Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 25, 2014 | Jun. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'Nova Lifestyle, Inc. | ' | ' |
Document Type | '10-K | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 19,389,032 | ' |
Entity Public Float | ' | ' | $28,552,585 |
Amendment Flag | 'false | ' | ' |
Entity Central Index Key | '0001473334 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current Assets | ' | ' |
Cash and cash equivalents | $2,323,338 | $3,150,492 |
Accounts receivable, net | 27,967,831 | 22,387,517 |
Advance to suppliers | 3,535,100 | 3,105,584 |
Inventories | 3,353,634 | 3,240,721 |
Prepaid expenses and other receivables | 648,620 | 179,713 |
Income tax receivable | 38,654 | 0 |
Deferred tax asset | 243,682 | 157,423 |
Total Current Assets | 38,110,859 | 32,221,450 |
Noncurrent Assets | ' | ' |
Heritage and cultural assets | 132,993 | 129,002 |
Plant, property and equipment, net | 13,146,638 | 8,551,114 |
Construction in progress | 1,024,645 | 5,374,056 |
Acquisition deposit | 0 | 3,000,000 |
Lease deposit | 103,122 | 43,029 |
Goodwill | 1,027,124 | 218,606 |
Intangible assets, net | 6,976,991 | 1,216,092 |
Deferred tax asset, net | 44,334 | 0 |
Total Noncurrent Assets | 22,455,847 | 18,531,899 |
Total Assets | 60,566,706 | 50,753,349 |
Current Liabilities | ' | ' |
Accounts payable | 6,895,254 | 7,123,534 |
Line of credit | 820,089 | 6,529,178 |
Advance from customers | 43,077 | 257,191 |
Accrued liabilities and other payables | 1,458,157 | 1,495,835 |
Taxes payable | 0 | 272,159 |
Total Current Liabilities | 9,216,577 | 15,677,897 |
Noncurrent Liabilities | ' | ' |
Line of credit | 6,602,258 | 0 |
Deferred rent payable | 74,152 | 55,902 |
Deferred tax liability, net | 0 | 45,370 |
Income tax payable | 5,944,424 | 4,608,592 |
Total Noncurrent Liabilities | 12,620,834 | 4,709,864 |
Total Liabilities | 21,837,411 | 20,387,761 |
Contingencies and Commitments | ' | ' |
Stockholders' Equity | ' | ' |
Common stock, $0.001 par value; 75,000,000 shares authorized, 19,206,024 and 18,536,567 shares issued and outstanding as of December 31, 2013 and 2012 | 19,206 | 18,537 |
Additional paid-in capital | 20,977,058 | 19,107,845 |
Subscription receivable | -750,000 | -1,950,000 |
Statutory reserves | 6,241 | 6,241 |
Accumulated other comprehensive income | 2,603,010 | 2,176,646 |
Retained earnings | 15,873,780 | 11,006,319 |
Total Stockholders' Equity | 38,729,295 | 30,365,588 |
Total Liabilities and Stockholders' Equity | $60,566,706 | $50,753,349 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Common stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 19,206,024 | 18,536,567 |
Common stock, shares outstanding | 19,206,024 | 18,536,567 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Net Sales | $78,356,493 | $66,297,498 |
Cost of Sales | 62,990,736 | 51,572,076 |
Gross Profit | 15,365,757 | 14,725,422 |
Operating Expenses | ' | ' |
Selling expenses | 3,345,903 | 3,158,191 |
General and administrative expenses | 5,921,091 | 4,788,947 |
Loss on disposal of plant, property and equipment | 37,879 | 123,675 |
Total Operating Expenses | 9,304,873 | 8,070,813 |
Income From Operations | 6,060,884 | 6,654,609 |
Other Income (Expenses) | ' | ' |
Non-operating expense | -217,221 | 50,915 |
Foreign exchange transaction gain | -71,296 | 47 |
Interest expense | -292,291 | -188,868 |
Financial expense | -13,273 | -11,166 |
Total Other Expenses, Net | -594,081 | -149,072 |
Income Before Income Tax | 5,466,803 | 6,505,537 |
Income Tax Expense | 599,342 | 1,071,654 |
Net Income | 4,867,461 | 5,433,883 |
Other Comprehensive Income | ' | ' |
Foreign currency translation | 426,364 | 37,672 |
Comprehensive Income | $5,293,825 | $5,471,555 |
Basic weighted average shares outstanding (in Shares) | 18,876,052 | 18,530,591 |
Diluted weighted average shares outstanding (in Shares) | 19,122,386 | 18,681,448 |
Basic net earnings per share (in Dollars per share) | $0.26 | $0.29 |
Diluted net earnings per share (in Dollars per share) | $0.25 | $0.29 |
STATEMENTS_OF_STOCKHOLDERS_EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Subscription Receivable [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Statutory Reserves [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2011 | $17,899 | $17,074,534 | ($1,950,000) | $2,138,974 | $6,241 | $5,572,436 | $22,860,084 |
Balance (in Shares) at Dec. 31, 2011 | 17,898,267 | ' | ' | ' | ' | ' | ' |
Sale of common stock in private placement, net | 517 | 1,753,332 | ' | ' | ' | ' | 1,753,849 |
Sale of common stock in private placement, net (in Shares) | 517,000 | ' | ' | ' | ' | ' | ' |
Exercise of warrants | 71 | 142,529 | ' | ' | ' | ' | 142,600 |
Exercise of warrants (in Shares) | 71,300 | ' | ' | ' | ' | ' | ' |
Stock issued for service | 50 | 137,450 | ' | ' | ' | ' | 137,500 |
Stock issued for service (in Shares) | 50,000 | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | 5,433,883 | 5,433,883 |
Foreign currency translation gain | ' | ' | ' | 37,672 | ' | ' | 37,672 |
Balance at Dec. 31, 2012 | 18,537 | 19,107,845 | -1,950,000 | 2,176,646 | 6,241 | 11,006,319 | 30,365,588 |
Balance (in Shares) at Dec. 31, 2012 | 18,536,567 | ' | ' | ' | ' | ' | 18,536,567 |
Exercise of warrants | 511 | 1,021,103 | ' | ' | ' | ' | 1,021,614 |
Exercise of warrants (in Shares) | 510,807 | ' | ' | ' | ' | ' | ' |
Stock issued for service | 158 | 681,481 | ' | ' | ' | ' | 681,639 |
Stock issued for service (in Shares) | 158,650 | ' | ' | ' | ' | ' | ' |
Capital contribution from officers | ' | 90,000 | ' | ' | ' | ' | 90,000 |
Fund received from subscription receivable | ' | ' | 1,200,000 | ' | ' | ' | 1,200,000 |
Warrants expense | ' | 76,629 | ' | ' | ' | ' | 76,629 |
Net income | ' | ' | ' | ' | ' | 4,867,461 | 4,867,461 |
Foreign currency translation gain | ' | ' | ' | 426,364 | ' | ' | 426,364 |
Balance at Dec. 31, 2013 | $19,206 | $20,977,058 | ($750,000) | $2,603,010 | $6,241 | $15,873,780 | $38,729,295 |
Balance (in Shares) at Dec. 31, 2013 | 19,206,024 | ' | ' | ' | ' | ' | 19,206,024 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash Flows From Operating Activities | ' | ' |
Net Income | $4,867,461 | $5,433,883 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 1,324,881 | 764,596 |
Deferred tax expense (benefit) | -171,938 | 163,370 |
Stock compensation expense | 581,640 | 57,292 |
Warrants expense | 76,629 | 0 |
Loss on fixed assets disposal | 37,879 | 123,675 |
Bad debt allowance | 52,188 | 225,897 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -3,155,909 | -3,624,756 |
Accounts receivable - related party | 0 | 28,289 |
Advance to suppliers | -411,706 | -2,753,569 |
Inventories | -53,035 | -1,386,750 |
Other current assets | -106,268 | -32,900 |
Accounts payable | -3,008,918 | 351,846 |
Advance from customers | -216,523 | 165,291 |
Accrued expenses and other payables | -181,904 | 658,371 |
Deferred rent payable | 16,209 | -3,178 |
Taxes payable | 392,076 | 655,505 |
Net Cash Provided by Operating Activities | 42,762 | 826,862 |
Cash Flows From Investing Activities | ' | ' |
Deposit on acquisition of Bright Swallow Int'l Group Ltd. | 0 | -3,000,000 |
Acquisition of Bright Swallow | -3,500,000 | 0 |
Cash acquired from acquisition of Bright Swallow | 342,029 | 0 |
Cash received from fixed assets disposal | 1,350 | 8,363 |
Acquisition of intangible asset | 0 | -538,614 |
Purchase of property and equipment | -502,081 | -651,805 |
Construction in progress | -317,252 | -4,626,107 |
Net Cash Used in Investing Activities | -3,975,954 | -8,808,163 |
Cash Flows From Financing Activities | ' | ' |
Repayment to related parties | -1,987 | 0 |
Proceeds from subscription receivable | 1,200,000 | 0 |
Proceed from line of credit and bank loan | 18,344,000 | 6,522,139 |
Repayment to line of credit and bank loan | -17,485,192 | 0 |
Cash proceeds from private placement, net | 0 | 1,753,849 |
Due from factor | 0 | 203,351 |
Cash received from warrants exercised | 1,021,614 | 142,600 |
Net Cash Provided by Financing Activities | 3,078,435 | 8,621,939 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 27,603 | 4,675 |
Net (decrease) / increase in cash and cash equivalents | -827,154 | 645,313 |
Cash and cash equivalents, beginning of year | 3,150,492 | 2,505,179 |
Cash and cash equivalents, ending of year | 2,323,338 | 3,150,492 |
Cash paid during the year for: | ' | ' |
Income tax payments | 364,053 | 269,316 |
Interest expense | 267,019 | 121,403 |
Construction Deposit Transferred to Construction in Progress [Member] | ' | ' |
Supplemental Disclosure of Non-Cash Financing Activities | ' | ' |
Property, Plant and Equipment, Transfers and Changes | 0 | 633,212 |
Construction in Progress Transferred to Fixed Assets [Member] | ' | ' |
Supplemental Disclosure of Non-Cash Financing Activities | ' | ' |
Property, Plant and Equipment, Transfers and Changes | $4,747,665 | $0 |
Note_1_Organization_and_Descri
Note 1 - Organization and Description of Business | 12 Months Ended |
Dec. 31, 2013 | |
Disclosure Text Block [Abstract] | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' |
Note 1 - Organization and Description of Business | |
Nova LifeStyle, Inc. (“Nova LifeStyle” or the “Company”), formerly known as Stevens Resources, Inc., was incorporated in the State of Nevada on September 9, 2009. | |
On June 30, 2011, Nova LifeStyle entered into and consummated a series of agreements that resulted in the acquisition of all of the ordinary shares of Nova Furniture Limited (“Nova Furniture”), a corporation primarily engaged in investment in China and organized on April 29, 2003, under the laws of the British Virgin Islands (“BVI”). Pursuant to the terms of a Share Exchange Agreement and Plan of Reorganization dated June 30, 2011 (the “Share Exchange Agreement”), Nova LifeStyle issued 11,920,000 shares of its common stock to the four designee shareholders of Nova Furniture in exchange for their 10,000 ordinary shares of Nova Furniture, consisting of all of its issued and outstanding capital stock. Concurrently with the Share Exchange Agreement and as a condition thereof, Nova LifeStyle entered into an agreement with its former president and director, pursuant to which he returned 10,000,000 shares of Nova LifeStyle’s common stock to Nova LifeStyle for cancelation in exchange for an unsecured 90-day promissory note of $80,000 bearing interest at 0.46% per annum. The $80,000 was paid in full on August 30, 2011. Upon completion of the foregoing transactions, Nova LifeStyle had 14,900,000 shares of its common stock issued and outstanding. | |
For accounting purposes, the transaction described above was treated as a recapitalization of Nova Furniture because Nova Furniture’s shareholders own the majority of Nova LifeStyle’s outstanding common stock following the transaction and exercise significant influence over the operating and financial policies of the consolidated entity, and Nova LifeStyle was a non-operating shell prior to the acquisition. Pursuant to Securities and Exchange Commission (“SEC”) rules, the merger or acquisition of a private operating company into a non-operating public shell with nominal net assets is considered a capital transaction in substance, rather than a business combination. As a result, the accompanying consolidated financial statements have been retroactively restated to reflect the recapitalization. | |
Nova Furniture formed Nova Furniture (Dongguan) Co., Ltd. (“Nova Dongguan”) on June 6, 2003, as a wholly foreign owned enterprise incorporated in the Guangdong Province of the People’s Republic of China (“China” or the “PRC”) and primarily engaged in the development, manufacture and sale of furniture. | |
The controlling shareholders of Nova Furniture formed Nova Furniture Holdings Limited (“Nova Holdings”) effective March 8, 2005, under the laws of the BVI and transferred all of their equity interests in Nova Furniture to Nova Holdings. This transaction was accounted for as a reorganization of entities under common control, with assets and liabilities transferred at their carrying amounts, and the financial statements are presented as if the reorganization had occurred retroactively. | |
On May 20, 2006, Nova Holdings formed Nova Furniture Macao Commercial Offshore Ltd. (“Nova Macao”) under the laws of Macao. Nova Macao is engaged in furniture trading with products purchased and imported mainly from Nova Dongguan. | |
On January 3, 2011, Nova Furniture issued an additional 11,917,616 shares (post-recapitalization shares) of its capital stock, of which 2,235,000 shares were issued to Nova Holdings and 9,682,616 shares were issued to St. Joyal, an unrelated U.S. company incorporated in the State of California and engaged in business development and investment activities. Following this issuance, Nova Holdings held 81.25% and St. Joyal held 18.75% of the equity interests in Nova Furniture. Pursuant to a shareholder agreement, St. Joyal is committed to pay $2.4 million by January 1, 2014, in exchange for its 18.75% equity interest in Nova Furniture. As of December 31, 2013, St. Joyal has paid $1.65 million to the Company and $0.75 million remains outstanding. The parties have agreed to extend the payment of the remaining balance until April 15, 2014. | |
On January 14, 2011, Nova Holdings transferred its equity interest in Nova Macao to Nova Furniture. This transaction was accounted for as a reorganization of entities under common control, with assets and liabilities transferred at their carrying amounts, and the financial statements are presented as if the reorganization had occurred retroactively as of the beginning of the first period presented. | |
On March 17, 2011, Nova Dongguan incorporated Nova Dongguan Chinese Style Furniture Museum (“Nova Museum”) under the laws of the PRC and contributed capital of RMB 1 million ($152,177). Nova Dongguan made an additional capital contribution of RMB 1.13 million ($172,351) on March 29, 2011. Nova Museum is a non-profit organization engaged principally in the promotion and dissemination of the culture and history of furniture in China. | |
On August 31, 2011, Nova LifeStyle acquired all the outstanding capital stock of Diamond Bar Outdoors, Inc. (“Diamond Bar”), a U.S. company incorporated in the State of California, for $0.45 million paid in full at closing. Diamond Bar, doing business as Diamond Sofa, is engaged in the import, marketing and sale of furniture in the U.S. market. Prior to its acquisition by Nova LifeStyle, Diamond Bar was one of the Company’s customers, and upon completion of the foregoing transaction, Diamond Bar became a wholly owned subsidiary of the Company. | |
Concurrently with the acquisition of Diamond Bar, the Company entered into a trademark purchase and assignment agreement dated August 31, 2011, with St. Joyal for the assignment of all rights, title and interest in certain registered U.S. trademarks for $0.2 million paid in full at the closing. The trademarks are used in the business of Diamond Bar, which previously had licensed the right to use the trademarks from St. Joyal. | |
On April 24, 2013, Nova LifeStyle completed the acquisition of Bright Swallow International Group Limited, a British Virgin Island corporation (the “BSI” or “Bright Swallow”), Nova Lifestyle acquired all the outstanding capital stock of Bright Swallow for $6.5 million paid in full at the closing pursuant to a stock purchase agreement entered into with the sole shareholder of Bright Swallow. Bright Swallow is engaged in export of sofas to overseas customers (see Note 18). | |
On October 21, 2013, Nova Dongguan incorporated Dongguan Ding Nuo Household Products Co., Ltd. (“Ding Nuo”) under the laws of the PRC and contributed capital of RMB 1 million ($162,994). Nova Dongguan made an additional capital contribution of RMB 0.1 million ($16,305) on November 27, 2013 through one of Nova Dongguan’s officer who acts as the nominee shareholder of Ding Nuo. All of the nominee shareholder’s shares were put in escrow and trust with Nova Dongguan and all profits and loss of Ding Nuo will be distributed to Nova Dongguan; accordingly, Nova Dongguan effectively controls 100% of Ding Nuo. Ding Nuo was established mainly for engaging in business with IKEA. | |
The “Company” and “Nova” collectively refer to Nova LifeStyle, the U.S. parent, and its subsidiaries, Nova Furniture, Nova Dongguan, Nova Macao, Nova Museum, Diamond Bar, BSI and Ding Nuo. | |
Note_2_Summary_of_Significant_
Note 2 - Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Significant Accounting Policies [Text Block] | ' | ||||||||
Note 2 - Summary of Significant Accounting Policies | |||||||||
Basis of Presentation | |||||||||
The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. | |||||||||
Use of Estimates | |||||||||
In preparing consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates, required by management, include the allowance for bad debt, valuation of inventories and recoverability of long-lived assets and goodwill. Actual results could differ from those estimates. | |||||||||
Business Combination | |||||||||
For a business combination, the assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree are recognized at the acquisition date, measured at their fair values as of that date. In a business combination achieved in stages, the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, are recognized at the full amounts of their fair values. In a bargain purchase in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any noncontrolling interest in the acquiree that excess in earnings is recognized as a gain attributable to the acquirer. | |||||||||
Deferred tax liability and asset are recognized for the deferred tax consequences of differences between the tax bases and the recognized values of assets acquired and liabilities assumed in a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 740-10. | |||||||||
Goodwill | |||||||||
Goodwill is the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC Topic 350, “Intangibles-Goodwill and Other,” goodwill is not amortized but is tested for impairment, annually or when circumstances indicate a possible impairment may exist. Impairment testing is performed at a reporting unit level. An impairment loss generally would be recognized when the carrying amount of the reporting unit exceeds its fair value, with the fair value of the reporting unit determined using discounted cash flow (“DCF”) analysis. A number of significant assumptions and estimates are involved in the application of the DCF analysis to forecast operating cash flows, including the discount rate, the internal rate of return and projections of realizations and costs to produce. Management considers historical experience and all available information at the time the fair values of its reporting units are estimated. | |||||||||
ASC Topic 350 also permits an entity to first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the first step of the two-step goodwill impairment test is required to be performed. Performing the qualitative assessment involved identifying the relevant drivers of fair value, evaluating the significance of all identified relevant events and circumstances, and weighing the factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. After evaluating and weighing all these relevant events and circumstances, it was concluded that a positive assertion can be made from the qualitative assessment that it is more likely than not that the fair value of Diamond Bar is greater than its carrying amount. As such, it is not necessary to perform the first step of the two-step goodwill impairment test for Diamond Bar reporting unit. Accordingly, as of December 31, 2013 and 2012, the Company concluded there was no impairment of goodwill of Diamond Bar. | |||||||||
