Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 12, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Orient Paper Inc. | ' |
Entity Central Index Key | '0001358190 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 18,456,900 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current Assets | ' | ' |
Cash and cash equivalents | $13,811,733 | $13,140,288 |
Restricted cash | ' | 1,585,138 |
Accounts receivable (net of allowance for doubtful accounts of $50,539 and $57,643 as of September 30, 2013 and December 31, 2012, respectively) | 2,476,418 | 2,836,335 |
Inventories | 12,573,474 | 15,104,101 |
Prepayments and other current assets | 698,601 | 5,401,705 |
Assets held for sale | 4,116,497 | ' |
Total current assets | 33,676,723 | 38,067,567 |
Prepayment on property, plant and equipment | 1,485,487 | 1,445,645 |
Property, plant and equipment | 161,647,758 | 122,391,456 |
Recoverable VAT | 3,382,951 | ' |
Deferred tax asset | 814,522 | 941,656 |
Total Assets | 201,007,441 | 162,846,324 |
Current Liabilities | ' | ' |
Short-term bank loans | 6,515,295 | 3,962,844 |
Current portion of long-term loan from credit union | 1,636,968 | 4,168,912 |
Current obligations under capital lease | 8,245,818 | ' |
Accounts payable | 1,095,869 | 1,012,906 |
Security deposit from related party | ' | 1,075,606 |
Notes payable | ' | 3,170,276 |
Accrued payroll and employee benefits | 280,913 | 292,638 |
Other payables and accrued liabilities | 1,911,786 | 1,262,284 |
Income taxes payables | 1,571,419 | 1,255,457 |
Total current liabilities | 21,258,068 | 16,200,923 |
Loan from credit union | 4,251,230 | 1,561,361 |
Loan from a related party | 2,379,046 | 2,315,239 |
Deferred gain on sale-leaseback | 698,896 | ' |
Long-term obligations under capital lease | 16,322,070 | ' |
Total liabilities | 44,909,310 | 20,077,523 |
Commitments and Contingencies | ' | ' |
Stockholders' Equity | ' | ' |
Common stock, 500,000,000 shares authorized, $0.001 par value per share, 18,456,900 and 18,459,775 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively | 18,457 | 18,460 |
Additional paid-in capital | 46,119,820 | 46,135,975 |
Statutory earnings reserve | 5,963,960 | 5,963,960 |
Accumulated other comprehensive income | 16,409,639 | 12,327,439 |
Retained earnings | 87,586,255 | 78,322,967 |
Total stockholders' equity | 156,098,131 | 142,768,801 |
Total Liabilities and Stockholders' Equity | $201,007,441 | $162,846,324 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Balance Sheets [Abstract] | ' | ' |
Accounts receivable, allowance for doubtful accounts | $50,539 | $57,643 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares issued | 18,456,900 | 18,459,775 |
Common stock, shares outstanding | 18,456,900 | 18,459,775 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Statements Of Income and Comprehensive Income [Abstract] | ' | ' | ' | ' |
Revenues | $37,686,114 | $37,651,354 | $90,471,282 | $107,582,025 |
Cost of sales | -29,250,300 | -30,831,301 | -74,306,836 | -87,223,136 |
Gross Profit | 8,435,814 | 6,820,053 | 16,164,446 | 20,358,889 |
Selling, general and administrative expenses | -957,029 | -703,877 | -2,730,751 | -2,434,679 |
Gain from disposal of property, plant and equipment, net | 84,737 | 45,242 | 84,737 | 45,242 |
Income from Operations | 7,563,522 | 6,161,418 | 13,518,432 | 17,969,452 |
Other Income (Expense): | ' | ' | ' | ' |
Interest income | 24,159 | 7,014 | 78,948 | 17,724 |
Subsidy income | 170,651 | ' | 170,651 | ' |
Interest expense | -244,385 | -219,263 | -723,103 | -644,898 |
Income before Income Taxes | 7,513,947 | 5,949,169 | 13,044,928 | 17,342,278 |
Provision for Income Taxes | -1,979,103 | -1,570,098 | -3,550,893 | -4,670,726 |
Net income | 5,534,844 | 4,379,071 | 9,494,035 | 12,671,552 |
Other Comprehensive Income: | ' | ' | ' | ' |
Foreign currency translation adjustment | 882,139 | -263,772 | 4,082,200 | 498,063 |
Total Comprehensive Income | $6,416,983 | $4,115,299 | $13,576,235 | $13,169,615 |
Earnings Per Share: | ' | ' | ' | ' |
Basic and Fully Diluted Earnings per Share | $0.30 | $0.24 | $0.51 | $0.69 |
Weighted Average Number of Shares Outstanding - Basic and Fully Diluted | 18,456,900 | 18,459,775 | 18,457,879 | 18,455,776 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash Flows from Operating Activities: | ' | ' |
Net income | $9,494,035 | $12,671,552 |
Adjustments to reconcile net income to net cash provided by operating activities | ' | ' |
Depreciation and amortization | 5,980,720 | 6,222,600 |
Gain from disposition of property, plant and equipment | -84,737 | -45,242 |
Recovery from bad debts | -8,592 | -2,882 |
(Reversal)/provision of stock-based expense for service received | -16,158 | 378,065 |
Gain on sale leaseback realized | -62,798 | ' |
Deferred tax | 274,427 | -385,166 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 441,591 | 149,802 |
Prepayments and other current assets | 1,449,388 | 789,462 |
Inventories | 2,912,685 | 965,723 |
Accounts payable | 54,408 | -1,644,669 |
Notes payable | -3,219,834 | 553,973 |
Accrued payroll and employee benefits | -18,336 | -71,853 |
Other payables and accrued liabilities | 827,129 | 325,358 |
Income taxes payable | 154,977 | -306,701 |
Net Cash Provided by Operating Activities | 18,178,905 | 19,600,022 |
Cash Flows from Investing Activities: | ' | ' |
Payment for construction in progress | -47,041,154 | -3,927,667 |
Refund of prepayment for purchase of property, plant and equipment | ' | 3,109,418 |
Proceeds from sale of property, plant and equipment | 2,582,747 | 175,416 |
Purchases of property, plant and equipment | -37,024 | -10,747,083 |
Net Cash Used in Investing Activities | -44,495,431 | -11,389,916 |
Cash Flows from Financing Activities: | ' | ' |
Proceeds from related party loans | 953,507 | 890,000 |
Repayments of related party loans | -953,507 | -1,090,000 |
Proceeds from bank loans | 9,063,833 | 4,352,643 |
Proceeds from sale-leaseback financing | 24,148,756 | ' |
Repayments of bank loans | -6,648,958 | -2,849,003 |
Payment of capital lease obligation | -1,355,435 | ' |
Release of restricted cash | 1,609,917 | ' |
Dividends paid | -230,747 | -461,494 |
Net Cash Provided by Financing Activities | 26,587,366 | 842,146 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 400,605 | -1,527 |
Net Increase in Cash and Cash Equivalents | 671,445 | 9,050,725 |
Cash and Cash Equivalents - Beginning of Period | 13,140,288 | 4,165,446 |
Cash and Cash Equivalents - End of Period | 13,811,733 | 13,216,171 |
Supplemental Disclosure of Cash Flow Information: | ' | ' |
Cash paid for interest, net of capitalized interest cost | 644,524 | 417,712 |
Cash paid for income taxes | $3,121,490 | $5,362,593 |
Organization_and_Business_Back
Organization and Business Background | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Organization and Business Background [Abstract] | ' | ||||||||||
Organization and Business Background | ' | ||||||||||
(1) Organization and Business Background | |||||||||||
Orient Paper, Inc. (“Orient Paper” or “the Company”) was incorporated under the laws of the State of Nevada on December 9, 2005, under the name of Carlateral, Inc. Carlateral, Inc. started its business by providing financing services specializing in subprime title loans, secured primarily using automobiles (and also boats, recreational vehicles, machinery, and other equipment) as collateral. | |||||||||||
Hebei Baoding Orient Paper Milling Company Limited (“Orient Paper HB”) was incorporated on March 10, 1996, under the laws of the People’s Republic of China (“PRC”). Orient Paper HB is mainly engaged in the production and distribution of paper products such as corrugating medium paper, offset paper and writing paper. Orient Paper HB also has capability to produce other paper and packaging-related products, such as plastic paper and craft paper. Orient Paper HB uses recycled paper as its primary raw material. | |||||||||||
Dongfang Zhiye Holding Limited (“Dongfang Holding”) was formed on November 13, 2006, under the laws of the British Virgin Islands, and is an investment holding company. As such, Dongfang Holding does not generate any financial or operating transactions. On July 16, 2007, Dongfang Holding entered into an agreement to acquire the equity ownership of Orient Paper HB and placed all the equity interest in trust with Mr. Zhenyong Liu, Mr. Xiaodong Liu, and Mr. Shuangxi Zhao (the original equity owners of Orient Paper HB, each, an “Orient Paper HB Equity Owner” and collectively, “Orient Paper HB Equity Owners”), pursuant to a trust agreement executed on the same date. Under the terms of the trust agreement, the Orient Paper HB Equity Owners would exercise control over the disposition of Dongfang Holding’s shares in Orient Paper HB on Dongfang Holding’s behalf until Dongfang Holding successfully completed the change in registration of Orient Paper HB’s capital with the relevant PRC Administration of Industry and Commerce as the 100% owner of Orient Paper HB’s equity interest. In connection with the consummation of the restructuring transactions on June 24, 2009 as described below, Dongfang Holding directed its trustee to return its equity ownership in Orient Paper HB to the Orient Paper HB Equity Owners. | |||||||||||
On October 29, 2007, Orient Paper entered into an Agreement and Plan of Merger (“Merger Agreement”) with (i) Orient Paper wholly owned subsidiary, CARZ Merger Sub, Inc., (ii) Dongfang Holding, and (iii) all shareholders of Dongfang Holding (Zhenyong Liu, Xiaodong Liu, Chen Li, Ning Liu, Jie Liu, Shenzhen Huayin Guaranty & Investment Company Limited, Top Good International Limited, Total Giant Group Limited, Total Shine Group Limited, Victory High Investment Limited, Think Big Trading Limited, Huge Step Enterprises Limited, and Sure Believe Enterprise Limited). | |||||||||||
Pursuant to the Merger Agreement, Dongfang Holding merged with CARZ Merger Sub, Inc. via a share exchange, with Dongfang Holding as the surviving entity. In exchange for their shares in Dongfang Holding, the Dongfang Holding shareholders received an aggregate of 7,450,497 newly-issued shares of Orient Paper’s common stock, $0.001 par value, which were distributed pro ratably among the Dongfang Holding shareholders in accordance with their respective ownership interests in Dongfang Holding. | |||||||||||
