Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 16, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Armco Metals Holdings, Inc. | |
Trading Symbol | amco | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 8,143,827 | |
Amendment Flag | false | |
Entity Central Index Key | 1,410,711 | |
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 | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets (Cu
Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash | $ 1,656,096 | $ 1,884,887 |
Pledged deposits | 9,846 | 498,615 |
Marketable securities | 6,226 | 73,943 |
Accounts receivable, net | 19,333,656 | 43,202,886 |
Inventories | 16,023,705 | 9,154,463 |
Advance on purchases | 5,682,270 | 1,093,402 |
Prepayments and other current assets | 871,011 | 1,164,603 |
Total Current Assets | 43,582,810 | 57,072,799 |
Property, plant and equipment, net | 29,501,508 | 32,563,929 |
Land use rights, net | 5,810,454 | 6,108,283 |
Deferred tax assets | 587,264 | 279,563 |
Total Assets | 79,482,036 | 96,024,574 |
CURRENT LIABILITIES: | ||
Loans payable | 10,677,110 | 17,011,843 |
Banker's acceptance notes payable and letters of credit | 1,707,287 | 1,767,790 |
Current maturities of capital lease obligation | 0 | 720,819 |
Accounts payable | 9,332,766 | 5,497,866 |
Due to related party | 560,956 | 717,703 |
Customer deposits | 1,417,492 | 1,467,281 |
Corporate income tax payable | 815,073 | 815,073 |
Value added tax and other taxes payable | 2,696,049 | 5,747,470 |
Deferred tax liabilities | 1,165,504 | 2,965,196 |
Accrued expenses and other current liabilities | 2,662,810 | 3,850,095 |
Total Current Liabilities | 31,376,304 | 41,438,212 |
Total Liabilities | 31,376,304 | 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, 8,143,827 and 5,615,088 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively | 8,144 | 5,615 |
Additional paid-in capital | 49,178,622 | 45,968,908 |
Retained earnings (deficit) | (3,713,432) | 4,491,948 |
Accumulated other comprehensive income: | 2,632,398 | 4,119,891 |
Total Stockholders' Equity | 48,105,732 | 54,586,362 |
Total Liabilities and Stockholders' Equity | 79,482,036 | 96,024,574 |
Chairman and CEO [Member] | ||
CURRENT LIABILITIES: | ||
Advances received from Chairman and CEO | $ 341,257 | $ 877,076 |
Consolidated Balance Sheets (C3
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
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) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 8,143,827 | 5,615,088 |
Common stock, shares outstanding | 8,143,827 | 5,615,088 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
NET REVENUES | $ 48,471,441 | $ 32,198,170 | $ 128,443,424 | $ 74,996,063 |
COST OF GOODS SOLD | 46,805,691 | 23,799,849 | 138,716,410 | 64,698,705 |
GROSSPROFIT | 1,665,750 | 8,398,321 | (10,272,986) | 10,297,358 |
OPERATING EXPENSES: | ||||
Selling expenses | 19,417 | 53,934 | 40,507 | 186,867 |
Professional fees | 163,952 | 117,690 | 452,290 | 543,229 |
General and administrative expenses | 427,816 | 602,002 | 1,895,730 | 2,577,582 |
Operating cost of idle manufacturing facility | 515,374 | 373,835 | 1,340,707 | 1,381,049 |
Total operating expenses | 1,126,559 | 1,147,461 | 3,729,234 | 4,688,727 |
INCOME (LOSS) FROM OPERATIONS | 539,191 | 7,250,860 | (14,002,220) | 5,608,631 |
OTHER EXPENSE: | ||||
Interest income | (324,173) | (318) | (324,326) | (99,118) |
Interest expense | 281,856 | 632,472 | 1,254,751 | 3,274,244 |
Loss on sales of marketable securities | 43,434 | 204,766 | 43,434 | |
Change in fair value of derivative liabilities | (1,597) | (134,760) | 107,378 | |
Loan guarantee expense | 13,002 | |||
Gain on forgiveness of short-term debt | 31,800 | (4,049,566) | ||
Government grant | (475,928) | 0 | ||
Other (income) expense | (79,645) | (13,689) | (194,397) | 61,339 |
Total other expense (income) | (90,162) | 660,302 | (3,719,460) | 3,400,279 |
INCOME (LOSS) BEFORE INCOME TAX PROVISION | 629,353 | 6,590,558 | (10,282,760) | 2,208,352 |
INCOME TAX PROVISION (BENEFIT) | 187,957 | 1,789,904 | (2,077,380) | 1,789,904 |
NET INCOME (LOSS) | 441,396 | 4,800,654 | (8,205,380) | 418,448 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||||
Change in unrealized income (loss) on marketable securities | (364,487) | 38,165 | (183,628) | 70,633 |
Foreign currency translation loss | (1,973,326) | (3,178) | (1,671,121) | (375,956) |
COMPREHENSIVE INCOME (LOSS) | $ (1,890,417) | $ 4,835,641 | $ (10,060,129) | $ 113,125 |
NET INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED: | ||||
Net income (loss) per common share – basic and diluted (in Dollars per share) | $ 0.05 | $ 0.87 | $ (1.21) | $ 0.09 |
Weighted Average Common Shares Outstanding - basic (in Shares) | 8,030,521 | 5,495,532 | 6,758,059 | 4,517,536 |
Weighted Average Common Shares Outstanding - diluted (in Shares) | 8,030,521 | 5,531,263 | 6,758,059 | 4,530,348 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | Total |
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 | $ 284 | 380,394 | $ 380,678 | |||
Issuance of common shares for employees (in Shares) | 283,912 | |||||
Issuance of common shares for third party services | $ 112 | 86,688 | 86,800 | |||
Issuance of common shares for third party services (in Shares) | 111,667 | |||||
Issuance of common stock in conversion of convertible notes | $ 1,482 | 1,305,048 | 1,306,530 | |||
Issuance of common stock in conversion of convertible notes (in Shares) | 1,482,250 | |||||
Issuance of common stock in conversion of loan to Chairman | $ 651 | 975,715 | 976,366 | |||
Issuance of common stock in conversion of loan to Chairman (in Shares) | 650,910 | |||||
Reclassification of derivative liabilities due to conversion of convertible notes | 461,869 | 461,869 | ||||
Net Loss | (8,205,380) | (8,205,380) | ||||
Change in unrealized gain on marketable securities | 183,628 | 183,628 | ||||
Foreign currency translation adjustment | (1,671,121) | (1,671,121) | ||||
Balance, September 30, 2015 at Sep. 30, 2015 | $ 8,144 | $ 49,178,622 | $ (3,713,432) | $ (245,514) | $ 2,877,912 | $ 48,105,732 |
Balance, September 30, 2015 (in Shares) at Sep. 30, 2015 | 8,143,827 | 8,143,827 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (8,205,380) | $ 418,448 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation expense | 2,026,860 | 2,099,052 |
Amortization expense | 39,458 | 92,082 |
Deferred income taxes | (2,077,605) | |
Gain on forgiveness of capital lease obligation | (125,371) | |
Gain on forgiveness of short-term debt | (4,049,566) | |
Change in fair value of derivative liabilities | (134,760) | 107,378 |
Loss on sales of marketable securities | 204,766 | 43,434 |
Amortization of debt discount | 611,339 | 1,991,581 |
Stock based compensation | 380,678 | 1,033,908 |
Shares issued for third party services | 86,800 | 268,002 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 23,080,817 | (28,274,868) |
Inventories | (7,405,965) | 6,355,762 |
Advance on purchases | 365,861 | (490,624) |
Prepayments and other current assets | (4,733,772) | 340,861 |
Banker's acceptance notes payable and letters of credit | (6,656,663) | |
Accounts payable | 4,129,800 | 16,122,951 |
Customer deposits | 441 | 821,096 |
Taxes payable | (2,930,373) | 3,490,127 |
Accrued expenses and other current liabilities | (1,071,065) | 596,902 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 192,963 | (1,640,571) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from release of pledged deposits | 227 | 5,942,529 |
Payment made towards pledged deposits | (1,815,807) | |
Proceeds from sales of marketable securities | 46,579 | 113,808 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 46,806 | 4,240,530 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from loans payable | 163,255 | 11,099,278 |
Repayment of loans payable | (523,823) | (14,486,944) |
Proceeds from capital lease obligation | 162,600 | |
Repayment of capital lease obligation | (107,712) | (341,574) |
Advances from Chairman and CEO | 241,756 | 172,613 |
Advances from (repayment to) related parties | (133,244) | 11,535 |
Proceeds from convertible notes | 600,000 | |
NET CASH USED IN FINANCING ACTIVITIES | (359,768) | (2,782,492) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (108,792) | 130,717 |
NET CHANGE IN CASH | (228,791) | (51,816) |
Cash at beginning of the period | 1,884,887 | 596,557 |
Cash at end of the period | 1,656,096 | 544,741 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||
Interest paid | 162,433 | 715,937 |
NON CASH FINANCING AND INVESTING ACTIVITIES: | ||
Debt discount due to derivative liabilities | 596,629 | 1,950,820 |
Change in fair value of marketable security | 183,628 | |
Reclassification from short-term debt to convertible debt | 5,554,468 | |
Reclassification of derivative liability to equity | 461,869 | 2,113,939 |
Common shares issued for conversion of debt and accrued interest | 1,306,530 | $ 6,610,635 |
Capital lease obligation settled with pledge deposit | 488,934 | |
Common shares issued for the settlement of loan with Chairman | $ 976,366 |
Note 1 - Organization and Opera
Note 1 - Organization and Operations | 9 Months Ended |
Sep. 30, 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 $1.30 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 Critic
Note 2 - Significant and Critical Accounting Policies and Practices | 9 Months Ended |