On April 24, 2013, Nova LifeStyle completed the acquisition of Bright Swallow. Under the acquisition method of accounting, the total purchase is allocated to tangible assets and intangible assets acquired and liabilities assumed based on their fair values with the excess charged to goodwill. Nova Lifestyle recognized $808,518 goodwill from the acquisition. As of December 31, 2013, the Company first assessed qualitative factors and determined it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The Company then performed the first step of the two-step goodwill impairment test. The Company completed the step one analysis using discounted cash flow. The DCF method uses revenue and expense projections and risk-adjusted discount rates. The process of determining fair value is subjective and requires management to exercise a significant amount of judgment in determining future growth rates, discount and tax rates and other factors. The results of the step one analysis indicated there was no impairment of goodwill of Bright Swallow. | |||||||||
Cash and Cash Equivalents | |||||||||
For purposes of the statement of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. | |||||||||
Accounts Receivable | |||||||||
The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Based on historical collection activity, the Company recorded $280,055 and $226,137 as allowance for bad debts as of December 31, 2013 and 2012, respectively. | |||||||||
Inventories | |||||||||
Inventories are stated at the lower of cost or market value with cost determined on a weighted-average basis, which approximates the first-in first-out method. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down their inventories to market value, if lower. The Company did not record any provision for write-downs of inventory at December 31, 2013 and 2012. | |||||||||
Plant, Property and Equipment and Construction in Progress | |||||||||
Plant, property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and improvements are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with 10% salvage value and estimated lives as follows: | |||||||||
Building and workshops | 20 years | ||||||||
Computer and office equipment | 5 years | ||||||||
Museum decoration and renovation | 10 years | ||||||||
Machinery | 10 years | ||||||||
Autos | 5 years | ||||||||
Depreciation of property, plant and equipment attributable to manufacturing activities is capitalized as part of inventories, and expensed to cost of goods sold when inventories are sold. | |||||||||
Construction in progress represents capital expenditure in respect of direct costs of construction or acquisition and design fees incurred. Capitalization of these costs ceases and the construction in progress is transferred to the appropriate category of property, plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Construction in progress is not depreciated. | |||||||||
Impairment of Long-Lived Assets | |||||||||
Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. | |||||||||
Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of December 31, 2013 and 2012, there were no significant impairments of its long-lived assets except that the Company disposed of an obsolete and unused workshop and recognized a loss of $37,879 and $123,675 for the year ended December 31, 2013 and 2012, respectively. | |||||||||
Research and Development | |||||||||
Research and development costs are related primarily to the Company designing and testing its new products in development stage. Research and development costs are recognized in general and administrative expenses and expensed as incurred. Research and development expense was $426,662 and $497,859 for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Income Taxes | |||||||||
Income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. | |||||||||
The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. | |||||||||
Under the provisions of ASC Topic 740, when tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. | |||||||||
China’s Corporate Income Tax Law (“CIT Law”), together with its Implementation Regulations, effective as of January 1, 2008, introduced a set of anti-avoidance measures under its special tax adjustments regulations. In January 2009, the State Administration of Taxation issued Circular of the State Administration of Taxation on the Issuance of the Implementation Measure of Special Tax Adjustments (“Circular 2”). The regulation is applied retrospectively for tax years beginning after January 1, 2008. Article 3 of Circular 2 states that in respect of transfer pricing administration, relevant tax authorities shall examine business transactions between enterprises and their related parties (“related-party transactions”) and evaluate whether they are conducted on an arm’s-length basis, in addition to conducting investigations and making adjustments, as required under the CIT Law and Article 36 of the PRC Tax Administration and Collection Law (“Tax Collection Law”). | |||||||||
The significant uncertain tax position arose from the transfer pricing between Nova Dongguan and Nova Macao, wherein the Company determined that the gross profit generated by Nova Dongguan from sales to Nova Macao was materially different from profits generated from sales to third parties. The statute of limitations for transfer pricing issues is 10 years from the tax year in which the transfer pricing issue arises pursuant to PRC tax law. | |||||||||
A reconciliation of the January 1, 2012, through December 31, 2013, amount of unrecognized tax benefits excluding interest and penalties ("Gross UTB") is as follows: | |||||||||
Gross UTB | |||||||||
2013 | 2012 | ||||||||
Beginning Balance – January 1 | 4,010,657 | $ | 3,709,129 | ||||||
Increase in unrecorded tax benefits taken in the years ending December 31, 2013 and 2012 | 800,778 | 291,220 | |||||||
Exchange rate adjustment | 115,996 | 10,308 | |||||||
Ending Balance – December 31 | $ | 4,927,431 | $ | 4,010,657 | |||||
At December 31, 2013, and 2012, the Company had cumulatively accrued approximately $1,017,000 and $610,000, respectively, for estimated interest and penalties related to unrecognized tax benefits. The Company recorded interest and penalties related to unrecognized tax benefits as a component of income tax expense, which totaled approximately $416,000 and $291,000 for years ended December 31, 2013, and 2012, respectively. | |||||||||
The tax returns of the Company’s PRC subsidiaries are subject to examination by the relevant PRC tax authorities. According to the Tax Collection Law, the statute of limitations for underpayment of taxes is three years if the underpayment is due to computational errors made by the taxpayer or the withholding agent. Under special circumstances, the statute of limitations is extended to five years if the underpayment of taxes is more than RMB 100,000. In accordance with the Implementation Regulations of the CIT Law, the statute of limitations in the case of transfer pricing issues is ten years. There is no statute of limitations in the case of tax evasion. | |||||||||
The Company’s Chinese subsidiaries are subject to taxation in the PRC. The Chinese’s subsidiaries’ PRC income tax returns are generally not subject to examination by the tax authorities for tax years before 2008. With a few exceptions, the tax years 2008-2012 remain open to examination by tax authorities in the PRC; the tax years 2011-2012 for US entities remain open to examination by tax authorities in the US. | |||||||||
Revenue Recognition | |||||||||
The Company’s revenue recognition policies are in compliance with ASC Topic 605, “Revenue Recognition.” Sales revenue is recognized when a formal arrangement exists, the price is fixed or determinable, the delivery is completed and no other significant obligations of the Company exist and collectability is reasonably assured. No revenue is recognized if there are significant uncertainties regarding the recovery of the consideration due, or the possible return of the goods. Payments received before all of the relevant criteria for revenue recognition are recorded as unearned revenue. | |||||||||
Sales revenue represents the invoiced value of goods, net of value-added taxes (“VAT”). All of the Company’s products sold in China are subject to the PRC VAT of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials purchased in China and included in the cost of producing the finished product. The Company records VAT payable and VAT receivable net of payments in the consolidated financial statements. The VAT tax return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government. | |||||||||
Franchise Arrangements | |||||||||
In 2010, the Company began entering into area product franchise agreements with franchisees who operate specialty furniture stores carrying only Nova-branded products. The product franchise agreement provides for the franchisee to retail Nova-brand furniture products for a period of one year from the date of the agreement. The franchisee is required to pay a deposit of RMB 30,000 at the signing of the agreement, which is used as payment for future purchases and is deferred on the Company’s balance sheet as a customer deposit. The franchisee is required to guarantee a minimum purchase amount from the Company during the contract period. The Company has the right to terminate the agreement should the franchisee fail to meet the minimum purchase amounts. The Company provides the franchisee with store images and designs, signage, floor plan product information and training. In addition, the Company will rebate a per square meter subsidy to the franchisee for the store build-out within six months from the agreement date. The franchisee earns 30% of the rebate on its initial purchase from the Company and then at a rate of 5% of each subsequent purchase until fully refunded of its deposit or six months from the agreement date, whichever is earlier. At December 31, 2013 and 2012, the Company had franchising subsidy payable of $149,667 and $179,786, respectively, and was included in other payables. In accordance with ASC 605-50, as the Company does not receive an identifiable benefit from these rebates, the rebates are recorded as a reduction of revenue on sales to the franchisees. | |||||||||
Cost of Sales | |||||||||
Cost of sales consists primarily of finished goods purchased from other manufacturers, material costs, labor costs and related overhead that are directly attributable to the production of the products. Write-down of inventory to the lower of cost or net realizable value is also recorded in the cost of sales. | |||||||||
Shipping and Handling Costs | |||||||||
Shipping and handling costs related to delivery of finished goods are included in selling expenses. During the years ended December 31, 2013 and 2012, shipping and handling costs were $500,714 and $623,721, respectively. | |||||||||
Advertising | |||||||||
Advertising expenses consist primarily of costs of promotion and marketing for the Company’s image and products, and costs of direct advertising. The Company expenses all advertising costs as incurred. Advertising expense was $425,850 and $519,692 for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Earnings per Share (EPS) | |||||||||
Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and warrants, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). | |||||||||
The following table presents a reconciliation of basic and diluted earnings per share for the years ended December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Net income | $ | 4,867,461 | $ | 5,433,883 | |||||
Weighted average shares outstanding – basic | 18,876,052 | 18,530,591 | |||||||
Effect of dilutive securities: | |||||||||
Unexercised warrants | 246,334 | 150,857 | |||||||
Weighted average shares outstanding – diluted | 19,122,386 | 18,681,448 | |||||||
Earnings per share – basic | $ | 0.26 | $ | 0.29 | |||||
Earnings per share – diluted | $ | 0.25 | $ | 0.29 | |||||
At December 31, 2013 and 2012, the Company had no options to purchase shares of common stock outstanding and warrants to purchase 522,473 and 983,280 shares of common stock were outstanding and exercisable, respectively. For both the years ended December 31, 2013 and 2012, 155,100 shares purchasable under the warrants were excluded from EPS as their effects were anti-dilutive. | |||||||||
Concentration of Credit Risk | |||||||||
Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. | |||||||||
Two major customers accounted for 26% (15% and 11% for each) and 32% (18% and 14% for each) of the Company’s sales for the years ended December 31, 2013 and 2012, respectively. Accounts receivable from these customers amounted to $8,136,122 and $7,310,616 as of December 31, 2013 and 2012, respectively. | |||||||||
The Company purchased its products from three major vendors during the year ended December 31, 2013, and from four major vendors during the year December 31, 2012, accounting for 33% (13%, 10% and 10% for each) and 48% (15%, 11%, 11% and 11% for each) of the purchases, respectively. Accounts payable to these vendors were $919,941 and $2,242,851 as of December 31, 2013 and 2012, respectively. | |||||||||
The operations of the Company are located principally in China and the US. Accordingly, the Company’s Chinese subsidiaries' business, financial condition and results of operations may be influenced by the political, economic and legal environments in China, as well as by the general state of the PRC economy. | |||||||||
The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments in China and foreign currency exchange. The Company’s results may be adversely affected by changes in PRC government policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. | |||||||||
The Company’s sales, purchase and expense transactions in China are denominated in Chinese Yuan Renminbi (“RMB”), and all of the assets and liabilities of the Company’s subsidiaries in China are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation in order to affect the remittance. | |||||||||
Statement of Cash Flows | |||||||||
In accordance with FASB ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company’s operations is calculated based upon local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet. | |||||||||
Fair Value of Financial Instruments | |||||||||
Some of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, other receivables, accounts payable, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: | |||||||||
· | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||||||||
· | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | ||||||||
· | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. | ||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under ASC Topic 480, “Distinguishing Liabilities from Equity,” and ASC Topic 815, “Derivatives and Hedging.” | |||||||||
Foreign Currency Translation and Transactions | |||||||||
The consolidated financial statements are presented in USD. The functional currency of Nova LifeStyle, Nova Furniture, Nova Macao, Bright Swallow and Diamond Bar is the United States Dollar (“$” or “USD”). The functional currency of Nova Dongguan, Nova Museum and Ding Nuo is RMB. The functional currencies of the Company’s foreign operations are translated into USD for balance sheet accounts using the current exchange rates in effect as of the balance sheet date and for revenue and expense accounts using the weighted-average exchange rate during the fiscal year. The translation adjustments are recorded as a separate component of stockholders’ equity, captioned “Accumulated other comprehensive income.” Gains and losses resulting from transactions denominated in foreign currencies are included in “Other income (expenses)” in the consolidated statements of income and comprehensive income. There have been no significant fluctuations in the exchange rate for the conversion of RMB to USD after the balance sheet date. | |||||||||
The RMB to USD exchange rates in effect as of December 31, 2013 and December 31, 2012, were RMB6.0969 =SD$1.00 and RMB6.2855 =SD$1.00, respectively. The weighted-average RMB to USD exchange rates in effect for the years ended December 31, 2013 and 2012, were RMB6.2142 =SD$1.00 and RMB6.3125 =SD$1.00, respectively. The exchange rates used in translation from RMB to USD were published by the People’s Bank of the People’s Republic of China. | |||||||||
Comprehensive Income | |||||||||
The Company follows FASB ASC 220 “Reporting Comprehensive Income.” Comprehensive income is comprised of net income and all changes to the consolidated statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Comprehensive income for the years ended December 31, 2013 and 2012 included net income and foreign currency translation adjustments. | |||||||||
Segment Reporting | |||||||||
ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. | |||||||||
Management determined that the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: the design, manufacture and sale of furniture. All of the Company’s long-lived assets for production are located at its facilities in Dongguan, Guangdong Province, China, and operate within the same environmental, safety and quality regulations governing furniture manufacturers. The Company established Nova Macao and Ding Nuo, and acquired Diamond Bar and Bright Swallow for the purpose of marketing and selling the Company’s products. As a result, management views the business and operations of Nova Dongguan, Nova Macao, Diamond Bar, Bright Swallow and Ding Nuo as a blended gross margin when determining future growth, return on investment and cash flows. Nova Museum, a non-profit organization engaged principally in the promotion and dissemination of the culture and history of furniture in China, has no operations or substantial assets other than its decorations and renovation, and its heritage and cultural assets are for the purpose of exhibition only. | |||||||||
Accordingly, management concluded that the Company had one reportable segment under ASC 280 because: (i) the Company’s products sold through Nova Dongguan, Nova Macao, and Ding Nuo are created with similar production processes, in the same facilities, under the same regulatory environment and sold to customers using similar distribution systems; (ii) Diamond Bar is a furniture distributor based in California focusing customers in US, and Bright Swallow is a furniture distributor based in Hong Kong focusing customers in Canada, they both are operated under the same senior management of Nova Dongguan and Nova Macao, and management views the operations of Nova Dongguan, Nova Macao, Diamond Bar, Bright Swallow and Ding Nuo as a whole for making business decisions; and (iii) although Nova Museum is principally engaged in the dissemination of the culture and history of furniture in China, it also serves a function of promoting and marketing the Company’s image and products by providing a platform and channel for consumers to be exposed to the Company and its products, it is operated under the same management with the same resources and in the same location as Nova Dongguan, and it is an additive and supplemental unit to the Company’s main operations, the manufacture and sale of furniture. | |||||||||
New Accounting Pronouncements | |||||||||
