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Loans Payable | 3 Months Ended
--- | ---
Mar. 31, 2013
Loans Payable [Abstract] |
Loans Payable | (8) Loans Payable Short-term bank loans
|  |  | March 31, 2013 |  |  | December 31, 2012 |
Industrial & Commercial Bank of China | (a) |  |  | 797,880 |  |  |  | 792,568 |
Industrial & Commercial Bank of China | (b) |  |  | 1,595,762 |  |  |  | 1,585,138 |
Bank of Hebei | (c) |  |  | 1,595,762 |  |  |  | 1,585,138 |
Total short-term bank loans |  |  | $ | 3,989,404 |  |  | $ | 3,962,844 |
(a) | 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 $797,880 and $792,568 as of March 31, 2013 and December 31, 2012, respectively. This new factoring facility will expire on August 28, 2013.
(b) | On November 9, 2012, the Company obtained from the Industrial & Commercial Bank of China another accounts receivable factoring facility with a maximum credit limit of $1,595,762 and $1,585,138 as of March 31, 2013 and December 31, 2012, respectively. 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 November 8, 2013 and carries an interest rate of 6.6% per annum, or 1.0% plus the prime rate for the loan set forth by the People’s Bank of China at the time of funding. The unpaid balance of the loan was in the amount of $1,595,762 and $1,585,138 as of March 31, 2013 and December 31, 2012, respectively.
(c) | On September 19, 2012, the Company obtained from the Bank of Hebei a new banking facility with maximum credit limit on bank loans of $1,595,762 and on notes payable of $1,595,762 as of March 31, 2013. 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 $1,595,762 and $1,585,138 as of March 31, 2013 and December 31, 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 March 31, 2013 and December 31, 2012, there were secured short-term borrowings of $2,393,642 and $2,377,706, respectively, and unsecured bank loans of $1,595,762 and $1,585,138, respectively. The factoring facility was secured by the Company’s accounts receivable in the amount of $2,400,084 and $2,836,335 as of March 31, 2013 and December 31, 2012, respectively. As of March 31, 2013, the Company had no unutilized credit facility for bank loans with the banks, while there is $279,258 of unutilized credit facility for notes payable. As of December 31, 2012, the Company had no unutilized credit facility with the banks. The average short-term borrowing rates for the three months ended March 31, 2013 and 2012 were approximately 6.60% and 7.49%, respectively. Long-term loans from credit union As of March 31, 2013 and December 31, 2012, loan payable to Rural Credit Union of Xushui County (formerly Rural Credit Cooperative of Xushui County) amounted to $5,768,678 and $5,730,273. On March 31, 2011, the Company entered into a three-year term loan agreement with the Rural Credit Union of Xushui County for an amount that is $1,571,825 as of March 31, 2013 and $1,561,361 at December 31, 2012. The loan is guaranteed by an independent third party. Interest payment is due quarterly and bears the rate of 0.72% per month. As of March 31, 2013, the entire balance of the loan in the amount of $1,571,825 has been presented as current portion of loan-term loan from credit union in the condensed consolidated balance sheet. 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 $4,196,853 as of March 31, 2013 and $4,168,912 as of December 31, 2012. The new loan is secured by its manufacturing equipment of $9,025,899 and $9,316,645 as of March 31, 2013 and December 31, 2012, respectively and will mature on June 9, 2013. Interest payment is due quarterly and bears the rate of 0.72% per month. As of March 31, 2013 and December 31, 2012, the entire balance of the loan in the amount of $4,196,853 and $4,168,912, respectively, have been presented as current portion of loan-term loan from credit union in the condensed consolidated balance sheet. Total interest expenses for the short-term bank loans and long-term loans for the three months ended March 31, 2013 and 2012 were $190,548 and $171,015, 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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