Sep. 30, 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 periods 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, as amended, filed with the SEC on March 30, 2015. Principles of Consolidation The Company applies the guidance of Topic 810 “Consolidation” The Company's consolidated subsidiaries and/or entities as of September 30, 2015 are as follows: Name of consolidated subsidiary or entity State or other jurisdiction of incorporation or organization Date of incorporation or formation (date of acquisition, if applicable) Attributable interest Armco Metal International Limited (“Armco HK”) Hong Kong SAR July 13, 2001 100% Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) PRC June 6, 2002 100% Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”) PRC January 9, 2007 100% Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”) PRC June 4, 2009 100% Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) PRC July 16, 2010 100% The consolidated financial statements include all accounts of the Company and the consolidated subsidiaries and/or entities as of reporting period ending date(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 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 accounting principles generally accepted in the United States of America (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 September 30, 2015 and December 31, 2014. The Company’s Level 3 financial liabilities consist of convertible notes with embedded conversion feature 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 derivative liabilities using a Black-Scholes model. These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates. 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 liability at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable to the change in the fair value of the derivative liabilities. The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as of September 30, 2015 and December 31, 2014: Recurring Fair Value Measures Level 1 Level 2 Level 3 Total September 30, 2015 Available-for-sale securities $ 6,226 - - $ 6,226 December 31, 2014 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 RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. Commencing July 21, 2005, China adopted a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies. The exchange rate of the US dollar against the RMB was adjusted from approximately RMB 8.28 per U.S. dollar to approximately RMB 8.11 per U.S. dollar on July 21, 2005. Since then, the PBOC administers and regulates the exchange rate of the U.S. dollar against the RMB taking into account demand and supply of RMB, as well as domestic and foreign economic and financial conditions. Unless otherwise noted, the rate presented below per U.S. $1.00 was the midpoint of the interbank rate as quoted by OANDA Corporation ( www.oanda.com September 30, 2015 December 31, 2014 September 30, 2014 Balance sheets 6.3638 6.1460 6.1547 Statements of operations and comprehensive income (loss) 6.1735 6.1457 6.1480 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 stock options, warrants and convertible debt instruments, and also unvested restricted stock. 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 anti -dilutive effect on the earnings per share calculation in the periods presented. Government Grants Government grants include cash subsidies as well as other subsidies received from the PRC government by the subsidiaries of the Company. Such subsidies are generally provided as incentives from the local government to encourage the expansion of local business. Government grants are recognized when received and all the conditions specified in the grant have been met. Government grants recognized as other income were $475,928 and $0 for the nine months ended September 30, 2015 and 2014, respectively. Recently Issued Accounting Pronouncements In April 2015, the FASB issued ASU 2015-03, “ Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”. In August 2015, the FASB issued ASU 2015-14, “ Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In August 2015, the FASB issued ASU No. 2015-15, “Interest-Imputation of Interest (Subtopic 835-30) - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit” . This Update states that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing those costs ratably over the term of the arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’s consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments”. The amendments in ASU 2015-16 require that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the estimated amounts, calculated as if the accounting had been completed at the acquisition date. The amendments also require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the estimated amounts had been recognized as of the acquisition date. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations. Reclassifica tion 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 | 9 Months Ended |
Sep. 30, 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: September 30, December 31, 2015 2014 Deposit for letters of credit $ 9,846 $ 10,492 Deposit for capital lease obligation - 488,123 $ 9,846 $ 498,615 |
Note 4 - Marketable Equity Secu
Note 4 - Marketable Equity Securities, Available for Sale | 9 Months Ended |
Sep. 30, 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 September 30, 2015, the Company’s available for sale marketable securities were marked to market to its fair value of $6,226. The Company sold 7,164,879 shares during the nine months ended September 30, 2015 for $46,579, with a realized loss on sales of $204,766. 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. Other Comprehensive Income (Loss) - Original Impairment Change in Other Than Unrealized C ost Temporary Gain (Loss) Fair Value Balance as of December 31, 2014 $ 2,686,102 $ (2,366,941 ) $ (245,218 ) $ 73,943 Sale of marketable securities (2,121,934 ) 1,870,589 (251,345 ) Total gains (realized/unrealized) included in: Other comprehensive income (loss): Changes in unrealized gain (loss) 183,628 183,628 Balance as of September 30, 2015 $ 564,168 $ (496,352 ) $ (61,590 ) $ 6,226 |
Note 5 - Accounts Receivable
Note 5 - Accounts Receivable | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 5 – Accounts Receivable Accounts receivable consisted of the following: September 30, December 31, 2015 2014 Accounts receivable $ 19,339,734 $ 43,257,621 Allowance for doubtful accounts (6,078 ) (54,735 ) $ 19,333,656 $ 43,202,886 |
Note 6 - Inventories
Note 6 - Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | Note 6 – Inventories Inventories consisted of the following: September 30, December 31, 2015 2014 Raw materials - Scrap metal $ 8,889,703 $ 2,602,983 Finished goods - processed scrap metal 8,857,167 7,684,154 Purchased merchandise for resale 377,865 697,217 Write-down of inventories (2,101,030 ) (1,829,891 ) $ 16,023,705 $ 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 September 30, 2015 or December 31, 2014. Slow-Moving or Obsolescence Markdowns The Company recorded no inventory obsolescence adjustments for the interim period ended September 30, 2015 and 2014. Lower of Cost or Market Adjustments There were 344,055 and $(1,958,544) of lower of cost or market adjustments for the interim period ended September 30, 2015 and 2014. |
Note 7 - Loans Payable
Note 7 - Loans Payable | 9 Months Ended |
Sep. 30, 2015 | |
Loans Payable [Abstract] | |
Loans Payable [Text Block] | Note 7 – Loans Payable Loans payable consisted of the following: September 30, December 31, 2015 2014 Bank loans – secured (i) $ 2,400,579 $ 2,485,649 Third party loans (ii) 8,276,531 14,347,694 Convertible notes payable (iii) - 178,500 $ 10,677,110 $ 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 9, 2016. Corporate or personal guarantees were provided for the bank loans as follows: $157 ,139 loans from Guanhutun Credit Union, collateralized by Henan Armco’s building and leasehold improvement; $2,243 ,440 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, $2,120,337 bears no interest and $6,156,194 bears interest rates ranging from 6.0% to 8.0% per annum. The maturity dates of the loans ranged from December 31, 2015 to January 21, 2016. 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 (“Chaoyang Investing & Construction Company”), and the related collateral was released as of December 31, 2014. On March 6, 2015, Chaoyang Investing & Construction Company agreed to forgive 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. On September 7, 2015, Armco Metal Holdings signed an agreement to guarantee to Chaoyang Investing & Construction Company the prompt payment of the above loan in order to facilitate the sale of the loan. On the same day, Chaoyang Investing & Construction Company transferred the loan together with interest and related guaranty to Shanghai Wisdom & Wealth Investment & Management Co., Ltd. (hereafter referred to as “Wisdom & Wealth”). The interest rate of the loan is 6.42% and the mature date is December 31, 2015. On September 8, 2015, Armco Metals Holdings signed an agreement with Wisdom & Wealth to permit Wisdom & Wealth to convert the loan and outstanding interest into the Company’s common shares with conversion rate of 85% market price with minimum conversion price of $0.2 per share. Upon conversion, the Company may need to issue in excess of 20% of the Company’s outstanding common stock. In accordance with Section 713 of the NYSE Company Guide, the Company is required to obtain stockholder approval prior to the issuance of any shares of its common stock upon the conversion of the loan as the ultimate issuance could be equal to 20% or more of the presently outstanding common stock at a conversion price of less than the greater of the book or market value of the stock, a change of control of the Company may occur. Under the terms of the agreement, Wisdom & Wealth agreed not to exercise any control over the Company or otherwise attempt to influence our management and to vote all of its shares in favor of or against the action as determined by the decision of a majority of the Company's stockholders. While the Company’s stockholders approved the possible issuance of in excess of 20% of the Company’s outstanding common stock upon the possible conversion of the loan, the Company has not obtained the approval of NYSE Regulation for the listing of additional shares. The loan is not presently convertible until the above contingency is resolved. The Company analyzed the modification of the debt terms under ASC 470-60 “Trouble Debt Restructurings” and ASC 470-50 “Extinguishment of Debt”. The Company determined the modification is substantial and the transaction should be accounted for as an extinguishment with the old debt written off and the new debt initially recorded at fair value with a new effective interest