As a result of the merger transaction, Dongfang Holding became a wholly-owned subsidiary of Orient Paper, which, in turn, has the controlling right on Dongfang Holding’s operating company, Orient Paper HB, pursuant to the terms of the trust agreement. Orient Paper HB, the entity through which the Company operates its business currently has no subsidiaries, either wholly- or partially-owned. | |||||||||||
Prior to the completion of the reverse merger, Orient Paper only had limited operations (since its incorporation on December 9, 2005). On December 21, 2007, the name of the Company was changed from Carlateral, Inc. to Orient Paper, Inc. in order to better reflect the current business plan subsequent to the reverse merger. Accordingly, the reverse merge has been recorded as a recapitalization of Orient Paper. | |||||||||||
To ensure proper compliance of the Company’s control over the ownership and operations of Orient Paper HB with certain PRC regulations, on June 24, 2009, the Company entered into a series of contractual agreements (the “Contractual Agreements”) with Orient Paper HB and Orient Paper HB Equity Owners via the Company’s wholly owned subsidiary Shengde Holdings, Inc. (“Shengde Holdings”) a Nevada corporation and Baoding Shengde Paper Co., Ltd. (“Orient Paper Shengde”), a wholly foreign-owned enterprise in the PRC with an original registered capital of $10,000,000 (subsequently increased to $60,000,000 in June 2010). Orient Paper Shengde is mainly engaged in production and distribution of digital photo paper and is 100% owned by Shengde Holdings. Prior to February 10, 2010, the Contractual Agreements included (i) Exclusive Technical Service and Business Consulting Agreement, which generally provides that Orient Paper Shengde shall provide exclusive technical, business and management consulting services to Orient Paper HB, in exchange for service fees including a fee equivalent to 80% of Orient Paper HB’s total annual net profits; (ii) Loan Agreement, which provides that Orient Paper Shengde will make a loan in the aggregate principal amount of $10,000,000 to Orient Paper HB Equity Owners in exchange for each such shareholder agreeing to contribute all of its proceeds from the loan to the registered capital of Orient Paper HB; (iii) Call Option Agreement, which generally provides, among other things, that Orient Paper HB Equity Owners irrevocably grant to Orient Paper Shengde an option to purchase all or part of each owner’s equity interest in Orient Paper HB. The exercise price for the options shall be RMB1 which Orient Paper Shengde should pay to each of Orient Paper HB Equity Owner for all their equity interests in Orient Paper HB; (iv) Share Pledge Agreement, which provides that Orient Paper HB Equity Owners will pledge all of their equity interests in Orient Paper HB to Orient Paper Shengde as security for their obligations under the other agreements described in this section. Specifically, Orient Paper Shengde is entitled to dispose of the pledged equity interests in the event that Orient Paper HB Equity Owners breach their obligations under the Loan Agreement or Orient Paper HB fails to pay the service fees to Orient Paper Shengde pursuant to the Exclusive Technical Service and Business Consulting Agreement; and (v) Proxy Agreement, which provides that Orient Paper HB Equity Owners shall irrevocably entrust a designee of Orient Paper Shengde with such shareholder’s voting rights and the right to represent such shareholder to exercise such owner’s rights at any equity owners’ meeting of Orient Paper HB or with respect to any equity owner action to be taken in accordance with the laws and Orient Paper HB’s Articles of Association. The terms of the agreement are binding on the parties for as long as Orient Paper HB Equity Owners continue to hold any equity interest in Orient Paper HB. An Orient Paper HB Equity Owner will cease to be a party to the agreement once it transfers its equity interests with the prior approval of Orient Paper Shengde. As the Company had controlled Orient Paper HB since July 16, 2007 through Dongfang Holding and the trust until June 24, 2009, and continues to control Orient Paper HB through Orient Paper Shengde and the Contractual Agreements, the execution of the Contractual Agreements is considered as a business combination under common control. | |||||||||||
On February 10, 2010, Orient Paper Shengde and the Orient Paper HB Equity Owners entered into a Termination of Loan Agreement to terminate the above $10,000,000 Loan Agreement. Because of the Company’s decision to fund future business expansions through Orient Paper Shengde instead of Orient Paper HB, the $10,000,000 loan contemplated was never made prior to the point of termination. The parties believe the termination of the Loan Agreement does not in itself compromise the effective control of the Company over Orient Paper HB and its businesses in the PRC. | |||||||||||
An agreement was also entered into among Orient Paper Shengde, Orient Paper HB and the Orient Paper HB Equity Owners on December 31, 2010, reiterating that Orient Paper Shengde is entitled to 100% of the distributable profit of Orient Paper HB, pursuant to the above mentioned Contractual Agreements. In addition, Orient Paper HB and the Orient Paper HB Equity Owners shall not declare any of Orient Paper HB’s unappropriated earnings as dividend, including the unappropriated earnings of Orient Paper HB from its establishment to 2010 and thereafter. | |||||||||||
Orient Paper has no direct equity interest in Orient Paper HB. However, through the Contractual Agreements described above Orient Paper is found to be the primary beneficiary of Orient Paper HB and is deemed to have the effective control over Orient Paper HB’s activities that most significantly affect its economic performance, resulting in Orient Paper HB being treated as a controlled variable interest entity of Orient Paper in accordance with Topic 810 - Consolidation of the Accounting Standards Codification (the “ASC”) issued by the Financial Accounting Standard Board (the “FASB”). The revenue of the Company generated from Orient Paper HB for the three months ended September 30, 2013 and 2012 were 95.78% and 95.07%, respectively. Revenue generated from Orient Paper HB for the nine months ended September 30, 2013 and 2012 were 96.14% and 95.07%, respectively. Orient Paper HB also accounted for 78.32% and 73.51% of the total assets of the Company as at September 30, 2013 and December 31, 2012, respectively. | |||||||||||
As of September 30, 2013 and December 31, 2012, details of the Company’s subsidiaries and variable interest entities are as follows: | |||||||||||
Name | Date of Incorporation | Place of | Percentage of | Principal Activity | |||||||
or Establishment | Incorporation or | Ownership | |||||||||
Establishment | |||||||||||
Subsidiary: | |||||||||||
Dongfang Holding | 13-Nov-06 | BVI | 100 | % | Inactive investment holding | ||||||
Shengde Holdings | 25-Feb-09 | State of Nevada | 100 | % | Investment holding | ||||||
Orient Paper Shengde | 1-Jun-09 | PRC | 100 | % | Paper Production and distribution | ||||||
Variable interest entity: | |||||||||||
Orient Paper HB | 10-Mar-96 | PRC | Control | * | Paper Production and distribution | ||||||
* Orient Paper HB is treated as a 100% controlled variable interest entity of the Company |
Basis_of_Presentation_and_Sign
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | ' |
Basis of Presentation and Significant Accounting Policies | ' |
(2) Basis of Presentation and Significant Accounting Policies | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and notes required by the United States of America generally accepted accounting principles (“GAAP”) for annual financial statements are not included herein. These interim statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2012 of Orient Paper, Inc. a Nevada corporation, and its subsidiaries and variable interest entity (which we sometimes refer to collectively as “Orient Paper”, “we”, “us” or “our”). | |
Principles of Consolidation | |
Our unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of September 30, 2013 and the results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for any future period. | |
Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates. |
Restricted_Cash
Restricted Cash | 9 Months Ended |
Sep. 30, 2013 | |
Restricted Cash [Abstract] | ' |
Restricted Cash | ' |
(3) Restricted Cash | |
Restricted cash of $nil and $1,585,138 as of September 30, 2013 and December 31, 2012, respectively, were presented for the cash deposited at the Bank of Hebei for purpose of securing the bank acceptance notes from the bank (see Note (11)). The restriction was lifted upon the maturity of the notes payable on June 18, 2013. |
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventories [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
(4) Inventories | |||||||||
Raw materials inventory includes mainly recycled paper and coal. Finished goods include mainly products of offset printing paper and corrugating medium paper. Inventories consisted of the following as of September 30, 2013 and December 31, 2012: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Raw Materials | |||||||||
Recycled paper board | $ | 7,426,624 | $ | 11,274,383 | |||||
Pulp | 14,194 | 13,813 | |||||||
Recycled printed paper | - | 884,236 | |||||||
Recycled white scrap paper | 3,035,234 | 766,144 | |||||||
Coal | 501,081 | 621,107 | |||||||
Base paper and other raw materials | 240,040 | 225,912 | |||||||
11,217,173 | 13,785,595 | ||||||||
Finished Goods | 1,356,301 | 1,318,506 | |||||||
Totals | $ | 12,573,474 | $ | 15,104,101 |
Prepayments_and_Other_Current_
Prepayments and Other Current Assets | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Prepayments and other current assets [Abstract] | ' | ||||||||
Prepayments and other current assets | ' | ||||||||
(5) Prepayments and other current assets | |||||||||
Prepayments and other current assets consisted of the following as of September 30, 2013 and December 31, 2012: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Prepaid AMEX annual fee | $ | 15,000 | $ | 6,875 | |||||
