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) | PRC | 16-Jul-10 | 100% | ||||||||||||||
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. | |||||||||||||||||
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 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 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 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 March 31, 2015 and December 31, 2014. | |||||||||||||||||
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. | |||||||||||||||||
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 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. | |||||||||||||||||
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: | |||||||||||||||||
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 | |||||||||||
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. | |||||||||||||||||
Foreign Currency Translation | |||||||||||||||||
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 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: | |||||||||||||||||
31-Mar-15 | 31-Dec-14 | 31-Mar-14 | |||||||||||||||
Balance sheets | 6.1091 | 6.146 | 6.1632 | ||||||||||||||
Statements of operations and comprehensive income (loss) | 6.1358 | 6.1457 | 6.1178 | ||||||||||||||
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 non-vested shares. | |||||||||||||||||
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 | |||||||||||||||||
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 |
Note_3_Pledged_Deposits
Note 3 - Pledged Deposits | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
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 and (b) capital lease obligation. | |||||||||
Pledged deposits consisted of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Deposit for letters of credit | $ | 10,565 | $ | 10,492 | |||||
Deposit for capital lease obligation | - | 488,123 | |||||||
$ | 10,565 | $ | 498,615 | ||||||
Note_4_Marketable_Equity_Secur
Note 4 - Marketable Equity Securities, Available for Sale | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
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 | ||||||||||||||||||||
As of March 31, 2015, the Company’s available for sale marketable securities were marked to market to its fair value of $27,087 and reported a $148,302 change in unrealized gain on marketable securities for the three months ended March 31, 2015 as other comprehensive income (loss) in its Stockholders’ Equity. | |||||||||||||||||||||
The Company sold 5,543,614 shares during the three months ended March 31, 2015 for $36,159, with a realized loss on sales of $158,999. | |||||||||||||||||||||
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 | Change in | ||||||||||||||||||||
Unrealized gain (loss) | |||||||||||||||||||||
Balance as of December 31, 2014 | $ | 2,686,102 | $ | (2,366,941 | ) | $ | 183,924 | $ | (429,142 | ) | $ | 73,943 | |||||||||
Sales of the securities | (195,158 | ) | (195,158 | ) | |||||||||||||||||
Total gain (realized/unrealized) included in: | |||||||||||||||||||||
Other comprehensive income: Changes in unrealized gain | 148,302 | 148,302 | |||||||||||||||||||
Balance as of March 31, 2015 | $ | 2,490,944 | $ | (2,366,941 | ) | $ | 183,924 | $ | (280,840 | ) | $ | 27,087 | |||||||||
Note_5_Accounts_Receivable
Note 5 - Accounts Receivable | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Receivables [Abstract] | |||||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 5 – Accounts Receivable | ||||||||
Accounts receivable consisted of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Accounts receivable | $ | 32,626,141 | $ | 43,257,621 | |||||
Allowance for doubtful accounts | (6,331 | ) | (54,735 | ) | |||||
$ | 32,619,810 | $ | 43,202,886 | ||||||
Note_6_Inventories
Note 6 - Inventories | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventory Disclosure [Text Block] | Note 6 – Inventories | ||||||||
Inventories consisted of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Raw materials - Scrap metal | $ | 5,665,819 | $ | 2,602,983 | |||||
Finished goods - processed scrap metal | 7,534,384 | 7,684,154 | |||||||
Purchased merchandise for resale | 661,261 | 697,217 | |||||||
Write-down of inventories | (3,247,343 | ) | (1,829,891 | ) | |||||
$ | 10,614,121 | $ | 9,154,463 | ||||||
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 March 31, 2015 or December 31, 2014. | |||||||||
Slow-Moving or Obsolescence Markdowns | |||||||||
The Company recorded no inventory obsolescence adjustments for the three months ended March 31, 2015 and 2014. | |||||||||
Lower of Cost or Market Adjustments | |||||||||
There were $1,400,279 and $390,173 of lower of cost or market adjustments for the three months ended March 31, 2015 and 2014, respectively. |
Note_7_Loans_and_Convertible_N
Note 7 - Loans and Convertible Notes Payable | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Loans Payable [Abstract] | |||||||||
Loans Payable [Text Block] | Note 7 – Loans and Convertible Notes Payable | ||||||||
Loans payable consisted of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Bank loans – secured (i) | $ | 2,500,663 | $ | 2,485,649 | |||||
Third party loans (ii) | 10,120,945 | 14,347,694 | |||||||
Convertible notes payable (iii) | 78,500 | 178,500 | |||||||
$ | 12,700,108 | $ | 17,011,843 | ||||||
(i) Bank loans | |||||||||
The Company obtained those short term loans from Shanghai Pudong Development Bank and Guanhutun Credit Union, respectively. Interest rates for the loans ranged from 2.47% to 11.59% per annum. The maturity dates of the loans ranged from March 16, 2016 to April 6, 2016. | |||||||||
Corporate or personal guarantees were provided for the bank loans as follows: | |||||||||
$163,690 loans from Guanhutun Credit Union, collateralized by Henan Armco’s building and leasehold improvement | |||||||||
$2,336,973 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, $518,669 bears no interest and $9,602,276 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. | |||||||||
Collateralization of Property, Plant and Equipmentand Land Use Rights | |||||||||
Both Renewable Metals and Lianyungang Armco’s property, plant and equipment and 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. | |||||||||
On March 6, 2015, Chaoyang Investing & Construction Company agreed to waive 50% of the loan (RMB 25,000,000, approximately $4,060,617) for the Company in order to attract future investment from the Company. 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 $4,092,256) is 6.42%,Till April 2015, Armco should make repayment no less than RMB 5,000,000 (approximately $818,451) and from May 2015, the Company should make monthly repayment no less than RMB 2,500,000 (approximately $409,226). All the loan and interest should be paid off by December 31, 2015. | |||||||||
(iii) Convertible notes payable | |||||||||
On March 3, 2015, Magna Equities II LLC converted its outstanding balance of $100,000 principal of the convertible note and its accrued interest of $4,067 into 142,779 shares with the conversation rate of $0.72887/share. See Note 11 for derivative analysis on the convertible note. | |||||||||
As of March 31, 2015, the convertible note principal balance was $78,500, with the interest rate of 8% per annum. The maturity date is July 31, 2015. The convertible note is convertible after 180 days from the issuance date at the option of the holder into shares of the Company’s common stock, at 63% of the average of the lowest three trading prices for the common stock during the ten trading day period prior to conversion. As of March 31, 2015, the $87,500 note is not convertible yet. |
Note_8_Bankers_Acceptance_Note
Note 8 - Banker's Acceptance Notes Payable and Letters of Credit | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Short-term Debt [Text Block] | |||||||||
Note 8 – Banker’s Acceptance Notes Payable and Letters of Credit | |||||||||
Banker’s acceptance notes payable consisted of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Renewable Metals | |||||||||
Letters of credit maturing on August 2, 2015 | $ | 1,778,467 | $ | 1,767,790 | |||||
$ | 1,778,467 | $ | 1,767,790 | ||||||
Note_9_Related_Party_Transacti
Note 9 - Related Party Transactions | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Related Party Transactions Disclosure [Text Block] | Note 9 – Related Party Transactions | ||||||||
The related parties consist of the following: | |||||||||
Kexuan Yao (“Mr. 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, the Mr. Yao advances funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and due on demand. As of March 31, 2015 and December 31, 2014, the advance balance was $976,366 and $877,076, respectively. | |||||||||
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 three months ended March 31, 2015 and March 31, 2014 were RMB 30,000(approximately $4,889) and RMB 30,000 (approximately $4,868), respectively. | |||||||||
Due to Other Related Parties | |||||||||
Due to other related parties consists of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Keli Yao | $ | - | $ | - | |||||
Yi Chu | 534,940 | 717,703 | |||||||
Total | $ | 534,940 | $ | 717,703 | |||||
The balance of $534,940 due to related parties represents the loan owed to the related parties, which is interest free, unsecured and repayable on demand. |
Note_10_Capital_Lease_Obligati
Note 10 - Capital Lease Obligation | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Leases, Capital [Abstract] | |||||||||
Capital Leases in Financial Statements of Lessee Disclosure [Text Block] | Note 10 – Capital Lease Obligation | ||||||||