rate. (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. On May 8, 2015, KBM Worldwide Inc. converted its outstanding balance of $78,500 loan principal and accrued interest of $3,110 into 115,317 shares with the conversation rate of $0.7077/share. On April 24, 2015, Fremerly Holding Ltd. (“Fremery”) and Shanghai Heqi Investment Center (“Heqi”) entered into an agreement to transfer $1.2 million of the loan Renewable Metals previously borrowed from Fremerly where Armco Metal Holdings was a guarantor to Heqi with the interest rate of 6% per annum and the due date on or before July 20, 2015. On April 27, 2015, Armco Metals Holdings signed an agreement with Heqi to permit Heqi to convert its loan and outstanding interest into the Company’s common shares with conversion rate of 85% multiplied by the volume weighed average price for the common stock during the 10 trading days ending on the latest complete trading day prior to the conversion date with maximum conversion shares amount of 1,224,154 shares of common stock. On May 20, 2015, Heqi converted $334,600, including $330,000 principal and $4,600 interest into 302,805 shares of common shares with the conversion rate of $1.10500/share. On June 3, 2015, Heqi converted $282,030, including $280,000 principal and $2,030 interest into 313,019 shares with the conversion rate of $0.90100/shares. On June 26, 2015, Heqi converted $332,203, including $330,000 principal and $2,203 interest into 355,359 shares with the conversion rate of $0.93484/share. On July 21, 2015, Heqi converted $172,020, including $170,937 principal and $1,083 interest into 252,971 shares with the conversation of $0.68/share. The remaining balance of $89,063 principal of the note was transferred to Company’s Chairman and Chief Executive Officer and the conversion option of the loan was removed . The loan became due on demand with zero interest rate and the balance was included in advances received from Chairman and CEO. The Company analyzed the modification of the terms under ASC 470-60 “Trouble Debt Restructurings” and ASC 470-50 “Extinguishment of Debt”. The Company determined the modification is not substantial and the transaction should not be accounted for as an extinguishment with the old debt written off and the new debt initially recorded at fair value with a new effective interest rate. See Note 11 for derivative analysis on the convertible notes. |
Note 8 - Banker's Acceptance No
Note 8 - Banker's Acceptance Notes Payable and Letters of Credit | 9 Months Ended |
Sep. 30, 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: September 30, December 31, 2015 2014 Renewable Metals Letters of credit maturing on February 2, 2015 $ 1,707,287 $ 1,767,790 $ 1,707,287 $ 1,767,790 |
Note 9 - Related Party Transact
Note 9 - Related Party Transactions | 9 Months Ended |
Sep. 30, 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 received from Chairman and CEO From time to time, the Chairman, Mr. Yao advances funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and due on demand. On June 9, 2015, the Company entered into an agreement to acknowledge the advancement of $976,366 from Mr. Yao as unsecured loan. On the same day, the Company approved converting the loan with the amount of $976, 366 into common shares of 650,910 shares with the conversion price of $1.5/share. As of September 30, 2015 and December 31, 2014, the advance balance was $341,257 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 the nine months ended September 30, 2015 and September 30, 2014 was RMB 90,000 (approximately $14,578) and RMB 90,000 (approximately $14,639), respectively. Due to Other Related Parties Due to other related parties consists of the following: September 30 , December 31, 2015 2014 Keli Yao $ - $ - Yi Chu 560,956 717,703 Total $ 560,956 $ 717,703 The balance of $ 560,956 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 Obligat
Note 10 - Capital Lease Obligation | 9 Months Ended |
Sep. 30, 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: September 30, 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 Instrument
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 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 September 30 , 2015, there were nil warrants nor derivative liability associated with the warrants outstanding. The table below summarizes the Company’s 2010 warrant activities through September 30, 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 (161,539 ) Balance, September 30, 2015 - - - - - Earned and exercisable, September 30,2015 - - - - - Unvested, September 30, 2015 - $ - $ - $ - $ - (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. On October 29, 2014, the Company issued a convertible note which is convertible after 180 days from the issuance date at 63% of the average of the lowest 3 trading prices 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 $78,500. On April 27, 2015, the note became convertible. On May 8, 2015, the Company received a conversion notice from its convertible notes holder, KBM Worldwide Inc., to convert $78,500 plus interest of $3,110 of the note into 115,317 shares of the Company’s common stock, at a conversion price of $0.7077/share. On April 24, 2015, Fremery Holding Ltd. (“Fremery”) and Shanghai Heqi Investment Center (“Heqi”) entered into an agreement to transfer $1.2 million of the loan Renewable Metals previously borrowed from Fremery where Armco Metal Holdings was a guarantor to Heqi with the interest rate of 6% per annum and the due date on or before July 20, 2015. On April 27, 2015, Armco Metals Holdings signed an agreement with Heqi to permit Heqi to convert its loan and outstanding interest into the Company’s common shares with conversion rate of 85% multiplied by the volume weighed average price for the common stock during the 10 trading days ending on the latest complete trading day prior to the conversion date with maximum conversion shares amount of 1,224,154 shares of common stock. On May 20, 2015, Heqi converted $334,600, including $330,000 principal and $4,600 interest, into 302,805 shares of common shares with the conversion rate of $1.10500/share. On June 3, 2015, Heqi converted $282,030, including $280,000 principal and $2,030 interest, into 313,019 shares with the conversion rate of $0.90100/shares. On June 26, 2015, Heqi converted $332,203, including $330,000 principal and $2,203 interest, into 355,359 shares with the conversion rate of $0.93484/share. On July 21, 2015, Heqi converted $172,020, including $170,937 principal and $1,083 interest into 252,971 shares with the conversation of $0.68/share. The remaining balance of $89,063 principal of the note was transferred to Mr. Yao. As of September 30, 2015, the convertible note balance with Heqi was zero. 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 options. The embedded conversion feature was measured at fair value at the date of inception and at the end of each reporting period or termination of the instruments 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 110%-138% risk free rate of 0.01%-0.08%, and an expected term of 0.2-0.51year. The fair value of the instruments determined using Black-Scholes option –pricing model as of the dates the notes became convertible was $596,629, and was recorded as debt discount. The debt discount associated with derivative liabilities was fully amortized into interest expense for the nine months ended September 30, 2015 as the notes were either converted or matured . 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 596,629 Change in fair value of derivative liabilities (134,760 ) Settlement of derivative liability due to conversion of related notes (461,869 ) Balance at September 30, 2015 $ - |
Note 12 - Commitments and Conti
Note 12 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 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. Plaintiff and the Director Defendants are currently making progress towards settling the lawsuit. The proposted settlement amount for the case is $100,000, which has not been recognized by the Company in its financial statements. The Court will schedule a trial date if such settlement is eventually not finalized. 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 September 30, 2015 were as follows: Date of Total Facilities Facilities Expiration Facilities Used Available Armco HK RZB (Beijing) Branch (i) November 3 0, 2016 5,500,000 - 5,500,000 DBS (Hong Kong) Limited (ii) October 9 ,2015 20,000,000 - 20,000,000 Sub-total - Armco HK 25,500,000 - 25,500,000 Renewable Metals Bank of China Lianyungang Branch (iii) December 27, 2015 7,856,941 - 7,856,941 Bank of Communications Lianyungang Branch (iv) February 2, 2016 11,313,995 1,707,286 9,606,709 Sub-total – Renewable Metals 19,170,936 1,707,286 17,463,650 $ 44,670,936 $ 1,707,286 $ 42,963,650 (i) On July 25, 2015, Armco HK entered into Amendment No. 6 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 $5 ,5 00,000, expiring November 3 0, 2016. The Company pays interest at 200 basis points per annum plus the lender’s cost of funds per annum on issued letters of credit in addition to fees upon issuance of the letter of credit of 6.25% for issuance commissions, negotiation commissions, commission-in-lieu and collection commissions. Amounts advanced under this facility are repaid from the proceeds of the sale of metal ore. The lender may, however, terminate the facility at any time or at its sole discretion upon the occurrence of any event which causes a material market disruption in respect of unusual movement in the level of funding costs to the lender or the unusual loss of liquidity in the funding market. The lender has the sole discretion to decide whether or not such event has occurred. The facility is secured by restricted cash deposits held by the lender, the personal guarantee of Mr. Yao, the Company’s guarantee, and a security interest in the contract for the purchase of the ore for which the letter of credit has been issued and the contract for the sale of the ore. (ii) 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 1.75% 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. As of September 30, 2015, Armco HK and DBS Bank were in the process renewing the line of credit. The lender may terminate the facility at any time 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. (iii) On March 15, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB 50,000,000 (approximately $7.8 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. (iv) On July 5, 2013, Renewable Metals obtained a RMB 72,000,000 (approximately $11.3 million) line of credit from Bank of Communications, Lianyungang Branch 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. As of September 30, 2015, the company is in the process of renewing the facility. The amount shall not be changed and the date of expiration shall be February 2, 2016. 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 $106,058). On April 13, 2015, Armco Metals Holding entered into a lease agreement for the lease of its principal executive offices which expires in April 2018. The base monthly rental is $1,629.85 for the first year and 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 | 9 Months Ended |