In February 2013, the FASB issued ASU 2013-2, Comprehensive Income (ASC Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, the new ASU requires entities to disclose in a single location (either on the face of the financial statement that reports net income or in the notes) the effects of reclassifications out of accumulated other comprehensive income (AOCI). For items reclassified out of AOCI and into net income in their entirety, entities must disclose the effect of the reclassification on each affected net income item. For AOCI reclassification items that are not reclassified in their entirety into net income, entities must provide a cross-reference to other required U.S. GAAP disclosures. There is no change in the requirement to present the components of net income and other comprehensive income in either a single continuous statement or two separate consecutive statements. The ASU does not change the items currently reported in other comprehensive income. | |||||||||
For public entities, the new disclosure requirements are effective for annual reporting periods beginning after December 15, 2012, and interim periods within those years. The ASU applies prospectively, and early adoption is permitted. The adoption of this ASU did not have a material impact to the Company’s consolidated financial statements. | |||||||||
As of December 31, 2013, there are no recently issued accounting standards not yet adopted that would have a material effect on the Company’s consolidated financial statements. | |||||||||
Note_3_Inventories
Note 3 - Inventories | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventory Disclosure [Text Block] | ' | ||||||||
Note 3 - Inventories | |||||||||
As of December 31, 2013 and 2012, inventories consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Raw material | $ | 250,914 | $ | 369,642 | |||||
Work in progress | 964,587 | 832,270 | |||||||
Finished goods | 2,138,133 | 2,038,809 | |||||||
$ | 3,353,634 | $ | 3,240,721 | ||||||
Note_4_Heritage_and_Cultural_A
Note 4 - Heritage and Cultural Assets | 12 Months Ended |
Dec. 31, 2013 | |
Heritage And Cultural Assets [Abstract] | ' |
Heritage And Cultural Assets [Text Block] | ' |
Note 4 - Heritage and Cultural Assets | |
As of December 31, 2013 and 2012, Nova Museum had heritage and cultural assets of $132,993 and $129,002, consisting principally of collectibles and antiques for exhibition. Depreciation is not required to be provided on heritage assets that have indefinite lives and no reduction in their value with the passage of time; however, the carrying amount of the heritage and cultural assets will be reviewed when there is evidence of impairment in accordance with ASC 360-10. | |
Note_5_Plant_Property_and_Equi
Note 5 - Plant, Property and Equipment, Net | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | ||||||||
Note 5 - Plant, Property and Equipment, Net | |||||||||
As of December 31, 2013 and 2012, plant, property and equipment consisted of the following: | |||||||||
2013 | 2012 | ||||||||
Building and workshops | $ | 10,945,252 | $ | 7,426,146 | |||||
Office equipment | 659,947 | 581,227 | |||||||
Autos | 318,759 | 309,195 | |||||||
Machinery | 4,921,867 | 3,100,756 | |||||||
Decoration and renovation | 775,874 | 548,497 | |||||||
Less: accumulated depreciation | (4,475,061 | ) | (3,414,707 | ) | |||||
$ | 13,146,638 | $ | 8,551,114 | ||||||
Depreciation expense was $954,532 and $709,812 for the years ended December 31, 2013 and 2012, respectively. | |||||||||
During the years ended December 31, 2013 and 2012, the Company had disposal loss of $37,879 and 123,675, respectively, from retirement of unused and obsolete workshop and equipment. | |||||||||
Note_6_Construction_in_Progres
Note 6 - Construction in Progress | 12 Months Ended |
Dec. 31, 2013 | |
Construction In Progress [Abstract] | ' |
Construction In Progress [Text Block] | ' |
Note 6 - Construction in Progress | |
At December 31, 2013 and 2012, the construction in progress of $1,024,645 and $5,374,056, respectively, consisted of construction cost of a new manufacturing plant at Nova Dongguan (Phase II factory construction project). The total construction cost is approximately $6.16 million. As of December 31, 2013, the factory construction was substantially completed and the Company is in the stage of purchasing and installing the manufacturing machines and equipment. | |
Note_7_Intangible_Assets
Note 7 - Intangible Assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Intangible Assets Disclosure [Text Block] | ' | ||||||||
Note 7 - Intangible Assets | |||||||||
Intangible assets consisted of land use right, trademark and customer relationship. All land in the PRC is government-owned and the ownership cannot be sold to any individual or company. However, the government grants the user a right to use the land (“land use right”). The Company acquired the right to use land in Dongguan, Guangdong Province, China, in 2004 for 50 years and is amortizing such rights on a straight-line basis for 50 years. | |||||||||
At February 28, 2012, the Company acquired another land use right for $536,193 (RMB3.4 million) with useful life of 50 years and is amortizing such right on a straight-line basis for 50 years. As of December 31, 2012, the Company paid in full for this land use right. In addition, the Company is required to pay an annual fee at $240 per MU (total 17.97 MU for the land) from the second year after commencement of the land filling for 60 years for a total of approximately $333,000 (RMB 2.1 million). The payment will be made annually with a 5% increase every 5 years. The Company records such fees on a straight-line basis. | |||||||||
The Company acquired a customer relationship with a fair value of $50,000 on August 31, 2011, as part of its acquisition of Diamond Bar. Concurrently with its acquisition of Diamond Bar, the Company entered into a trademark purchase and assignment agreement for all rights, title and interest in two trademarks (Diamond Sofa and Diamond Furniture) for $200,000 paid in full at the closing. Amortization of customer relationship and trademark is provided using the straight-line method and estimated lives were 5 years for each. | |||||||||
The Company acquired a customer relationship with a fair value of $6,100,559 on April 24, 2013, as part of its acquisition of Bright Swallow. Amortization of customer relationship is provided using the straight-line method and estimated life was 15 years. | |||||||||
Intangible assets consisted of the following at December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Land use right | $ | 1,149,009 | $ | 1,114,532 | |||||
Customer relationship | 6,150,559 | 50,000 | |||||||
Trademark | 200,000 | 200,000 | |||||||
Less: accumulated amortization | (522,577 | ) | (148,440 | ) | |||||
$ | 6,976,991 | $ | 1,216,092 | ||||||
Amortization of intangible assets was $370,349 and $54,784 for the years ended December 31, 2013 and 2012, respectively. Annual amortization expense is expected to be approximately $472,430 for each year from 2014 to 2015, $459,100 for 2016, and $432,430 for 2017 and 2018. | |||||||||
Note_8_Prepaid_Expenses_and_Ot
Note 8 - Prepaid Expenses and Other Receivables | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Other Assets Disclosure [Text Block] | ' | ||||||||
Note 8 - Prepaid Expenses and Other Receivables | |||||||||
Other current assets consisted of the following at December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Prepaid expenses | $ | 546,364 | $ | 111,521 | |||||
Other receivables | 102,256 | 68,192 | |||||||
Total | $ | 648,620 | $ | 179,713 | |||||
Other receivables represented cash advances to employees, security deposit and exhibition deposits. At December 31, 2013, prepaid expenses included prepayments for consulting of approximately $100,000, designing fee for show rooms of approximately $245,040, insurance of approximately $115,600, and IR expense of approximately $80,200. | |||||||||
Note_9_Accrued_Liabilities_and
Note 9 - Accrued Liabilities and Other Payables | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | ' | ||||||||
Note 9 - Accrued Liabilities and Other Payables | |||||||||
Accrued liabilities and other payables consisted of the following at December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Other payables | $ | 119,481 | $ | 89,982 | |||||
Salary payable | 500,057 | 961,669 | |||||||
Financed insurance premiums | 61,147 | - | |||||||
Accrued consulting fees | 174,710 | - | |||||||
Franchising subsidy | 149,667 | 179,786 | |||||||
Accrued rents | 164,982 | - | |||||||
Accrued expenses, others | 288,113 | 264,398 | |||||||
Total | $ | 1,458,157 | $ | 1,495,835 | |||||
Accrued expenses represented utility, freight expenses and service charges from accountants and attorneys. Other payables represented payables to contractors and vendors other than for purchase of materials. Franchising subsidy represented the accrued amount the Company will pay to its franchisees as a rebate to support their franchise store decoration expense. | |||||||||
Note_10_Line_of_Credit
Note 10 - Line of Credit | 12 Months Ended |
Dec. 31, 2013 | |
Debt Disclosure [Abstract] | ' |
Debt Disclosure [Text Block] | ' |
Note 10 - Line of Credit | |
Diamond Bar entered into an agreement with a bank in California for a line of credit of up to $5,000,000 with annual interest of 4.5% and maturity on June 1, 2015. The line of credit is secured by all of assets of Diamond Bar Outdoors, Inc., a subsidiary of Nova Lifestyle and guaranteed by Nova Lifestyle. As of December 31, 2013 and 2012, Diamond Bar had $4,754,258 and $3,283,613 outstanding on the line of credit, respectively. During the years ended December 31, 2013 and 2012, the Company recorded interest expense of $158,543 and $71,539, respectively. | |
In June 2013, the loan was modified for the following covenants: (i) maintain a minimum tangible net worth of not less than $5 million; (ii) maintain a current ratio in excess of 1.25 to 1.00; and (iii) maintain a ratio of debt to tangible net worth not in excess of 2.500 to 1.000; (iv) the pre-tax income must be not less than 1.000% of total revenue quarterly. As of December 31, 2013, Diamond Bar was in compliance with all the covenants. In addition, the loan agreement provided a cross default provision whereby an event of default on this loan will cause the Nova Macau loan to also be in default. | |
On April 25, 2012, Nova Dongguan entered into an agreement with a commercial bank in Dongguan for a line of credit of up to $3,280,356 (RMB 20 million) with maturity on April 24, 2015. As of December 31, 2013 and 2012, Nova Dongguan had $820,089 (RMB 5.00 million) with maturity on November 20, 2014 and $1,645,565 (RMB 10.34 million) outstanding on the line of credit, respectively. The loan currently bears monthly interest of 0.55% and requires monthly payment on the interest; the interest rate will be adjusted annually. The loan was secured by the building of Nova Dongguan and guaranteed by Nova Dongguan and the Company’s CEO. During the years ended December 31, 2013 and 2012, the Company recorded interest expense of $56,407 and $43,575, respectively. | |
On August 24, 2012, Nova Macao entered into an agreement with a commercial bank in Hong Kong for a line of credit of up to $8,000,000 with maturity on August 23, 2013. On August 23, 2013, the Company renewed the line of credit with annual interest rate of 4.25% and maturity on November 21, 2013. On December 17, 2013, the Company renewed the line of credit of up to $6,500,000 with maturity on January 30, 2015. The loan requires monthly payment on the interest and the interest rate will be adjusted annually. The loan was secured by assignment of Sinosure (China Export and Credit Insurance Company) credit insurance. As of December 31, 2013 and 2012, Nova Macao had $1,848,000 and $1,600,000 outstanding on the line of credit, respectively. During the years ended December 31, 2013 and 2012, the Company paid interest of $78,664 and $6,139, respectively. | |
The loan has the following covenants: (i) total outstanding under working capital advance shall not exceed the lesser of (a) the credit commitment of $6,500,000, (b) insurance claim limits and (c) borrowing base allowed of 80% advance rate against certain eligible accounts receivable; (ii) eligible account receivables are insured buyers by Sinosure assigned to the bank and within established insurance limit; (iii) the bank has an absolute right to exclude any portion of the accounts receivable from the aging report for computation of the borrowing base as it deems fit; (iv) in case the aggregate outstanding amount of credit facilities exceeds the available amount of facilities conferred by the aforesaid computation of borrowing base, the excess amount should be settled with 7 days by Nova Furniture Macao Commercial Offshore Limited; and. (v) the Company maintains a debt to tangible net worth ratio of not in excess of 3.0x throughout the whole term of the loan. As of December 31, 2013, Nova Macao was in compliance with all the covenants. | |
Note_11_Income_Taxes_and_Other
Note 11 - Income Taxes and Other Taxes Payable | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Tax Disclosure [Text Block] | ' | ||||||||
Note 11 – Income Taxes and Other Taxes (Receivable) Payable | |||||||||
Taxes (receivable) payable consisted of the following at December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Income tax (receivable) payables | $ | (38,654 | ) | $ | 255,793 | ||||
Other taxes payable | - | 16,366 | |||||||
Total tax payable (receivable) – current | $ | (38,654 | ) | $ | 272,159 | ||||
Total income tax payable – noncurrent | $ | 5,944,424 | $ | 4,608,592 | |||||
Other taxes payable includes VAT, city construction, sales tax and stamp tax. | |||||||||
The components of income before income taxes consisted of the following for the years ended December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Income (loss) subject to domestic income taxes only | $ | (345,043 | ) | $ | 491,393 | ||||
Income subject to foreign income taxes only | 5,811,846 | 6,014,144 | |||||||
Total | $ | 5,466,803 | $ | 6,505,537 | |||||
The Company’s subsidiaries incorporated in the PRC are subject to enterprise income taxes. The provision for income taxes from continuing operations consisted of the following: | |||||||||
2013 | 2012 | ||||||||
Current: | |||||||||
Federal | $ | 243,587 | $ | 363,780 | |||||
State | (1,951 | ) | 35,187 | ||||||
PRC | 533,667 | 509,623 | |||||||
775,303 | 908,590 | ||||||||
Deferred: | |||||||||
Federal | (136,075 | ) | 143,431 | ||||||
State | (17,061 | ) | 26,021 | ||||||
PRC | (22,825 | ) | (6,388 | ) | |||||
Total provision for income taxes | $ | 599,342 | $ | 1,071,654 | |||||
The following is reconciliation of the difference between the actual provision for income taxes and the provision computed by applying the federal statutory rate on income from continuing operations before income taxes: | |||||||||
2013 | 2012 | ||||||||
Tax at Federal Statutory rate | $ | 1,855,311 | $ | 2,211,861 | |||||
Foreign Rate Differential | (522,166 | ) | (541,273 | ) | |||||
Foreign Permanent Differences | 47,627 | 7,395 | |||||||
ASC 740-10 Uncertain Tax Position | 708,296 | 582,672 | |||||||
Tax exemption | (1,481,334 | ) | (1,397,866 | ) | |||||
Others | (8,392 | ) | 208,865 | ||||||
$ | 599,342 | $ | 1,071,654 | ||||||
The following presents the aggregate dollar and per share effects of the Company’s tax exemption: | |||||||||
The aggregate dollar effect of tax holiday | |||||||||
2013 | 2012 | ||||||||
Aggregate dollar effect of tax holiday | $ | 1,481,334 | $ | 1,397,866 | |||||
Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred taxes are comprised of the following: | |||||||||
2013 | 2012 | ||||||||
Current Deferred Tax Assets: | |||||||||
Accrued liabilities | $ | 260,413 | $ | 157,423 | |||||
Current Deferred Tax Liabilities: | |||||||||
Prepaid Expenses | (16,731 | ) | - | ||||||
Net Current Deferred Tax Assets before Valuation Allowance | 243,682 | 157,423 | |||||||
Less: Valuation Allowance | - | - | |||||||
Current Deferred Tax Assets, Net: | 243,682 | 157,423 | |||||||
Non-Current Deferred Tax Assets: | |||||||||
Fed & CA Amortization | 33,129 | 8,852 | |||||||
Fed & CA NOL | 55,315 | - | |||||||
Intercompany payable | - | - | |||||||
Land Use Rights | 7,251 | 7,034 | |||||||
PRC Fixed Asset and Amortization | 995 | 643 | |||||||
NOL | 19,239 | 5,045 | |||||||
Non-Current Deferred Tax Liabilities: | |||||||||
Fed & CA Depreciation | (29,740 | ) | (35,237 | ) | |||||
Purchase Accounting | (17,000 | ) | (17,000 | ) | |||||
Prepaid Expenses | (661 | ) | (320 | ) | |||||
PRC Depreciation on Building | (8,309 | ) | (9,342 | ) | |||||
Net Non-Current Deferred Tax Assets (Liabilities) before Valuation Allowance | 60,219 | (40,325 | ) | ||||||
Less: Valuation Allowance | (15,885 | ) | (5,045 | ) | |||||
Non-Current Deferred Tax Assets (Liabilities), Net: | 44,334 | (45,370 | ) | ||||||
Total Deferred, Net: | $ | 288,016 | $ | 112,053 | |||||
The Company has recorded a partial valuation allowance against its PRC deferred tax assets for the year ended December 31, 2013 and 2012. In accordance with ASC 740 Accounting for Income Taxes, based on all available evidence, including the Company’s historical results and the forecast of its future income, it is more likely than not that substantially all of its PRC entities will be able to realize the Company's deferred tax assets. | |||||||||
Nova Lifestyle, Inc. and Diamond Bar are subject to U.S. federal and state income taxes. Nova Furniture BVI was incorporated in the BVI. There is no income tax for a company domiciled in the BVI. Accordingly, the Company’s consolidated financial statements do not present any income tax provision related to the BVI tax jurisdiction where Nova Furniture BVI is domiciled. On April 24, 2013, the Company acquired all outstanding shares of BSI. Generally, there is no income tax for a company domiciled in the BVI. | |||||||||
For U.S. federal income tax purposes, the Company has net operating loss, or NOL carryforwards of approximately $147,000 and $0 at December 31, 2013 and 2012, respectively. For U.S. California income tax purposes, the Company has net operating loss, or NOL carryforwards of approximately $114,000 and $0 at December 31, 2013 and 2012, respectively. The NOL carryforwards will expire after 20 years beginning from the year it occurred if not utilized. | |||||||||
Nova Dongguan, Nova Museum and Ding Nuo are governed by the Enterprise Income Tax Law of the PRC, which is subject to a 25% corporate income tax. On September 19, 2013, BSI moved the office from Macau to Hong Kong, which is subject to a 16.5% corporate income tax. Nova Museum is subject to a 25% corporate income tax in the first year and allowed to apply for tax-exempt status in the second year following its incorporation. Nova Macao is an income tax-exempt entity incorporated and domiciled in Macao. | |||||||||
The Company has net operating loss carry forwards for PRC enterprise income tax purposes of $56,773 and $0 at December 31, 2013 and 2012 respectively. | |||||||||
Undistributed earnings of the Company's foreign subsidiaries amounted to approximately $19.4 million as of December 31, 2013 and $13.7 million as of December 31, 2012. Those earnings are considered to be permanently reinvested and accordingly, no deferred tax expense is recorded for U.S. federal and state income tax or applicable withholding taxes. | |||||||||
Note_12_Related_Party_Transact
Note 12 - Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
Note 12 - Related Party Transactions | |