Recoverable VAT | 500,000 | 4,784,074 | |||||||
Prepaid insurance | 123,058 | 55,922 | |||||||
Prepayment for purchase of materials | 6,792 | 77,445 | |||||||
Prepaid land lease | 53,751 | 475,541 | |||||||
Others | - | 1,848 | |||||||
$ | 698,601 | $ | 5,401,705 |
Assets_held_for_sale
Assets held for sale | 9 Months Ended |
Sep. 30, 2013 | |
Assets held for sale [Abstract] | ' |
Assets held for sale | ' |
(6) Assets held for sale | |
As of September 30, 2013, assets held for sale in the amount of $4,116,497 represented the three employee dormitory buildings to be sold to a related party company controlled by our Chairman and CEO Mr. Zhenyong Liu. Please refer to Note (10) for the details of the related party transaction. As the sale was not yet completed by the end of September 30, 2013, the dormitories were classified as held for sale in accordance with ASC 360-10-35. It was expected that the sales will be consummated by the end of year 2013. |
Prepayment_on_Property_Plant_a
Prepayment on Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2013 | |
Prepayment on property, plant and equipment [Abstract] | ' |
Prepayment on property, plant and equipment | ' |
(7) Prepayment on property, plant and equipment | |
As of September 30, 2013 and December 31, 2012, prepayment on property, plant and equipment consisted of $1,485,487 and $1,445,645, respectively, in respect of prepaid land use right prepayment made on October 26, 2012 for the entitlement of land use right for some 54,267 square meters of land located in our Xushui County, Baoding plant. The purchase is expected to be completed in year 2013. | |
Property_Plant_and_Equipment
Property, Plant and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, plant and equipment | ' | ||||||||
(8) Property, plant and equipment | |||||||||
As of September 30, 2013 and December 31, 2012, property, plant and equipment consisted of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Property, Plant, and Equipment: | |||||||||
Land use rights | $ | 7,727,124 | $ | 9,895,081 | |||||
Building and improvements | 22,307,565 | 31,625,816 | |||||||
Machinery and equipment | 120,552,470 | 111,857,002 | |||||||
Vehicles | 485,616 | 439,007 | |||||||
Construction in progress | 47,552,834 | 1,315,664 | |||||||
198,625,609 | 155,132,570 | ||||||||
Less accumulated depreciation and amortization | (36,977,851 | ) | (32,741,114 | ) | |||||
Property, Plant and Equipment, net | $ | 161,647,758 | $ | 122,391,456 | |||||
As of December 31, 2012, land use rights represented two parcels of state-owned land located in Xushui County of Hebei Province in China, with lease terms of 50 years expiring in 2053 and 2061, respectively. On August 9, 2013, one of these land use rights was sold to a related party company controlled by our Chairman and CEO Mr. Zhenyong Liu. See Note (10) for the details of the related party transaction.The remaining land use right as of September 30, 2013 will expire in year 2061. | |||||||||
The Company entered into a sale-leaseback arrangement with a leasing company in China on June 16, 2013 for a total financing proceeds in the amount of RMB150 million (approximately US$24 million). Under the sale-leaseback arrangement, Orient Paper HB sold certain of its paper manufacturing equipment to the leasing company for an amount of RMB 150 million (approximately US$24 million). Concurrent with the sale of equipment, Orient Paper HB leases back all of the equipment sold to the leasing company for a lease term of three years. At the end of the lease term, Orient Paper HB may pay a nominal purchase price of RMB 15,000 (approximately $2,400) to the leasing company and buy back all of the leased equipment. The sale-leaseback is treated by the Company as a mere financing and capital lease transaction, rather than a sale of assets (under which gain or loss is immediately recognized) under ASC 840-40-25-4. All of the Leased Equipment are included as part of the property, plant and equipment of the Company as of September 30, 2013. As a result of the sale, a deferred gain on sale of leased equipment in the amount of $758,257 was created at the closing of the transaction and presented as a non-current liability. The deferred gain would be amortized by the Company during the lease term and would be used to offset the depreciation of the leased equipment, which are recorded at the new cost of $25,878,515 as of September 30, 2013. See “Financing with Sale-Leaseback” under Note (9), Loans Payable, for details of the transaction and asset collaterals. The depreciation of capital lease equipment has started in July 2013 and was included with the depreciation expense of the company’s own assets in the statement of income. During the three months and the nine months ended September 30, 2013, depreciation of capital lease equipment was $396,736 and $396,736, respectively. The accumulated depreciation of the leased asset was $401,396 as of September 30, 2013. During the three months and the nine months ended September 30, 2013, the gain realized on sale-leaseback transaction was $62,798 and $62,798, respectively. The gain realized was recorded in cost of sales as a reduction of depreciation expenses. The unamortized deferred gain on sale-lease back was $698,896 as of September 30, 2013. | |||||||||
Construction in progress mainly represents payments for the new 15,000 tonnes per year tissue paper manufacturing equipment PM8, the tissue paper workshops, four warehouses, office buildings and the new staff dormitory in the Wei County industrial park. For the nine months ended September 30, 2013 and 2012, the amount of interest capitalized is $152,036 and $nil, respectively. For the three months ended September 30, 2013 and 2012, the amount of interest capitalized is $113,941 and $nil, respectively. | |||||||||
As of September 30, 2013, the three employee dormitory buildings in the amount of $4,116,497, which will be sold to a related party company controlled by our Chairman and CEO Mr. Zhenyong Liu by the end of year 2013, were reclassified as assets held for sale. Please refer to Note (6) for details. | |||||||||
As of September 30, 2013 and December 31, 2012, certain property, plant and equipment of Orient Paper HB with net values of $22,439,622 and $9,316,645 have been pledged for the long-term loan from credit union of Orient Paper HB, respectively. As of September 30, 2013, essentially all production equipment of Orient Paper Shengde with net value of $36,667,728 has been pledged for the guarantee of Orient Paper HB’s performance under the capital lease. In addition, land use right with net values of $nil and $7,419,614 were pledged for an independent third party which cross-guarantees the Company’s credit facility from the Bank of Hebei as of September 30, 2013 and December 31, 2012, respectively. The amount of that long-term loan of the third party was $1,505,881 as of December 31, 2012 and has been paid off on June 3, 2013. In addition, land use right with net values of $7,508,189 as of September 30, 2013 was pledged for the sale-leaseback financing. See “Financing with Sale-Leaseback” under Note (9), Loans Payable, for details of the transaction and asset collaterals. | |||||||||
Depreciation and amortization of property, plant and equipment was $2,059,270 and $2,171,851 during the three months ended September 30, 2013 and 2012, respectively. Depreciation and amortization of property, plant and equipment was $5,980,720 and $6,222,600 during the nine months ended September 30, 2013 and 2012, respectively. |
Loans_Payable
Loans Payable | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Loans Payable [Abstract] | ' | ||||||||||
Loans Payable | ' | ||||||||||
(9) Loans Payable | |||||||||||
Short-term bank loans | |||||||||||
September 30, | December 31, | ||||||||||
2013 | 2012 | ||||||||||
Industrial & Commercial Bank of China | (a) | $ | - | $ | 792,568 | ||||||
Industrial & Commercial Bank of China | (b) | 1,628,824 | 1,585,138 | ||||||||
Bank of Hebei | (c) | - | 1,585,138 | ||||||||
Industrial & Commercial Bank of China | (d) | 814,412 | - | ||||||||
Industrial & Commercial Bank of China | (e) | 4,072,059 | - | ||||||||
Total short-term bank loans | $ | 6,515,295 | $ | 3,962,844 | |||||||
(a) | On September 4, 2012, the Company refinanced with the Industrial & Commercial Bank of China (“ICBC”) an accounts receivable factoring facility with a maximum credit limit of $792,568 as of December 31, 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 factoring facility carried an interest rate of 6.6% per annum. The Company paid off the principal balance and accrued interest under the factoring facility on August 28, 2013. | ||||||||||
(b) | On November 9, 2012, the Company obtained from the ICBC another accounts receivable factoring facility with a maximum credit limit of $1,628,824 and $1,585,138 as of September 30, 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 $1,628,824 and $1,585,138 as of September 30, 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 $1,585,138 and on notes payable of $1,585,138 as of December 31, 2012. The facility was guaranteed by an independent third party. On the same day, the Company drew down from this banking facility a new working capital loan of $1,585,138 as of December 31, 2012. The loan bore interest at the rate of 6.6% per annum. Both the term of the banking facility and loan were for one year and expire on September 19, 2013. The Company paid off the loan balance on September 18, 2013. | ||||||||||
(d) | On September 6, 2013, the Company acquired a new accounts receivable factoring facility from the ICBC for $814,412. 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 factoring facility will expire on August 4, 2014 and bears an interest rate of 110% of the primary lending rate of the People’s Bank of China and was at 6.6% per annum at the time of funding. | ||||||||||
Concurrent with the signing of the new factoring agreement, the Company also entered into a financial service agreement with ICBC, which will provide accounts receivable management services to the Company during the terms of the underlying factoring facility. The factoring facility is personally guaranteed by the Company’s Chairman and CEO Mr. Zhenyong Liu. | |||||||||||