Sep. 30, 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. 12,500 common shares earned for the quarter ended March 31, 2015 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 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. 99,167 common shares were earned for the nine months ended September 30, 2015. The total value of $72,550 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 nine months ended September 30, 2015, the Company granted 238,912 shares of its common stock to its employees and directors for their service of approximately $324,428 , in lieu of cash, which were recorded as compensation expense for the nine months ended September 30, 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 installments As of September 30, 2015, 45,000 shares were vested and record as compensation expense at amount of $56,250 . Summary of the Company’s A mended 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 Vested, December 31, 2014 795,462 $ 4,118,012 Unvested, December 31, 2014 - - Options – granted - - Options – canceled - - Shares – granted 298,912 399,428 Shares – canceled (- ) (- ) Balance, September 30, 2015 1,094,374 $ 4,517,440 Vested, September 30, 2015 1,079,374 4,498,690 Unvested, September 30, 2015 15,000 $ 18,750 The total number of the common shares authorized under the Amended and Restated 2009 Stock Incentive Plan was 1,120,000. As of September 30, 2015 , there were 25,626 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 | 9 Months Ended |
Sep. 30, 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 20.20% and 81.1% for the nine months ended September 30, 2015 and September 30, 2014, respectively. |
Note 15 - Concentrations and Cr
Note 15 - Concentrations and Credit Risk | 9 Months Ended |
Sep. 30, 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 September 30, 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 in the history. Customers and Credit Concentrations Customer concentrations and credit concentrations are as follows: Net sales For the Nine Months Ended September 30 September 30 2015 2014 Cusomter A 43.9 % - % Cusomter B 18.3 % - % Cusomter C 14.9 % 15.7 % Cusomter D 11.5 % 65.8 % 88.6 % 81.5 % Net Accounts Receivable at September 30 December 31, 2015 2014 Cusomter A 77.0 % - % Cusomter B 15.0 % - % Cusomter C 6.0 % 21.1 % 98.0 % 21.1 % 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 Nine Months Ended September 30 September 30 2015 2014 Vendor A 51.4 % 88.2 % Vendor B 28.6 % 10.1 % Vendor C 6.0 % - % 86.0 % 98.3 % Accounts Payable at September 30 December 31, 2015 2014 Vendor A 71.2 % 89.1 % Vendor B 17.0 % - % Vendor C 3.7 % - % 91.9 % 89.1 % |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 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 periods 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, as amended, 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” The Company's consolidated subsidiaries and/or entities as of September 30, 2015 are as follows: Name of consolidated subsidiary or entity State or other jurisdiction of incorporation or organization Date of incorporation or formation (date of acquisition, if applicable) Attributable interest Armco Metal International Limited (“Armco HK”) Hong Kong SAR July 13, 2001 100% Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) PRC June 6, 2002 100% Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”) PRC January 9, 2007 100% Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”) PRC June 4, 2009 100% Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) PRC July 16, 2010 100% The consolidated financial statements include all accounts of the Company and the consolidated subsidiaries and/or entities as of reporting period ending date(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 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 accounting principles generally accepted in the United States of America (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 September 30, 2015 and December 31, 2014. The Company’s Level 3 financial liabilities consist of convertible notes with embedded conversion feature 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 derivative liabilities using a Black-Scholes model. These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates. 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 liability at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable to the change in the fair value of the derivative liabilities. The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as of September 30, 2015 and December 31, 2014: Recurring Fair Value Measures Level 1 Level 2 Level 3 Total September 30, 2015 Available-for-sale securities $ 6,226 - - $ 6,226 December 31, 2014 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 RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. Commencing July 21, 2005, China adopted a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies. The exchange rate of the US dollar against the RMB was adjusted from approximately RMB 8.28 per U.S. dollar to approximately RMB 8.11 per U.S. dollar on July 21, 2005. Since then, the PBOC administers and regulates the exchange rate of the U.S. dollar against the RMB taking into account demand and supply of RMB, as well as domestic and foreign economic and financial conditions. Unless otherwise noted, the rate presented below per U.S. $1.00 was the midpoint of the interbank rate as quoted by OANDA Corporation ( www.oanda.com September 30, 2015 December 31, 2014 September 30, 2014 Balance sheets 6.3638 6.1460 6.1547 Statements of operations and comprehensive income (loss) 6.1735 6.1457 6.1480 |
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 stock options, warrants and convertible debt instruments, and also unvested restricted stock. 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 anti -dilutive effect on the earnings per share calculation in the periods presented. |
Government Grants, Policy [Policy Text Block] | Government Grants Government grants include cash subsidies as well as other subsidies received from the PRC government by the subsidiaries of the Company. Such subsidies are generally provided as incentives from the local government to encourage the expansion of local business. Government grants are recognized when received and all the conditions specified in the grant have been met. Government grants recognized as other income were $475,928 and $0 for the nine months ended September 30, 2015 and 2014, respectively. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements In April 2015, the FASB issued ASU 2015-03, “ Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”. In August 2015, the FASB issued ASU 2015-14, “ Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In August 2015, the FASB issued ASU No. 2015-15, “Interest-Imputation of Interest (Subtopic 835-30) - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit” . This Update states that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing those costs ratably over the term of the arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’s consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments”. The amendments in ASU 2015-16 require that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the estimated amounts, calculated as if the accounting had been completed at the acquisition date. The amendments also require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the estimated amounts had been recognized as of the acquisition date. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations. |
Reclassification, Policy [Policy Text Block] | Reclassifica tion 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 Crit23
Note 2 - Significant and Critical Accounting Policies and Practices (Tables) | 9 Months Ended |
Sep. 30, 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 (date of acquisition, if applicable) Attributable interest Armco Metal International Limited (“Armco HK”) Hong Kong SAR July 13, 2001 100% Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) PRC June 6, 2002 100% Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”) PRC January 9, 2007 100% Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”) PRC June 4, 2009 100% Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) PRC July 16, 2010 100% |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Recurring Fair Value Measures Level 1 Level 2 Level 3 Total September 30, 2015 Available-for-sale securities $ 6,226 - - $ 6,226 December 31, 2014 Available-for-sale securities $ 73,943 - - $ 73,943 |
Schedule of Foreign Exchange Contracts, Statement of Financial Position [Table Text Block] | September 30, 2015 December 31, 2014 September 30, 2014 Balance sheets 6.3638 6.1460 6.1547 Statements of operations and comprehensive income (loss) 6.1735 6.1457 6.1480 |
Note 3 - Pledged Deposits (Tabl
Note 3 - Pledged Deposits (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Transfers and Servicing [Abstract] | |