Diamond Bar leased a warehouse and office in Commerce, California, U.S., from an entity owned by the spouse of the Company’s president. The lease expired upon the sale of the property by the landlord in June 2013 and the Company continued to lease the space on monthly basis until October 31, 2013 with the written permission from the buyer. The monthly rent under this lease was $41,500. Total rental expense for the years ended December 31, 2013 and 2012 was $373,500 and $457,200, respectively. | |
On September 30, 2011, Diamond Bar leased a showroom in High Point, North Carolina from the Company’s president. On April 1, 2013, the Company renewed the lease for one year. The lease was for $31,650 and only for use during two furniture exhibitions held in April 1, 2013 to March 31, 2014. | |
Note_13_Deferred_Rent_Payable
Note 13 - Deferred Rent Payable | 12 Months Ended |
Dec. 31, 2013 | |
Disclosure Text Block Supplement [Abstract] | ' |
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Noncurrent [Text Block] | ' |
Note 13 - Deferred Rent Payable | |
Deferred rent payable represented supplemental payments the Company must pay to the residents who originally lived on the land in Dongguan, Guangdong Province, China, to which the Company acquired land use rights for commercial use. The Company was required to pay an annual amount at RMB 800 per mu (or 666.67 square meters) for a total of 60 mu (or 40,000 square meters) starting from 2003 for 60 years. The payment increases 10% every 5 years. The Company recorded such expense on a straight-line basis. During the years ended December 31, 2013 and 2012, the Company recorded expense of $14,331 and $13,550, respectively. As of December 31, 2013 and 2012, the Company had $74,152 and $55,902 of deferred rent payable, respectively. | |
Note_14_Stockholders_Equity
Note 14 - Stockholders' Equity | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||||||||||||
Note 14 - Stockholders’ Equity | |||||||||||||
Warrants | |||||||||||||
Following is a summary of the warrant activity for the years ended December 31, 2013 and 2012: | |||||||||||||
Number of | Average | Weighted | |||||||||||
Warrants | Exercise | Average | |||||||||||
Price | Remaining | ||||||||||||
Contractual | |||||||||||||
Term in Years | |||||||||||||
Outstanding at January 1, 2012 | 899,480 | $ | 2 | 2.63 | |||||||||
Exercisable at January 1, 2012 | 899,480 | $ | 2 | 2.63 | |||||||||
Granted | 155,100 | 4.5 | 3 | ||||||||||
Exercised | 71,300 | 2 | - | ||||||||||
Outstanding at December 31, 2012 | 983,280 | 2.39 | 1.69 | ||||||||||
Exercisable at December 31, 2012 | 983,280 | 2.39 | 1.69 | ||||||||||
Granted | 50,000 | 4.00 | 2.50 | ||||||||||
Exercised | 510,807 | 2 | - | ||||||||||
Forfeited | - | - | - | ||||||||||
Expired | - | - | - | ||||||||||
Outstanding at December 31, 2013 | 522,473 | $ | 2.93 | 0.93 | |||||||||
Exercisable at December 31, 2013 | 522,473 | $ | 2.93 | 0.93 | |||||||||
Shares issued to IR firm | |||||||||||||
On August 3, 2012, the Company entered into a contract with an investor relations firm. The Company agreed to issue 100,000 shares of common stock to the firm for 24 months of investor relation services. On August 15, 2012, the Company issued the first 50,000 of such 100,000 shares to the investor relations firm, at $2.75 per share, which was the stock price on the date of contract. The remaining 50,000 common stock shares were to be issued to the investor relations firm within 180 business days of the contract signing date and the Company issued the remaining 50,000 common stock shares on April 30, 2013. During the years ended December 31, 2013 and 2012, the Company recorded $137,500 and $57,292 as stock-based compensation, respectively. | |||||||||||||
Shares issued to consultant | |||||||||||||
On April 30, 2013, the Company entered a consulting service agreement extension addendum to the original agreement dated on January 16, 2013 with a consultant for continuously providing the Company general business related consulting services and corporate support related to the Company’s IR and up-listing efforts. In the original agreement, the Company agreed to pay $1,250 per month on or about the 15th of each month for the services to be performed in January, February, March and April of 2013, and issue 4,000 shares of the Company’s common stock. In the extension addendum, the Company agreed to pay $1,250 per month on or about the 15th of each month for the services to be performed in May, June, July and August of 2013, the Company also agreed to issue an additional 4,650 shares of common stock to the consultant. The board approved the issuance and delivery of 8,650 common stock shares to the consultant on July 19, 2013 and those shares were issued on August 6, 2013. The Company recorded $26,349 stock compensation expense for 8,650 shares issued to the consultant. | |||||||||||||
On July 1, 2013, the Company entered into a consulting agreement with a consulting firm in China for providing management M&A, business strategy and financing consultation services effective July 15, 2013. The Company agreed to issue 50,000 shares of common stock to the firm for 12 months of consulting services starting on July 15, 2013. The Company also agreed to issue three-year warrants for the firm to purchase 50,000 shares of the Company’s common stock with an exercise price of $4 per share. Both the common stock and warrants shall be issued to Consultant or its designees within 7 business days upon execution of the Agreement. The fair value of the 50,000 shares of common stock was $200,000 at July 1, 2013, and will be amortized over the service term. During the year ended December 31, 2013, the company recorded $100,000 as stock-based compensation. | |||||||||||||
The warrants issued to the consulting firm are exercisable for a fixed number of shares, and classified as equity instruments. The Company accounted for the warrants issued based on the fair value method under ASC Topic 505, and the fair value of the warrants was calculated using the Black-Scholes model under the following assumptions: estimated life of 3 years, volatility of 353%, risk-free interest rate of 0.66% and dividend yield of 0%. No estimate of forfeitures was made as the Company has a short history of granting options and warrants. Because these equity-classified warrants are vested immediately and are non-forfeitable; based on ASC 505-50, performance commitment has been reached at the grant date, and accordingly, the measurement date is the grant date. The fair value of the warrants issued to the consulting firm at grant date was $194,989, and will be amortized over the service term. During year ended December 31, 2013, the company recorded $76,629 as warrants expense. | |||||||||||||
Note_15_Statutory_Reserves
Note 15 - Statutory Reserves | 12 Months Ended |
Dec. 31, 2013 | |
Statutory Reserves [Abstract] | ' |
Statutory Reserves [Text Block] | ' |
Note 15 - Statutory Reserves | |
As a U.S. holding company, the Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries, Nova Dongguan and Nova Macao, only out of the subsidiary’s retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s PRC subsidiaries. Pursuant to the corporate laws of the PRC and Macao, including the PRC Regulations on Enterprises with Foreign Investment, Nova Dongguan and Nova Macao are only required to maintain one statutory reserve by appropriating from after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings. As a result of the PRC laws and regulations described below that require such annual appropriations of 10% of after-tax income to be set aside prior to payment of dividends as a general statutory reserve fund, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company as a dividend. | |
Surplus Reserve Fund | |
Nova Dongguan and Nova Macao are required to transfer 10% of net income, as determined under PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the subsidiary’s registered capital. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholdings or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issuance is not less than 25% of the registered capital. | |
At December 31, 2013 and 2012, Nova Macao had surplus reserves of $6,241, representing 50% of its registered capital. Nova Dongguan did not make any transfer to surplus reserves due to its accumulated deficit. | |
Common Welfare Fund | |
The common welfare fund is a voluntary fund to which Nova Dongguan and Nova Macao can each elect to transfer 5% to 10% of its net income. This fund can only be utilized on capital items for the collective benefit of the subsidiary’s employees, such as construction of dormitories, cafeteria facilities, and other staff welfare facilities. This fund is non-distributable other than upon liquidation. Nova Dongguan and Nova Macao do not participate in this voluntary fund. | |
Note_16_Geographical_Sales
Note 16 - Geographical Sales | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Segment Reporting Disclosure [Text Block] | ' | ||||||||
Note 16 - Geographical Sales | |||||||||
Geographical distribution of sales consisted of the following for the years ended December 31, 2013 and 2012: | |||||||||
Geographical Areas | 2013 | 2012 | |||||||
China* | $ | 16,013,329 | $ | 17,148,142 | |||||
North America | 44,031,182 | 30,453,771 | |||||||
Asia** | 2,516,044 | 1,840,624 | |||||||
Europe | 14,265,227 | 14,843,873 | |||||||
Australia | 794,527 | 777,651 | |||||||
Hong Kong | 704,167 | 813,482 | |||||||
Other countries | 32,017 | 419,955 | |||||||
$ | 78,356,493 | $ | 66,297,498 | ||||||
* excluding Hong Kong | |||||||||
** excluding China | |||||||||
Note_17_Commitments_and_Contin
Note 17 - Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies Disclosure [Text Block] | ' | ||||
Note 17 - Commitments and Contingencies | |||||
Lease Commitment | |||||
On June 17, 2013, the Company entered into a lease agreement for office, warehouse, and storage and distribution space with five years term from November 1, 2013 to October 31, 2018. The lease agreement also provides an option to extend for an additional six-year term. The monthly rental payment is $42,000 with 3% increase annually. The rent will be recorded on a straight-line basis over the term of the lease. | |||||
On September 19, 2013, Bright Swallow entered into a lease agreement for office with two years term from October 1, 2013, to September 30, 2015. The monthly rental payment is 20,000 Hong Kong Dollars ($2,580 at September 30, 2013). | |||||
The Company has entered into several lease agreements for office and warehouse space in Commerce, California and showroom space in Las Vegas, Nevada and High Point, North Carolina with month-to-month or annual terms. Total rental expense for the years ended December 31, 2013 and 2012 was $620,192 and $630,900, respectively. The estimated annual rental expense for lease commitments is as follows: | |||||
Year | Amount | ||||
2014 | $ | 537,450 | |||
2015 | 544,910 | ||||
2016 | 537,360 | ||||
2017 | 553,480 | ||||
2018 | 472,710 | ||||
Thereafter | - | ||||
Total | $ | 2,645,910 | |||
Capital Contribution | |||||
Nova Dongguan’s total registered capital is $20 million. As of December 31, 2013 and 2012, Nova Dongguan received $14.60 million and $13.60 million in capital contributions, respectively. On January 20, 2014, Nova Dongguan received capital contributions of $1.00 million. The remaining $4.40 million of contribution to registered capital was originally due by June 30, 2012, and the local State Administration of Industry and Commerce (“SAIC”) has granted extension for contribution during our annual review process in 2012 and 2013 by renewal of our business license for the years of 2012 and 2013. Pursuant to the new Registered Capital Registration System Reform Plan promulgated by the State Council on February 7, 2014 and its implementation rules by local SAIC, from March 1, 2014, companies registered in China are not required for annual review by SAIC and there is no registered capital contribution deadline requirement by SAIC. Nova Dongguan is currently complying with the new corporate registration regulation in China. | |||||
Employment Agreements | |||||
On November 7, 2013, the Company entered into one-year employment agreements with Mr. Ya Ming (Jeffrey) Wong and Mr. Yuen Ching (Sammy) Ho to serve as the Company’s Chief Executive Officer and Chief Financial Officer, respectively. The agreements provide for annual salaries of $100,000 and $80,000, respectively and annual bonuses at the sole discretion of the Board of Directors. | |||||
On June 30, 2011, the Company entered into a one-year employment agreement with Thanh H. Lam to serve as the Company’s president. The agreement, as amended effective as of September 1, 2011, provides for an annual salary of $80,000 and an annual bonus at the sole discretion of the Board. The agreement was automatically extended for another year at June 30, 2012. On May 3, 2013, the Company entered an amended and restated employment agreement with Thanh H. Lam to serve as the Company’s president for five years. The agreement provides for an annual salary of $80,000, 200,000 shares of the Company’s common stock and an annual bonus at the sole discretion of the Board. The 200,000 shares to be issued to Ms. Lam are subject to the terms of a stock award agreement. The first 50,000 shares of common stock shall be vested immediately, and the remaining shares shall be vested at 50,000 shares per year for three years on each anniversary of the effective date of the stock award agreement. During the year ended December 31, 2013, the Company recorded $317,791 as stock-based compensation to Thanh H Lam. | |||||
Note_18_Business_Acquisition_a
Note 18 - Business Acquisition and Unaudited Pro Forma Information | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Business Combinations [Abstract] | ' | ||||||||
Business Combination Disclosure [Text Block] | ' | ||||||||
Note 18 - Business Acquisition and Unaudited Pro Forma Information | |||||||||
On April 24, 2013, Nova Lifestyle completed the acquisition and acquired all the outstanding capital stock representing 100% equity interest of Bright Swallow for $6.50 million cash paid in full at the closing pursuant to a stock purchase agreement entered into with the sole shareholder of Bright Swallow on March 22, 2013. Bright Swallow is a BVI company engaged in export of sofas to overseas customers. The Stock Purchase Agreement contained such representations, warranties, obligations and conditions as are customary for transactions of the type governed by such agreements. | |||||||||
As a result of the acquisition, Bright Swallow became a wholly owned subsidiary of the Company. Prior to the closing of the transaction, there were no material relationships between the Company and Bright Swallow, or any of their respective affiliates, directors or officers, or any associates of their respective officers or directors, other than in respect of the Stock Acquisition Agreement. The purpose of the acquisition was to expedite the Company’s market share expansion. The purchase of Bright Swallow will be accounted for as a business combination under ASC Topic 805, “Business Combinations”. Bright Swallow completed the process of legal title transfer with the local authority on August 1, 2013. | |||||||||
The acquisition closing date was April 24, 2013. Since there were no material transactions from April 24, 2013 to April 30, 2013, May 1, 2013 has been designated as the acquisition date in these financial statements. The Company expects to realize synergies from combining the Bright Swallow operations with its own. Revenue of Bright Swallow included in the consolidated income statement for the year ended December 31, 2013 was $6,238,555. Net income of Bright Swallow included in the consolidated income statement for the years ended December 31, 2013 was $131,376. Under the acquisition method of accounting, the total purchase price is allocated to tangible assets and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition with the excess recorded as goodwill. Goodwill represents the synergies expected from combining Bright Swallow’s business with the Company’s existing operations. Goodwill is expected to be deductible for tax purposes over a period of 15 years. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition: | |||||||||
Cash | $ | 342,029 | |||||||
Accounts receivable | 2,317,889 | ||||||||
Other receivable | 110,000 | ||||||||
Customer relationship | 6,100,559 | ||||||||
Goodwill | 808,518 | ||||||||
Accounts payable | (2,670,477 | ) | |||||||
ASC 740 income tax liabilities | (508,518 | ) | |||||||
Net assets acquired | $ | 6,500,000 | |||||||
The following unaudited pro forma consolidated results of operations of Nova LifeStyle and Bright Swallow for the years ended December 31, 2013 and 2012, presents the operations of Nova LifeStyle and Bright Swallow as if the acquisition of Bright Swallow occurred on January 1, 2013 and 2012, respectively. The unaudited pro forma consolidated results of operation for the years ended December 31, 2013 and 2012. The pro forma results are not necessarily indicative of the actual results that would have occurred had the acquisition been completed as of the beginning of the periods presented, nor are they necessarily indicative of future consolidated results. | |||||||||
2013 | 2012 | ||||||||
(Unaudited) | (Unaudited) | ||||||||
Net sales | $ | 81,852,777 | $ | 80,000,995 | |||||
Net income | $ | 5,161,654 | $ | 6,270,496 | |||||
Basic weighted average shares outstanding | 18,876,052 | 18,530,591 | |||||||
Diluted weighted average shares outstanding | 19,122,386 | 18,681,448 | |||||||
Basic net earnings per share | $ | 0.27 | $ | 0.34 | |||||
Diluted net earnings per share | $ | 0.27 | $ | 0.34 | |||||
Note_19_Subsequent_Events
Note 19 - Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
Note 19 - Subsequent Events | |
The company has evaluated subsequent events through the issuance of the consolidated financial statements and the following subsequent event has been identified that requires disclosure in this section. | |
On March 3, 2014, the Company entered into a consulting agreement with a consulting firm for investor relations consulting services effective March 3, 2014 and with a term continuing until September 2, 2014. The Company agreed to pay a retainer of $10,000 to be held during the term, $9,700 a month for its services and $25,000 upon an offering of primary shares by the Company. | |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Basis of Accounting, Policy [Policy Text Block] | ' | ||||||||
Basis of Presentation | |||||||||
The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. | |||||||||
Use of Estimates, Policy [Policy Text Block] | ' | ||||||||
Use of Estimates | |||||||||
In preparing consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates, required by management, include the allowance for bad debt, valuation of inventories and recoverability of long-lived assets and goodwill. Actual results could differ from those estimates. | |||||||||
Business Combinations Policy [Policy Text Block] | ' | ||||||||
Business Combination | |||||||||
For a business combination, the assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree are recognized at the acquisition date, measured at their fair values as of that date. In a business combination achieved in stages, the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, are recognized at the full amounts of their fair values. In a bargain purchase in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any noncontrolling interest in the acquiree that excess in earnings is recognized as a gain attributable to the acquirer. | |||||||||