Capital lease obligation consisted of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Total capital lease obligation | $ | - | $ | 720,819 | |||||
Less current maturities | - | (720,819 | ) | ||||||
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 on the overdue capital lease obligation of $560,988. On March 31, 2015, China Financial Leasing Co., Ltd. agreed to use the deposit of RMB 3,000,000 to settle the overdue capital lease obligation. As a result, a gain of $89,397 was recognized as other income by the Company. | |||||||||
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 on the overdue capital lease obligation of $159,831. On March 23, 2015, the Company paid an additional RMB 800,000 (approximately $130,826). On March 29, 2015, Jiangsu Financial Leasing Co., Ltd. agreed to waive the remaining overdue capital lease obligation of $35,974, which was recognized as other income by the Company. |
Note_11_Derivative_Instruments
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments | 3 Months Ended | |||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||
Disclosure Text Block [Abstract] | ||||||||||||||||||||||||||||
Derivatives and Fair Value [Text Block] | Note 11 – Derivative Instruments and the Fair Value of Financial Instruments | |||||||||||||||||||||||||||
(i) | Warrants Issued in April 2010 (“2010 Warrants) | |||||||||||||||||||||||||||
As of March 31, 2015, 2010 warrants to purchase 161,539 shares of the Company’s common stock remain outstanding. Since the Magna note bears derivative feature, as discussed below, the warrants were tainted under ASC 815-15 “Derivatives and Hedging”. The tainting terminated upon full conversion of the Magna note. As of March 31, 2015, there was no derivative liability associated with the warrants. | ||||||||||||||||||||||||||||
The table below summarizes the Company’s 2010 warrant activities through March 31, 2015: | ||||||||||||||||||||||||||||
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, 2014 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Granted | - | - | - | - | - | |||||||||||||||||||||||
Canceled for cashless exercise | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised (Cashless) | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised | (- | ) | - | - | - | - | ||||||||||||||||||||||
Expired | (- | ) | - | - | - | - | ||||||||||||||||||||||
Balance, March 31, 2015 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Earned and exercisable, March 31, 2015 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Unvested, March 31, 2015 | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||
The following table summarizes information concerning outstanding and exercisable 2010 warrants as of March 31, 2015: | ||||||||||||||||||||||||||||
Warrants Outstanding | Warrants Exercisable | |||||||||||||||||||||||||||
Range of Exercise Prices | Number Outstanding | Average Remaining Contractual Life (in years) | Weighted Average Exercise Price | Number Exercisable | Average Remaining Contractual Life (in years) | Weighted Average Exercise Price | ||||||||||||||||||||||
$ | 75 | 161,539 | 0.06 | $ | 75 | 161,539 | 0.06 | $ | 75 | |||||||||||||||||||
$ | 75 | 161,539 | 0.06 | $ | 75 | 151,539 | 0.06 | $ | 75 | |||||||||||||||||||
(ii) | Convertible Note | |||||||||||||||||||||||||||
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. On February 23, 2015, the note became convertible. On March 3, 2015, the Company received a conversation notice from its convertible notes holder, Magna Equities II LLC, to convert $100,000 plus interest of $4,067 of the note into 142,779 shares of the Company’s common stock, at a conversation price of $0.72887/share. | ||||||||||||||||||||||||||||
The Company analyzed the conversion option of the convertible debt. The Company considered derivative accounting under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion feature should be classified as a liability due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion option. 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. | ||||||||||||||||||||||||||||
The fair value of the instruments was determined by using Black-Scholes option-pricing model based on the following assumptions: dividend yield of 0%, volatility of 135% - 138%, risk free rate of 0.08%, and an expected term of 0.49 - 0.51 year. | ||||||||||||||||||||||||||||
The following table summarizes the change of fair value of the derivative debt liabilities. | ||||||||||||||||||||||||||||
Balance at December 31, 2014 | $ | - | ||||||||||||||||||||||||||
To record derivative liabilities as debt discount | 95,298 | |||||||||||||||||||||||||||
Change in fair value of derivative liabilities | 15,427 | |||||||||||||||||||||||||||
Settlement of derivative liability due to conversion of related notes | (110,725 | ) | ||||||||||||||||||||||||||
Balance at March 31, 2015 | $ | - | ||||||||||||||||||||||||||
On March 3, 2015, the debt discount of $95,298 was fully amortized as the note was converted to equity. |
Note_12_Commitments_and_Contin
Note 12 - Commitments and Contingencies | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||
Commitments and Contingencies Disclosure [Text Block] | Note 12 – 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. | ||||||||||||||
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 March 31, 2015 were as follows | ||||||||||||||
Date of Expiration | Total Facilities | Facilities Used | Facilities Available | |||||||||||
Armco HK | ||||||||||||||
RZB Bank (i) | 31-Jul-15 | $ | 7,000,000 | $ | - | $ | 7,000,000 | |||||||
DBS (Hong Kong) Limited (ii) | 9-Oct-15 | 20,000,000 | - | 20,000,000 | ||||||||||
Sub-total - Armco HK | 27,000,000 | - | 27,000,000 | |||||||||||
Henan Armco | ||||||||||||||
Bank of China (iii) | 23-May-14 | 4,910,947 | 4,910,947 | - | ||||||||||
China CITIC Bank (iv) | 19-Jun-15 | 6,547,609 | - | 6,547,609 | ||||||||||
ICBC (v) | 29-Aug-15 | 3,273,805 | - | 3,273,805 | ||||||||||
Guangdong Development Bank Zhengzhou Branch (vi) | 15-May-15 | 15,714,262 | - | 15,714,262 | ||||||||||
Sub-total – Henan Armco | 30,446,623 | 4,910,947 | 25,535,676 | |||||||||||
Renewable Metals | ||||||||||||||
Bank of China Lianyungang Branch (vii) | 27-Dec-15 | 8,184,512 | - | 8,184,512 | ||||||||||
Shanghai Pudong Development Bank (viii) | 9-Apr-15 | 2,455,353 | 2,336,973 | 118,380 | ||||||||||
Bank of Communications Lianyungang Branch (x) | 2-Aug-15 | 11,785,697 | 1,778,467 | 10,007,230 | ||||||||||
Sub-total – Renewable Metals | 22,425,562 | 4,115,440 | 18,310,122 | |||||||||||
$ | 79,872,185 | $ | 9,026,387 | $ | 70,845,798 | |||||||||
(i) | On October 10, 2014, Armco HK extended the Banking Facilities Agreement with DBS Bank (Hong Kong) Limited (originally entered on December 21,2011) 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. On March 12, 2014, Amrco HK entered into a Banking Facilities Agreement with RZB bank of $7, 000, 000 for issuance of commercial letters of credit in connection with the Company’s purchase of metal ore, expiring July 31, 2015. The Company pays interest Bank's Cost of Funds plus 200 base point (2%) per annum. | |||||||||||||
(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 sole discretion to decide wheher or not such event has occured. 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 sale of the ore. | |||||||||||||
(iii) | On June 8, 2013, Henan Armco obtained a RMB 30,000,000 (approximately $4.8 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 were closed on November 23, 2014, the line of credit from this bank was terminated. | |||||||||||||
(iv) | On June 19, 2013, Henan Armco obtained a RMB 40,000,000 (approximately $6.5 million) line of credit from China Citic Bank, Zhengzhou Branch, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring two (2) years from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Yao, the Company’s Chairman and Chief Executive Officer. | |||||||||||||
(v) | 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 one (1) year from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Yao. | |||||||||||||
(vi) | On May 16, 2014, Henan Armco obtained a RMB 96,000,000 (approximately $15.7 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. | |||||||||||||
(vii) | On March 15, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB50,000,000 (approximately $8.2 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, Ms. 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. The term of the facility is 12 months with interest 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 by Mr. Yao and Ms. Yi Chu. | |||||||||||||
(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 expiring 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 March 19, 2015, the Company entered into a new employment agreement (the "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 benefits 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 April 13, 2015, Armco Metals Holding entered into a lease agreement for the lease of its principal executive offices that expires in April 2018. The base monthly rental of $1,629.85 for the first year will increase 4% each year. The company is also responsible for its proportionate share of the building's monthly operating expenses which are presently estimated at $660.75 per month. |
Note_13_Stockholders_Equity
Note 13 - Stockholders' Equity | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Stockholders' Equity Note [Abstract] | |||||||||
Stockholders' Equity Note Disclosure [Text Block] | Note 13 – Stockholders’ Equity | ||||||||