Schedule of Financial Instruments Owned and Pledged as Collateral [Table Text Block] | September 30, December 31, 2015 2014 Deposit for letters of credit $ 9,846 $ 10,492 Deposit for capital lease obligation - 488,123 $ 9,846 $ 498,615 |
Note 4 - Marketable Equity Se25
Note 4 - Marketable Equity Securities, Available for Sale (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Fair Value, Assets Measured on Recurring Basis [Table Text Block] | Other Comprehensive Income (Loss) - Original Impairment Change in Other Than Unrealized C ost Temporary Gain (Loss) Fair Value Balance as of December 31, 2014 $ 2,686,102 $ (2,366,941 ) $ (245,218 ) $ 73,943 Sale of marketable securities (2,121,934 ) 1,870,589 (251,345 ) Total gains (realized/unrealized) included in: Other comprehensive income (loss): Changes in unrealized gain (loss) 183,628 183,628 Balance as of September 30, 2015 $ 564,168 $ (496,352 ) $ (61,590 ) $ 6,226 |
Note 5 - Accounts Receivable (T
Note 5 - Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | September 30, December 31, 2015 2014 Accounts receivable $ 19,339,734 $ 43,257,621 Allowance for doubtful accounts (6,078 ) (54,735 ) $ 19,333,656 $ 43,202,886 |
Note 6 - Inventories (Tables)
Note 6 - Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | September 30, December 31, 2015 2014 Raw materials - Scrap metal $ 8,889,703 $ 2,602,983 Finished goods - processed scrap metal 8,857,167 7,684,154 Purchased merchandise for resale 377,865 697,217 Write-down of inventories (2,101,030 ) (1,829,891 ) $ 16,023,705 $ 9,154,463 |
Note 7 - Loans Payable (Tables)
Note 7 - Loans Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Loans Payable [Abstract] | |
Loans Payable [Table Text Block] | September 30, December 31, 2015 2014 Bank loans – secured (i) $ 2,400,579 $ 2,485,649 Third party loans (ii) 8,276,531 14,347,694 Convertible notes payable (iii) - 178,500 $ 10,677,110 $ 17,011,843 |
Note 8 - Banker's Acceptance 29
Note 8 - Banker's Acceptance Notes Payable and Letters of Credit (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure Text Block [Abstract] | |
Schedule of Short-term Debt [Table Text Block] | September 30, December 31, 2015 2014 Renewable Metals Letters of credit maturing on February 2, 2015 $ 1,707,287 $ 1,767,790 $ 1,707,287 $ 1,767,790 |
Note 9 - Related Party Transa30
Note 9 - Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | September 30 , December 31, 2015 2014 Keli Yao $ - $ - Yi Chu 560,956 717,703 Total $ 560,956 $ 717,703 |
Note 10 - Capital Lease Oblig31
Note 10 - Capital Lease Obligation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Leases, Capital [Abstract] | |
Schedule of Capital Leased Assets [Table Text Block] | September 30, 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 Instrume32
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 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 (161,539 ) Balance, September 30, 2015 - - - - - Earned and exercisable, September 30,2015 - - - - - Unvested, September 30, 2015 - $ - $ - $ - $ - |
Schedule of Derivative Liabilities at Fair Value [Table Text Block] | Balance at December 31, 2014 $ - To record derivative liabilities as debt discount 596,629 Change in fair value of derivative liabilities (134,760 ) Settlement of derivative liability due to conversion of related notes (461,869 ) Balance at September 30, 2015 $ - |
Note 12 - Commitments and Con33
Note 12 - Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Line of Credit Facilities [Table Text Block] | Date of Total Facilities Facilities Expiration Facilities Used Available Armco HK RZB (Beijing) Branch (i) November 3 0, 2016 5,500,000 - 5,500,000 DBS (Hong Kong) Limited (ii) October 9 ,2015 20,000,000 - 20,000,000 Sub-total - Armco HK 25,500,000 - 25,500,000 Renewable Metals Bank of China Lianyungang Branch (iii) December 27, 2015 7,856,941 - 7,856,941 Bank of Communications Lianyungang Branch (iv) February 2, 2016 11,313,995 1,707,286 9,606,709 Sub-total – Renewable Metals 19,170,936 1,707,286 17,463,650 $ 44,670,936 $ 1,707,286 $ 42,963,650 |
Note 13 - Stockholders' Equity
Note 13 - Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 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 Vested, December 31, 2014 795,462 $ 4,118,012 Unvested, December 31, 2014 - - Options – granted - - Options – canceled - - Shares – granted 298,912 399,428 Shares – canceled (- ) (- ) Balance, September 30, 2015 1,094,374 $ 4,517,440 Vested, September 30, 2015 1,079,374 4,498,690 Unvested, September 30, 2015 15,000 $ 18,750 |
Note 15 - Concentrations and 35
Note 15 - Concentrations and Credit Risk (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Risks and Uncertainties [Abstract] | |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | Net sales For the Nine Months Ended September 30 September 30 2015 2014 Cusomter A 43.9 % - % Cusomter B 18.3 % - % Cusomter C 14.9 % 15.7 % Cusomter D 11.5 % 65.8 % 88.6 % 81.5 % Net Accounts Receivable at September 30 December 31, 2015 2014 Cusomter A 77.0 % - % Cusomter B 15.0 % - % Cusomter C 6.0 % 21.1 % 98.0 % 21.1 % |
Schedule of Vendor Purchase Concentrations [Table Text Block] | Net Purchase For the Nine Months Ended September 30 September 30 2015 2014 Vendor A 51.4 % 88.2 % Vendor B 28.6 % 10.1 % Vendor C 6.0 % - % 86.0 % 98.3 % Accounts Payable at September 30 December 31, 2015 2014 Vendor A 71.2 % 89.1 % Vendor B 17.0 % - % Vendor C 3.7 % - % 91.9 % 89.1 % |
Note 1 - Organization and Ope36
Note 1 - Organization and Operations (Details) - USD ($) | Aug. 12, 2008 | Jun. 27, 2008 | Jun. 27, 2008 | Sep. 30, 2015 | Dec. 31, 2014 | Dec. 01, 2008 |
Note 1 - Organization and Operations (Details) [Line Items] | ||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
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 | |||||
Investment Options, Exercise Price | $ 1.30 | $ 1.30 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 2 years | |||||
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 Crit37
Note 2 - Significant and Critical Accounting Policies and Practices (Details) | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Jul. 21, 2005 | Jul. 20, 2005 | |
Note 2 - Significant and Critical Accounting Policies and Practices (Details) [Line Items] | ||||
$ 475,928 | $ 0 | |||
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 Crit38
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Consolidation Information | 9 Months Ended |
Sep. 30, 2014 | |
Armco HK [Member] | |
Variable Interest Entity [Line Items] | |
Jurisdiction | Hong Kong SAR |
Attributable interest | 100.00% |
Henan Armco [Member] | |
Variable Interest Entity [Line Items] | |
Jurisdiction | PRC |
Attributable interest | 100.00% |
Renewable Metals [Member] | |
Variable Interest Entity [Line Items] | |
Jurisdiction | PRC |
Attributable interest | 100.00% |
Lianyungang Armco [Member] | |
Variable Interest Entity [Line Items] | |
Jurisdiction | PRC |
Attributable interest | 100.00% |
Armco Shanghai [Member] | |
Variable Interest Entity [Line Items] | |
Jurisdiction | PRC |
Attributable interest | 100.00% |
Note 2 - Significant and Crit39
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Financial Assets and Liabilities Recurring Fair Value Measures - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Financial Assets and Liabilities Recurring Fair Value Measures [Line Items] | ||
Available-for-sale securities | $ 6,226 | $ 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 | $ 6,226 | $ 73,943 |
Note 2 - Significant and Crit40
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Exchange Rates (RMB Into U.S. Dollars) | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 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 | 6.3638 | 6.1460 | 6.1547 |
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 | 6.1735 | 6.1457 | 6.1480 |
Note 3 - Pledged Deposits (Deta
Note 3 - Pledged Deposits (Details) - Pledged Deposits - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Pledged Deposits [Abstract] | ||
Deposit for letters of credit | $ 9,846 | $ 10,492 |
Deposit for capital lease obligation | 0 | 488,123 |
$ 9,846 | $ 498,615 |
Note 4 - Marketable Equity Se42
Note 4 - Marketable Equity Securities, Available for Sale (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Note 4 - Marketable Equity Securities, Available for Sale (Details) [Line Items] | ||
Available-for-sale Securities | $ 6,226 | $ 73,943 |
Marketable Securities Shares Sold (in Shares) | 7,164,879 | |
Proceeds from Issuance or Sale of Equity | $ 46,579 | |
Available-for-sale Securities, Gross Realized Losses | 204,766 | |
Estimate of Fair Value Measurement [Member] | ||
Note 4 - Marketable Equity Securities, Available for Sale (Details) [Line Items] | ||
Available-for-sale Securities | $ 6,226 |
Note 4 - Marketable Equity Se43
Note 4 - Marketable Equity Securities, Available for Sale (Details) - Fair Value of Marketable Securities, Available for Sale - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
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 | $ 73,943 | |||
Sale of marketable securities | 46,579 | $ 113,808 | ||
Total gains (realized/unrealized) included in: | ||||
Other comprehensive income (loss): Changes in unrealized gain (loss) | $ (364,487) | $ 38,165 | (183,628) | $ 70,633 |
Balance as of September 30, 2015 | 6,226 | 6,226 | ||
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 | (245,218) | |||
Balance as of December 31, 2014 | 73,943 | |||
Sale of marketable securities | (2,121,934) | |||
Sale of marketable securities | 1,870,589 | |||
Sale of marketable securities | (251,345) | |||
Total gains (realized/unrealized) included in: | ||||
Other comprehensive income (loss): Changes in unrealized gain (loss) | 183,628 | |||
Other comprehensive income (loss): Changes in unrealized gain (loss) | 183,628 | |||
Balance as of September 30, 2015 | 564,168 | 564,168 | ||
Balance as of September 30, 2015 | (496,352) | (496,352) | ||
Balance as of September 30, 2015 | (61,590) | (61,590) | ||
Balance as of September 30, 2015 | $ 6,226 | $ 6,226 |
Note 5 - Accounts Receivable (D