Deferred tax liability and asset are recognized for the deferred tax consequences of differences between the tax bases and the recognized values of assets acquired and liabilities assumed in a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 740-10. | |||||||||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | ' | ||||||||
Goodwill | |||||||||
Goodwill is the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC Topic 350, “Intangibles-Goodwill and Other,” goodwill is not amortized but is tested for impairment, annually or when circumstances indicate a possible impairment may exist. Impairment testing is performed at a reporting unit level. An impairment loss generally would be recognized when the carrying amount of the reporting unit exceeds its fair value, with the fair value of the reporting unit determined using discounted cash flow (“DCF”) analysis. A number of significant assumptions and estimates are involved in the application of the DCF analysis to forecast operating cash flows, including the discount rate, the internal rate of return and projections of realizations and costs to produce. Management considers historical experience and all available information at the time the fair values of its reporting units are estimated. | |||||||||
ASC Topic 350 also permits an entity to first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the first step of the two-step goodwill impairment test is required to be performed. Performing the qualitative assessment involved identifying the relevant drivers of fair value, evaluating the significance of all identified relevant events and circumstances, and weighing the factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. After evaluating and weighing all these relevant events and circumstances, it was concluded that a positive assertion can be made from the qualitative assessment that it is more likely than not that the fair value of Diamond Bar is greater than its carrying amount. As such, it is not necessary to perform the first step of the two-step goodwill impairment test for Diamond Bar reporting unit. Accordingly, as of December 31, 2013 and 2012, the Company concluded there was no impairment of goodwill of Diamond Bar. | |||||||||
On April 24, 2013, Nova LifeStyle completed the acquisition of Bright Swallow. Under the acquisition method of accounting, the total purchase is allocated to tangible assets and intangible assets acquired and liabilities assumed based on their fair values with the excess charged to goodwill. Nova Lifestyle recognized $808,518 goodwill from the acquisition. As of December 31, 2013, the Company first assessed qualitative factors and determined it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The Company then performed the first step of the two-step goodwill impairment test. The Company completed the step one analysis using discounted cash flow. The DCF method uses revenue and expense projections and risk-adjusted discount rates. The process of determining fair value is subjective and requires management to exercise a significant amount of judgment in determining future growth rates, discount and tax rates and other factors. The results of the step one analysis indicated there was no impairment of goodwill of Bright Swallow. | |||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | ||||||||
Cash and Cash Equivalents | |||||||||
For purposes of the statement of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. | |||||||||
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | ' | ||||||||
Accounts Receivable | |||||||||
The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Based on historical collection activity, the Company recorded $280,055 and $226,137 as allowance for bad debts as of December 31, 2013 and 2012, respectively. | |||||||||
Inventory, Policy [Policy Text Block] | ' | ||||||||
Inventories | |||||||||
Inventories are stated at the lower of cost or market value with cost determined on a weighted-average basis, which approximates the first-in first-out method. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down their inventories to market value, if lower. The Company did not record any provision for write-downs of inventory at December 31, 2013 and 2012. | |||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | ||||||||
Plant, Property and Equipment and Construction in Progress | |||||||||
Plant, property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and improvements are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with 10% salvage value and estimated lives as follows: | |||||||||
Building and workshops | 20 years | ||||||||
Computer and office equipment | 5 years | ||||||||
Museum decoration and renovation | 10 years | ||||||||
Machinery | 10 years | ||||||||
Autos | 5 years | ||||||||
Depreciation of property, plant and equipment attributable to manufacturing activities is capitalized as part of inventories, and expensed to cost of goods sold when inventories are sold. | |||||||||
Construction in progress represents capital expenditure in respect of direct costs of construction or acquisition and design fees incurred. Capitalization of these costs ceases and the construction in progress is transferred to the appropriate category of property, plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Construction in progress is not depreciated. | |||||||||
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | ' | ||||||||
Impairment of Long-Lived Assets | |||||||||
Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. | |||||||||
Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of December 31, 2013 and 2012, there were no significant impairments of its long-lived assets except that the Company disposed of an obsolete and unused workshop and recognized a loss of $37,879 and $123,675 for the year ended December 31, 2013 and 2012, respectively. | |||||||||
Research and Development Expense, Policy [Policy Text Block] | ' | ||||||||
Research and Development | |||||||||
Research and development costs are related primarily to the Company designing and testing its new products in development stage. Research and development costs are recognized in general and administrative expenses and expensed as incurred. Research and development expense was $426,662 and $497,859 for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Income Tax, Policy [Policy Text Block] | ' | ||||||||
Income Taxes | |||||||||
Income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. | |||||||||
The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. | |||||||||
Under the provisions of ASC Topic 740, when tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. | |||||||||
China’s Corporate Income Tax Law (“CIT Law”), together with its Implementation Regulations, effective as of January 1, 2008, introduced a set of anti-avoidance measures under its special tax adjustments regulations. In January 2009, the State Administration of Taxation issued Circular of the State Administration of Taxation on the Issuance of the Implementation Measure of Special Tax Adjustments (“Circular 2”). The regulation is applied retrospectively for tax years beginning after January 1, 2008. Article 3 of Circular 2 states that in respect of transfer pricing administration, relevant tax authorities shall examine business transactions between enterprises and their related parties (“related-party transactions”) and evaluate whether they are conducted on an arm’s-length basis, in addition to conducting investigations and making adjustments, as required under the CIT Law and Article 36 of the PRC Tax Administration and Collection Law (“Tax Collection Law”). | |||||||||
The significant uncertain tax position arose from the transfer pricing between Nova Dongguan and Nova Macao, wherein the Company determined that the gross profit generated by Nova Dongguan from sales to Nova Macao was materially different from profits generated from sales to third parties. The statute of limitations for transfer pricing issues is 10 years from the tax year in which the transfer pricing issue arises pursuant to PRC tax law. | |||||||||
A reconciliation of the January 1, 2012, through December 31, 2013, amount of unrecognized tax benefits excluding interest and penalties ("Gross UTB") is as follows: | |||||||||
Gross UTB | |||||||||
2013 | 2012 | ||||||||
Beginning Balance – January 1 | 4,010,657 | $ | 3,709,129 | ||||||
Increase in unrecorded tax benefits taken in the years ending December 31, 2013 and 2012 | 800,778 | 291,220 | |||||||
Exchange rate adjustment | 115,996 | 10,308 | |||||||
Ending Balance – December 31 | $ | 4,927,431 | $ | 4,010,657 | |||||
At December 31, 2013, and 2012, the Company had cumulatively accrued approximately $1,017,000 and $610,000, respectively, for estimated interest and penalties related to unrecognized tax benefits. The Company recorded interest and penalties related to unrecognized tax benefits as a component of income tax expense, which totaled approximately $416,000 and $291,000 for years ended December 31, 2013, and 2012, respectively. | |||||||||
The tax returns of the Company’s PRC subsidiaries are subject to examination by the relevant PRC tax authorities. According to the Tax Collection Law, the statute of limitations for underpayment of taxes is three years if the underpayment is due to computational errors made by the taxpayer or the withholding agent. Under special circumstances, the statute of limitations is extended to five years if the underpayment of taxes is more than RMB 100,000. In accordance with the Implementation Regulations of the CIT Law, the statute of limitations in the case of transfer pricing issues is ten years. There is no statute of limitations in the case of tax evasion. | |||||||||
The Company’s Chinese subsidiaries are subject to taxation in the PRC. The Chinese’s subsidiaries’ PRC income tax returns are generally not subject to examination by the tax authorities for tax years before 2008. With a few exceptions, the tax years 2008-2012 remain open to examination by tax authorities in the PRC; the tax years 2011-2012 for US entities remain open to examination by tax authorities in the US. | |||||||||
Revenue Recognition, Policy [Policy Text Block] | ' | ||||||||
Revenue Recognition | |||||||||
The Company’s revenue recognition policies are in compliance with ASC Topic 605, “Revenue Recognition.” Sales revenue is recognized when a formal arrangement exists, the price is fixed or determinable, the delivery is completed and no other significant obligations of the Company exist and collectability is reasonably assured. No revenue is recognized if there are significant uncertainties regarding the recovery of the consideration due, or the possible return of the goods. Payments received before all of the relevant criteria for revenue recognition are recorded as unearned revenue. | |||||||||
Sales revenue represents the invoiced value of goods, net of value-added taxes (“VAT”). All of the Company’s products sold in China are subject to the PRC VAT of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials purchased in China and included in the cost of producing the finished product. The Company records VAT payable and VAT receivable net of payments in the consolidated financial statements. The VAT tax return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government. | |||||||||
Franchise Arrangements [Policy Text Block] | ' | ||||||||
Franchise Arrangements | |||||||||
In 2010, the Company began entering into area product franchise agreements with franchisees who operate specialty furniture stores carrying only Nova-branded products. The product franchise agreement provides for the franchisee to retail Nova-brand furniture products for a period of one year from the date of the agreement. The franchisee is required to pay a deposit of RMB 30,000 at the signing of the agreement, which is used as payment for future purchases and is deferred on the Company’s balance sheet as a customer deposit. The franchisee is required to guarantee a minimum purchase amount from the Company during the contract period. The Company has the right to terminate the agreement should the franchisee fail to meet the minimum purchase amounts. The Company provides the franchisee with store images and designs, signage, floor plan product information and training. In addition, the Company will rebate a per square meter subsidy to the franchisee for the store build-out within six months from the agreement date. The franchisee earns 30% of the rebate on its initial purchase from the Company and then at a rate of 5% of each subsequent purchase until fully refunded of its deposit or six months from the agreement date, whichever is earlier. At December 31, 2013 and 2012, the Company had franchising subsidy payable of $149,667 and $179,786, respectively, and was included in other payables. In accordance with ASC 605-50, as the Company does not receive an identifiable benefit from these rebates, the rebates are recorded as a reduction of revenue on sales to the franchisees. | |||||||||
Cost of Sales, Policy [Policy Text Block] | ' | ||||||||
Cost of Sales | |||||||||
Cost of sales consists primarily of finished goods purchased from other manufacturers, material costs, labor costs and related overhead that are directly attributable to the production of the products. Write-down of inventory to the lower of cost or net realizable value is also recorded in the cost of sales. | |||||||||
Shipping and Handling Cost, Policy [Policy Text Block] | ' | ||||||||
Shipping and Handling Costs | |||||||||
Shipping and handling costs related to delivery of finished goods are included in selling expenses. During the years ended December 31, 2013 and 2012, shipping and handling costs were $500,714 and $623,721, respectively. | |||||||||
Advertising Costs, Policy [Policy Text Block] | ' | ||||||||
Advertising | |||||||||
Advertising expenses consist primarily of costs of promotion and marketing for the Company’s image and products, and costs of direct advertising. The Company expenses all advertising costs as incurred. Advertising expense was $425,850 and $519,692 for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Earnings Per Share, Policy [Policy Text Block] | ' | ||||||||
Earnings per Share (EPS) | |||||||||
Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares were dilutive. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and warrants, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). | |||||||||
The following table presents a reconciliation of basic and diluted earnings per share for the years ended December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Net income | $ | 4,867,461 | $ | 5,433,883 | |||||
Weighted average shares outstanding – basic | 18,876,052 | 18,530,591 | |||||||
Effect of dilutive securities: | |||||||||
Unexercised warrants | 246,334 | 150,857 | |||||||
Weighted average shares outstanding – diluted | 19,122,386 | 18,681,448 | |||||||
Earnings per share – basic | $ | 0.26 | $ | 0.29 | |||||
Earnings per share – diluted | $ | 0.25 | $ | 0.29 | |||||
At December 31, 2013 and 2012, the Company had no options to purchase shares of common stock outstanding and warrants to purchase 522,473 and 983,280 shares of common stock were outstanding and exercisable, respectively. For both the years ended December 31, 2013 and 2012, 155,100 shares purchasable under the warrants were excluded from EPS as their effects were anti-dilutive. | |||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' | ||||||||
Concentration of Credit Risk | |||||||||
Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. | |||||||||
Two major customers accounted for 26% (15% and 11% for each) and 32% (18% and 14% for each) of the Company’s sales for the years ended December 31, 2013 and 2012, respectively. Accounts receivable from these customers amounted to $8,136,122 and $7,310,616 as of December 31, 2013 and 2012, respectively. | |||||||||
The Company purchased its products from three major vendors during the year ended December 31, 2013, and from four major vendors during the year December 31, 2012, accounting for 33% (13%, 10% and 10% for each) and 48% (15%, 11%, 11% and 11% for each) of the purchases, respectively. Accounts payable to these vendors were $919,941 and $2,242,851 as of December 31, 2013 and 2012, respectively. | |||||||||
The operations of the Company are located principally in China and the US. Accordingly, the Company’s Chinese subsidiaries' business, financial condition and results of operations may be influenced by the political, economic and legal environments in China, as well as by the general state of the PRC economy. | |||||||||
The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments in China and foreign currency exchange. The Company’s results may be adversely affected by changes in PRC government policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. | |||||||||
The Company’s sales, purchase and expense transactions in China are denominated in Chinese Yuan Renminbi (“RMB”), and all of the assets and liabilities of the Company’s subsidiaries in China are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation in order to affect the remittance. | |||||||||
Statement of Cash Flows Policy [Policy Text Block] | ' | ||||||||
Statement of Cash Flows | |||||||||
In accordance with FASB ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company’s operations is calculated based upon local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet. | |||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | ||||||||
Fair Value of Financial Instruments | |||||||||
Some of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, other receivables, accounts payable, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: | |||||||||
· | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||||||||
· | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | ||||||||
· | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. | ||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under ASC Topic 480, “Distinguishing Liabilities from Equity,” and ASC Topic 815, “Derivatives and Hedging.” | |||||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' | ||||||||
Foreign Currency Translation and Transactions | |||||||||
The consolidated financial statements are presented in USD. The functional currency of Nova LifeStyle, Nova Furniture, Nova Macao, Bright Swallow and Diamond Bar is the United States Dollar (“$” or “USD”). The functional currency of Nova Dongguan, Nova Museum and Ding Nuo is RMB. The functional currencies of the Company’s foreign operations are translated into USD for balance sheet accounts using the current exchange rates in effect as of the balance sheet date and for revenue and expense accounts using the weighted-average exchange rate during the fiscal year. The translation adjustments are recorded as a separate component of stockholders’ equity, captioned “Accumulated other comprehensive income.” Gains and losses resulting from transactions denominated in foreign currencies are included in “Other income (expenses)” in the consolidated statements of income and comprehensive income. There have been no significant fluctuations in the exchange rate for the conversion of RMB to USD after the balance sheet date. | |||||||||