Issuance of Common Stock to Parties Other Than Employees for Acquiring Goods or Services | |||||||||
Legal Services Agreement – All Bright Law Offices | |||||||||
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 three months ending March 31, 2015 | |||||||||
12,500 common shares earned for the quarter ended March 31, 2105 were valued at $1.14 per share, which was the market price on quarter end date, or $14,250, which was recorded as legal expenses. | |||||||||
Consulting Services Agreement – Shanghai Heqi Investment Center | |||||||||
On January 13, 2015, the Company entered into a Consulting Services Agreement (“Consulting Agreement”) with Shanghai Heqi Investment Center (Limited Partner) ("Heqi"), a China based company. Pursuant to the Consulting Agreement, Heqi agreed to provide consulting services from February 1, 2015 to January 31, 2016 in exchange for 150,000 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 Heqi. | |||||||||
Shares Earned during the three months ending March 31, 2015 | |||||||||
24,167 common shares earned for the quarter ended March 31, 2105 were valued at $1.14 per share, which was the market price on quarter end date, or $27,550, which was recorded as consulting expenses. | |||||||||
2009 Stock Incentive Plan as Amended | |||||||||
2014 Amendment to the 2009 Stock Incentive Plan | |||||||||
At the 2014 Annual Meeting of Stockholders (the “2014 Annual Meeting”) of the Company held on November 17, 2014, 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 1,120,000 shares of the Company’s common stock. | |||||||||
Shares Awarded during 2015 | |||||||||
During the three months ended March 31, 2015, the Company granted 164,215 shares of its common stock to its employees and directors for the first quarter of their 2015 service of approximately $232,599, in lieu of cash, which were recorded as compensation expense for the quarter ended March 31, 2015. | |||||||||
On March 19, 2015, the Company granted 60,000 shares of its common stock to its Chairman and CEO Kexuan Yao for part of his compensation for the period of January 1, 2015 to December 31, 2015, vesting in four equal quarterly installment beginning on April 1, 2015, which 15,000 shares is vested and record as compensation expense at amount of $18,750 for the quarter ended March 31, 2015. | |||||||||
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, 2013 | 561,841 | $ | 3,277,207 | ||||||
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 | - | $ | - | ||||||
Options – granted | - | - | |||||||
Options – canceled | - | - | |||||||
Shares – granted | 224,215 | 307,599 | |||||||
Shares – canceled | (- | ) | (- | ) | |||||
Balance, March 31, 2015 | 1,019,677 | $ | 4,425,611 | ||||||
Vested, March 31, 2015 | 974,677 | 4,369,361 | |||||||
Unvested, March 31, 2015 | 45,000 | $ | 56,250 | ||||||
As of March 31, 2015, there were 100,323 shares of common stock remaining available for issuance under the Amended and Restated 2009 Stock Incentive Plan. |
Note_14_Income_Taxes
Note 14 - Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Note 14 – 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. | |
The effective rate is 9.61% and 0% for the three months ended March 31, 2015 and March 31, 2014, respectively. |
Note_15_Concentrations_and_Cre
Note 15 - Concentrations and Credit Risk | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Risks and Uncertainties [Abstract] | |||||||||
Concentration Risk Disclosure [Text Block] | Note 15 – 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 March 31, 2015, 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 Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Cusomter A | 57.23 | % | 22.6 | % | |||||
Cusomter B | 19.1 | % | 37.2 | % | |||||
Cusomter C | 15.59 | % | 12.3 | % | |||||
Cusomter D | - | % | 11.8 | % | |||||
91.92 | % | 83.9 | % | ||||||
Net Accounts Receivable at | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Cusomter A | 46.88 | % | 30.4 | % | |||||
Cusomter B | 25.23 | % | 24.1 | % | |||||
Cusomter C | - | % | 19.8 | % | |||||
72.11 | % | 74.3 | % | ||||||
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 Purchase | |||||||||
For the Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Vendor A | 51.2 | % | 38.4 | % | |||||
Vendor B | 41.88 | % | 37 | % | |||||
93.07 | % | 75.4 | % | ||||||
Accounts Payable at | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Vendor A | 53.67 | % | 49.2 | % | |||||
Vendor B | 26.35 | % | 29.6 | % | |||||
80.02 | % | 78.8 | % | ||||||
Note_16_Foreign_Operations
Note 16 - Foreign Operations | 3 Months Ended |
Mar. 31, 2015 | |
Foreign Operations [Abstract] | |
Foreign Operations [Text Block] | Note 16- 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 three months ended March 31, 2015 or 2014. | |
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_17_Subsequent_Events
Note 17 - Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 17– Subsequent Events |
On April 9, 2015, the Company extended the RMB 5,000,000 (approximately $819,390) loan from Shanghai Pudong Development Bank, which originally matured on April 9, 2015, to April, 2016. The interest rate changed from 7.2% to 6.9% per annum. | |
In July 2013, Renewable Metals borrowed a 6-month note in the amount of $3,500,000 from Fremery Holdings, Ltd. ("Fremery") pursuant to the term of a loan agreement (the “Note”). Based on a few amended agreements, the due date of the Note is extended to July 20, 2015. On April 23, 2015, Armco Metals Holdings agreed to provide guarantees to the Note. On April 24, 2015, Fremery entered into an agreement with Heqi to sell $1,200,000 of the Note (the "Purchased Debt") to Heqi. | |
On April 27, 2015 the Company entered into an Agreement with Heqi pursuant to which, from time to time, Heqi has the right to convert the Purchased Debt into shares of the Company’s common stock at a conversion price equal to 85% of volume weighed average price for the common stock during the 10 trading days prior to the conversion date. Heqi is not entitled to convert any portion of the Purchased Debt if, at the time of conversion, the number of shares to be issued to Heqi would result in Heqi and/or its affiliates being the beneficial owner of more than 19.99% of outstanding shares of common stock. Under the terms of the agreement, the maximum conversion number of shares of the Company’s common stock is 1,224,154 shares, and any amount of the Purchased Debt which is not available for conversion, if any, at maturity must be satisfied by the company in cash. | |
On May 8, 2015, the Company received a notice from KBM Worldwide Inc. to request to convert $78,500 principle of the note and $3,110 of the accrued interest into 115,317 common shares, at the conversion rate of $0.7077/share, pursuant to the terms set forth in the convertible note agreement. |
Accounting_Policies_by_Policy_
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 | ||||||||||||||||
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 | ||||||||||||||||
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 and/or entities as of March 31, 2015 are as follows: | |||||||||||||||||
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) | |||||||||||||||||
Armco Metal International Limited (“Armco HK”) | Hong Kong SAR | 13-Jul-01 | 100% | ||||||||||||||
Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) | PRC | 6-Jun-02 | 100% | ||||||||||||||
Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”) | PRC | 9-Jan-07 | 100% | ||||||||||||||
Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”) | PRC | 4-Jun-09 | 100% | ||||||||||||||
Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) | PRC | 16-Jul-10 | 100% | ||||||||||||||
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. | |||||||||||||||||
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 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 | ||||||||||||||||
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: | |||||||||||||||||
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 March 31, 2015 and December 31, 2014. | |||||||||||||||||
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. | |||||||||||||||||
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 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. | |||||||||||||||||
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: | |||||||||||||||||
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 | |||||||||||
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. | |||||||||||||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation | ||||||||||||||||
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 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: | |||||||||||||||||
31-Mar-15 | 31-Dec-14 | 31-Mar-14 | |||||||||||||||
Balance sheets | 6.1091 | 6.146 | 6.1632 | ||||||||||||||
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 | ||||||||||||||||
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. | |||||||||||||||||
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 | ||||||||||||||||
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 |
Note_2_Significant_and_Critica1
Note 2 - Significant and Critical Accounting Policies and Practices (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Schedule of Variable Interest Entities [Table Text Block] | 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) | |||||||||||||||||
Armco Metal International Limited (“Armco HK”) | Hong Kong SAR | 13-Jul-01 | 100% | ||||||||||||||
Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) | PRC | 6-Jun-02 | 100% | ||||||||||||||
Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”) | PRC | 9-Jan-07 | 100% | ||||||||||||||
Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”) | PRC | 4-Jun-09 | 100% | ||||||||||||||
Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) | PRC | 16-Jul-10 | 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-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 | |||||||||||
Schedule of Foreign Exchange Contracts, Statement of Financial Position [Table Text Block] | 31-Mar-15 | 31-Dec-14 | 31-Mar-14 | ||||||||||||||
Balance sheets | 6.1091 | 6.146 | 6.1632 | ||||||||||||||
Statements of operations and comprehensive income (loss) | 6.1358 | 6.1457 | 6.1178 |
Note_3_Pledged_Deposits_Tables
Note 3 - Pledged Deposits (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Transfers and Servicing [Abstract] | |||||||||
Schedule of Financial Instruments Owned and Pledged as Collateral [Table Text Block] | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Deposit for letters of credit | $ | 10,565 | $ | 10,492 | |||||
Deposit for capital lease obligation | - | 488,123 | |||||||
$ | 10,565 | $ | 498,615 |
Note_4_Marketable_Equity_Secur1
Note 4 - Marketable Equity Securities, Available for Sale (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
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 | Change in | ||||||||||||||||||||
Unrealized gain (loss) | |||||||||||||||||||||
Balance as of December 31, 2014 | $ | 2,686,102 | $ | (2,366,941 | ) | $ | 183,924 | $ | (429,142 | ) | $ | 73,943 | |||||||||
Sales of the securities | (195,158 | ) | (195,158 | ) | |||||||||||||||||
Total gain (realized/unrealized) included in: | |||||||||||||||||||||
Other comprehensive income: Changes in unrealized gain | 148,302 | 148,302 | |||||||||||||||||||
Balance as of March 31, 2015 | $ | 2,490,944 | $ | (2,366,941 | ) | $ | 183,924 | $ | (280,840 | ) | $ | 27,087 |
Note_5_Accounts_Receivable_Tab
Note 5 - Accounts Receivable (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Receivables [Abstract] | |||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Accounts receivable | $ | 32,626,141 | $ | 43,257,621 | |||||
Allowance for doubtful accounts | (6,331 | ) | (54,735 | ) | |||||
$ | 32,619,810 | $ | 43,202,886 |
Note_6_Inventories_Tables
Note 6 - Inventories (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of Inventory, Current [Table Text Block] | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Raw materials - Scrap metal | $ | 5,665,819 | $ | 2,602,983 | |||||
Finished goods - processed scrap metal | 7,534,384 | 7,684,154 | |||||||
Purchased merchandise for resale | 661,261 | 697,217 | |||||||
Write-down of inventories | (3,247,343 | ) | (1,829,891 | ) | |||||
$ | 10,614,121 | $ | 9,154,463 |
Note_7_Loans_and_Convertible_N1
Note 7 - Loans and Convertible Notes Payable (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Loans Payable [Abstract] | |||||||||
Loans Payable [Table Text Block] | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Bank loans – secured (i) | $ | 2,500,663 | $ | 2,485,649 | |||||
Third party loans (ii) | 10,120,945 | 14,347,694 | |||||||
Convertible notes payable (iii) | 78,500 | 178,500 | |||||||
$ | 12,700,108 | $ | 17,011,843 |
Note_8_Bankers_Acceptance_Note1
Note 8 - Banker's Acceptance Notes Payable and Letters of Credit (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure Text Block [Abstract] | |||||||||
Schedule of Short-term Debt [Table Text Block] | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Renewable Metals | |||||||||
Letters of credit maturing on August 2, 2015 | $ | 1,778,467 | $ | 1,767,790 | |||||
$ | 1,778,467 | $ | 1,767,790 |
Note_9_Related_Party_Transacti1
Note 9 - Related Party Transactions (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Schedule of Related Party Transactions [Table Text Block] | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Keli Yao | $ | - | $ | - | |||||
Yi Chu | 534,940 | 717,703 | |||||||
Total | $ | 534,940 | $ | 717,703 |
Note_10_Capital_Lease_Obligati1
Note 10 - Capital Lease Obligation (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Leases, Capital [Abstract] | |||||||||
Schedule of Capital Leased Assets [Table Text Block] | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Total capital lease obligation | $ | - | $ | 720,819 | |||||
Less current maturities | - | (720,819 | ) | ||||||
Total Capital lease obligation, net of current maturities | $ | - | $ | - |
Note_11_Derivative_Instruments1
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Tables) | 3 Months Ended | |||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||
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, 2014 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Granted | - | - | - | - | - | |||||||||||||||||||||||
Canceled for cashless exercise | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised (Cashless) | (- | ) | - | - | - | - | ||||||||||||||||||||||
Exercised | (- | ) | - | - | - | - | ||||||||||||||||||||||
Expired | (- | ) | - | - | - | - | ||||||||||||||||||||||
Balance, March 31, 2015 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Earned and exercisable, March 31, 2015 | 161,539 | $ | 75 | $ | 75 | $ | - | $ | - | |||||||||||||||||||
Unvested, March 31, 2015 | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | Warrants Outstanding | Warrants Exercisable | ||||||||||||||||||||||||||
Range of Exercise Prices | Number Outstanding | Average Remaining Contractual Life (in years) | Weighted Average Exercise Price | Number Exercisable | Average Remaining Contractual Life (in years) | Weighted Average Exercise Price | ||||||||||||||||||||||
$ | 75 | 161,539 | 0.06 | $ | 75 | 161,539 | 0.06 | $ | 75 | |||||||||||||||||||
$ | 75 | 161,539 | 0.06 | $ | 75 | 151,539 | 0.06 | $ | 75 | |||||||||||||||||||
Schedule of Derivative Liabilities at Fair Value [Table Text Block] | Balance at December 31, 2014 | $ | - | |||||||||||||||||||||||||
To record derivative liabilities as debt discount | 95,298 | |||||||||||||||||||||||||||
Change in fair value of derivative liabilities | 15,427 | |||||||||||||||||||||||||||
Settlement of derivative liability due to conversion of related notes | (110,725 | ) | ||||||||||||||||||||||||||
Balance at March 31, 2015 | $ | - |
Note_12_Commitments_and_Contin1
Note 12 - Commitments and Contingencies (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
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 | ||||||||||||||
RZB Bank (i) | 31-Jul-15 | $ | 7,000,000 | $ | - | $ | 7,000,000 | |||||||
DBS (Hong Kong) Limited (ii) | 9-Oct-15 | 20,000,000 | - | 20,000,000 | ||||||||||
Sub-total - Armco HK | 27,000,000 | - | 27,000,000 | |||||||||||
Henan Armco | ||||||||||||||
Bank of China (iii) | 23-May-14 | 4,910,947 | 4,910,947 | - | ||||||||||
China CITIC Bank (iv) | 19-Jun-15 | 6,547,609 | - | 6,547,609 | ||||||||||
ICBC (v) | 29-Aug-15 | 3,273,805 | - | 3,273,805 | ||||||||||
Guangdong Development Bank Zhengzhou Branch (vi) | 15-May-15 | 15,714,262 | - | 15,714,262 | ||||||||||
Sub-total – Henan Armco | 30,446,623 | 4,910,947 | 25,535,676 | |||||||||||
Renewable Metals | ||||||||||||||
Bank of China Lianyungang Branch (vii) | 27-Dec-15 | 8,184,512 | - | 8,184,512 | ||||||||||
Shanghai Pudong Development Bank (viii) | 9-Apr-15 | 2,455,353 | 2,336,973 | 118,380 | ||||||||||
Bank of Communications Lianyungang Branch (x) | 2-Aug-15 | 11,785,697 | 1,778,467 | 10,007,230 | ||||||||||
Sub-total – Renewable Metals | 22,425,562 | 4,115,440 | 18,310,122 | |||||||||||
$ | 79,872,185 | $ | 9,026,387 | $ | 70,845,798 |
Note_13_Stockholders_Equity_Ta
Note 13 - Stockholders' Equity (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
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, 2013 | 561,841 | $ | 3,277,207 | ||||||
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 | - | $ | - | ||||||
Options – granted | - | - | |||||||
Options – canceled | - | - | |||||||
Shares – granted | 224,215 | 307,599 | |||||||
Shares – canceled | (- | ) | (- | ) | |||||
Balance, March 31, 2015 | 1,019,677 | $ | 4,425,611 | ||||||
Vested, March 31, 2015 | 974,677 | 4,369,361 | |||||||
Unvested, March 31, 2015 | 45,000 | $ | 56,250 |
Note_15_Concentrations_and_Cre1
Note 15 - Concentrations and Credit Risk (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Risks and Uncertainties [Abstract] | |||||||||
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | Net sales | ||||||||
For the Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Cusomter A | 57.23 | % | 22.6 | % | |||||
Cusomter B | 19.1 | % | 37.2 | % | |||||
Cusomter C | 15.59 | % | 12.3 | % | |||||
Cusomter D | - | % | 11.8 | % | |||||
91.92 | % | 83.9 | % | ||||||
Net Accounts Receivable at | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Cusomter A | 46.88 | % | 30.4 | % | |||||
Cusomter B | 25.23 | % | 24.1 | % | |||||
Cusomter C | - | % | 19.8 | % | |||||
72.11 | % | 74.3 | % | ||||||
Schedule of Vendor Purchase Concentrations [Table Text Block] | Net Purchase | ||||||||
For the Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Vendor A | 51.2 | % | 38.4 | % | |||||
Vendor B | 41.88 | % | 37 | % | |||||
93.07 | % | 75.4 | % | ||||||
Accounts Payable at | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Vendor A | 53.67 | % | 49.2 | % | |||||
Vendor B | 26.35 | % | 29.6 | % | |||||
80.02 | % | 78.8 | % |
Note_1_Organization_and_Operat1
Note 1 - Organization and Operations (Details) (USD $) | 0 Months Ended | 6 Months Ended | ||||
Aug. 12, 2008 | Jun. 27, 2008 | Jun. 27, 2008 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 01, 2008 | |