Note 5 - Accounts Receivable (Details) - Accounts Receivable - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Accounts Receivable [Abstract] | ||
Accounts receivable | $ 19,339,734 | $ 43,257,621 |
Allowance for doubtful accounts | (6,078) | (54,735) |
$ 19,333,656 | $ 43,202,886 |
Note 6 - Inventories (Details)
Note 6 - Inventories (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 |
Note 6 - Inventories (Details) [Line Items] | |||
Inventory, Work in Process, Gross | $ 0 | $ 0 | |
Inventory Adjustments | 2,101,030 | $ 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 | $ 344,055 | $ (1,958,544) |
Note 6 - Inventories (Details)
Note 6 - Inventories (Details) - Inventories - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Inventories [Abstract] | ||
Raw materials - Scrap metal | $ 8,889,703 | $ 2,602,983 |
Finished goods - processed scrap metal | 8,857,167 | 7,684,154 |
Purchased merchandise for resale | 377,865 | 697,217 |
Write-down of inventories | (2,101,030) | (1,829,891) |
$ 16,023,705 | $ 9,154,463 |
Note 7 - Loans Payable (Details
Note 7 - Loans Payable (Details) | Jul. 21, 2015USD ($)$ / sharesshares | Jun. 26, 2015USD ($)$ / sharesshares | Jun. 03, 2015USD ($)$ / sharesshares | May. 20, 2015USD ($)$ / sharesshares | May. 08, 2015USD ($)$ / sharesshares | Apr. 27, 2015shares | Apr. 24, 2015USD ($)shares | Mar. 06, 2015USD ($) | Mar. 06, 2015CNY (¥) | Mar. 03, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | Dec. 31, 2014CNY (¥) | Sep. 30, 2015USD ($) | Sep. 30, 2015CNY (¥) | Sep. 08, 2015$ / shares | Apr. 30, 2015 |
Henan's Building and Leasehold Improvement [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 157,139 | |||||||||||||||
Renewable Metal's Inventories [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Guarantor Obligations, Maximum Exposure, Undiscounted | 2,243,440 | |||||||||||||||
Notes Payable to Banks [Member] | Land Use Rights [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Loans Payable | $ 8,135,373 | ¥ 50,000,000 | ||||||||||||||
Magna Equities II LLC [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ / shares | $ 0.72887 | |||||||||||||||
Debt Conversion, Original Debt, Amount | $ 100,000 | |||||||||||||||
Debt Conversion, Accrued Interest, Amount | $ 4,067 | |||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | shares | 142,779 | |||||||||||||||
KBM Worldwide Inc. [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ / shares | $ 0.7077 | |||||||||||||||
Debt Conversion, Original Debt, Amount | $ 78,500 | |||||||||||||||
Debt Conversion, Accrued Interest, Amount | $ 3,110 | |||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | shares | 115,317 | |||||||||||||||
Shanghai Heqi Investment Center [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |||||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ / shares | $ 0.68 | $ 0.93484 | $ 0.90100 | $ 1.10500 | ||||||||||||
Debt Conversion, Original Debt, Amount | $ 332,203 | $ 282,030 | $ 334,600 | |||||||||||||
Debt Conversion, Accrued Interest, Amount | $ 1,083 | $ 2,203 | $ 2,030 | $ 4,600 | ||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | shares | 252,971 | 355,359 | 313,019 | 302,805 | ||||||||||||
Convertible Notes Payable | $ 1,200,000 | |||||||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 10 days | |||||||||||||||
Convertible Debt, Maximum Shares (in Shares) | shares | 1,224,154 | |||||||||||||||
Debt Conversion, Principal, Amount | $ 170,937 | $ 330,000 | $ 280,000 | $ 330,000 | ||||||||||||
Debt Conversion, Converted Instrument, Amount | $ 172,020 | |||||||||||||||
Lianyungang Chaoyang Investment Construction Development Co. Ltd [Member] | Notes Payable to Banks [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.42% | 6.42% | ||||||||||||||
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 | ||||||||||||||
Wisdom & Wealth [Member] | Notes Payable to Banks [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Conversion Rate Percentage | 85.00% | |||||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ / shares | $ 0.2 | |||||||||||||||
Common Stock, Issued, Percent of Outstanding | 20.00% | |||||||||||||||
Chairman and CEO [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | 0.00% | ||||||||||||||
Loans Payable | $ 89,063 | |||||||||||||||
Bears No Interest [Member] | Third Party Loans [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Loans Payable | 2,120,337 | |||||||||||||||
Bears Interest [Member] | Third Party Loans [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Loans Payable | $ 6,156,194 | |||||||||||||||
Minimum [Member] | Notes Payable to Banks [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.47% | 2.47% | ||||||||||||||
Minimum [Member] | Third Party Loans [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | 6.00% | ||||||||||||||
Maximum [Member] | Notes Payable to Banks [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 11.59% | 11.59% | ||||||||||||||
Maximum [Member] | Third Party Loans [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% | ||||||||||||||
Maximum [Member] | Shanghai Heqi Investment Center [Member] | ||||||||||||||||
Note 7 - Loans Payable (Details) [Line Items] | ||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | shares | 1,224,154 |
Note 7 - Loans Payable (Detai48
Note 7 - Loans Payable (Details) - Loans Payable - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | |
Loans Payable [Abstract] | |||
Bank loans – secured (i) | [1] | $ 2,400,579 | $ 2,485,649 |
Third party loans (ii) | [2] | $ 8,276,531 | 14,347,694 |
Convertible notes payable (iii) | [3] | 178,500 | |
$ 10,677,110 | $ 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 loans ranged from 2.47% to 11.59% per annum. The maturity dates of the loans ranged from March 16, 2016 to April 9, 2016. Corporate or personal guarantees were provided for the bank loans as follows: $157,139 loans from Guanhutun Credit Union, collateralized by Henan Armco's building and leasehold improvement $2,243,440 loans from Shanghai Pudong Development Bank, collateralized by Renewable Metals inventories and guaranteed by the Company's Chairman and Chief Executive Officer | ||
[2] | Among third party loans, $2,120,337 bears no interest and $6,156,194 bears interest rates ranging from 6.0% to 8.0% per annum. The maturity dates of the loans ranged from December 31, 2015 to January 21, 2016. 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 ("Chaoyang Investing & Construction Company"), and the related collateral was released as of December 31, 2014. On March 6, 2015, Chaoyang Investing & Construction Company agreed to forgive 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. On September 7, 2015, Armco Metal Holdings signed an agreement to guarantee to Chaoyang Investing & Construction Company the prompt payment of the above loan in order to facilitate the sale of the loan. On the same day, Chaoyang Investing & Construction Company transferred the loan together with interest and related guaranty to Shanghai Wisdom & Wealth Investment & Management Co., Ltd. (hereafter referred to as "Wisdom & Wealth"). The interest rate of the loan is 6.42% and the mature date is December 31, 2015. On September 8, 2015, Armco Metals Holdings signed an agreement with Wisdom & Wealth to permit Wisdom & Wealth to convert the loan and outstanding interest into the Company's common shares with conversion rate of 85% market price with minimum conversion price of $0.2 per share. Upon conversion, the Company may need to issue in excess of 20% of the Company's outstanding common stock. In accordance with Section 713 of the NYSE Company Guide, the Company is required to obtain stockholder approval prior to the issuance of any shares of its common stock upon the conversion of the loan as the ultimate issuance could be equal to 20% or more of the presently outstanding common stock at a conversion price of less than the greater of the book or market value of the stock, a change of control of the Company may occur. Under the terms of the agreement, Wisdom & Wealth agreed not to exercise any control over the Company or otherwise attempt to influence our management and to vote all of its shares in favor of or against the action as determined by the decision of a majority of the Company's stockholders. While the Company's stockholders approved the possible issuance of in excess of 20% of the Company's outstanding common stock upon the possible conversion of the loan, the Company has not obtained the approval of NYSE Regulation for the listing of additional shares. The loan is not presently convertible until the above contingency is resolved.The Company analyzed the modification of the debt terms under ASC 470-60 "Trouble Debt Restructurings" and ASC 470-50 "Extinguishment of Debt". The Company determined the modification is substantial and the transaction should be accounted for as an extinguishment with the old debt written off and the new debt initially recorded at fair value with a new effective interest rate. | ||