The RMB to USD exchange rates in effect as of December 31, 2013 and December 31, 2012, were RMB6.0969 =SD$1.00 and RMB6.2855 =SD$1.00, respectively. The weighted-average RMB to USD exchange rates in effect for the years ended December 31, 2013 and 2012, were RMB6.2142 =SD$1.00 and RMB6.3125 =SD$1.00, respectively. The exchange rates used in translation from RMB to USD were published by the People’s Bank of the People’s Republic of China. | |||||||||
Comprehensive Income, Policy [Policy Text Block] | ' | ||||||||
Comprehensive Income | |||||||||
The Company follows FASB ASC 220 “Reporting Comprehensive Income.” Comprehensive income is comprised of net income and all changes to the consolidated statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Comprehensive income for the years ended December 31, 2013 and 2012 included net income and foreign currency translation adjustments. | |||||||||
Segment Reporting, Policy [Policy Text Block] | ' | ||||||||
Segment Reporting | |||||||||
ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. | |||||||||
Management determined that the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: the design, manufacture and sale of furniture. All of the Company’s long-lived assets for production are located at its facilities in Dongguan, Guangdong Province, China, and operate within the same environmental, safety and quality regulations governing furniture manufacturers. The Company established Nova Macao and Ding Nuo, and acquired Diamond Bar and Bright Swallow for the purpose of marketing and selling the Company’s products. As a result, management views the business and operations of Nova Dongguan, Nova Macao, Diamond Bar, Bright Swallow and Ding Nuo as a blended gross margin when determining future growth, return on investment and cash flows. Nova Museum, a non-profit organization engaged principally in the promotion and dissemination of the culture and history of furniture in China, has no operations or substantial assets other than its decorations and renovation, and its heritage and cultural assets are for the purpose of exhibition only. | |||||||||
Accordingly, management concluded that the Company had one reportable segment under ASC 280 because: (i) the Company’s products sold through Nova Dongguan, Nova Macao, and Ding Nuo are created with similar production processes, in the same facilities, under the same regulatory environment and sold to customers using similar distribution systems; (ii) Diamond Bar is a furniture distributor based in California focusing customers in US, and Bright Swallow is a furniture distributor based in Hong Kong focusing customers in Canada, they both are operated under the same senior management of Nova Dongguan and Nova Macao, and management views the operations of Nova Dongguan, Nova Macao, Diamond Bar, Bright Swallow and Ding Nuo as a whole for making business decisions; and (iii) although Nova Museum is principally engaged in the dissemination of the culture and history of furniture in China, it also serves a function of promoting and marketing the Company’s image and products by providing a platform and channel for consumers to be exposed to the Company and its products, it is operated under the same management with the same resources and in the same location as Nova Dongguan, and it is an additive and supplemental unit to the Company’s main operations, the manufacture and sale of furniture. | |||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | ||||||||
New Accounting Pronouncements | |||||||||
In February 2013, the FASB issued ASU 2013-2, Comprehensive Income (ASC Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, the new ASU requires entities to disclose in a single location (either on the face of the financial statement that reports net income or in the notes) the effects of reclassifications out of accumulated other comprehensive income (AOCI). For items reclassified out of AOCI and into net income in their entirety, entities must disclose the effect of the reclassification on each affected net income item. For AOCI reclassification items that are not reclassified in their entirety into net income, entities must provide a cross-reference to other required U.S. GAAP disclosures. There is no change in the requirement to present the components of net income and other comprehensive income in either a single continuous statement or two separate consecutive statements. The ASU does not change the items currently reported in other comprehensive income. | |||||||||
For public entities, the new disclosure requirements are effective for annual reporting periods beginning after December 15, 2012, and interim periods within those years. The ASU applies prospectively, and early adoption is permitted. The adoption of this ASU did not have a material impact to the Company’s consolidated financial statements. | |||||||||
As of December 31, 2013, there are no recently issued accounting standards not yet adopted that would have a material effect on the Company’s consolidated financial statements. |
Note_2_Summary_of_Significant_1
Note 2 - Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Note 2 - Summary of Significant Accounting Policies (Tables) [Line Items] | ' | ||||||||
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | 'A reconciliation of the January 1, 2012, through December 31, 2013, amount of unrecognized tax benefits excluding interest and penalties ("Gross UTB") is as follows: | ||||||||
Gross UTB | |||||||||
2013 | 2012 | ||||||||
Beginning Balance – January 1 | 4,010,657 | $ | 3,709,129 | ||||||
Increase in unrecorded tax benefits taken in the years ending December 31, 2013 and 2012 | 800,778 | 291,220 | |||||||
Exchange rate adjustment | 115,996 | 10,308 | |||||||
Ending Balance – December 31 | $ | 4,927,431 | $ | 4,010,657 | |||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 'The following table presents a reconciliation of basic and diluted earnings per share for the years ended December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
Net income | $ | 4,867,461 | $ | 5,433,883 | |||||
Weighted average shares outstanding – basic | 18,876,052 | 18,530,591 | |||||||
Effect of dilutive securities: | |||||||||
Unexercised warrants | 246,334 | 150,857 | |||||||
Weighted average shares outstanding – diluted | 19,122,386 | 18,681,448 | |||||||
Earnings per share – basic | $ | 0.26 | $ | 0.29 | |||||
Earnings per share – diluted | $ | 0.25 | $ | 0.29 | |||||
Property Plant and Equipment Estimated Useful Lives [Member] | ' | ||||||||
Note 2 - Summary of Significant Accounting Policies (Tables) [Line Items] | ' | ||||||||
Property, Plant and Equipment [Table Text Block] | 'Depreciation of property and equipment is provided using the straight-line method for substantially all assets with 10% salvage value and estimated lives as follows: | ||||||||
Building and workshops | 20 years | ||||||||
Computer and office equipment | 5 years | ||||||||
Museum decoration and renovation | 10 years | ||||||||
Machinery | 10 years | ||||||||
Autos | 5 years |
Note_3_Inventories_Tables
Note 3 - Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventory, Current [Table Text Block] | 'As of December 31, 2013 and 2012, inventories consisted of the following: | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Raw material | $ | 250,914 | $ | 369,642 | |||||
Work in progress | 964,587 | 832,270 | |||||||
Finished goods | 2,138,133 | 2,038,809 | |||||||
$ | 3,353,634 | $ | 3,240,721 |
Note_5_Plant_Property_and_Equi1
Note 5 - Plant, Property and Equipment, Net (Tables) (Property, Plant and Equipment [Member]) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Member] | ' | ||||||||
Note 5 - Plant, Property and Equipment, Net (Tables) [Line Items] | ' | ||||||||
Property, Plant and Equipment [Table Text Block] | 'As of December 31, 2013 and 2012, plant, property and equipment consisted of the following: | ||||||||
2013 | 2012 | ||||||||
Building and workshops | $ | 10,945,252 | $ | 7,426,146 | |||||
Office equipment | 659,947 | 581,227 | |||||||
Autos | 318,759 | 309,195 | |||||||
Machinery | 4,921,867 | 3,100,756 | |||||||
Decoration and renovation | 775,874 | 548,497 | |||||||
Less: accumulated depreciation | (4,475,061 | ) | (3,414,707 | ) | |||||
$ | 13,146,638 | $ | 8,551,114 |
Note_7_Intangible_Assets_Table
Note 7 - Intangible Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | 'Intangible assets consisted of the following at December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
Land use right | $ | 1,149,009 | $ | 1,114,532 | |||||
Customer relationship | 6,150,559 | 50,000 | |||||||
Trademark | 200,000 | 200,000 | |||||||
Less: accumulated amortization | (522,577 | ) | (148,440 | ) | |||||
$ | 6,976,991 | $ | 1,216,092 |
Note_8_Prepaid_Expenses_and_Ot1
Note 8 - Prepaid Expenses and Other Receivables (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Schedule of Other Current Assets [Table Text Block] | 'Other current assets consisted of the following at December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
Prepaid expenses | $ | 546,364 | $ | 111,521 | |||||
Other receivables | 102,256 | 68,192 | |||||||
Total | $ | 648,620 | $ | 179,713 |
Note_9_Accrued_Liabilities_and1
Note 9 - Accrued Liabilities and Other Payables (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Schedule of Accrued Liabilities [Table Text Block] | 'Accrued liabilities and other payables consisted of the following at December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
Other payables | $ | 119,481 | $ | 89,982 | |||||
Salary payable | 500,057 | 961,669 | |||||||
Financed insurance premiums | 61,147 | - | |||||||
Accrued consulting fees | 174,710 | - | |||||||
Franchising subsidy | 149,667 | 179,786 | |||||||
Accrued rents | 164,982 | - | |||||||
Accrued expenses, others | 288,113 | 264,398 | |||||||
Total | $ | 1,458,157 | $ | 1,495,835 |
Note_11_Income_Taxes_and_Other1
Note 11 - Income Taxes and Other Taxes Payable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Taxes Payable [Table Text Block] | 'Taxes (receivable) payable consisted of the following at December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
Income tax (receivable) payables | $ | (38,654 | ) | $ | 255,793 | ||||
Other taxes payable | - | 16,366 | |||||||
Total tax payable (receivable) – current | $ | (38,654 | ) | $ | 272,159 | ||||
Total income tax payable – noncurrent | $ | 5,944,424 | $ | 4,608,592 | |||||
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | 'The components of income before income taxes consisted of the following for the years ended December 31, 2013 and 2012: | ||||||||
2013 | 2012 | ||||||||
Income (loss) subject to domestic income taxes only | $ | (345,043 | ) | $ | 491,393 | ||||
Income subject to foreign income taxes only | 5,811,846 | 6,014,144 | |||||||
Total | $ | 5,466,803 | $ | 6,505,537 | |||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | 'The Company’s subsidiaries incorporated in the PRC are subject to enterprise income taxes. The provision for income taxes from continuing operations consisted of the following: | ||||||||
2013 | 2012 | ||||||||
Current: | |||||||||
Federal | $ | 243,587 | $ | 363,780 | |||||
State | (1,951 | ) | 35,187 | ||||||
PRC | 533,667 | 509,623 | |||||||
775,303 | 908,590 | ||||||||
Deferred: | |||||||||
Federal | (136,075 | ) | 143,431 | ||||||
State | (17,061 | ) | 26,021 | ||||||
PRC | (22,825 | ) | (6,388 | ) | |||||
Total provision for income taxes | $ | 599,342 | $ | 1,071,654 | |||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | 'The following is reconciliation of the difference between the actual provision for income taxes and the provision computed by applying the federal statutory rate on income from continuing operations before income taxes: | ||||||||
2013 | 2012 | ||||||||
Tax at Federal Statutory rate | $ | 1,855,311 | $ | 2,211,861 | |||||
Foreign Rate Differential | (522,166 | ) | (541,273 | ) | |||||
Foreign Permanent Differences | 47,627 | 7,395 | |||||||
ASC 740-10 Uncertain Tax Position | 708,296 | 582,672 | |||||||
Tax exemption | (1,481,334 | ) | (1,397,866 | ) | |||||
Others | (8,392 | ) | 208,865 | ||||||
$ | 599,342 | $ | 1,071,654 | ||||||
Schedule of the Aggregate Dollar and Per Share Effects of Tax Exemption [Table Text Block] | 'The following presents the aggregate dollar and per share effects of the Company’s tax exemption: | ||||||||
2013 | 2012 | ||||||||
Aggregate dollar effect of tax holiday | $ | 1,481,334 | $ | 1,397,866 | |||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 'Deferred taxes are comprised of the following: | ||||||||
2013 | 2012 | ||||||||
Current Deferred Tax Assets: | |||||||||
Accrued liabilities | $ | 260,413 | $ | 157,423 | |||||
Current Deferred Tax Liabilities: | |||||||||
Prepaid Expenses | (16,731 | ) | - | ||||||
Net Current Deferred Tax Assets before Valuation Allowance | 243,682 | 157,423 | |||||||
Less: Valuation Allowance | - | - | |||||||
Current Deferred Tax Assets, Net: | 243,682 | 157,423 | |||||||
Non-Current Deferred Tax Assets: | |||||||||
Fed & CA Amortization | 33,129 | 8,852 | |||||||
Fed & CA NOL | 55,315 | - | |||||||
Intercompany payable | - | - | |||||||
Land Use Rights | 7,251 | 7,034 | |||||||
PRC Fixed Asset and Amortization | 995 | 643 | |||||||
NOL | 19,239 | 5,045 | |||||||
Non-Current Deferred Tax Liabilities: | |||||||||
Fed & CA Depreciation | (29,740 | ) | (35,237 | ) | |||||
Purchase Accounting | (17,000 | ) | (17,000 | ) | |||||
Prepaid Expenses | (661 | ) | (320 | ) | |||||
PRC Depreciation on Building | (8,309 | ) | (9,342 | ) | |||||
Net Non-Current Deferred Tax Assets (Liabilities) before Valuation Allowance | 60,219 | (40,325 | ) | ||||||
Less: Valuation Allowance | (15,885 | ) | (5,045 | ) | |||||
Non-Current Deferred Tax Assets (Liabilities), Net: | 44,334 | (45,370 | ) | ||||||
Total Deferred, Net: | $ | 288,016 | $ | 112,053 |
Note_14_Stockholders_Equity_Ta
Note 14 - Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | 'Following is a summary of the warrant activity for the years ended December 31, 2013 and 2012: | ||||||||||||
Number of | Average | Weighted | |||||||||||
Warrants | Exercise | Average | |||||||||||
Price | Remaining | ||||||||||||
Contractual | |||||||||||||
Term in Years | |||||||||||||
Outstanding at January 1, 2012 | 899,480 | $ | 2 | 2.63 | |||||||||
Exercisable at January 1, 2012 | 899,480 | $ | 2 | 2.63 | |||||||||
Granted | 155,100 | 4.5 | 3 | ||||||||||
Exercised | 71,300 | 2 | - | ||||||||||
Outstanding at December 31, 2012 | 983,280 | 2.39 | 1.69 | ||||||||||
Exercisable at December 31, 2012 | 983,280 | 2.39 | 1.69 | ||||||||||
Granted | 50,000 | 4.00 | 2.50 | ||||||||||
Exercised | 510,807 | 2 | - | ||||||||||
Forfeited | - | - | - | ||||||||||
Expired | - | - | - | ||||||||||
Outstanding at December 31, 2013 | 522,473 | $ | 2.93 | 0.93 | |||||||||
Exercisable at December 31, 2013 | 522,473 | $ | 2.93 | 0.93 |
Note_16_Geographical_Sales_Tab
Note 16 - Geographical Sales (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | 'Geographical distribution of sales consisted of the following for the years ended December 31, 2013 and 2012: | ||||||||
Geographical Areas | 2013 | 2012 | |||||||
China* | $ | 16,013,329 | $ | 17,148,142 | |||||
North America | 44,031,182 | 30,453,771 | |||||||
Asia** | 2,516,044 | 1,840,624 | |||||||
Europe | 14,265,227 | 14,843,873 | |||||||
Australia | 794,527 | 777,651 | |||||||
Hong Kong | 704,167 | 813,482 | |||||||
Other countries | 32,017 | 419,955 | |||||||
$ | 78,356,493 | $ | 66,297,498 | ||||||
* excluding Hong Kong | |||||||||
** excluding China |
Note_17_Commitments_and_Contin1
Note 17 - Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | 'The estimated annual rental expense for lease commitments is as follows: | ||||
Year | Amount | ||||
2014 | $ | 537,450 | |||
2015 | 544,910 | ||||
2016 | 537,360 | ||||
2017 | 553,480 | ||||
2018 | 472,710 | ||||
Thereafter | - | ||||
Total | $ | 2,645,910 |
Note_18_Business_Acquisition_a1
Note 18 - Business Acquisition and Unaudited Pro Forma Information (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Business Combinations [Abstract] | ' | ||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | 'The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition: | ||||||||
Cash | $ | 342,029 | |||||||
Accounts receivable | 2,317,889 | ||||||||
Other receivable | 110,000 | ||||||||
Customer relationship | 6,100,559 | ||||||||
Goodwill | 808,518 | ||||||||
Accounts payable | (2,670,477 | ) | |||||||
ASC 740 income tax liabilities | (508,518 | ) | |||||||
Net assets acquired | $ | 6,500,000 | |||||||
Business Acquisition, Pro Forma Information [Table Text Block] | 'The following unaudited pro forma consolidated results of operations of Nova LifeStyle and Bright Swallow for the years ended December 31, 2013 and 2012, presents the operations of Nova LifeStyle and Bright Swallow as if the acquisition of Bright Swallow occurred on January 1, 2013 and 2012, respectively. The unaudited pro forma consolidated results of operation for the years ended December 31, 2013 and 2012. The pro forma results are not necessarily indicative of the actual results that would have occurred had the acquisition been completed as of the beginning of the periods presented, nor are they necessarily indicative of future consolidated results. | ||||||||
2013 | 2012 | ||||||||
(Unaudited) | (Unaudited) | ||||||||
Net sales | $ | 81,852,777 | $ | 80,000,995 | |||||
Net income | $ | 5,161,654 | $ | 6,270,496 | |||||
Basic weighted average shares outstanding | 18,876,052 | 18,530,591 | |||||||
Diluted weighted average shares outstanding | 19,122,386 | 18,681,448 | |||||||
Basic net earnings per share | $ | 0.27 | $ | 0.34 | |||||
Diluted net earnings per share | $ | 0.27 | $ | 0.34 |
Note_1_Organization_and_Descri1
Note 1 - Organization and Description of Business (Details) | 12 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | |
USD ($) | USD ($) | Contributed Capital on March 17, 2011 [Member] | Contributed Capital on March 17, 2011 [Member] | Contributed Capital on March 29, 2011 [Member] | Contributed Capital on March 29, 2011 [Member] | Contributed Capital Made on October 21, 2013 [Member] | Contributed Capital Made on October 21, 2013 [Member] | Contributed Capital Made on November 27, 2013 [Member] | Contributed Capital Made on November 27, 2013 [Member] | Nova Holdings [Member] | St. Joyal [Member] | St. Joyal [Member] | Nova Furniture Limited [Member] | Diamond Bar [Member] | Diamond Bar [Member] | Bright Swallow International Group Limited [Member] | Dongguan Ding Nuo Household Products Co., Ltd. [Member] | Trademarks [Member] | ||
Nova Dongguan [Member] | Nova Dongguan [Member] | Nova Dongguan [Member] | Nova Dongguan [Member] | Dongguan Ding Nuo Household Products Co., Ltd. [Member] | Dongguan Ding Nuo Household Products Co., Ltd. [Member] | Dongguan Ding Nuo Household Products Co., Ltd. [Member] | Dongguan Ding Nuo Household Products Co., Ltd. [Member] | USD ($) | USD ($) | USD ($) | Trademarks [Member] | USD ($) | USD ($) | USD ($) | ||||||
USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | ||||||||||||
Note 1 - Organization and Description of Business (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,920,000 | ' | ' | ' | ' | ' |
Number of Shareholders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' |
Number of Shares Exchanged (in Shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' |
Stock Repurchased During Period, Shares (in Shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' |
Debt Instrument, Maturity Date, Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '90-day | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $80,000 | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.46% | ' | ' | ' | ' | ' |