Note 1 - Organization and Operations (Details) [Line Items] | ||||||
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 | ||||
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% | 100.00% | |||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 7,694,000 | |||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $6,890,000 | $6,890,000 | ||||
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Options Issued | 5,300,000 | |||||
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 | ||||
Investment Options, Exercise Price | $13 | $1.30 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 5,300,000 | |||||
Stock Issued During Period, Value, Stock Options Exercised | $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 | 2,000,000 | |||||
Investment Options, Exercise Price | $5 |
Note_2_Significant_and_Critica2
Note 2 - Significant and Critical Accounting Policies and Practices (Details) (China, Yuan Renminbi) | Jul. 21, 2005 | Jul. 20, 2005 |
China, Yuan Renminbi | ||
Note 2 - Significant and Critical Accounting Policies and Practices (Details) [Line Items] | ||
Foreign Currency Exchange Rate, Translation | 8.11 | 8.28 |
Note_2_Significant_and_Critica3
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Consolidation Information | 3 Months Ended |
Mar. 31, 2015 | |
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 $) | Mar. 31, 2015 | Dec. 31, 2014 |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [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 | $27,087 | $73,943 |
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 | 27,087 | 73,943 |
Fair Value, Measurements, Recurring [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 | $27,087 | $73,943 |
Note_2_Significant_and_Critica5
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Exchange Rates (RMB Into U.S. Dollars) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Balance Sheet [Member] | |||
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Exchange Rates (RMB Into U.S. Dollars) [Line Items] | |||
Financial Statement | 6.1091 | 6.146 | 6.1632 |
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 | 6.1358 | 6.1457 | 6.1178 |
Note_3_Pledged_Deposits_Detail
Note 3 - Pledged Deposits (Details) - Pledged Deposits (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Pledged Deposits [Abstract] | ||
Deposit for letters of credit | $10,565 | $10,492 |
Deposit for capital lease obligation | 0 | 488,123 |
$10,565 | $498,615 |
Note_4_Marketable_Equity_Secur2
Note 4 - Marketable Equity Securities, Available for Sale (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Note 4 - Marketable Equity Securities, Available for Sale (Details) [Line Items] | |
Available-for-sale Securities, Gross Unrealized Gain | $148,302 |
Marketable Securities Shares Sold (in Shares) | 5,543,614 |
Proceeds from Issuance or Sale of Equity | 36,159 |
Available-for-sale Securities, Gross Realized Losses | 158,999 |
Estimate of Fair Value Measurement [Member] | |
Note 4 - Marketable Equity Securities, Available for Sale (Details) [Line Items] | |
Available-for-sale Securities | $27,087 |
Note_4_Marketable_Equity_Secur3
Note 4 - Marketable Equity Securities, Available for Sale (Details) - Fair Value of Marketable Securities, Available for Sale (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Note 4 - Marketable Equity Securities, Available for Sale (Details) - Fair Value of Marketable Securities, Available for Sale [Line Items] | ||
Sales of the securities | ($36,159) | |
Other comprehensive income: Changes in unrealized gain | 148,302 | 21,938 |
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] | ||
Balance as of December 31, 2014 | 2,686,102 | |
Balance as of December 31, 2014 | -2,366,941 | |
Balance as of December 31, 2014 | 183,924 | |
Balance as of December 31, 2014 | -429,142 | |
Balance as of December 31, 2014 | 73,943 | |
Sales of the securities | -195,158 | |
Sales of the securities | -195,158 | |
Other comprehensive income: Changes in unrealized gain | 148,302 | |
Other comprehensive income: Changes in unrealized gain | 148,302 | |
Balance as of March 31, 2015 | 2,490,944 | |
Balance as of March 31, 2015 | -2,366,941 | |
Balance as of March 31, 2015 | 183,924 | |
Balance as of March 31, 2015 | -280,840 | |
Balance as of March 31, 2015 | $27,087 |
Note_5_Accounts_Receivable_Det
Note 5 - Accounts Receivable (Details) - Accounts Receivable (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Accounts Receivable [Abstract] | ||
Accounts receivable | $32,626,141 | $43,257,621 |
Allowance for doubtful accounts | -6,331 | -54,735 |
$32,619,810 | $43,202,886 |
Note_6_Inventories_Details
Note 6 - Inventories (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Note 6 - Inventories (Details) [Line Items] | |||
Inventory, Work in Process, Gross | $0 | $0 | |
Inventory Adjustments | 3,247,343 | 1,829,891 | |
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 | $1,400,279 | $390,173 |
Note_6_Inventories_Details_Inv
Note 6 - Inventories (Details) - Inventories (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Inventories [Abstract] | ||
Raw materials - Scrap metal | $5,665,819 | $2,602,983 |
Finished goods - processed scrap metal | 7,534,384 | 7,684,154 |
Purchased merchandise for resale | 661,261 | 697,217 |
Write-down of inventories | -3,247,343 | -1,829,891 |
$10,614,121 | $9,154,463 |
Note_7_Loans_and_Convertible_N2
Note 7 - Loans and Convertible Notes Payable (Details) | 0 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||||||||||||
Aug. 27, 2014 | Mar. 31, 2015 | Aug. 27, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Apr. 30, 2015 | Apr. 30, 2015 | 31-May-15 | 31-May-15 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 06, 2015 | Mar. 06, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 03, 2015 | Mar. 03, 2015 | |
USD ($) | Land Use Rights [Member] | Land Use Rights [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Notes Payable to Banks [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] | Convertible Debt [Member] | Magna Equities II LLC [Member] | Magna Equities II LLC [Member] | |||
Notes Payable to Banks [Member] | Notes Payable to Banks [Member] | Scenario, Forecast [Member] | Scenario, Forecast [Member] | Scenario, Forecast [Member] | Scenario, Forecast [Member] | Minimum [Member] | Maximum [Member] | Lianyungang Chaoyang Investment Construction Development Co. Ltd [Member] | Lianyungang Chaoyang Investment Construction Development Co. Ltd [Member] | Lianyungang Chaoyang Investment Construction Development Co. Ltd [Member] | Lianyungang Chaoyang Investment Construction Development Co. Ltd [Member] | Lianyungang Chaoyang Investment Construction Development Co. Ltd [Member] | Lianyungang Chaoyang Investment Construction Development Co. Ltd [Member] | Bears No Interest [Member] | Bears Interest [Member] | Minimum [Member] | Maximum [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||
USD ($) | CNY | Lianyungang Chaoyang Investment Construction Development Co. Ltd [Member] | Lianyungang Chaoyang Investment Construction Development Co. Ltd [Member] | Lianyungang Chaoyang Investment Construction Development Co. Ltd [Member] | Lianyungang Chaoyang Investment Construction Development Co. Ltd [Member] | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | |||||||||||||
USD ($) | CNY | USD ($) | CNY | |||||||||||||||||||||||
Note 7 - Loans and Convertible Notes Payable (Details) [Line Items] | ||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.47% | 11.59% | 6.42% | 6.42% | 6.00% | 8.00% | 8.00% | |||||||||||||||||||
Guarantor Obligations, Maximum Exposure, Undiscounted | $163,690 | $2,336,973 | ||||||||||||||||||||||||
Loans Payable | 8,135,373 | 50,000,000 | 4,092,256 | 25,000,000 | 518,669 | 9,602,276 | 87,500 | |||||||||||||||||||
Debt Instrument, Decrease, Forgiveness, Percentage | 50.00% | 50.00% | ||||||||||||||||||||||||
Debt Instrument, Decrease, Forgiveness | 4,060,617 | 25,000,000 | ||||||||||||||||||||||||
Interest Expense, Debt | 511,097 | 3,141,048 | ||||||||||||||||||||||||
Repayments of Bank Debt | 818,451 | 5,000,000 | ||||||||||||||||||||||||
Debt Instrument, Monthly Payment | 409,226 | 2,500,000 | ||||||||||||||||||||||||
Debt Conversion, Original Debt, Amount | 100,000 | |||||||||||||||||||||||||
Debt Conversion, Accrued Interest, Amount | 4,067 | |||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 142,779 | |||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $0.73 | |||||||||||||||||||||||||
Convertible Notes Payable | $100,000 | $78,500 | ||||||||||||||||||||||||
Debt Instrument, Conversion Term | 180 days | |||||||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 58.00% | 63.00% | ||||||||||||||||||||||||
Debt Instrument, Convertible, Threshold Trading Prices | 3 | 3 | ||||||||||||||||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 10 days | 10 days |
Note_7_Loans_and_Convertible_N3
Note 7 - Loans and Convertible Notes Payable (Details) - Loans Payable (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
Loans Payable [Abstract] | ||||
Bank loans b secured (i) | $2,500,663 | [1] | $2,485,649 | [1] |
Third party loans (ii) | 10,120,945 | [2] | 14,347,694 | [2] |
Convertible notes payable (iii) | 78,500 | [3] | 178,500 | [3] |
$12,700,108 | $17,011,843 | |||
[1] | The Company obtained those short term loans from Shanghai Pudong Development Bank and Guanhutun Credit Union, respectively. Interest rates for the loansranged from 2.47% to 11.59% per annum. The maturity dates of the loans ranged from March 16, 2016 to April 6, 2016.Corporate or personal guarantees were provided for the bank loans as follows:$163,690 loans from Guanhutun Credit Union, collateralized by Henan Armco's building and leasehold improvement$2,336,973 loans from Shanghai Pudong Development Bank, collateralized by Renewable Metals inventories and guaranteed by the Company's Chairman andChief Executive Officer | |||