(e) | On September 2, 2013, the Company entered into a working capital loan agreement with the ICBC for $4,072,059, with which $814,412 is payable on June 15, 2014 and $3,257,647 is payable on August 15, 2014. However, ICBC has rights to prematurely call the entire balance of the loan depending on the financial or collection condition of the Company any time before the maturity date. The loan bears an interest rate of 115% over the primary lending rate of the People’s Bank of China and was at 6.9% per annum at the time of funding. | ||||||||||
Concurrent with the signing of the working capital loan agreement, the Company also entered into a trust agreement with the ICBC, which will provide trust account management services to the Company during the terms of the underlying loan. The working capital loan is guaranteed by Hebei Fangsheng Real Estate Development Co. Ltd. (“Hebei Fangsheng”) with the land use right on our Headquarters Compound pledged by Hebei Fangsheng as collateral for the benefit of the bank. The land use right on our Headquarters Compound was acquired by Hebei Fangsheng from the Company on August 9, 2013 (see Note (10) for the related party transaction). Hebei Fangsheng is controlled by the Company’s Chairman and CEO Mr. Zhenyong Liu. | |||||||||||
As of September 30, 2013 and December 31, 2012, there were secured short-term borrowings in the amounts of $6,515,295 and $2,377,706, respectively, and unsecured bank loans in the amount of $nil and $1,585,138, respectively. The factoring facilities were secured by the Company’s accounts receivable in the amount of $2,476,418 and $2,836,335 as of September 30, 2013 and December 31, 2012, respectively. | |||||||||||
As of September 30, 2013 and December 31, 2012, the Company had no unutilized credit facility with the banks. The average short-term borrowing rates for the nine months ended September 30, 2013 and 2012 were approximately 6.62% and 8.28%, respectively. The average short-term borrowing rate for the three months ended September 30, 2013 and 2012 were approximately 6.65% and 8.46%, respectively. | |||||||||||
Long-term loans from credit union | |||||||||||
As of September 30, 2013 and December 31, 2012, loan payable to Rural Credit Union of Xushui County amounted to $5,888,198 and $5,730,273, respectively. | |||||||||||
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 $1,604,391 as of September 30, 2013 and $1,561,361 as of 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 September 30, 2013, the entire balance of the loan in the amount of $1,604,391 was presented as current portion of long-term loan from credit union in the condensed consolidated balance sheet. | |||||||||||
On June 10, 2011, the Company entered into a term loan agreement with the Rural Credit Union of Xushui County for an amount that was $4,168,912 as of December 31, 2012. Interest payment is due quarterly and bears the rate of 0.72% per month. The loan is secured by its manufacturing equipment of $9,316,645 as of December 31, 2012, and became matured on June 9, 2013. On July 26, 2013 the Company paid off the unpaid principal balance and accrued interest. | |||||||||||
On July 15, 2013, the Company entered into a new agreement with the Rural Credit Union of Xushui County for a term of 5 years, which is due and payable on various scheduled repayment dates between December 21, 2013 and July 26, 2018. The loan is secured by certain of the Company’s manufacturing equipments in the amount of $22,439,622 as of September 30, 2013. Interest payment is due quarterly and bears a fixed rate of 0.72% per months. As of September 30, 2013, total outstanding loan balance was $4,283,807, with $32,577 becoming due within one year and presented as current portion of long term loan from credit union in the condensed balance sheet. | |||||||||||
Total interest expenses for the short-term and long-term loans for the three months ended September 30, 2013 and 2012 were $207,807 and $185,495, respectively. | |||||||||||
Total interest expenses for the short-term and long-term loans for the nine months ended September 30, 2013 and 2012 were $592,184 and $543,468, respectively. | |||||||||||
Financing with Sale-Leaseback | |||||||||||
The Company entered into a sale-leaseback arrangement (the “Lease Financing Agreement”) with China National Foreign Trade Financial & Leasing Co., Ltd ("CNFTFL") on June 16, 2013, for a total financing proceeds in the amount of RMB150 million (approximately US$24 million). Under the sale-leaseback arrangement, Orient Paper HB sold certain of its paper manufacturing equipment (the “Leased Equipment”) to CNFTFL for an amount of RMB 150 million (approximately US$24 million). Concurrent with the sale of equipment, Orient Paper HB leases back all of the equipment sold to CNFTFL for a lease term of three years. At the end of the lease term, Orient Paper HB may pay a nominal purchase price of RMB 15,000 (approximately $2,400) to CNFTFL and buy back all of the Leased Equipment. The sale-leaseback is treated by the Company as a mere financing and capital lease transaction, rather than a sale of assets (under which gain or loss is immediately recognized) under ASC 840-40-25-4. All of the Leased Equipment are included as part of the property, plant and equipment of the Company’s as of September 30, 2013; while the net present value of the minimum lease payment (including a lease service charge equal to 5.55% of the amount financed, i.e. approximately US$1.35 million) was recorded as obligations under capital lease and was calculated with CNFTFL’s implicit interest rate of 6.15% per annum and stated at $25,750,170 at the inception of the lease on June 16, 2013. The balance of the long-term obligations under capital lease was $16,322,070 as of September 30, 2013, which is net of its current portion in the amount of $8,245,818. | |||||||||||
Total interest expenses for the sale-leaseback arrangement for the three months ended September 30, 2013 and 2012 were $114,041 and $nil, respectively. Total interest expenses for the sale-leaseback arrangement for the nine months ended September 30, 2013 and 2012 were $174,495 and $nil, respectively. | |||||||||||
As a result of the sale, a deferred gain on sale of leased equipment in the amount of $758,257 was created at the closing of the transaction and is presented as a non-current liability. The deferred gain would be amortized by the Company during the lease term and would be used to offset the depreciation of the Leased Equipment, which was recorded at the new cost of $25,878,515 as of September 30, 2013. | |||||||||||
As part of the sale-leaseback transaction, Orient Paper HB entered into a Collateral Agreement with CNFTFL and pledged the land use right in the amount of approximately $7,508,189 on some 58,566 square meters of land as collateral for the lease. In addition to Orient Paper HB’s collateral, Orient Paper Shengde also entered into a Guarantee Contract with CNFTFL on June 16, 2013. Under the Guarantee Contract, Orient Paper Shengde agrees to guarantee Orient Paper HB’s performance under the lease and to pledge all of its production equipment as additional collateral. Net book value of Orient Paper Shengde’s asset guarantee was $36,667,728 as of September 30, 2013. | |||||||||||
The future minimum lease payments of the capital lease as of September 30, 2013 were as follows: | |||||||||||
Year Ending September 30, | Amount | ||||||||||
2014 | $ | 9,412,972 | |||||||||
2015 | 8,905,152 | ||||||||||
2016 | 8,398,028 | ||||||||||
$ | 26,716,152 | ||||||||||
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
(10) Related Party Transactions | |
Mr. Zhenyong Liu is the director, principal stockholder and chief executive officer of the Company. He loaned money to Orient Paper HB for working capital purposes over a period of time. On August 31, 2009, Orient Paper, Orient Paper HB, and Mr. Liu entered into a tri-party Debt Assignment and Assumption Agreement, under which Orient Paper agreed to assume the loan of $4,000,000 due from Orient Paper HB to Mr. Liu. Concurrently, Orient Paper issued 1,204,341 shares of restricted common stock to Mr. Liu at the market price of $3.32132 per share. As of September 30, 2013 and December 31, 2012, net amount due to Mr. Liu were $2,379,046 and $2,315,239, respectively. | |
The unsecured loan of Mr. Liu is interest bearing and the interest rate is equal to the rate established by the People’s Bank of China, which was 5.85% per annum as of December 31, 2012. The term is for 3 years and starts from January 1, 2010 and is due December 31, 2012. On January 1, 2013, Orient Paper HB and Mr. Liu entered into another three-year term and extended the maturity date further to December 31, 2015. The unsecured loan carries an annual interest rate based on the People’s Bank of China at the time of the renewal and was set at 6.15% per annum. | |
The interest expenses incurred for above related party loans are $36,478 and $33,768 for the three months ended September 30, 2013 and 2012, while the interest expenses were $108,460 and $101,430 for the nine months ended September 30, 2013 and 2012. | |
During the nine months and the three months ended September 30, 2013, the Company borrowed $953,507 and $174,121, respectively, from a shareholder to pay for various expenses incurred in the U.S. The amount was repayable on demand with interest free. The Company repaid the entire balance by the end of the period. | |
Sale of Headquarters Compound Real Properties to a Related Party | |