Repayments of Notes Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80,000 | ' | ' | ' | ' | ' |
Common Stock, Shares, Issued (in Shares) | 19,206,024 | 18,536,567 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,900,000 | ' | ' | ' | ' | ' |
Common Stock, Shares, Outstanding (in Shares) | 19,206,024 | 18,536,567 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,900,000 | ' | ' | ' | ' | ' |
Sale of Stock, Number of Shares Issued in Transaction (in Shares) | ' | ' | 11,917,616 | ' | ' | ' | ' | ' | ' | ' | ' | 2,235,000 | ' | 9,682,616 | ' | ' | ' | ' | ' | ' |
Equity Method Investment, Ownership Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 81.25% | ' | 18.75% | ' | ' | ' | ' | ' | ' |
Common Stock, Share Subscribed but Unissued, Subscriptions Receivable | 750,000 | 1,950,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 750,000 | 2,400,000 | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance or Sale of Equity | 1,200,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,650,000 | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Contributed Capital | ' | ' | ' | 152,177 | 1,000,000 | 172,351 | 1,130,000 | 1,000,000 | 162,994 | 16,305 | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Consideration Transferred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 450,000 | 6,500,000 | ' | ' |
Payments to Acquire Intangible Assets | $0 | $538,614 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $200,000 | ' | ' | ' | $200,000 |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | 100.00% | ' |
Note_2_Summary_of_Significant_2
Note 2 - Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Goodwill | $1,027,124 | $218,606 |
Allowance for Doubtful Accounts Receivable | 280,055 | 226,137 |
Property, Plant and Equipment, Salvage Value, Percentage | 10.00% | ' |
Asset Impairment Charges | 0 | 0 |
Gain (Loss) on Disposition of Assets | -37,879 | 123,675 |
Research and Development Expense | 426,662 | 497,859 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 1,017,000 | 610,000 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 416,000 | 291,000 |
VAT tax rate, sales | 17.00% | ' |
Term Of Franchise Agreement | '1 year | ' |
Initial Franchise Fees | 30,000 | ' |
Store Build out Subsidy Period | '6 months | ' |
Decline in Initial Franchise Fees, Description | 'The franchisee earns 30% of the rebate on its initial purchase from the Company and then at a rate of 5% of each subsequent purchase until fully refunded of its deposit or six months from the agreement date, whichever is earlier. | ' |
Other Accounts Payable and Accrued Liabilities | 149,667 | 179,786 |
Shipping, Handling and Transportation Costs | 500,714 | 623,721 |
Advertising Expense | 425,850 | 519,692 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | 0 | 0 |
Class of Warrant or Right, Outstanding (in Shares) | 522,473 | 983,280 |
Accounts Payable, Other, Current | 119,481 | 89,982 |
Number of Operating Segments | 1 | ' |
Number of Reportable Segments | 1 | ' |
Major Customer A [Member] | Customer Concentration Risk [Member] | Sales [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 15.00% | 18.00% |
Major Customer B [Member] | Customer Concentration Risk [Member] | Sales [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 11.00% | 14.00% |
China, Yuan Renminbi | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Foreign Currency Exchange Rate Description | 'RMB6.0969 =SD$1.00 | 'RMB6.2855 =SD$1.00 |
Foreign Currency Weighted-Average Exchange Rate Description | 'RMB6.2142 =SD$1.00 | 'RMB6.3125 =SD$1.00 |
Warrant [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 155,100 | 155,100 |
Major Vendor A [Member] | Supplier Concentration Risk [Member] | Cost of Goods, Total [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 13.00% | 15.00% |
Major Vendor B [Member] | Supplier Concentration Risk [Member] | Cost of Goods, Total [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 10.00% | 11.00% |
Major Vendor C [Member] | Supplier Concentration Risk [Member] | Cost of Goods, Total [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 10.00% | 11.00% |
Major Vendor D [Member] | Supplier Concentration Risk [Member] | Cost of Goods, Total [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | ' | 11.00% |
Customer Concentration Risk [Member] | Sales [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Concentration Risk, Customer | 'Two major customers | 'Two major customers |
Concentration Risk, Percentage | 26.00% | 32.00% |
Accounts and Other Receivables, Net, Current | 8,136,122 | 7,310,616 |
Supplier Concentration Risk [Member] | Cost of Goods, Total [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 33.00% | 48.00% |
Concentration Risk, Supplier | 'three major vendors | 'four major vendors |
Accounts Payable, Other, Current | 919,941 | 2,242,851 |
Diamond Bar [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Goodwill, Impairment Loss | 0 | 0 |
Bright Swallow International Group Limited [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Goodwill | $808,518 | ' |
Transfer Pricing Issues [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Taxes, Statute of Limitation | '10 years | ' |
Underpayment of Taxes [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Taxes, Statute of Limitation | '3 years | ' |
Underpayment of Taxes in excess of RMB100,000 [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Taxes, Statute of Limitation | '5 years | ' |
Note_2_Summary_of_Significant_3
Note 2 - Summary of Significant Accounting Policies (Details) - Schedule of Estimated Useful Lives of Property and Equipment | 12 Months Ended |
Dec. 31, 2013 | |
Building and Workshops [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and Equipment | '20 years |
Computer Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and Equipment | '5 years |
Museum Decoration and Renovation [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and Equipment | '10 years |
Machinery and Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and Equipment | '10 years |
Automobiles [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property and Equipment | '5 years |
Note_2_Summary_of_Significant_4
Note 2 - Summary of Significant Accounting Policies (Details) - Schedule of Unrecognized Tax Benefits Roll Forward (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Unrecognized Tax Benefits Roll Forward [Abstract] | ' | ' |
Beginning Balance b January 1 | $4,010,657 | $3,709,129 |
Increase in unrecorded tax benefits taken in the years ending December 31, 2013 and 2012 | 800,778 | 291,220 |
Exchange rate adjustment | 115,996 | 10,308 |
Ending Balance b December 31 | $4,927,431 | $4,010,657 |
Note_2_Summary_of_Significant_5
Note 2 - Summary of Significant Accounting Policies (Details) - Schedule of Earnings per Share, Basic and Diluted (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Earnings per Share, Basic and Diluted [Abstract] | ' | ' |
Net income (in Dollars) | $4,867,461 | $5,433,883 |
Weighted average shares outstanding b basic | 18,876,052 | 18,530,591 |
Effect of dilutive securities: | ' | ' |
Unexercised warrants | 246,334 | 150,857 |
Weighted average shares outstanding b diluted | 19,122,386 | 18,681,448 |
Earnings per share b basic (in Dollars per share) | $0.26 | $0.29 |
Earnings per share b diluted (in Dollars per share) | $0.25 | $0.29 |
Note_3_Inventories_Details_Sch
Note 3 - Inventories (Details) - Schedule of Inventory, Current (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Inventory, Current [Abstract] | ' | ' |
Raw material | $250,914 | $369,642 |
Work in progress | 964,587 | 832,270 |
Finished goods | 2,138,133 | 2,038,809 |
$3,353,634 | $3,240,721 |
Note_4_Heritage_and_Cultural_A1
Note 4 - Heritage and Cultural Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Heritage And Cultural Assets [Abstract] | ' | ' |
Heritage and cultural museum assets | $132,993 | $129,002 |
Note_5_Plant_Property_and_Equi2
Note 5 - Plant, Property and Equipment, Net (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Abstract] | ' | ' |
Depreciation | $954,532 | $709,812 |
Gain (Loss) on Disposition of Assets | ($37,879) | $123,675 |
Note_5_Plant_Property_and_Equi3
Note 5 - Plant, Property and Equipment, Net (Details) - Schedule of Property, Plant and Equipment (Under Review) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Less: accumulated depreciation | ($4,475,061) | ($3,414,707) |
13,146,638 | 8,551,114 | |
Building and Workshops [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 10,945,252 | 7,426,146 |
Office Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 659,947 | 581,227 |
Vehicles [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 318,759 | 309,195 |
Machinery and Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 4,921,867 | 3,100,756 |
Museum Decoration and Renovation [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | $775,874 | $548,497 |
Note_6_Construction_in_Progres1
Note 6 - Construction in Progress (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Construction In Progress [Abstract] | ' | ' |
Construction in Progress, Gross | $1,024,645 | $5,374,056 |
Construction in Progress Expenditures Incurred but Not yet Paid | $6,160,000 | ' |
Note_7_Intangible_Assets_Detai
Note 7 - Intangible Assets (Details) | 12 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | USD ($) | Diamond Bar [Member] | Diamond Bar [Member] | Bright Swallow International Group Limited [Member] | Land Use Right, Acquired in 2004 [Member] | Land Use Right Acquired February 28, 2012 [Member] | Land Use Right Acquired February 28, 2012 [Member] | Customer Relationships [Member] | Customer Relationships [Member] | Trademarks [Member] | Trademarks [Member] | Trademarks [Member] | |
Customer Relationships [Member] | Trademarks [Member] | Customer Relationships [Member] | USD ($) | CNY | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||
USD ($) | USD ($) | USD ($) | |||||||||||
Note 7 - Intangible Assets (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | ' | ' | '5 years | '5 years | '15 years | '50 years | '50 years | '50 years | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Amortization Method | ' | ' | 'straight-line method | 'straight-line method | 'straight-line method | 'straight-line basis for 50 years | 'straight-line basis for 50 years | 'straight-line basis for 50 years | ' | ' | ' | ' | ' |
Payments to Acquire Intangible Assets | $0 | $538,614 | ' | $200,000 | ' | ' | $536,193 | 3,400,000 | ' | ' | $200,000 | ' | ' |
Land Use Rights Acquired, Annual Fee, Payment Description | ' | ' | ' | ' | ' | ' | 'In addition, the Company is required to pay an annual fee at $240 per MU (total 17.97 MU for the land) from the second year after commencement of the land filling for 60 years for a total of approximately $333,000 (RMB 2.1 million). The payment will be made annually with a 5% increase every 5 years. | 'In addition, the Company is required to pay an annual fee at $240 per MU (total 17.97 MU for the land) from the second year after commencement of the land filling for 60 years for a total of approximately $333,000 (RMB 2.1 million). The payment will be made annually with a 5% increase every 5 years. | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Gross | ' | ' | 50,000 | ' | ' | ' | ' | ' | 6,150,559 | 50,000 | ' | 200,000 | 200,000 |
Number of trademarks acquired | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-lived Intangible Assets, Fair Value Disclosure | ' | ' | ' | ' | 6,100,559 | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of Intangible Assets | 370,349 | 54,784 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | ' | 472,430 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | ' | 472,430 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | ' | 459,100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | ' | 432,430 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | ' | $432,430 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note_7_Intangible_Assets_Detai1
Note 7 - Intangible Assets (Details) - Schedule of Finite-Lived Intangible Assets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Less: accumulated amortization | ($522,577) | ($148,440) |
6,976,991 | 1,216,092 | |
Land Use Right [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, gross | 1,149,009 | 1,114,532 |
Customer Relationships [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, gross | 6,150,559 | 50,000 |
Trademarks [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, gross | $200,000 | $200,000 |
Note_8_Prepaid_Expenses_and_Ot2
Note 8 - Prepaid Expenses and Other Receivables (Details) (USD $) | Dec. 31, 2013 |
Disclosure Text Block Supplement [Abstract] | ' |
Prepaid Professional Fees | $100,000 |
Prepaid Design Fees | 245,040 |
Prepaid Insurance | 115,600 |
Prepaid Investor Relations | $80,200 |
Note_8_Prepaid_Expenses_and_Ot3
Note 8 - Prepaid Expenses and Other Receivables (Details) - Schedule of Other Current Assets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Other Current Assets [Abstract] | ' | ' |
Prepaid expenses | $546,364 | $111,521 |
Other receivables | 102,256 | 68,192 |
Total | $648,620 | $179,713 |
Note_9_Accrued_Liabilities_and2
Note 9 - Accrued Liabilities and Other Payables (Details) - Schedule of Accrued Liabilitites (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Accrued Liabilitites [Abstract] | ' | ' |
Other payables | $119,481 | $89,982 |
Salary payable | 500,057 | 961,669 |
Financed insurance premiums | 61,147 | 0 |
Accrued consulting fees | 174,710 | 0 |
Franchising subsidy | 149,667 | 179,786 |
Accrued rents | 164,982 | 0 |
Accrued expenses, others | 288,113 | 264,398 |
Total | $1,458,157 | $1,495,835 |
Note_10_Line_of_Credit_Details
Note 10 - Line of Credit (Details) | 12 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | USD ($) | Diamond Bar [Member] | Diamond Bar [Member] | Nova Dongguan [Member] | Nova Dongguan [Member] | Nova Dongguan [Member] | Nova Dongguan [Member] | Nova Dongguan [Member] | Nova Dongguan [Member] | Nova Macao [Member] | Nova Macao [Member] | Nova Macao [Member] | |
California Bank Line of Credit [Member] | California Bank Line of Credit [Member] | 2nd Drawing [Member] | Dongguan Commercial Bank Line of Credit [Member] | Dongguan Commercial Bank Line of Credit [Member] | Dongguan Commercial Bank Line of Credit [Member] | Dongguan Commercial Bank Line of Credit [Member] | Hong Kong Commercial Bank [Member] | Line of Credit Renewal on December 17, 2013 [Member] | Hong Kong Commercial Bank [Member] | Hong Kong Commercial Bank [Member] | |||
USD ($) | USD ($) | Dongguan Commercial Bank Line of Credit [Member] | USD ($) | USD ($) | CNY | CNY | Hong Kong Commercial Bank [Member] | USD ($) | USD ($) | ||||
USD ($) | |||||||||||||
Note 10 - Line of Credit (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | $5,000,000 | ' | ' | $3,280,356 | ' | 20,000,000 | ' | $6,500,000 | ' | $8,000,000 |
Line of Credit Facility, Interest Rate at Period End | ' | ' | ' | 4.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Collateral | ' | ' | ' | 'secured by all of assets of Diamond Bar Outdoors, Inc., a subsidiary of Nova Lifestyle and guaranteed by Nova Lifestyle | ' | 'secured by the building of Nova Dongguan and guaranteed by Nova Dongguan and the Company's CEO | ' | ' | ' | ' | ' | 'secured by assignment of Sinosure (China Export and Credit Insurance Company) credit insurance | ' |
Line of Credit Facility, Amount Outstanding | ' | ' | 4,754,258 | 3,283,613 | ' | 820,089 | 1,645,565 | 5,000,000 | 10,340,000 | ' | ' | 1,848,000 | 1,600,000 |
Interest Expense, Debt | ' | ' | 158,543 | 71,539 | ' | 56,407 | 43,575 | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Covenant Terms | ' | ' | ' | 'i) maintain a minimum tangible net worth of not less than $5 million; (ii) maintain a current ratio in excess of 1.25 to 1.00; and (iii) maintain a ratio of debt to tangible net worth not in excess of 2.500 to 1.000; (iv) the pre-tax income must be not less than 1.000% of total revenue quarterly. As of December 31, 2013, Diamond Bar was in compliance with all the covenants | ' | ' | ' | ' | ' | ' | ' | ' | 'i) total outstanding under working capital advance shall not exceed the lesser of (a) the credit commitment of $6,500,000, (b) insurance claim limits and (c) borrowing base allowed of 80% advance rate against certain eligible accounts receivable; (ii) eligible account receivables are insured buyers by Sinosure assigned to the bank and within established insurance limit; (iii) the bank has an absolute right to exclude any portion of the accounts receivable from the aging report for computation of the borrowing base as it deems fit; (iv) in case the aggregate outstanding amount of credit facilities exceeds the available amount of facilities conferred by the aforesaid computation of borrowing base, the excess amount should be settled with 7 days by Nova Furniture Macao Commercial Offshore Limited; and. (v) the Company maintains a debt to tangible net worth ratio of not in excess of 3.0x throughout the whole term of the loan. As of December 31, 2013, Nova Macao was in compliance with all the covenants |
Debt Instrument, Maturity Date | ' | ' | ' | ' | 20-Nov-14 | ' | 24-Apr-15 | ' | ' | ' | ' | 21-Nov-13 | 23-Aug-13 |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | 0.55% | ' | ' | ' | ' | ' | 4.25% | ' |
Debt Instrument, Payment Terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'requires monthly payment on the interest; the interest rate will be adjusted annually | ' | ' | ' |
Line of Credit Facility, Expiration Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30-Jan-15 | ' | ' |
Interest Paid | $267,019 | $121,403 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $78,664 | $6,139 |
Note_11_Income_Taxes_and_Other2
Note 11 - Income Taxes and Other Taxes Payable (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Note 11 - Income Taxes and Other Taxes Payable (Details) [Line Items] | ' | ' |
Opeating Loss Carryforwards, Expiration Date, Description | '20 years beginning from the year it occurred if not utilized | ' |
Undistributed Earnings of Foreign Subsidiaries | $19,400,000 | $13,700,000 |
Internal Revenue Service (IRS) [Member] | ' | ' |
Note 11 - Income Taxes and Other Taxes Payable (Details) [Line Items] | ' | ' |
Operating Loss Carryforwards | 147,000 | 0 |
State and Local Jurisdiction [Member] | ' | ' |
Note 11 - Income Taxes and Other Taxes Payable (Details) [Line Items] | ' | ' |
Operating Loss Carryforwards | 114,000 | 0 |
Foreign Tax Authority [Member] | ' | ' |
Note 11 - Income Taxes and Other Taxes Payable (Details) [Line Items] | ' | ' |
Operating Loss Carryforwards | $56,773 | $0 |
Nova Dongguan [Member] | ' | ' |
Note 11 - Income Taxes and Other Taxes Payable (Details) [Line Items] | ' | ' |
Corporate Income Tax, PRC | 25.00% | ' |
Nova Museum [Member] | ' | ' |
Note 11 - Income Taxes and Other Taxes Payable (Details) [Line Items] | ' | ' |
Corporate Income Tax, PRC | 25.00% | ' |
Other Information Pertaining to Income Taxes | 'subject to a 25% corporate income tax in the first year and allowed to apply for tax-exempt status in the second year following its incorporation | ' |
Dongguan Ding Nuo Household Products Co., Ltd. [Member] | ' | ' |
Note 11 - Income Taxes and Other Taxes Payable (Details) [Line Items] | ' | ' |
Corporate Income Tax, PRC | 25.00% | ' |
Bright Swallow International Group Limited [Member] | ' | ' |
Note 11 - Income Taxes and Other Taxes Payable (Details) [Line Items] | ' | ' |
Corporate Income Tax, PRC | 16.50% | ' |
Nova Macao [Member] | ' | ' |
Note 11 - Income Taxes and Other Taxes Payable (Details) [Line Items] | ' | ' |