[2] | Among third party loans, $518,669 bears no interest and $9,602,276 bears interest rates ranging from 6.0% to 8.0% per annum. The maturity dates of theloans ranged from July 20, 2015 to December 31, 2015.Collateralization of Property, Plant and Equipment and Land Use RightsBoth Renewable Metals and Lianyungang Armco's property, plant and equipment and land use rights representing all of the Company's land use rights werecollateralized 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 AssetManagement Corporation, an organization authorized by the People's Bank of China to dispose of bad assets from banks, mainly from Bank of China, transferred theloan to Lianyungang Chaoyang Investment Construction Development Co., Ltd, and the related collateral was released as of December 31, 2014.On March 6, 2015, Chaoyang Investing & Construction Company agreed to waive 50% of the loan (RMB 25,000,000, approximately $4,060,617) for the Company inorder to attract future investment from the Company. The interest (RMB 3,141,048, approximately $511,097) of the loan for the year ended December 31, 2014 was notwaived but won't bear any further interest. The interest rate of the rest loan (RMB 25,000,000, approximately $4,092,256) is 6.42%,Till April 2015, Armco should makerepayment no less than RMB 5,000,000 (approximately $818,451) and from May 2015, the Company should make monthly repayment no less than RMB 2,500,000(approximately $409,226). All the loan and interest should be paid off by December 31, 2015. | |||
[3] | On March 3, 2015, Magna Equities II LLC converted its outstanding balance of $100,000 principal of the convertible note and its accrued interest of $4,067 into 142,779shares with the conversation rate of $0.72887/share. See Note 11 for derivative analysis on the convertible note. |
Note_8_Bankers_Acceptance_Note2
Note 8 - Banker's Acceptance Notes Payable and Letters of Credit (Details) - Bankerbs Acceptance Notes Payable (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Renewable Metals | ||
Short-term debt | $1,778,467 | $1,767,790 |
Letter of Credit [Member] | Renewable Metals [Member] | ||
Renewable Metals | ||
Short-term debt | 1,778,467 | 1,767,790 |
Renewable Metals [Member] | ||
Renewable Metals | ||
Short-term debt | $1,778,467 | $1,767,790 |
Note_9_Related_Party_Transacti2
Note 9 - Related Party Transactions (Details) | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Jan. 01, 2006 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2014 | Jan. 01, 2006 |
USD ($) | CNY | USD ($) | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Monthly Payment [Member] | Operating Lease From Related Party [Member] | Operating Lease From Related Party [Member] | Operating Lease From Related Party [Member] | Operating Lease From Related Party [Member] | Operating Lease From Related Party [Member] | |
USD ($) | USD ($) | Operating Lease From Related Party [Member] | USD ($) | CNY | USD ($) | CNY | sqm | ||||
CNY | |||||||||||
Note 9 - Related Party Transactions (Details) [Line Items] | |||||||||||
Due to Related Parties | $534,940 | 534,940 | $717,703 | $976,366 | $877,076 | ||||||
Area of Land | 176.37 | ||||||||||
Operating Leases, Rent Expense | 10,000 | $4,889 | 30,000 | $4,868 | 30,000 |
Note_9_Related_Party_Transacti3
Note 9 - Related Party Transactions (Details) - Due to Other Related Parties | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 |
USD ($) | CNY | USD ($) | Yi Chu [Member] | Yi Chu [Member] | |
USD ($) | USD ($) | ||||
Related Party Transaction [Line Items] | |||||
Due to Related Parties | $534,940 | 534,940 | $717,703 | $534,940 | $717,703 |
Note_10_Capital_Lease_Obligati2
Note 10 - Capital Lease Obligation (Details) | 0 Months Ended | 0 Months Ended | 3 Months Ended | |||||||||||||
Sep. 17, 2013 | Sep. 15, 2012 | Dec. 12, 2011 | Nov. 18, 2010 | Mar. 31, 2015 | Mar. 23, 2015 | Mar. 23, 2015 | Dec. 31, 2014 | Sep. 17, 2013 | Sep. 17, 2013 | Sep. 15, 2012 | Sep. 15, 2012 | Sep. 17, 2013 | Sep. 15, 2012 | Mar. 29, 2015 | Mar. 31, 2015 | |
USD ($) | USD ($) | CNY | USD ($) | USD ($) | CNY | USD ($) | CNY | Overdue Lease Obligation [Member] | Overdue Lease Obligation [Member] | Capital Lease Obligations [Member] | Capital Lease Obligations [Member] | |||||
USD ($) | CNY | USD ($) | USD ($) | |||||||||||||
Note 10 - 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 | $0 | $130,826 | 800,000 | $720,819 | $2,261,284 | 15,000,000 | $5,935,517 | 37,500,000 | $159,831 | 560,988 | ||||||
Security Deposit | 488,122 | 3,000,000 | ||||||||||||||
Other Income | $35,974 | $89,397 |
Note_10_Capital_Lease_Obligati3
Note 10 - Capital Lease Obligation (Details) - Capital Lease Obligation | Mar. 31, 2015 | Mar. 23, 2015 | Mar. 23, 2015 | Dec. 31, 2014 | Sep. 17, 2013 | Sep. 17, 2013 | Sep. 15, 2012 | Sep. 15, 2012 |
USD ($) | USD ($) | CNY | USD ($) | USD ($) | CNY | USD ($) | CNY | |
Capital Lease Obligation [Abstract] | ||||||||
Total capital lease obligation | $0 | $130,826 | 800,000 | $720,819 | $2,261,284 | 15,000,000 | $5,935,517 | 37,500,000 |
Less current maturities | 0 | -720,819 | ||||||
Total Capital lease obligation, net of current maturities | $0 | $0 |
Note_11_Derivative_Instruments2
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | ||
Aug. 27, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 03, 2015 | Apr. 20, 2010 | Dec. 31, 2014 | |
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||
Class of Warrant or Right, Outstanding (in Shares) | 161,539 | |||||
Derivative Liability (in Dollars) | $0 | $0 | ||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 58.00% | 63.00% | ||||
Debt Instrument, Convertible, Threshold Trading Prices | 3 | 3 | ||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 10 days | 10 days | ||||
Convertible Notes Payable (in Dollars) | 100,000 | |||||
Amortization of Debt Discount (Premium) (in Dollars) | 95,298 | 494,593 | ||||
Convertible Notes Payable [Member] | Minimum [Member] | ||||||
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||
Fair Value Assumptions, Expected Volatility Rate | 135.00% | |||||
Fair Value Assumptions, Expected Term | 178 days | |||||
Convertible Notes Payable [Member] | Maximum [Member] | ||||||
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||
Fair Value Assumptions, Expected Volatility Rate | 138.00% | |||||
Fair Value Assumptions, Expected Term | 186 days | |||||
Convertible Notes Payable [Member] | ||||||
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||
Fair Value Assumptions, Expected Dividend Rate | 0.00% | |||||
Fair Value Assumptions, Risk Free Interest Rate | 0.08% | |||||
Amortization of Debt Discount (Premium) (in Dollars) | 95,298 | |||||
Magna Equities II LLC [Member] | ||||||
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||
Debt Conversion, Original Debt, Amount (in Dollars) | 100,000 | |||||
Debt Conversion, Accrued Interest, Amount (in Dollars) | $4,067 | |||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 142,779 | |||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $0.73 | |||||
Rodman & Renshaw [Member] | ||||||
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||
Warrants Term | 180 days |
Note_11_Derivative_Instruments3
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities (Warrants 2010 [Member], USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Note 11 - 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 |
Exercise Price Per Share | $75 | $75 |
Number of Warrant Shares (in Shares) | 161,539 | 161,539 |
Exercise Price Per Share | $75 | $75 |
Earned and Exercisable [Member] | Weighted Average [Member] | ||
Note 11 - 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 11 - 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 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities [Line Items] | ||
Exercise Price Per Share | $75 | $75 |
Exercise Price Per Share | $75 | $75 |
Note_11_Derivative_Instruments4
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Outstanding and Exercisable Warrants (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number Outstanding (in Shares) | 161,539 |
Warrant [Member] | Range One [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 |
Average Remaining Contractual Life | 21 days |
Weighted Average Exercise Price | $75 |
Number Exercisable (in Shares) | 161,539 |
Average Remaining Contractual Life (in years) | 21 days |
Weighted Average Exercise Price | $75 |
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 |
Average Remaining Contractual Life | 21 days |
Weighted Average Exercise Price | $75 |
Number Exercisable (in Shares) | 151,539 |
Average Remaining Contractual Life (in years) | 21 days |
Weighted Average Exercise Price | $75 |
Note_11_Derivative_Instruments5
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Change of Fair Value of Derivative Debt Liabilities (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Change of Fair Value of Derivative Debt Liabilities [Abstract] | |
Balance at December 31, 2014 | $0 |
Balance at March 31, 2015 | 0 |
To record derivative liabilities as debt discount | 95,298 |
Change in fair value of derivative liabilities | 15,427 |
Settlement of derivative liability due to conversion of related notes | ($110,725) |
Note_12_Commitments_and_Contin2