The Company was informed in 2012 that a recent Xushui County urban redevelopment plan mandates that the current site on which our principal executive offices and other production facilities are situated (the “Headquarters Compound”) and neighboring area be reserved for residential use only. It is expected that the Company, like other manufacturers in the affected area, will be required eventually to cease all operations currently conducted on the Headquarters Compound site. In order to comply with this government mandate, the Company intends to initiate the process of relocating its offices and facilities to a new site. To that end, the Company has entered into negotiations concerning the potential sale of this property and all of the buildings and facilities located thereon (the “Potential Sale”) with Hebei Fangsheng Real Estate Development Co. Ltd. (“Hebei Fangsheng”), a real estate development company owned by Mr. Zhenyong Liu, our Chairman and Chief Executive Officer and his family. In November 2012, Hebei Fangsheng provided the Company with a payment of approximately $1,075,606 earnest money deposit payment in connection with the Potential Sale, which would be refunded to Hebei Fangsheng in the event that the parties fail to reach an agreement on the terms of the Potential Sale. The Company recorded the receipt of the earnest money deposit as a security deposit as of December 31, 2012 accordingly. | |
On August 7, 2013 the Company’s Audit Committee and the Board of Directors approved the sale of the land use right of the Headquarters Compound (the “LUR”), the office building and essentially all industrial-use buildings in the Headquarters Compound (the “Industrial Buildings”), and three employee dormitory buildings located within the Headquarters Compound (the “Dormitories”) to Hebei Fangsheng for cash prices of approximately $2.79 million, $1.15 million, and $4.29 million, respectively. In connection with the sale of the Industrial Buildings, Hebei Fangsheng agrees to lease the Industrial Buildings back to the Company for its original use for a term of up to three years, with an annual rental payment of approximately $162,882. As a condition for the sale of the Dormitories, Hebei Fangsheng agrees that it will act as an agent for the Company, which does not have the qualification to sell residential housing units in China, and that it is obligated to sell all of the 132 apartment units in the Dormitories to qualified employees of the Company at its acquisition price. Hebei Fangsheng further represents that it will not seek to profit from the resale of the Dormitories units and will allow the Company to inspect the books and records of the sale upon completion of the resale of the Dormitories units to ensure the objectives are achieved. | |
The sale was conducted on an arms-length basis, and was reviewed by the Company’s Audit Committee and approved by the Board of Directors. The $2.79 million sale price of the industrial land use right was determined by the valuation from a government designated appraisal, which was 3.35% higher than a second independent appraisal commissioned by the Company. The $1.15 million sale price of the Industrial Buildings was determined by negotiation between the Company and Hebei Fangsheng and is equal to the appraised value based on the assumption that the use of the buildings would be continued until they are retired. Based on the assumption that such buildings would have to be torn down to comply with the re-zoning, a second independent appraisal obtained by the Company put the value at $0.4 million. Although the Company and Hebei Fangsheng agree to set the sale price of the Dormitories at the Company’s original construction cost of the three dormitory buildings for $4.29 million, an independent appraisal shows that the value for the three buildings as employee dormitories was $4.63 million. | |
For the sale of the Headquarters Compound LUR and the Industrial Buildings, it generated a net gain on disposal of approximately $84,737, net of land appreciation tax and other transactional taxes and fees paid out of the proceeds of the sale to various local government tax authorities. | |
The dormitories were reclassified as assets held for sale on August 9, 2013 in accordance with ASC 360-10-45-9. As the sale was not yet completed by the end of September 30, 2013, the dormitories remained as assets held for sale under current asset in the amount of $4,116,497 as of September 30, 2013. The closing of the sale is expected to be consummated in the fourth quarter of 2013. | |
Subsequent to the sale of Headquarters Compound LUR, on September 2, 2013 Hebei Fangsheng agreed to pledge the same LUR as collateral for the Company’s $4,072,059 working capital loan from the ICBC until the expiration of the entire loan balance on August 15, 2014. |
Notes_Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2013 | |
Notes payable [Abstract] | ' |
Notes payable | ' |
(11) Notes payable | |
As of December 31, 2012, the Company had six bank acceptance notes from Bank of Hebei to one of its major suppliers for a total amount of $3,170,276. An amount of approximately $1,585,138 was under the Company’s banking facility obtained from Bank of Hebei on September 13, 2012 as mention in Note (9), while the remaining portion, an amount of approximately $1,585,138, was secured with a restricted bank deposit as mention in Note (3) above. The bank acceptance notes bear interest rate at nil% per annum and 5% of notes amount as handling charge. They became due and were payable on various dates starting from March 24 through June 18 during the year of 2013. As of September 30, 2013, all bank acceptance notes have been paid off. |
Other_Payables_and_Accrued_Lia
Other Payables and Accrued Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Other payables and accrued liabilities [Abstract] | ' | ||||||||
Other payables and accrued liabilities | ' | ||||||||
(12) Other payables and accrued liabilities | |||||||||
Other payables and accrued liabilities consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued electricity | $ | 207,103 | $ | 232,763 | |||||
Accrued professional fees | 150,000 | 143,597 | |||||||
Value-added tax payable | 529,801 | - | |||||||
Accrued interest | 769,157 | 656,623 | |||||||
Payable for purchase of equipment | - | 152,173 | |||||||
Insurance premium payable | 124,079 | 56,773 | |||||||
Others | 131,646 | 20,355 | |||||||
Totals | $ | 1,911,786 | $ | 1,262,284 |
Common_Stock
Common Stock | 9 Months Ended |
Sep. 30, 2013 | |
Common Stock [Abstract] | ' |
Common Stock | ' |
(13) Common Stock | |
Issuance of common stock pursuant to the 2011 Incentive Stock Plan | |
On January 12, 2012, the Company issued shares of 109,584 out of the 2011 Incentive Stock Plan of Orient Paper Inc. (the “2011 ISP”) to certain of its directors and officers when the stock was at $3.45 per share, as compensation for their services in the past years. Total fair value of the stock was calculated at $378,065 as of the date of issuance. The 2011 ISP was approved by the shareholders of the Company in August 2011 and sets aside 375,000 shares of the Company’s common stock for the purpose of compensating services provided by the employees, directors and other service providers. See Note (16), Stock Incentive Plan, for more details of the 2011 ISP. | |
Cancellation of certain director compensation shares | |
On April 4, 2013, the Company cancelled 2,875 shares of common stock previously issued on March 31, 2011 to two of its directors. The cancellation of shares was at the request of the New York Stock Exchange following a review of the Company’s shares listing application, where the stock exchange believes the shares were issued without shareholder approval and after the Company was subject to the shareholder approval requirement for any stock compensation. The Company reversed the related capital accounts and 2011 compensation expense of $0 and $16,158, respectively, during the three months and nine months ended September 30, 2013. | |
Dividend declared | |
On June 1, 2012, the Company’s Board of Directors approved a quarterly cash dividend of $0.0125 per share for each of the coming four quarters. The first quarterly dividend was declared on June 1, 2012 to shareholders of record as of June 15, 2012. The dividends were paid on July 2, 2012. | |
On September 4, 2012, the Company declared another quarterly dividend of $0.0125 per share to shareholders of record as of September 14, 2012. The dividends were paid on October 1, 2012. On December 6, 2012, the Company declared a third quarterly cash dividend of $0.0125 per share to shareholders of record as of December 17, 2012. The dividends were paid on December 31, 2012. | |
On April 4, 2013, the Company declared another quarterly dividend of $0.0125 per share to shareholders of record as of April 16, 2013. The dividend was paid on April 30, 2013. | |
Future declaration of dividends will depend on, among other things, the Company's results of operations, capital requirements, financial condition and on such other factors as the Company's Board of Directors may in its discretion consider relevant and in the best long term interest of the shareholders. |
Earnings_per_Share
Earnings per Share | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Earnings per Share [Abstract] | ' | ||||||||
Earnings per Share | ' | ||||||||
(14) Earnings per Share | |||||||||
For the three months and nine months ended September 30, 2013 and 2012, there were no securities with dilutive effect issued and outstanding. The basic and diluted net income per share were calculated as follows: | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Basic income per share | |||||||||
Net income for the period - numerator | $ | 5,534,844 | $ | 4,379,071 | |||||
Weighted average common stock outstanding - denominator | 18,456,900 | 18,459,775 | |||||||
Net income per share | $ | 0.3 | $ | 0.24 | |||||
Diluted income per share | |||||||||
Net income for the period - numerator | $ | 5,534,844 | $ | 4,379,071 | |||||
Weighted average common stock outstanding - denominator | 18,456,900 | 18,459,775 | |||||||
Effect of dilution | - | - | |||||||
Weighted average common stock outstanding - denominator | 18,456,900 | 18,459,775 | |||||||
Diluted income per share | $ | 0.3 | $ | 0.24 | |||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Basic income per share | |||||||||
Net income for the period - numerator | $ | 9,494,035 | $ | 12,671,552 | |||||
Weighted average common stock outstanding - denominator | 18,457,879 | 18,455,776 | |||||||
Net income per share | $ | 0.51 | $ | 0.69 | |||||
Diluted income per share | |||||||||
Net income for the period - numerator | $ | 9,494,035 | $ | 12,671,552 | |||||
Weighted average common stock outstanding - denominator | 18,457,879 | 18,455,776 | |||||||
