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Loans Payable | 9 Months Ended
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Sep. 30, 2012
Loans Payable [Abstract] |
Loans Payable | (7) Loans Payable Short-term bank loans
|  |  |  |  | September 30, 2012 |  |  | December 31, 2011 |
Industrial & Commercial Bank of China |  |  | (a) |  |  | $ | - |  |  | $ | 2,046,503 |
Industrial & Commercial Bank of China |  |  | (b) |  |  |  | 790,326 |  |  |  | 787,116 |
Industrial & Commercial Bank of China |  |  | (c) |  |  |  | 1,975,816 |  |  |  | - |
Bank of Hebei |  |  | (d) |  |  |  | 1,580,653 |  |  |  | - |
Total short-term bank loans |  |  |  |  |  | $ | 4,346,795 |  |  | $ | 2,833,619 |
(a) | On March 16, 2011, the Company obtained from the Industrial & Commercial Bank of China an accounts receivable factoring facility with a maximum credit limit of $2,046,503 as of December 31, 2011. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company's books at all times, are not fully collected. The term of the factoring facility expired on February 27, 2012 and carried an interest rate of 6.4236% per annum, which is 106% of the prime rate for the loan set forth by the People's Bank of China at the time of funding. The company paid off the balance of the factoring facility on February 24, 2012.
(b) | On August 18, 2011, the Company obtained from the Industrial & Commercial Bank of China an accounts receivable factoring facility with a maximum credit limit of $787,116 as of December 31, 2011. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company's books at all times, are not fully collected. The term of the factoring facility expired on August 15, 2012 and carried an interest rate of 8.528% per annum. The Company paid off the 2011 factoring outstanding balance on August 15, 2012 and subsequently refinanced with the Industrial & Commercial Bank of China on September 4, 2012 under similar terms, except carries an interest rate of 6.6% per annum. The unpaid balance of the factoring facility was $790,326 as of September 30, 2012. This new factoring facility will expire on August 28, 2013.
(c) | On March 13, 2012, the Company obtained from the Industrial & Commercial Bank of China another accounts receivable factoring facility with a maximum credit limit of $1,975,816 as of September 30, 2012. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company's books at all times, are not fully collected. The term of the factoring facility expires on January 4, 2013 and carries an interest rate of 8.856% per annum as of September 30, 2012, or 3.5% plus the prime rate for the loan set forth by the People's Bank of China at the time of funding.
(d) | On September 19, 2012, the Company obtained from the Bank of Hebei a new banking facility with maximum credit limit on bank loans of $1,580,653 and on notes payable of $1,580,653, respectively. The facility is guaranteed by an independent third party. On the same day, the Company drew down from this banking facility a new working capital loan of $1,580,653 as of September 30, 2012. The loan bears interest at the rate of 6.6% per annum. Both the term of the banking facility and loan are for one year and expire on September 19, 2013.
As of September 30, 2012 and December 31, 2011, there were secured short-term borrowings of $2,766,142 and $2,833,619, respectively, and unsecured bank loans of $1,580,653 and nil, respectively. The factoring facility was secured by the Company's accounts receivable in the amount of $2,776,936 and $3,820,696 as of September 30, 2012 and December 31, 2011, respectively. As of September 30, 2012 and December 31, 2011, the Company had no unutilized credit facility for bank loans with the banks, while for there are $1,027,425 and nil of unutilized credit facility for notes payable with the bank as of September 30, 2012 and December 31, 2011 respectively. The average short-term borrowing rates for the nine months ended September 30, 2012 and 2011 were approximately 8.28% and 6.07%, respectively. The average short-term borrowing rates for the three months ended September 30, 2012 and 2011 were approximately 8.46% and 6.46%, respectively. Long-term loans from credit union As of September 30, 2012 and December 31, 2011, loan payable to Rural Credit Union of Xushui County, amounted to $5,714,060 and $5,690,852. On March 31, 2011, the Company entered into a three-year term loan agreement with Rural Credit Union of Xushui County for an amount that is $1,556,943 as of September 30, 2012 and $1,550,619 as of December 31, 2011. The loan is guaranteed by an independent third party. Interest payment is due quarterly and bears the rate of 0.72% per month. On June 10, 2011, the Company entered into a new term loan agreement with the Rural Credit Union of Xushui County for an amount that is $4,157,117 and $4,140,233 as of September 30, 2012 and December 31, 2011, respectively. The new loan is secured by its manufacturing equipment of $9,640,129 and $10,646,244 as of September 30, 2012 and December 31, 2011, respectively, and will mature on June 9, 2013. Interest payment is due quarterly and bears the rate of 0.72% per month. As of September 30, 2012, the entire balance of the loan in the amount of $4,157,177 has been presented as current portion of loan-term debt from credit union in the condensed consolidated balance sheet. Total interest expenses for the short-term bank loans and long-term loan for the three months ended September 30, 2012 and 2011 was $185,495 and $178,685, respectively. Total interest expenses for the short-term bank loans and long-term loans for the nine months ended September 30, 2012 and 2011 were $543,468 and $319,874, respectively.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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