Note 12 - Commitments and Contingencies (Details) | 1 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||||||||||||||||||||||||||
Dec. 21, 2011 | Mar. 31, 2015 | Dec. 21, 2011 | Mar. 12, 2014 | Mar. 19, 2015 | Apr. 09, 2015 | Apr. 09, 2015 | Apr. 13, 2015 | Apr. 13, 2015 | Dec. 21, 2011 | Dec. 21, 2011 | Dec. 21, 2011 | Mar. 12, 2014 | Mar. 12, 2014 | Dec. 20, 2011 | Jun. 08, 2013 | Jun. 08, 2013 | Jun. 19, 2013 | Jun. 19, 2013 | Jun. 19, 2013 | Sep. 10, 2013 | Sep. 10, 2013 | Sep. 10, 2013 | 16-May-14 | 16-May-14 | 16-May-14 | Sep. 10, 2013 | Mar. 31, 2015 | Mar. 15, 2013 | Mar. 15, 2013 | Sep. 10, 2013 | Sep. 10, 2013 | Sep. 10, 2013 | Jul. 05, 2011 | Jul. 05, 2011 | Jul. 05, 2011 | Mar. 31, 2015 | Jul. 01, 2014 | Jul. 01, 2014 | Dec. 21, 2011 | Mar. 12, 2014 | Mar. 12, 2014 | Mar. 11, 2014 | |
USD ($) | Each Issuance [Member] | Each Issuance [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Commission [Member] | Opening Commission [Member] | Balance Outstanding [Member] | Amendment [Member] | DBS Hong Kong [Member] | Commission [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] | 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] | Armco Shanghai [Member] | Armco Shanghai [Member] | DBS Hong Kong [Member] | RZB Hong Kong [Member] | RZB Hong Kong [Member] | RZB Hong Kong [Member] | ||
Opening Commission [Member] | Balance Outstanding [Member] | Yao [Member] | Shanghai Pudong Development Banks [Member] | Shanghai Pudong Development Banks [Member] | USD ($) | DBS Hong Kong [Member] | DBS Hong Kong [Member] | DBS Hong Kong [Member] | RZB Hong Kong [Member] | RZB Hong Kong [Member] | Bank of China [Member] | Bank of China [Member] | China CITIC Bank [Member] | China CITIC Bank [Member] | China CITIC Bank [Member] | ICBC Bank [Member] | ICBC Bank [Member] | ICBC Bank [Member] | Guangdong Development Bank [Member] | Guangdong Development Bank [Member] | Guangdong Development Bank [Member] | Shanghai Pudong Development Banks [Member] | USD ($) | 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 ($) | USD ($) | USD ($) | ||||||
DBS Hong Kong [Member] | DBS Hong Kong [Member] | USD ($) | USD ($) | CNY | USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | |||||||||||||||||||||||
USD ($) | |||||||||||||||||||||||||||||||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $819,390 | 5,000,000 | $7,000,000 | $4,800,000 | 30,000,000 | $6,500,000 | 40,000,000 | $3,200,000 | 20,000,000 | $15,700,000 | 96,000,000 | $8,200,000 | 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 | 2.00% | 2.50% | 2.00% | ||||||||||||||||||||||||||||||||||||||||
Export Bill Collection Commission | 6.25% | 12.50% | 25.00% | 6.25% | 6.25% | ||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 9,026,387 | 50,000 | 50,000 | 4,910,947 | 4,115,440 | ||||||||||||||||||||||||||||||||||||||
Pledged Deposits | 3.00% | ||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | 79,872,185 | 30,446,623 | 22,425,562 | 7,000,000 | |||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Expiration Period | 2 years | 1 year | 12 years | ||||||||||||||||||||||||||||||||||||||||
Interest Rate Basis Points Above Cost of Funds | 120.00% | 120.00% | |||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 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 | ||||||||||||||||||||||||||||||||||||||||||
Reimbursable Fees to Executive | 10,000 | ||||||||||||||||||||||||||||||||||||||||||
Life Insurance Death Benefit | 2,000,000 | ||||||||||||||||||||||||||||||||||||||||||
Operating Leases, Rent Expense, Net | 109,822 | 674,933 | |||||||||||||||||||||||||||||||||||||||||
Lessee Leasing Arrangements, Base Monthly Rental | 1,629.85 | ||||||||||||||||||||||||||||||||||||||||||
Lessee Leasing Arrangements, Annual Rent Increase | 4.00% | ||||||||||||||||||||||||||||||||||||||||||
Lessee Leasing Arrangements, Monthly Operating Expenses | $660.75 |
Note_12_Commitments_and_Contin3
Note 12 - Commitments and Contingencies (Details) - Uncommitted Trade Credit Facilities (USD $) | 3 Months Ended | |
Mar. 31, 2015 | ||
Line of Credit Facility [Line Items] | ||
Total Facilities | $79,872,185 | |
Facilities Used | 9,026,387 | |
Facilities Available | 70,845,798 | |
RZB Beijing [Member] | Armco HK [Member] | ||
Line of Credit Facility [Line Items] | ||
Date of Expiration | 31-Jul-15 | [1] |
Total Facilities | 7,000,000 | [1] |
Facilities Used | [1] | |
Facilities Available | 7,000,000 | [1] |
DBS Hong Kong [Member] | Armco HK [Member] | ||
Line of Credit Facility [Line Items] | ||
Date of Expiration | 9-Oct-15 | [2] |
Total Facilities | 20,000,000 | [2] |
Facilities Used | [2] | |
Facilities Available | 20,000,000 | [2] |
Bank of China Lianyungang [Member] | Henan Armco [Member] | ||
Line of Credit Facility [Line Items] | ||
Date of Expiration | 23-May-14 | [3] |
Total Facilities | 4,910,947 | [3] |
Facilities Used | 4,910,947 | [3] |
Bank of China Lianyungang [Member] | Renewable Metals [Member] | ||
Line of Credit Facility [Line Items] | ||
Date of Expiration | 27-Dec-15 | [4] |
Total Facilities | 8,184,512 | [4] |
Facilities Available | 8,184,512 | [4] |
China CITIC Bank [Member] | Henan Armco [Member] | ||
Line of Credit Facility [Line Items] | ||
Date of Expiration | 19-Jun-15 | [5] |
Total Facilities | 6,547,609 | [5] |
Facilities Used | [5] | |
Facilities Available | 6,547,609 | [5] |
ICBC Bank [Member] | Henan Armco [Member] | ||
Line of Credit Facility [Line Items] | ||
Date of Expiration | 29-Aug-15 | [6] |
Total Facilities | 3,273,805 | [6] |
Facilities Used | [6] | |
Facilities Available | 3,273,805 | [6] |
Guangdong Development Bank [Member] | Henan Armco [Member] | ||
Line of Credit Facility [Line Items] | ||
Date of Expiration | 15-May-15 | [7] |
Total Facilities | 15,714,262 | [7] |
Facilities Available | 15,714,262 | [7] |
Shanghai Pudong Development Banks [Member] | Renewable Metals [Member] | ||
Line of Credit Facility [Line Items] | ||
Date of Expiration | 9-Apr-15 | [8] |
Total Facilities | 2,455,353 | [8] |
Facilities Used | 2,336,973 | [8] |
Facilities Available | 118,380 | [8] |
Bank of Communications Lianyungang [Member] | Renewable Metals [Member] | ||
Line of Credit Facility [Line Items] | ||
Date of Expiration | 2-Aug-15 | [9] |
Total Facilities | 11,785,697 | [9] |
Facilities Used | 1,778,467 | [9] |
Facilities Available | 10,007,230 | [9] |
Armco HK [Member] | ||
Line of Credit Facility [Line Items] | ||
Total Facilities | 27,000,000 | |
Facilities Available | 27,000,000 | |
Henan Armco [Member] | ||
Line of Credit Facility [Line Items] | ||
Total Facilities | 30,446,623 | |
Facilities Used | 4,910,947 | |
Facilities Available | 25,535,676 | |
Renewable Metals [Member] | ||
Line of Credit Facility [Line Items] | ||
Total Facilities | 22,425,562 | |
Facilities Used | 4,115,440 | |
Facilities Available | $18,310,122 | |
[1] | On October 10, 2014, Armco HK extended the Banking Facilities Agreement with DBS Bank (Hong Kong) Limited (originally entered on December 21,2011)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 orDBS 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 advancedunder 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 issecured 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 creditamount, the Company's letter of comfort and the guarantee of Mr. Yao. On March 12, 2014, Amrco HK entered into a Banking Facilities Agreement withRZB bank of $7, 000, 000 for issuance of commercial letters of credit in connection with the Company's purchase of metal ore, expiring July 31, 2015. TheCompany pays interest Bank's Cost of Funds plus 200 base point (2%) per annum. | |
[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 (HongKong) Limited. The amendment indicates that the total facilities amount shall be decreased from $15,000,000 to $7,000,000. The Company pays interest at200 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 of6.25% for issuance commissions, negotiation commissions, commission-in-lieu and collection commissions. Amounts advanced under this facility arerepaid 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 ofany 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 ofliquidity in the funding market. The lender has sole discretion to decide wheher or not such event has occured. The facility is secured by restricted cashdeposits 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 orefor which the letter of credit has been issued and the contract for sale of the ore. | |
[3] | On June 8, 2013, Henan Armco obtained a RMB 30,000,000 (approximately $4.8 million) line of credit from Bank of China for issuance of letters of credit tofinance the purchase of metal ore and scrap metal expiring May 23, 2014. The facility is secured by the guarantee provided by Renewable Metals and thepledge 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. Sincethe accounts of Bank of China were closed on November 23, 2014, the line of credit from this bank was terminated. | |
[4] | On March 15, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB50,000,000 (approximately $8.2 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 securedby Renewable metals properties, machinery and equipment and land use rights, and guaranteed by Mr. Yao, Ms. Yi Chu, and Henan Armco, respectively. | |
[5] | On June 19, 2013, Henan Armco obtained a RMB 40,000,000 (approximately $6.5 million) line of credit from China Citic Bank, Zhengzhou Branch, forissuance of letters of credit to finance the purchase of metal ore and scrap metal expiring two (2) years from the date of issuance. The facility is guaranteedby Renewable Metals and Mr. Yao, the Company's Chairman and Chief Executive Officer. | |