Effect of dilution | - | - | |||||||
Weighted average common stock outstanding - denominator | 18,457,879 | 18,455,776 | |||||||
Diluted income per share | $ | 0.51 | $ | 0.69 |
Income_Taxes
Income Taxes | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
(15) Income Taxes | |||||||||
United States | |||||||||
Orient Paper and Shengde Holdings are incorporated in the State of Nevada and are subject to the U.S. federal tax and state statutory tax rates up to 34% and 0%, respectively. | |||||||||
PRC | |||||||||
Orient Paper HB and Orient Paper Shengde are PRC operating companies and are subject to PRC Enterprise Income Tax. Pursuant to the PRC New Enterprise Income Tax Law, Enterprise Income Tax is generally imposed at a statutory rate of 25%. | |||||||||
The provision for income taxes for the three months ended September 30, 2013 and 2012 was as follows: | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Provision for Income Taxes | |||||||||
Current Tax Provision - PRC | $ | 1,808,503 | $ | 1,955,264 | |||||
Deferred Tax Provision - PRC | 170,600 | (385,166 | ) | ||||||
Total Provision for Income Taxes | $ | 1,979,103 | $ | 1,570,098 | |||||
The provision for income taxes for the nine months ended September 30, 2013 and 2012 was as follows: | |||||||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Provision for Income Taxes | |||||||||
Current Tax Provision - PRC | $ | 3,276,466 | $ | 5,055,892 | |||||
Deferred Tax Provision - PRC | 274,427 | (385,166 | ) | ||||||
Total Provision for Income Taxes | $ | 3,550,893 | $ | 4,670,726 | |||||
During the three months ended September 30, 2013 and 2012, the effective income tax rate was estimated by the Company to be 26.3% and 26.4%, respectively, while during the nine months ended September 30, 2013 and 2012, the effective income tax rate was estimated by the Company to be 27.2% and 26.9%, respectively. The effective tax rate is lower than the U.S. statutory rate of 35% primarily because the undistributed earnings of our PRC subsidiary Orient Paper Shengde and the VIE, Orient Paper HB are considered or are expected to be indefinitely reinvested offshore to support our future capacity expansion. | |||||||||
On June 1, 2012, the Company’s Board of Directors declared a quarterly cash dividend of $0.0125/share for four quarters starting the first record date of June 15, 2012. Total cash dividends for the four quarters were in the amount of $922,989. The source of fund for the cash dividend paid by the Company was provided by Orient Paper HB, the Company’s VIE. For purposes of the consolidated financial statements, the dividend paid has been recorded as a distribution from the Company’s retained earnings. For U.S federal income tax purposes, the Company made the assumption that, despite the repatriation of fund was made by a variable interest entity and not the Company’s wholly-owned subsidiary, the receipt of a profit distribution from its Chinese VIE constitute a tax item of income that will be fully offset by the Company’s current year ordinary tax deductions and accumulated Net Operating Losses (NOLs), which amounted to $4,526,391 before any utilization of such NOLs to absorb taxable income derived from the dividend distribution as of December 31, 2012. The Company does not believe that its current and future dividend policy and the available U.S. tax deductions and NOLs will cause the Company to recognize any substantial current U.S. federal or state corporate income tax liability in the near future. Nor does it believe that the amount of the repatriation of the VIE’s earnings and profits for purposes of paying dividends will change the Company’s position that its PRC subsidiary Orient Paper Shengde and the VIE, Orient Paper HB are considered or are expected to be indefinitely reinvested offshore to support our future capacity expansion. If these earnings are repatriated to the U.S. resulting in U.S. taxable income in the future, or if it is determined that such earnings are to be remitted in the foreseeable future, additional tax provisions would be required. | |||||||||
The Company has adopted ASC Topic 740-10-05, Income Taxes, related to uncertain income tax positions. To date, the adoption of this interpretation has not impacted the Company’s financial position, results of operations, or cash flows. The Company performed self-assessment and the Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by taxing authorities. Audit periods remain open for review until the statute of limitations has passed, which in the PRC is usually 5 years. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of September 30, 2013 and December 31, 2012, management considered that the Company had no uncertain tax positions affecting its consolidated financial position and results of operations or cash flows, and will continue to evaluate for any uncertain position in future. There are no estimated interest costs and penalties provided in the Company’s condensed consolidated financial statements for both the three months and the nine months ended September 30, 2013 and 2012, respectively. The Company’s tax positions related to open tax years are subject to examination by the relevant tax authorities and the major one is the China Tax Authority. |
Stock_Incentive_Plan
Stock Incentive Plan | 9 Months Ended |
Sep. 30, 2013 | |
Stock Incentive Plan [Abstract] | ' |
Stock Incentive Plan | ' |
(16) Stock Incentive Plan | |
On August 28, 2011, the Company’s Annual General Meeting approved the 2011 Incentive Stock Plan (the “2011 ISP”) as previously adopted by the Board of Directors on July 5, 2011. Under the 2011 ISP, the Company may grant an aggregate of 375,000 shares of the Company’s common stock to the Company’s directors, officers, employees or consultants. No stock or option was issued under the 2011 ISP until January 11, 2012, when the Compensation Committee granted 109,584 shares of restricted common stock to certain officers and directors of the Company. | |
On September 10, 2012, the Company’s Annual General Meeting approved the 2012 Incentive Stock Plan (the “2012 ISP”). Under the 2012 ISP, the Company may grant an aggregate of 200,000 shares of the Company’s common stock to the Company’s directors, officers, employees or consultants. Specifically, the Board and/or the Compensation Committee have authority to (a) grant, in its discretion, Incentive Stock Options or Non-statutory Options, Stock Awards or Restricted Stock Purchase Offers; (b) determine in good faith the fair market value of the stock covered by any grant; (c) determine which eligible persons shall receive grants and the number of shares, restrictions, terms and conditions to be included in such grants; and (d) make all other determinations necessary or advisable for the 2012 ISP's administration. No stock or option was issued under the 2012 ISP on or before September 30, 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies [Abstract] | ' | ||||
Commitments and Contingencies | ' | ||||
(17) Commitments and Contingencies | |||||
Operating Lease | |||||
Orient Paper leases 32.95 acres of land from a local government in Xushui County, Baoding City, Hebei, China through a real estate lease with a 30-year term, which expires on December 31, 2031. The lease requires an annual rental payment of approximately $19,546 (RMB 120,000). This operating lease is renewable at the end of the 30-year term. | |||||
On November 27, 2012, Orient Paper entered into a 49.4 acres land lease with an investment company in the Economic Development Zone in Wei County, Hebei, China. The lease term of the Wei County land lease commences on the date of the lease and lasts for 15 years. The lease requires an annual rental payment of $586,377 (RMB 3,600,000). The Company will be building two new tissue paper production lines and future production facilities in the leased Wei County land. | |||||
As mentioned in Note (10) Related Party Transactions, in connection with the sale of Industrial Buildings to Hebei Fangsheng, Hebei Fangsheng agrees to lease the Industrial Buildings back to Orient Paper at an annual rental of $162,882 (RMB 1,000,000), for a term of up to three years. The Company will continue its operations in the current location for a maximum of three years while looking for a new location to relocate its offices and the digital photo paper operations currently located in the headquarters compound. | |||||
The rental expenses for the three months ended September 30, 2013 and 2012 were $177,898 and $4,742, respectively. Total rental expenses for the nine months ended September 30, 2013 and 2012 were $475,999 and $14,245, respectively. | |||||
Future minimum lease payments of all operating leases are as follows: | |||||
Year Ending September 30, | Amount | ||||
2014 | $ | 768,805 | |||
2015 | 768,805 | ||||
2016 | 741,658 | ||||
2017 | 605,922 | ||||
2018 | 605,922 | ||||
Thereafter | 5,531,485 | ||||
$ | 9,022,597 | ||||
Capital commitment | |||||
As of September 30, 2013, the Company has signed several contracts for construction of equipment and facilities, including a new tissue paper production line PM8. Total outstanding commitments under these contracts were $37,518,080 and $5,243,636 as of September 30, 2013 and December 31, 2012, respectively. With the exception of a 5%-10% performance holdback (approximately $6,076,490) on the construction of equipment and facilities is payable in 2014 and 2015, the Company expected to pay off all the balances by the end of year 2014. | |||||
Pending Litigation | |||||