Other Information Pertaining to Income Taxes | 'income tax-exempt entity incorporated | ' |
Note_11_Income_Taxes_and_Other3
Note 11 - Income Taxes and Other Taxes Payable (Details) - Schedule of Taxes Payable (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Taxes Payable [Abstract] | ' | ' |
Income tax (receivable) payables | ($38,654) | $255,793 |
Other taxes payable | 0 | 16,366 |
Total tax payable (receivable) b current | -38,654 | 272,159 |
Total income tax payable b noncurrent | $5,944,424 | $4,608,592 |
Note_11_Income_Taxes_and_Other4
Note 11 - Income Taxes and Other Taxes Payable (Details) - Schedule of Income before Income Tax, Domestic and Foreign (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Income before Income Tax, Domestic and Foreign [Abstract] | ' | ' |
Income (loss) subject to domestic income taxes only | ($345,043) | $491,393 |
Income subject to foreign income taxes only | 5,811,846 | 6,014,144 |
Total | $5,466,803 | $6,505,537 |
Note_11_Income_Taxes_and_Other5
Note 11 - Income Taxes and Other Taxes Payable (Details) - Schedule of Components of Income Tax Expense (Benefit) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Current: | ' | ' |
Federal | $243,587 | $363,780 |
State | -1,951 | 35,187 |
PRC | 533,667 | 509,623 |
775,303 | 908,590 | |
Deferred: | ' | ' |
Federal | -136,075 | 143,431 |
State | -17,061 | 26,021 |
PRC | -22,825 | -6,388 |
Total provision for income taxes | $599,342 | $1,071,654 |
Note_11_Income_Taxes_and_Other6
Note 11 - Income Taxes and Other Taxes Payable (Details) - Schedule of Effective Income Tax Rate Reconciliation (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ' | ' |
Tax at Federal Statutory rate | $1,855,311 | $2,211,861 |
Foreign Rate Differential | -522,166 | -541,273 |
Foreign Permanent Differences | 47,627 | 7,395 |
ASC 740-10 Uncertain Tax Position | 708,296 | 582,672 |
Tax exemption | -1,481,334 | -1,397,866 |
Others | -8,392 | 208,865 |
$599,342 | $1,071,654 |
Note_11_Income_Taxes_and_Other7
Note 11 - Income Taxes and Other Taxes Payable (Details) - Schedule of the Aggregate Dollar and Per Sare Effects of Tax Exemption (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of the Aggregate Dollar and Per Sare Effects of Tax Exemption [Abstract] | ' | ' |
Aggregate dollar effect of tax holiday | $1,481,334 | $1,397,866 |
Note_11_Income_Taxes_and_Other8
Note 11 - Income Taxes and Other Taxes Payable (Details) - Schedule of Deferred Tax Assets and Liabilities (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current Deferred Tax Assets: | ' | ' |
Accrued liabilities | $260,413 | $157,423 |
Current Deferred Tax Liabilities: | ' | ' |
Prepaid Expenses | -16,731 | 0 |
Net Current Deferred Tax Assets before Valuation Allowance | 243,682 | 157,423 |
Less: Valuation Allowance | 0 | 0 |
Current Deferred Tax Assets, Net: | 243,682 | 157,423 |
Non-Current Deferred Tax Assets: | ' | ' |
Fed & CA Amortization | 33,129 | 8,852 |
Fed & CA NOL | 55,315 | 0 |
Intercompany payable | 0 | 0 |
Land Use Rights | 7,251 | 7,034 |
PRC Fixed Asset and Amortization | 995 | 643 |
NOL | 19,239 | 5,045 |
Non-Current Deferred Tax Liabilities: | ' | ' |
Fed & CA Depreciation | -29,740 | -35,237 |
Purchase Accounting | -17,000 | -17,000 |
Prepaid Expenses | -661 | -320 |
PRC Depreciation on Building | -8,309 | -9,342 |
Net Non-Current Deferred Tax Assets (Liabilities) before Valuation Allowance | 60,219 | -40,325 |
Less: Valuation Allowance | -15,885 | -5,045 |
Non-Current Deferred Tax Assets (Liabilities), Net: | 44,334 | 0 |
Total Deferred, Net: | $288,016 | $112,053 |
Note_12_Related_Party_Transact1
Note 12 - Related Party Transactions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Note 12 - Related Party Transactions (Details) [Line Items] | ' | ' | ' |
Operating Leases, Rent Expense | $620,192 | ' | ' |
Warehouse and Office Lease [Member] | President [Member] | Diamond Bar [Member] | ' | ' | ' |
Note 12 - Related Party Transactions (Details) [Line Items] | ' | ' | ' |
Related Party Transaction, Description of Transaction | ' | ' | 'Diamond Bar leased a warehouse and office in Commerce, California, U.S., from an entity owned by the spouse of the Company's president. The lease expired upon the sale of the property by the landlord in June 2013 and the Company continued to lease the space on monthly basis until October 31, 2013 with the written permission from the buyer |
Operating Leases, Rent Expense | 373,500 | 457,200 | ' |
Warehouse and Office Monthly Rent Expense [Member] | President [Member] | Diamond Bar [Member] | ' | ' | ' |
Note 12 - Related Party Transactions (Details) [Line Items] | ' | ' | ' |
Operating Leases, Rent Expense | ' | ' | 41,500 |
Showroom Lease [Member] | President [Member] | Diamond Bar [Member] | ' | ' | ' |
Note 12 - Related Party Transactions (Details) [Line Items] | ' | ' | ' |
Related Party Transaction, Description of Transaction | 'renewed the lease for one year | ' | 'On September 30, 2011, Diamond Bar leased a showroom in High Point, North Carolina from the Company's president |
Operating Leases, Rent Expense | $31,650 | ' | ' |
Note_13_Deferred_Rent_Payable_
Note 13 - Deferred Rent Payable (Details) | 12 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | USD ($) | Land Use Right Acquired in Dongguan, China [Member] | Land Use Right Acquired in Dongguan, China [Member] | Land Use Right Acquired in Dongguan, China [Member] | |
USD ($) | CNY | USD ($) | |||
Note 13 - Deferred Rent Payable (Details) [Line Items] | ' | ' | ' | ' | ' |
Land Use Rights Acquired, Annual Fee, Payment Description | ' | ' | 'required to pay an annual amount at RMB 800 per mu (or 666.67 square meters) for a total of 60 mu (or 40,000 square meters) starting from 2003 for 60 years. The payment increases 10% every 5 years. | 'required to pay an annual amount at RMB 800 per mu (or 666.67 square meters) for a total of 60 mu (or 40,000 square meters) starting from 2003 for 60 years. The payment increases 10% every 5 years. | ' |
Land use fee, per mu (in Yuan Renminbi) | ' | ' | ' | 800 | ' |
Land use fee, term | ' | ' | '60 years | '60 years | ' |
Land use fee, increase percentage | ' | ' | 10.00% | 10.00% | ' |
Land use fee, terms of price increase | ' | ' | '5 years | '5 years | ' |
Operating Leases, Rent Expense | 620,192 | ' | 14,331 | ' | 13,550 |
Deferred Rent Credit, Noncurrent | $74,152 | $55,902 | ' | ' | ' |
Note_14_Stockholders_Equity_De
Note 14 - Stockholders' Equity (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Note 14 - Stockholders' Equity (Details) [Line Items] | ' | ' |
Share-based Compensation (in Dollars) | $581,640 | $57,292 |
Stock Issued During Period, Value, Issued for Services (in Dollars) | 681,639 | 137,500 |
Fair Value Assumptions, Expected Term | '3 years | ' |
Fair Value Assumptions, Expected Volatility Rate | 353.00% | ' |
Fair Value Assumptions, Risk Free Interest Rate | 0.66% | ' |
Fair Value Assumptions, Expected Dividend Rate | 0.00% | ' |
Warrants, Fair Value of Warrants, Granted (in Dollars) | 194,989 | ' |
Adjustments to Additional Paid in Capital, Warrant Issued (in Dollars) | 76,629 | ' |
Original Consulting Service Agreement [Member] | ' | ' |
Note 14 - Stockholders' Equity (Details) [Line Items] | ' | ' |
Shares Issued During Period, Shares to be Issued | 4,000 | ' |
Other Commitments, Description | 'the original agreement, the Company agreed to pay $1,250 per month on or about the 15th of each month for the services to be performed in January, February, March and April of 2013, and issue 4,000 shares of the Company's common stock | ' |
Other Commitment (in Dollars) | 1,250 | ' |
Extension Addendum Consulting Service Agreement [Member] | ' | ' |
Note 14 - Stockholders' Equity (Details) [Line Items] | ' | ' |
Shares Issued During Period, Shares to be Issued | 4,650 | ' |
Other Commitments, Description | 'In the extension addendum, the Company agreed to pay $1,250 per month on or about the 15th of each month for the services to be performed in May, June, July and August of 2013, the Company also agreed to issue an additional 4,650 shares of common stock to the consultant. | ' |
Other Commitment (in Dollars) | 1,250 | ' |
Investor Relations Contract [Member] | ' | ' |
Note 14 - Stockholders' Equity (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | ' | 100,000 |
Investor relation contract, total service period | ' | '24 months |
Stock Issued During Period, Shares, Issued for Services | 50,000 | 50,000 |
Shares Issued, Price Per Share (in Dollars per share) | ' | $2.75 |
Shares Issued During Period, Shares to be Issued | ' | 50,000 |
Investor Relation Contract, Stock to Be Issued, Issuance Date Description | ' | 'within 180 business days of the contract signing date |
Share-based Compensation (in Dollars) | 137,500 | 57,292 |
Consulting Service Agreement [Member] | ' | ' |
Note 14 - Stockholders' Equity (Details) [Line Items] | ' | ' |
Stock Issued During Period, Shares, Issued for Services | 8,650 | ' |
Share-based Compensation (in Dollars) | 26,349 | ' |
Business Strategy and Financing Consultation [Member] | ' | ' |
Note 14 - Stockholders' Equity (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 50,000 | ' |
Investor relation contract, total service period | '12 months | ' |
Stock Issued During Period, Shares, Issued for Services | 50,000 | ' |
Share-based Compensation (in Dollars) | 100,000 | ' |
Warrants, Term | '3 years | ' |
Class of Warrants or Rights, Granted | 50,000 | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Share) | $4 | ' |
Stock Issued During Period, Value, Issued for Services (in Dollars) | $200,000 | ' |
Note_14_Stockholders_Equity_De1
Note 14 - Stockholders' Equity (Details) - Schedule of Stockholders' Equity Note, Warrants or Rights (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Class of Warrant or Right [Line Items] | ' | ' |
Outstanding | 522,473 | 983,280 |
Number of Warrants [Member] | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' |
Outstanding | 983,280 | 899,480 |
Exercisable | 983,280 | 899,480 |
Granted | 50,000 | 155,100 |
Exercised | 510,807 | 71,300 |
Forfeited | 0 | ' |
Expired | 0 | ' |
Outstanding | 522,473 | 983,280 |
Exercisable | 522,473 | 983,280 |
Average Exercise Price [Member] | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' |
Outstanding | 2.39 | 2 |
Exercisable | 2.39 | 2 |
Granted | 4 | 4.5 |
Exercised | 2 | 2 |
Forfeited | 0 | ' |
Expired | 0 | ' |
Outstanding | 2.93 | 2.39 |
Exercisable | 2.93 | 2.39 |
Weighted Average Remaining Contractual Term [Member] | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' |
Outstanding | '1 year 251 days | '2 years 229 days |
Exercisable | '1 year 251 days | '2 years 229 days |
Granted | '2 years 6 months | '3 years |
Exercised | '0 years | '0 years |
Forfeited | '0 years | ' |
Expired | '0 years | ' |
Outstanding | '339 days | '1 year 251 days |
Exercisable | '339 days | '1 year 251 days |
Note_15_Statutory_Reserves_Det
Note 15 - Statutory Reserves (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
Nova Dongguan [Member] | Nova Macao [Member] | |||
Note 15 - Statutory Reserves (Details) [Line Items] | ' | ' | ' | ' |
Number of statutory reserve accounts | ' | ' | 1 | 1 |
Statutory reserve, after-tax income percentage | ' | ' | 10.00% | 10.00% |
Statutory reserve, percentage of registered capital | ' | ' | 50.00% | 50.00% |
Statutory reserve, percentage of registered capital minimum | ' | ' | 25.00% | 25.00% |
Statutory Equity Reserves (in Dollars) | $6,241 | $6,241 | ' | ' |
Common welfare fund, voluntary contribution | ' | ' | '5% to 10% | '5% to 10% |
Note_16_Geographical_Sales_Det
Note 16 - Geographical Sales (Details) - Schedule of Sales by Geographic Region (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Note 16 - Geographical Sales (Details) - Schedule of Sales by Geographic Region [Line Items] | ' | ' | ||
Sales | $78,356,493 | $66,297,498 | ||
China [Member] | ' | ' | ||
Note 16 - Geographical Sales (Details) - Schedule of Sales by Geographic Region [Line Items] | ' | ' | ||
Sales | 16,013,329 | [1] | 17,148,142 | [1] |
North America [Member] | ' | ' | ||
Note 16 - Geographical Sales (Details) - Schedule of Sales by Geographic Region [Line Items] | ' | ' | ||
Sales | 44,031,182 | 30,453,771 | ||
Asia [Member] | ' | ' | ||
Note 16 - Geographical Sales (Details) - Schedule of Sales by Geographic Region [Line Items] | ' | ' | ||
Sales | 2,516,044 | [2] | 1,840,624 | [2] |
Europe [Member] | ' | ' | ||
Note 16 - Geographical Sales (Details) - Schedule of Sales by Geographic Region [Line Items] | ' | ' | ||
Sales | 14,265,227 | 14,843,873 | ||
Australia [Member] | ' | ' | ||
Note 16 - Geographical Sales (Details) - Schedule of Sales by Geographic Region [Line Items] | ' | ' | ||
Sales | 794,527 | 777,651 | ||
Hong Kong [Member] | ' | ' | ||
Note 16 - Geographical Sales (Details) - Schedule of Sales by Geographic Region [Line Items] | ' | ' | ||
Sales | 704,167 | 813,482 | ||
Other Countries [Member] | ' | ' | ||
Note 16 - Geographical Sales (Details) - Schedule of Sales by Geographic Region [Line Items] | ' | ' | ||
Sales | $32,017 | $419,955 | ||
[1] | excluding Hong Kong | |||
[2] | excluding China |
Note_17_Commitments_and_Contin2
Note 17 - Commitments and Contingencies (Details) | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2013 | Jan. 20, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | Subsequent Event [Member] | Office, Warehouse and Storage and Distribution Lease [Member] | Office Lease [Member] | Office Lease [Member] | Warehouse and Office Lease [Member] | Employment Agreement [Member] | Employment Agreement [Member] | Employment Agreement [Member] | Employment Agreement [Member] | Employment Agreement [Member] | Nova Dongguan [Member] | Nova Dongguan [Member] | |
Nova Dongguan [Member] | USD ($) | Bright Swallow International Group Limited [Member] | Bright Swallow International Group Limited [Member] | USD ($) | Chief Financial Officer [Member] | Chief Executive Officer [Member] | President [Member] | President [Member] | President [Member] | USD ($) | USD ($) | ||
USD ($) | USD ($) | HKD | USD ($) | USD ($) | USD ($) | USD ($) | |||||||
Note 17 - Commitments and Contingencies (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Description of Lessee Leasing Arrangements, Operating Leases | ' | ' | 'Company entered into a lease agreement for office, warehouse, and storage and distribution space with five years term from November 1, 2013 to October 31, 2018. The lease agreement also provides an option to extend for an additional six-year term. | 'lease agreement for office with two years term from October 1, 2013, to September 30, 2015 | 'lease agreement for office with two years term from October 1, 2013, to September 30, 2015 | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Leases, Rent Expense, Minimum Rentals | ' | ' | $42,000 | $2,580 | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Operating lease, annual rent expense increase | ' | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Leases, Rent Expense | 620,192 | ' | ' | ' | ' | 630,900 | ' | ' | ' | ' | ' | ' | ' |
Capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 |
Proceeds from Contributed Capital | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,600,000 | 13,600,000 |
Other Commitment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,400,000 | ' |
Other Commitments, Description | ' | ' | ' | ' | ' | ' | 'one-year employment agreements | ' | 'Company entered an amended and restated employment agreement with Thanh H. Lam to serve as the Company's president for five years | 'The agreement was automatically extended for another year at June 30, 2012 | 'one-year employment agreement | ' | ' |
Officers' Compensation | ' | ' | ' | ' | ' | ' | $80,000 | $100,000 | $317,791 | ' | $80,000 | ' | ' |
Stock Issued During Period, Shares, Share-based Compensation, Gross (in Shares) | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | ' | ' | ' | ' | ' | ' | ' | ' | 'first 50,000 shares of common stock shall be vested immediately, and the remaining shares shall be vested at 50,000 shares per year for three years on each anniversary of the effective date of the stock award agreement. | ' | ' | ' | ' |
Note_17_Commitments_and_Contin3
Note 17 - Commitments and Contingencies (Details) - Schedule of Future Minimum Rental Payments for Operating Leases (USD $) | Dec. 31, 2013 |
Schedule of Future Minimum Rental Payments for Operating Leases [Abstract] | ' |
2014 | $537,450 |
2015 | 544,910 |
2016 | 537,360 |
2017 | 553,480 |
2018 | 472,710 |
Thereafter | 0 |
Total | $2,645,910 |
Note_18_Business_Acquisition_a2
Note 18 - Business Acquisition and Unaudited Pro Forma Information (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Note 18 - Business Acquisition and Unaudited Pro Forma Information (Details) [Line Items] | ' | ' |
Revenue, Net | $78,356,493 | $66,297,498 |
Net Income (Loss) Attributable to Parent | 4,867,461 | 5,433,883 |
Bright Swallow International Group Limited [Member] | Goodwill Deductible for Tax Purposes [Member] | ' | ' |
Note 18 - Business Acquisition and Unaudited Pro Forma Information (Details) [Line Items] | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '15 years | ' |
Bright Swallow International Group Limited [Member] | ' | ' |
Note 18 - Business Acquisition and Unaudited Pro Forma Information (Details) [Line Items] | ' | ' |
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ' |
Business Combination, Consideration Transferred | 6,500,000 | ' |
Revenue, Net | 6,238,555 | ' |
Net Income (Loss) Attributable to Parent | $131,376 | ' |
Note_18_Business_Acquisition_a3
Note 18 - Business Acquisition and Unaudited Pro Forma Information (Details) - Schedule of Business Acquisition (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Business Acquisition [Line Items] | ' | ' |
Goodwill | $1,027,124 | $218,606 |
Bright Swallow International Group Limited [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Cash | 342,029 | ' |
Accounts receivable | 2,317,889 | ' |
Other receivable | 110,000 | ' |
Customer relationship | 6,100,559 | ' |
Goodwill | 808,518 | ' |
Accounts payable | -2,670,477 | ' |
ASC 740 income tax liabilities | -508,518 | ' |
Net assets acquired | $6,500,000 | ' |
Note_18_Business_Acquisition_a4
Note 18 - Business Acquisition and Unaudited Pro Forma Information (Details) - Business Acquisition, Pro Forma Information (Unaudited) (Bright Swallow International Group Limited [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Bright Swallow International Group Limited [Member] | ' | ' |
Note 18 - Business Acquisition and Unaudited Pro Forma Information (Details) - Business Acquisition, Pro Forma Information (Unaudited) [Line Items] | ' | ' |
Net sales | $81,852,777 | $80,000,995 |
Net income | $5,161,654 | $6,270,496 |
Basic weighted average shares outstanding | 18,876,052 | 18,530,591 |
Diluted weighted average shares outstanding | 19,122,386 | 18,681,448 |
Basic net earnings per share | $0.27 | $0.34 |
Diluted net earnings per share | $0.27 | $0.34 |
Note_19_Subsequent_Events_Deta
Note 19 - Subsequent Events (Details) (Subsequent Event [Member], Consulting Service Agreement [Member], USD $) | Mar. 03, 2014 |
Consulting Retainer Fee [Member] | ' |
Note 19 - Subsequent Events (Details) [Line Items] | ' |
Other Commitment | $10,000 |
Consulting, Monthly Payment for Services [Member] | ' |
Note 19 - Subsequent Events (Details) [Line Items] | ' |
Other Commitment | 9,700 |
Consulting, Offering of Primary Shares [Member] | ' |
Note 19 - Subsequent Events (Details) [Line Items] | ' |
Other Commitment | $25,000 |