[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 142,779 shares with the conversation rate of $0.72887/share. On May 8, 2015, KBM Worldwide Inc. converted its outstanding balance of $78,500 loan principal and accrued interest of $3,110 into 115,317 shares with the conversation rate of $0.7077/share. On April 24, 2015, Fremerly Holding Ltd. ("Fremery") and Shanghai Heqi Investment Center ("Heqi") entered into an agreement to transfer $1.2 million of the loan Renewable Metals previously borrowed from Fremerly where Armco Metal Holdings was a guarantor to Heqi with the interest rate of 6% per annum and the due date on or before July 20, 2015. On April 27, 2015, Armco Metals Holdings signed an agreement with Heqi to permit Heqi to convert its loan and outstanding interest into the Company's common shares with conversion rate of 85% multiplied by the volume weighed average price for the common stock during the 10 trading days ending on the latest complete trading day prior to the conversion date with maximum conversion shares amount of 1,224,154 shares of common stock. On May 20, 2015, Heqi converted $334,600, including $330,000 principal and $4,600 interest into 302,805 shares of common shares with the conversion rate of $1.10500/share. On June 3, 2015, Heqi converted $282,030, including $280,000 principal and $2,030 interest into 313,019 shares with the conversion rate of $0.90100/shares. On June 26, 2015, Heqi converted $332,203, including $330,000 principal and $2,203 interest into 355,359 shares with the conversion rate of $0.93484/share. On July 21, 2015, Heqi converted $172,020, including $170,937 principal and $1,083 interest into 252,971 shares with the conversation of $0.68/share. The remaining balance of $89,063 principal of the note was transferred to Company's Chairman and Chief Executive Officer and the conversion option of the loan was removed. The loan became due on demand with zero interest rate and the balance was included in advances received from Chairman and CEO. The Company analyzed the modification of the terms under ASC 470-60 "Trouble Debt Restructurings" and ASC 470-50 "Extinguishment of Debt". The Company determined the modification is not substantial and the transaction should not be accounted for as an extinguishment with the old debt written off and the new debt initially recorded at fair value with a new effective interest rate. See Note 11 for derivative analysis on the convertible notes. |
Note 8 - Banker's Acceptance 49
Note 8 - Banker's Acceptance Notes Payable and Letters of Credit (Details) - Banker’s Acceptance Notes Payable - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Renewable Metals | ||
Letters of credit maturing on February 2, 2015 | $ 1,707,287 | $ 1,767,790 |
10,677,110 | 17,011,843 | |
Renewable Metals [Member] | ||
Renewable Metals | ||
$ 1,707,287 | $ 1,767,790 |
Note 9 - Related Party Transa50
Note 9 - Related Party Transactions (Details) | Jun. 09, 2015USD ($)$ / sharesshares | Jan. 01, 2006CNY (¥)m² | Sep. 30, 2015USD ($) | Sep. 30, 2015CNY (¥) | Sep. 30, 2014USD ($) | Sep. 30, 2014CNY (¥) | Sep. 30, 2015CNY (¥) | Dec. 31, 2014USD ($) |
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||||
Due to Related Parties | $ 560,956 | ¥ 560,956 | $ 717,703 | |||||
Operating Lease From Related Party [Member] | ||||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||||
Area of Land (in Square Meters) | m² | 176.37 | |||||||
Operating Leases, Rent Expense | 14,578 | ¥ 90,000 | $ 14,639 | ¥ 90,000 | ||||
Operating Lease From Related Party [Member] | Monthly Payment [Member] | ||||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||||
Operating Leases, Rent Expense | ¥ | ¥ 10,000 | |||||||
Chief Executive Officer [Member] | ||||||||
Note 9 - Related Party Transactions (Details) [Line Items] | ||||||||
Proceeds from Related Party Debt | $ 976,366 | |||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | shares | 650,910 | |||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ / shares | $ 1.5 | |||||||
Due to Related Parties | $ 341,257 | $ 877,076 |
Note 9 - Related Party Transa51
Note 9 - Related Party Transactions (Details) - Due to Other Related Parties | Sep. 30, 2015USD ($) | Sep. 30, 2015CNY (¥) | Dec. 31, 2014USD ($) |
Related Party Transaction [Line Items] | |||
Due to Related Parties | $ 560,956 | ¥ 560,956 | $ 717,703 |
Keli Yao [Member] | |||
Related Party Transaction [Line Items] | |||
Due to Related Parties | 0 | 0 | |
Yi Chu [Member] | |||
Related Party Transaction [Line Items] | |||
Due to Related Parties | $ 560,956 | $ 717,703 |
Note 10 - Capital Lease Oblig52
Note 10 - Capital Lease Obligation (Details) | Mar. 31, 2015USD ($) | Mar. 29, 2015USD ($) | Sep. 17, 2013USD ($) | Sep. 15, 2012USD ($) | Dec. 12, 2011 | Nov. 18, 2010 | Sep. 30, 2015USD ($) | Mar. 23, 2015USD ($) | Mar. 23, 2015CNY (¥) | Dec. 31, 2014USD ($) | Sep. 17, 2013CNY (¥) | Sep. 15, 2012CNY (¥) |
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 | $ 2,261,284 | $ 5,935,517 | $ 0 | $ 130,826 | ¥ 800,000 | $ 720,819 | ¥ 15,000,000 | ¥ 37,500,000 | ||||
Security Deposit | 488,122 | ¥ 3,000,000 | ||||||||||
Settlement of Overdue Capital Lease Obligation | $ 3,000,000 | |||||||||||
Overdue Lease Obligation [Member] | ||||||||||||
Note 10 - Capital Lease Obligation (Details) [Line Items] | ||||||||||||
Capital Lease Obligations | $ 159,831 | $ 560,988 | ||||||||||
Capital Lease Obligations [Member] | ||||||||||||
Note 10 - Capital Lease Obligation (Details) [Line Items] | ||||||||||||
Other Income | $ 89,397 | $ 35,974 |
Note 10 - Capital Lease Oblig53
Note 10 - Capital Lease Obligation (Details) - Capital Lease Obligation | Sep. 30, 2015USD ($) | Mar. 23, 2015USD ($) | Mar. 23, 2015CNY (¥) | Dec. 31, 2014USD ($) | Sep. 17, 2013USD ($) | Sep. 17, 2013CNY (¥) | Sep. 15, 2012USD ($) | Sep. 15, 2012CNY (¥) |
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 Instrume54
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - USD ($) | Jul. 21, 2015 | Jun. 26, 2015 | Jun. 03, 2015 | May. 20, 2015 | May. 08, 2015 | Apr. 24, 2015 | Mar. 03, 2015 | Oct. 29, 2014 | Aug. 27, 2014 | Sep. 30, 2015 |
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||||||
Debt Instrument, Conversion Term | 180 days | |||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 10.00% | |||||||||
Magna Equities II LLC [Member] | ||||||||||
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||||||
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) | $ 0.72887 | |||||||||
KBM Worldwide Inc. [Member] | ||||||||||
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||||||
Debt Conversion, Original Debt, Amount | $ 78,500 | |||||||||
Debt Conversion, Accrued Interest, Amount | $ 3,110 | |||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 115,317 | |||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ 0.7077 | |||||||||
Shanghai Heqi Investment Center [Member] | ||||||||||
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||||||
Debt Conversion, Original Debt, Amount | $ 332,203 | $ 282,030 | $ 334,600 | |||||||
Debt Conversion, Accrued Interest, Amount | $ 1,083 | $ 2,203 | $ 2,030 | $ 4,600 | ||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 252,971 | 355,359 | 313,019 | 302,805 | ||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ 0.68 | $ 0.93484 | $ 0.90100 | $ 1.10500 | ||||||
Convertible Notes Payable | $ 1,200,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |||||||||
Debt Conversion, Principal, Amount | $ 170,937 | $ 330,000 | $ 280,000 | $ 330,000 | ||||||
Debt Conversion, Converted Instrument, Amount | $ 172,020 | |||||||||
Chairman and CEO [Member] | ||||||||||
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | |||||||||
Loans Payable | $ 89,063 | |||||||||
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% | |||||||||
Convertible Debt, Fair Value Disclosures | $ 596,629 | |||||||||
Maximum [Member] | Shanghai Heqi Investment Center [Member] | ||||||||||
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 1,224,154 | |||||||||
Maximum [Member] | Convertible Notes Payable [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, Risk Free Interest Rate | 0.08% | |||||||||
Minimum [Member] | Convertible Notes Payable [Member] | ||||||||||
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items] | ||||||||||
Fair Value Assumptions, Expected Volatility Rate | 110.00% | |||||||||
Fair Value Assumptions, Risk Free Interest Rate | 0.01% | |||||||||
Fair Value Assumptions, Expected Term | 73 days |
Note 11 - Derivative Instrume55
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities - Warrants 2010 [Member] | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities [Line Items] | |
Balance, December 31, 2014 | 161,539 |
Balance, December 31, 2014 (in Dollars per share) | $ / shares | $ 75 |
Expired | (161,539) |
Balance, September 30, 2015 | 0 |
Weighted Average [Member] | |
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities [Line Items] | |
Balance, December 31, 2014 (in Dollars per share) | $ / shares | $ 75 |
Note 11 - Derivative Instrume56
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Change of Fair Value of Derivative Debt Liabilities - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Change of Fair Value of Derivative Debt Liabilities [Abstract] | ||
Balance at December 31, 2014 | $ 0 | |
Balance at September 30, 2015 | 0 | |
To record derivative liabilities as debt discount | 596,629 | |
Change in fair value of derivative liabilities | (134,760) | |
Settlement of derivative liability due to conversion of related notes | $ (461,869) | $ (2,113,939) |
Note 12 - Commitments and Con57
Note 12 - Commitments and Contingencies (Details) | Apr. 13, 2015USD ($) | Mar. 25, 2015 | Mar. 19, 2015USD ($)shares | Oct. 10, 2014USD ($) | Jul. 01, 2014USD ($) | Jul. 01, 2014CNY (¥) | Jul. 05, 2013USD ($) | Dec. 21, 2011USD ($) | Dec. 20, 2011 | Sep. 30, 2015USD ($) | Jul. 25, 2015USD ($) | Jul. 24, 2015USD ($) | Jul. 05, 2013CNY (¥) | Mar. 15, 2013USD ($) | Mar. 15, 2013CNY (¥) |
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Long-term Line of Credit | $ 1,707,286 | ||||||||||||||
Pledged Deposits | 3.00% | ||||||||||||||
Yao [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | shares | 60,000 | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
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 | ||||||||||||||
Subsequent Event [Member] | Yao [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Salaries, Wages and Officers' Compensation | $ 250,000 | ||||||||||||||
Bonus Percentage of Base Salary | 50.00% | ||||||||||||||
Reimbursable Fees to Executive | $ 10,000 | ||||||||||||||
Life Insurance Death Benefit | $ 2,000,000 | ||||||||||||||
Renewable Metals [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Long-term Line of Credit | $ 1,707,286 | ||||||||||||||
Armco Shanghai [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Operating Leases, Rent Expense, Net | $ 106,058 | ¥ 674,933 | |||||||||||||
RZB Hong Kong [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,500,000 | $ 15,000,000 | |||||||||||||
RZB Hong Kong [Member] | Each Issuance [Member] | Balance Outstanding [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Export Bill Collection Commission | 6.25% | ||||||||||||||