On April 1, 2011 the Company was served a summon for a complaint filed by Tribank Capital Investments, Inc. (“Tribank”) on March 30, 2011 in the Superior Court of the State of California for the County of Los Angeles against the Company and its Chairman and CEO Mr. Zhenyong Liu (the “Tribank Matter”). By filing the complaint, Tribank alleges, among other claims, that the Company breached the Non-Circumvention Agreement dated October 29, 2008 between the Company and Tribank (the “Agreement”), and that the Company was unjustly enriched as a result of breaching the Agreement. The complaint seeks, among other relief, compensatory damages and plaintiff’s counsel’s fees. On April 29, 2011 the Company filed a Notice of Removal to remove the jurisdiction of the case from the state court of California to the Federal District Court for the District of Central California and filed a motion to dismiss the lawsuit on May 6, 2011. On July 18, 2011, United States District Court Judge Manual Real granted Orient Paper motion to dismiss the complaint in its entirety, finding that venue is improper because the contract that forms the basis of the parties' relationship contains a valid and enforceable forum selection clause providing that the Hong Kong Special Administrative Region of China is the exclusive forum for resolution of disputes. Tribank subsequently filed a notice of appeal with the court on August 5, 2011 and did file an opening brief with the U.S. Court of Appeals for the Ninth Circuit, to which the Company filed an answering brief on August 31, 2012. Oral argument took place on April 9, 2013. Shortly thereafter, the Ninth Circuit entered a memorandum reversing the District Court’s dismissal because the record was not sufficiently developed to make a determination as to whether the forum selection clause applied, and remanding the case back to the District Court with instructions to hold an evidentiary hearing before ruling on the Company’s motion to dismiss. The evidentiary hearing was held on August 12, 2013. Subsequent to the hearing, the District Court ordered to dismiss the case in its entirety for the same reasons on August 14, 2013. The appeal period for Tribank has expired. | |||||
Cross-Guarantee with a Third Party | |||||
As of December 31, 2012, the Company used land use right in the amount of $7,419,614 as a pledge for a bank loan of an independent third party, which cross-guarantees the Company’s credit facility of $1,585,138 from the Bank of Hebei. That long-term loan of the third party had been paid off on June 3, 2013, while the credit facility guaranteed by the independent third party expired on September 19, 2013. |
Segment_Reporting
Segment Reporting | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||
Segment Reporting | ' | ||||||||||||||||||||
(18) Segment Reporting | |||||||||||||||||||||
Since March 10, 2010, Orient Paper Shengde started its operations and thereafter the Company manages its operations through two business operating segments: Orient Paper HB, which produces printing paper and corrugating medium paper, and Orient Paper Shengde, which produces digital photo paper. They are managed separately because each business requires different technology and marketing strategies. | |||||||||||||||||||||
The Company evaluates performance of its operating segments based on net income. Administrative functions such as finance, treasury, and information systems are centralized. However, where applicable, portions of the administrative function expenses are allocated between the operating segments based on gross revenue generated. The operating segments do share facilities in Xushui County, Baoding City, Hebei, China. All sales were sold to customers located in the PRC. | |||||||||||||||||||||
Summarized financial information for the two reportable segments for the three months and nine months ended September 30, 2013 and 2012 is as follows: | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | of Inter-segment | Consolidated | |||||||||||||||||
Revenues | $ | 36,097,505 | $ | 1,588,609 | $ | - | $ | - | $ | 37,686,114 | |||||||||||
Gross Profit | 8,029,435 | 406,379 | - | - | 8,435,814 | ||||||||||||||||
Depreciation and amortization | 1,364,219 | 695,051 | - | - | 2,059,270 | ||||||||||||||||
Interest income | 22,871 | 1,265 | 23 | - | 24,159 | ||||||||||||||||
Interest expense | 242,740 | - | 1,645 | - | 244,385 | ||||||||||||||||
Income tax expense | 1,879,452 | 99,651 | - | - | 1,979,103 | ||||||||||||||||
Net Income (Loss) | 5,649,511 | 270,450 | (385,117 | ) | - | 5,534,844 | |||||||||||||||
Three Months Ended | |||||||||||||||||||||
September 30, 2012 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | of Inter-segment | Consolidated | |||||||||||||||||
Revenues | $ | 35,795,860 | $ | 1,855,494 | $ | - | $ | - | $ | 37,651,354 | |||||||||||
Gross Profit | 6,359,616 | 460,437 | - | - | 6,820,053 | ||||||||||||||||
Depreciation and amortization | 1,495,447 | 676,404 | - | - | 2,171,851 | ||||||||||||||||
Interest income | 6,434 | 557 | 23 | - | 7,014 | ||||||||||||||||
Interest expense | 216,065 | - | 3,198 | - | 219,263 | ||||||||||||||||
Income tax expense | 1,461,159 | 108,939 | - | - | 1,570,098 | ||||||||||||||||
Net Income (Loss) | 4,385,536 | 301,474 | (326,937 | ) | 18,998 | 4,379,071 | |||||||||||||||
Nine Months Ended | |||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | Of Inter-segment | Consolidated | |||||||||||||||||
Revenues | $ | 86,982,167 | $ | 3,489,115 | $ | - | $ | - | $ | 90,471,282 | |||||||||||
Gross Profit | 15,536,788 | 627,658 | - | - | 16,164,446 | ||||||||||||||||
Depreciation and amortization | 3,914,115 | 2,066,605 | - | - | 5,980,720 | ||||||||||||||||
Interest income | 76,599 | 2,300 | 49 | - | 78,948 | ||||||||||||||||
Interest expense | 719,593 | - | 3,510 | - | 723,103 | ||||||||||||||||
Income tax expense | 3,397,122 | 153,771 | - | - | 3,550,893 | ||||||||||||||||
Net Income (Loss) | 10,247,650 | 371,382 | (1,124,997 | ) | - | 9,494,035 | |||||||||||||||
Total Assets | 157,419,273 | 43,411,503 | 176,665 | - | 201,007,441 | ||||||||||||||||
Nine Months Ended | |||||||||||||||||||||
September 30, 2012 | |||||||||||||||||||||
Orient Paper HB | Orient Paper | Not Attributable | Elimination | Enterprise-wide, | |||||||||||||||||
Shengde | to Segments | of Inter-segment | Consolidated | ||||||||||||||||||
Revenues | $ | 102,277,317 | $ | 5,304,708 | $ | - | $ | - | $ | 107,582,025 | |||||||||||
Gross Profit | 19,013,163 | 1,345,726 | - | - | 20,358,889 | ||||||||||||||||
Depreciation and amortization | 5,072,530 | 1,150,070 | - | - | 6,222,600 | ||||||||||||||||
Interest income | 13,898 | 3,748 | 78 | - | 17,724 | ||||||||||||||||
Interest expense | 641,700 | - | 3,198 | - | 644,898 | ||||||||||||||||
Income tax expense | 4,356,289 | 314,437 | - | - | 4,670,726 | ||||||||||||||||
Net Income (Loss) | 12,747,873 | 914,059 | (1,001,459 | ) | 11,079 | 12,671,552 | |||||||||||||||
Year Ended | |||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||
Orient Paper HB | Orient Paper | Not Attributable | Elimination | Enterprise-wide, | |||||||||||||||||
Shengde | to Segments | of Inter-segment | Consolidated | ||||||||||||||||||
Total Assets | $ | 119,707,195 | $ | 43,076,428 | $ | 62,701 | $ | - | $ | 162,846,324 | |||||||||||
Concentration_of_Major_Custome
Concentration of Major Customers and Suppliers | 9 Months Ended |
Sep. 30, 2013 | |
Concentration of Major Customers and Suppliers and Concentration of Credit Risk [Abstract] | ' |
Concentration of Major Customers and Suppliers | ' |
(19) Concentration of Major Customers and Suppliers | |
For the three months ended September 30, 2013 and 2012, the Company had no single customer contributing over 10% of total sales. | |
For the nine months ended September 30, 2013 and 2012, the Company had no single customer contributing over 10% of total sales. | |
For the three months ended September 30, 2013, the Company had two major suppliers which primarily accounted for 77% and 8% of the total purchases. For the three months ended September 30, 2012, the Company had two major suppliers which primarily accounted for 76% and 8% of the total purchases. | |
For the nine months ended September 30, 2013, the Company had two major suppliers which primarily accounted for 75%, and 10% of the total purchases. For the nine months ended September 30, 2012, the Company had two major suppliers which primarily accounted for 76% and 7% of the total purchases. |
Concentration_of_Credit_Risk
Concentration of Credit Risk | 9 Months Ended |
Sep. 30, 2013 | |
Concentration of Major Customers and Suppliers and Concentration of Credit Risk [Abstract] | ' |
Concentration of Credit Risk | ' |
(20) Concentration of Credit Risk | |
Financial instruments for which the Company is potentially subject to concentration of credit risk consist principally of cash. The Company places its temporary cash investments in reputable financial institutions in the PRC and the United States. Although it is generally understood that the PRC central government stands behind all of the banks in China in the event of bank failure, there is no deposit insurance system in China that is similar to the protection provided by the Federal Deposit Insurance Corporation (FDIC) of the United States. The Company’s U.S. bank accounts are all fully covered by the FDIC insurance as of September 30, 2013 and December 31, 2012, respectively. |
Risks_and_Uncertainties
Risks and Uncertainties | 9 Months Ended |
Sep. 30, 2013 | |
Concentration of Major Customers and Suppliers and Concentration of Credit Risk [Abstract] | ' |
Risks and Uncertainties | ' |
(21) Risks and Uncertainties | |
Orient Paper is subject to substantial risks from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, foreign currency exchange rates, and operating in the PRC under its various laws and restrictions. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2013 | |
Recent Accounting Pronouncements [Abstract] | ' |
Recent Accounting Pronouncements | ' |
(22) Recent Accounting Pronouncements | |
In February 2013, the FASB issued ASU 2013-01, Balance Sheet (Topic 220): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies that ordinary trade receivables and receivables are not in the scope of ASU 2011-11. ASU 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the Codification or subject to a master netting arrangement or similar agreement. The effective date is the same as the effective date of ASU 2011-11, i.e. effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. Its adoption of ASU 2013-01 is not expected to have any material impact on its condensed consolidated financial statements. | |
In February 2013 the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The ASU requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified. This ASU is effective prospectively for reporting periods beginning after December 15, 2012. Its adoption of ASU 2013-02 is not expected to have any material impact on its condensed consolidated financial statements. | |