[6] | 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 tofinance the purchase of metal ore and scrap metal expiring one (1) year from the date of issuance. The facility is guaranteed by Renewable Metals and Mr.Yao. | |
[7] | On May 16, 2014, Henan Armco obtained a RMB 96,000,000 (approximately $15.7 million) line of credit from Guangdong Development Bank ZhengzhouBranch 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 lendingpublished 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 providedby Mr. Yao and Renewable Metals jointly and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit arerepaid from the proceeds of the sale of metal ore. | |
[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 ShanghaiPudong Development Bank for the purchase of raw materials. The term of the facility is 12 months with interest at 120% of the applicable base rate forlending 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'sland use right and guarantees provided by Mr. Yao and Ms. Yi Chu. | |
[9] | On July 5, 2011, Renewable Metals obtained a RMB 72,000,000 (approximately $11.7 million) line of credit from Bank of Communications, LianyungangBranch expiring expiring August 2, 2015. The letters of credit require Renewable Metals to pledge cash deposit equal to 20% of the letter of credit for lettersof 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 letterof credit. The facility is secured by Renewable Metals inventories and guarantee provided by Mr. Yao. |
Note_13_Stockholders_Equity_De
Note 13 - Stockholders' Equity (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 19, 2015 | Jan. 13, 2015 | Apr. 07, 2014 | Nov. 17, 2014 | Nov. 16, 2014 | |
Note 13 - Stockholders' Equity (Details) [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,120,000 | 300,000 | |||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 164,215 | ||||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures (in Dollars) | $232,599 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 974,677 | 795,462 | |||||
Restated 2009 Stock Incentive Plan [Member] | |||||||
Note 13 - Stockholders' Equity (Details) [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 100,323 | ||||||
Chief Executive Officer [Member] | |||||||
Note 13 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 60,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 15,000 | ||||||
Stock Granted, Value, Share-based Compensation, Net of Forfeitures (in Dollars) | 18,750 | ||||||
Legal Expenses [Member] | |||||||
Note 13 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 12,500 | ||||||
Share Price (in Dollars per share) | $1.14 | ||||||
Stock Issued During Period, Value, Issued for Services (in Dollars) | 14,250 | ||||||
Consulting Fees [Member] | |||||||
Note 13 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 24,167 | ||||||
Share Price (in Dollars per share) | $1.14 | ||||||
Stock Issued During Period, Value, Issued for Services (in Dollars) | $27,550 | ||||||
Shanghai Heqi Investment Center [Member] | |||||||
Note 13 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 150,000 | ||||||
All Bright Law Offices [Member] | |||||||
Note 13 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 50,000 |
Note_13_Stockholders_Equity_De1
Note 13 - Stockholders' Equity (Details) - Amended and Restated 2009 Stock Incentive Plan Activities (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Amended and Restated 2009 Stock Incentive Plan Activities [Abstract] | ||
Number of Shares or Options | 795,462 | 561,841 |
Fair Value at Date of Grant | $4,118,012 | $3,277,207 |
Number of Shares or Options | 974,677 | 795,462 |
Fair Value at Date of Grant | 4,369,361 | 4,118,012 |
Number of Shares or Options | 45,000 | |
Fair Value at Date of Grant | 56,250 | |
Number of Shares or Options | 224,215 | 233,621 |
Fair Value at Date of Grant | 307,599 | 840,805 |
Number of Shares or Options | 1,019,677 | 795,462 |
Fair Value at Date of Grant | $4,425,611 | $4,118,012 |
Note_14_Income_Taxes_Details
Note 14 - Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Note 14 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 33.00% | |
Effective Income Tax Rate Reconciliation, Percent | 9.61% | 0.00% |
State [Member] | ||
Note 14 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 30.00% | |
Local [Member] | ||
Note 14 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 3.00% | |
Inland Revenue, Hong Kong [Member] | Armco HK [Member] | ||
Note 14 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 16.50% | |
Henan Armco [Member] | ||
Note 14 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | |
Renewable Metals [Member] | ||
Note 14 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | |
Lianyungang Armco [Member] | ||
Note 14 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | |
Armco Shanghai [Member] | ||
Note 14 - Income Taxes (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% |
Note_15_Concentrations_and_Cre2
Note 15 - Concentrations and Credit Risk (Details) - Customer and Credit Concentrations (Customer Concentration Risk [Member]) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Customer A [Member] | Sales Revenue, Net [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 57.23% | 22.60% | |
Customer A [Member] | Accounts Receivable [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 46.88% | 30.40% | |
Customer B [Member] | Sales Revenue, Net [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 19.10% | 37.20% | |
Customer B [Member] | Accounts Receivable [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 25.23% | 24.10% | |
Customer C [Member] | Sales Revenue, Net [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 15.59% | 12.30% | |
Customer C [Member] | Accounts Receivable [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 19.80% | ||
Customer D [Member] | Sales Revenue, Net [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 11.80% | ||
Sales Revenue, Net [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 91.92% | 83.90% | |
Accounts Receivable [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 72.11% | 74.30% |
Note_15_Concentrations_and_Cre3
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations (Supplier Concentration Risk [Member]) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Vendor A [Member] | Cost of Goods, Total [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 51.20% | 38.40% | |
Vendor A [Member] | Account Payable [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 53.67% | 49.20% | |
Vendor B [Member] | Cost of Goods, Total [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 41.88% | 37.00% | |
Vendor B [Member] | Account Payable [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 26.35% | 29.60% | |
Cost of Goods, Total [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 93.07% | 75.40% | |
Account Payable [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 80.02% | 78.80% |
Note_16_Foreign_Operations_Det
Note 16 - Foreign Operations (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Note 16 - Foreign Operations (Details) [Line Items] | ||
Foreign Currency Fair Value Hedge Asset at Fair Value (in Dollars) | $0 | $0 |
Retained Earnings Appropriated Surplus Reserve | 10.00% | |
Statutory Surplus Reserve PRC Requirement | 50.00% | |
Minimum [Member] | ||
Note 16 - Foreign Operations (Details) [Line Items] | ||
Statutory Common Welfare Fund Requirement | 5.00% | |
Maximum [Member] | ||
Note 16 - Foreign Operations (Details) [Line Items] | ||
Statutory Common Welfare Fund Requirement | 10.00% |
Note_17_Subsequent_Events_Deta
Note 17 - Subsequent Events (Details) | 0 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||||
Aug. 27, 2014 | Mar. 31, 2015 | Apr. 27, 2015 | Apr. 24, 2015 | Apr. 27, 2015 | 8-May-15 | 8-May-15 | Apr. 09, 2015 | Apr. 09, 2015 | Mar. 03, 2015 | Mar. 03, 2015 | Sep. 10, 2013 | Sep. 10, 2013 | Jul. 31, 2013 | |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Minimum [Member] | Maximum [Member] | Renewable Metals [Member] | Renewable Metals [Member] | Renewable Metals [Member] | |||
Maximum [Member] | Heqi [Member] | Heqi [Member] | KBM Worldwide Inc. [Member] | KBM Worldwide Inc. [Member] | Shanghai Pudong Development Banks [Member] | Shanghai Pudong Development Banks [Member] | Shanghai Pudong Development Banks [Member] | Shanghai Pudong Development Banks [Member] | Shanghai Pudong Development Banks [Member] | Shanghai Pudong Development Banks [Member] | Fremery Holdings, Ltd. [Member] | |||
Heqi [Member] | Fremery Holdings, Ltd. [Member] | USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | ||||||
USD ($) | ||||||||||||||
Note 17 - Subsequent Events (Details) [Line Items] | ||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $819,390 | 5,000,000 | $2,400,000 | 15,000,000 | ||||||||||
Line of Credit Facility, Interest Rate at Period End | 7.20% | 6.90% | ||||||||||||
Debt Instrument, Term | 6 months | |||||||||||||
Proceeds from Issuance of Long-term Debt | 3,500,000 | |||||||||||||
Debt Instrument, Sold During the Period | 1,200,000 | |||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 58.00% | 63.00% | 85.00% | |||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 10 days | 10 days | 10 days | |||||||||||
Debt Instrument, Convertible, Ownership Threshold | 19.99% | |||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 1,224,154 | 115,317 | ||||||||||||
Debt Conversion, Original Debt, Amount | 78,500 | |||||||||||||
Debt Conversion, Accrued Interest, Amount | $3,110 | |||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $0.71 |