DBS Hong Kong [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 20,000,000 | ||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||||||||||||||
Bank of China Lianyungang [Member] | Renewable Metals [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 7,800,000 | ¥ 50,000,000 | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.872% | 7.872% | |||||||||||||
Bank of Communications Lianyungang [Member] | Renewable Metals [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 11,300,000 | ¥ 72,000,000 | |||||||||||||
Cash Collateral Letters of Credit at Sight | 20.00% | ||||||||||||||
Cash Collateral Other Domestic Letters of Credit | 30.00% | ||||||||||||||
Inventory Collateral | 166.00% | ||||||||||||||
DBS Hong Kong [Member] | Balance Outstanding [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Export Bill Collection Commission | 6.25% | ||||||||||||||
DBS Hong Kong [Member] | Commission [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Export Bill Collection Commission | 12.50% | ||||||||||||||
DBS Hong Kong [Member] | Opening Commission [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Export Bill Collection Commission | 25.00% | ||||||||||||||
Long-term Line of Credit | $ 50,000 | ||||||||||||||
DBS Hong Kong [Member] | Each Issuance [Member] | Opening Commission [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Long-term Line of Credit | $ 50,000 | ||||||||||||||
Commission [Member] | RZB Hong Kong [Member] | |||||||||||||||
Note 12 - Commitments and Contingencies (Details) [Line Items] | |||||||||||||||
Export Bill Collection Commission | 6.25% |
Note 12 - Commitments and Con58
Note 12 - Commitments and Contingencies (Details) - Uncommitted Trade Credit Facilities | 9 Months Ended | |
Sep. 30, 2015USD ($) | ||
Armco HK | ||
Total Facilities | $ 44,670,936 | |
Facilities Used | 1,707,286 | |
Facilities Available | 42,963,650 | |
Henan Armco [Member] | ||
Armco HK | ||
Total Facilities | 25,500,000 | |
Facilities Available | 25,500,000 | |
Renewable Metals [Member] | ||
Armco HK | ||
Total Facilities | 19,170,936 | |
Facilities Used | 1,707,286 | |
Facilities Available | $ 17,463,650 | |
RZB Beijing [Member] | Armco HK [Member] | ||
Armco HK | ||
Date of Expiration | Nov. 30, 2016 | [1] |
Total Facilities | $ 5,500,000 | [1] |
Facilities Used | [1] | |
Facilities Available | $ 5,500,000 | [1] |
DBS Hong Kong [Member] | Armco HK [Member] | ||
Armco HK | ||
Date of Expiration | Oct. 9, 2015 | [2] |
Total Facilities | $ 20,000,000 | [2] |
Facilities Used | [2] | |
Facilities Available | $ 20,000,000 | [2] |
Bank of China Lianyungang [Member] | Renewable Metals [Member] | ||
Armco HK | ||
Date of Expiration | Dec. 27, 2015 | [3] |
Total Facilities | $ 7,856,941 | [3] |
Facilities Used | [3] | |
Facilities Available | $ 7,856,941 | [3] |
Bank of Communications Lianyungang [Member] | Renewable Metals [Member] | ||
Armco HK | ||
Date of Expiration | Feb. 2, 2016 | [4] |
Total Facilities | $ 11,313,995 | [4] |
Facilities Used | 1,707,286 | [4] |
Facilities Available | $ 9,606,709 | [4] |
[1] | On July 25, 2015, Armco HK entered into Amendment No. 6 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 $5,500,000, expiring November 30, 2016. The Company pays interest at 200 basis points per annum plus the lender's cost of funds per annum on issued letters of credit in addition to fees upon issuance of the letter of credit of 6.25% for issuance commissions, negotiation commissions, commission-in-lieu and collection commissions. Amounts advanced under this facility are repaid from the proceeds of the sale of metal ore. The lender may, however, terminate the facility at any time or at its sole discretion upon the occurrence of any event which causes a material market disruption in respect of unusual movement in the level of funding costs to the lender or the unusual loss of liquidity in the funding market. The lender has the sole discretion to decide whether or not such event has occurred. The facility is secured by restricted cash deposits held by the lender, the personal guarantee of Mr. Yao, the Company's guarantee, and a security interest in the contract for the purchase of the ore for which the letter of credit has been issued and the contract for the sale of the ore. | |
[2] | 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 1.75% 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. As of September 30, 2015, Armco HK and DBS Bank were in the process renewing the line of credit. The lender may terminate the facility at any time 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. | |
[3] | On March 15, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB 50,000,000 (approximately $7.8 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. | |
[4] | On July 5, 2013, Renewable Metals obtained a RMB 72,000,000 (approximately $11.3 million) line of credit from Bank of Communications, Lianyungang Branch expiring August 2, 2015. The letters of credit require Renewable Metals to pledge cash deposit equal to 20% of the letter of credit for letters of credit at sight, or 30% for other domestic letters of credit and for extended domestic letters of credit, the collateral of inventory equal to 166% of the letter of credit. As of September 30, 2015, the company is in the process of renewing the facility. The amount shall not be changed and the date of expiration shall be February 2, 2016. The facility is secured by Renewable Metals inventories and guarantee provided by Mr. Yao. |
Note 13 - Stockholders' Equit59
Note 13 - Stockholders' Equity (Details) - USD ($) | Mar. 19, 2015 | Jan. 13, 2015 | Dec. 31, 2014 | Nov. 17, 2014 | Apr. 07, 2014 | Mar. 31, 2015 | Sep. 30, 2015 |
Note 13 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 238,912 | ||||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures (in Dollars) | $ 324,428 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 795,462 | 1,079,374 | |||||
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, Award Vesting Period | 4 years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 45,000 | ||||||
Stock Granted, Value, Share-based Compensation, Net of Forfeitures (in Dollars) | $ 56,250 | ||||||
Shanghai Heqi Investment Center [Member] | |||||||
Note 13 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 150,000 | ||||||
Restated 2009 Stock Incentive Plan [Member] | |||||||
Note 13 - Stockholders' Equity (Details) [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 300,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,120,000 | 1,120,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 25,626 | ||||||
All Bright Law Offices [Member] | |||||||
Note 13 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 50,000 | ||||||
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 | 99,167 | ||||||
Stock Issued During Period, Value, Issued for Services (in Dollars) | $ 72,550 |
Note 13 - Stockholders' Equit60
Note 13 - Stockholders' Equity (Details) - Amended and Restated 2009 Stock Incentive Plan Activities - USD ($) | Dec. 31, 2014 | Sep. 30, 2015 |
Amended and Restated 2009 Stock Incentive Plan Activities [Abstract] | ||
Vested, Number of shares or options | 795,462 | 1,079,374 |
Vested, fair value at date of grant (in Dollars) | $ 4,118,012 | $ 4,498,690 |
Unvested, number of shares or options | 15,000 | |
Unvested, fair value at date of grant (in Dollars per share) | $ 18,750 | |
Shares – granted | 298,912 | |
Shares – granted (in Dollars) | $ 399,428 | |
Balance, September 30, 2015 | 1,094,374 | |
Balance, September 30, 2015 (in Dollars) | $ 4,517,440 |
Note 14 - Income Taxes (Details
Note 14 - Income Taxes (Details) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 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 | 20.20% | 81.10% |
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% | |
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% | |
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% |
Note 15 - Concentrations and 62
Note 15 - Concentrations and Credit Risk (Details) - Customer and Credit Concentrations - Customer Concentration Risk [Member] | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Sales Revenue, Net [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 88.60% | 81.50% | |
Accounts Receivable [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 98.00% | 21.10% | |
Customer A [Member] | Sales Revenue, Net [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 43.90% | ||
Customer A [Member] | Accounts Receivable [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 77.00% | ||
Customer B [Member] | Sales Revenue, Net [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 18.30% | ||
Customer B [Member] | Accounts Receivable [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 15.00% | ||
Customer C [Member] | Sales Revenue, Net [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 14.90% | 15.70% | |
Customer C [Member] | Accounts Receivable [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 6.00% | 21.10% | |
Customer D [Member] | Sales Revenue, Net [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 11.50% | 65.80% |
Note 15 - Concentrations and 63
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations - Supplier Concentration Risk [Member] | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Cost of Goods, Total [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 86.00% | 98.30% | |
Account Payable [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 91.90% | 89.10% | |
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 | 51.40% | 88.20% | |
Vendor A [Member] | Account Payable [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 71.20% | 89.10% | |
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 | 28.60% | 10.10% | |
Vendor B [Member] | Account Payable [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 17.00% | ||
Vendor C [Member] | Cost of Goods, Total [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 6.00% | ||
Vendor C [Member] | Account Payable [Member] | |||
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items] | |||
Concentration rick, percentage | 3.70% |