In July 2013, the FASB issued ASU 2013-11, Income Tax (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The ASU provides a guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Its adoption of ASU2013-11 is not expected to have any material impact on its condensed consolidated financial statements. |
Basis_of_Presentation_and_Sign1
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
Our unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of September 30, 2013 and the results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for any future period. | |
Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates. |
Organization_and_Business_Back1
Organization and Business Background (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Organization and Business Background [Abstract] | ' | ||||||||||
Subsidiaries and Variable Interest Entities | ' | ||||||||||
Name | Date of Incorporation | Place of | Percentage of | Principal Activity | |||||||
or Establishment | Incorporation or | Ownership | |||||||||
Establishment | |||||||||||
Subsidiary: | |||||||||||
Dongfang Holding | 13-Nov-06 | BVI | 100 | % | Inactive investment holding | ||||||
Shengde Holdings | 25-Feb-09 | State of Nevada | 100 | % | Investment holding | ||||||
Orient Paper Shengde | 1-Jun-09 | PRC | 100 | % | Paper Production and distribution | ||||||
Variable interest entity: | |||||||||||
Orient Paper HB | 10-Mar-96 | PRC | Control | * | Paper Production and distribution | ||||||
* Orient Paper HB is treated as a 100% controlled variable interest entity of the Company |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventories [Abstract] | ' | ||||||||
Schedule of inventories | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Raw Materials | |||||||||
Recycled paper board | $ | 7,426,624 | $ | 11,274,383 | |||||
Pulp | 14,194 | 13,813 | |||||||
Recycled printed paper | - | 884,236 | |||||||
Recycled white scrap paper | 3,035,234 | 766,144 | |||||||
Coal | 501,081 | 621,107 | |||||||
Base paper and other raw materials | 240,040 | 225,912 | |||||||
11,217,173 | 13,785,595 | ||||||||
Finished Goods | 1,356,301 | 1,318,506 | |||||||
Totals | $ | 12,573,474 | $ | 15,104,101 |
Prepayments_and_Other_Current_1
Prepayments and Other Current Assets (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Prepayments and other current assets [Abstract] | ' | ||||||||
Summary of prepayments and other current assets | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Prepaid AMEX annual fee | $ | 15,000 | $ | 6,875 | |||||
Recoverable VAT | 500,000 | 4,784,074 | |||||||
Prepaid insurance | 123,058 | 55,922 | |||||||
Prepayment for purchase of materials | 6,792 | 77,445 | |||||||
Prepaid land lease | 53,751 | 475,541 | |||||||
Others | - | 1,848 | |||||||
$ | 698,601 | $ | 5,401,705 |
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Schedule of property, plant and equipment | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Property, Plant, and Equipment: | |||||||||
Land use rights | $ | 7,727,124 | $ | 9,895,081 | |||||
Building and improvements | 22,307,565 | 31,625,816 | |||||||
Machinery and equipment | 120,552,470 | 111,857,002 | |||||||
Vehicles | 485,616 | 439,007 | |||||||
Construction in progress | 47,552,834 | 1,315,664 | |||||||
198,625,609 | 155,132,570 | ||||||||
Less accumulated depreciation and amortization | (36,977,851 | ) | (32,741,114 | ) | |||||
Property, Plant and Equipment, net | $ | 161,647,758 | $ | 122,391,456 | |||||
Loans_Payable_Tables
Loans Payable (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Loans Payable [Abstract] | ' | ||||||||||
Schedule of short-term bank loans | ' | ||||||||||
September 30, | December 31, | ||||||||||
2013 | 2012 | ||||||||||
Industrial & Commercial Bank of China | (a) | $ | - | $ | 792,568 | ||||||
Industrial & Commercial Bank of China | (b) | 1,628,824 | 1,585,138 | ||||||||
Bank of Hebei | (c) | - | 1,585,138 | ||||||||
Industrial & Commercial Bank of China | (d) | 814,412 | - | ||||||||
Industrial & Commercial Bank of China | (e) | 4,072,059 | - | ||||||||
Total short-term bank loans | $ | 6,515,295 | $ | 3,962,844 | |||||||
Schedule of future minimum lease payments of capital lease | ' | ||||||||||
Year Ending September 30, | Amount | ||||||||||
2014 | $ | 9,412,972 | |||||||||
2015 | 8,905,152 | ||||||||||
2016 | 8,398,028 | ||||||||||
$ | 26,716,152 | ||||||||||
Other_Payables_and_Accrued_Lia1
Other Payables and Accrued Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Other payables and accrued liabilities [Abstract] | ' | ||||||||
Summary of other Payables and Accrued Liabilities | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued electricity | $ | 207,103 | $ | 232,763 | |||||
Accrued professional fees | 150,000 | 143,597 | |||||||
Value-added tax payable | 529,801 | - | |||||||
Accrued interest | 769,157 | 656,623 | |||||||
Payable for purchase of equipment | - | 152,173 | |||||||
Insurance premium payable | 124,079 | 56,773 | |||||||
Others | 131,646 | 20,355 | |||||||
Totals | $ | 1,911,786 | $ | 1,262,284 |
Earnings_per_Share_Tables
Earnings per Share (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Earnings per Share [Abstract] | ' | ||||||||
Summary of basic and diluted net income per share | ' | ||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Basic income per share | |||||||||
Net income for the period - numerator | $ | 5,534,844 | $ | 4,379,071 | |||||
Weighted average common stock outstanding - denominator | 18,456,900 | 18,459,775 | |||||||
Net income per share | $ | 0.3 | $ | 0.24 | |||||
Diluted income per share | |||||||||
Net income for the period - numerator | $ | 5,534,844 | $ | 4,379,071 | |||||
Weighted average common stock outstanding - denominator | 18,456,900 | 18,459,775 | |||||||
Effect of dilution | - | - | |||||||
Weighted average common stock outstanding - denominator | 18,456,900 | 18,459,775 | |||||||
Diluted income per share | $ | 0.3 | $ | 0.24 | |||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Basic income per share | |||||||||
Net income for the period - numerator | $ | 9,494,035 | $ | 12,671,552 | |||||
Weighted average common stock outstanding - denominator | 18,457,879 | 18,455,776 | |||||||
Net income per share | $ | 0.51 | $ | 0.69 | |||||
Diluted income per share | |||||||||
Net income for the period - numerator | $ | 9,494,035 | $ | 12,671,552 | |||||
Weighted average common stock outstanding - denominator | 18,457,879 | 18,455,776 | |||||||
Effect of dilution | - | - | |||||||
Weighted average common stock outstanding - denominator | 18,457,879 | 18,455,776 | |||||||
Diluted income per share | $ | 0.51 | $ | 0.69 |
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Summary of provisions for income taxes | ' | ||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Provision for Income Taxes | |||||||||
Current Tax Provision - PRC | $ | 1,808,503 | $ | 1,955,264 | |||||
Deferred Tax Provision - PRC | 170,600 | (385,166 | ) | ||||||
Total Provision for Income Taxes | $ | 1,979,103 | $ | 1,570,098 | |||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Provision for Income Taxes | |||||||||
Current Tax Provision - PRC | $ | 3,276,466 | $ | 5,055,892 | |||||
Deferred Tax Provision - PRC | 274,427 | (385,166 | ) | ||||||
Total Provision for Income Taxes | $ | 3,550,893 | $ | 4,670,726 | |||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies [Abstract] | ' | ||||
Future Minimum Lease Payments for Capital Leases | ' | ||||
Year Ending September 30, | Amount | ||||
2014 | $ | 768,805 | |||
2015 | 768,805 | ||||
2016 | 741,658 | ||||
2017 | 605,922 | ||||
2018 | 605,922 | ||||
Thereafter | 5,531,485 | ||||
$ | 9,022,597 | ||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||
Summarized financial information for reportable segments | ' | ||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | of Inter-segment | Consolidated | |||||||||||||||||
Revenues | $ | 36,097,505 | $ | 1,588,609 | $ | - | $ | - | $ | 37,686,114 | |||||||||||
Gross Profit | 8,029,435 | 406,379 | - | - | 8,435,814 | ||||||||||||||||
Depreciation and amortization | 1,364,219 | 695,051 | - | - | 2,059,270 | ||||||||||||||||
Interest income | 22,871 | 1,265 | 23 | - | 24,159 | ||||||||||||||||
Interest expense | 242,740 | - | 1,645 | - | 244,385 | ||||||||||||||||
Income tax expense | 1,879,452 | 99,651 | - | - | 1,979,103 | ||||||||||||||||
Net Income (Loss) | 5,649,511 | 270,450 | (385,117 | ) | - | 5,534,844 | |||||||||||||||
Three Months Ended | |||||||||||||||||||||
September 30, 2012 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | of Inter-segment | Consolidated | |||||||||||||||||
Revenues | $ | 35,795,860 | $ | 1,855,494 | $ | - | $ | - | $ | 37,651,354 | |||||||||||
Gross Profit | 6,359,616 | 460,437 | - | - | 6,820,053 | ||||||||||||||||
Depreciation and amortization | 1,495,447 | 676,404 | - | - | 2,171,851 | ||||||||||||||||
Interest income | 6,434 | 557 | 23 | - | 7,014 | ||||||||||||||||
Interest expense | 216,065 | - | 3,198 | - | 219,263 | ||||||||||||||||
Income tax expense | 1,461,159 | 108,939 | - | - | 1,570,098 | ||||||||||||||||
Net Income (Loss) | 4,385,536 | 301,474 | (326,937 | ) | 18,998 | 4,379,071 | |||||||||||||||
Nine Months Ended | |||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||
Orient Paper | Orient Paper | Not Attributable | Elimination | Enterprise-wide, | |||||||||||||||||
HB | Shengde | to Segments | Of Inter-segment | Consolidated | |||||||||||||||||
Revenues | $ | 86,982,167 | $ | 3,489,115 | $ | - | $ | - | $ | 90,471,282 | |||||||||||
Gross Profit | 15,536,788 | 627,658 | - | - | 16,164,446 | ||||||||||||||||
Depreciation and amortization | 3,914,115 | 2,066,605 | - | - | 5,980,720 | ||||||||||||||||
Interest income | 76,599 | 2,300 | 49 | - | 78,948 | ||||||||||||||||
Interest expense | 719,593 | - | 3,510 | - | 723,103 | ||||||||||||||||
Income tax expense | 3,397,122 | 153,771 | - | - | 3,550,893 | ||||||||||||||||
Net Income (Loss) | 10,247,650 | 371,382 | (1,124,997 | ) | - | 9,494,035 | |||||||||||||||
Total Assets | 157,419,273 | 43,411,503 | 176,665 | - | 201,007,441 | ||||||||||||||||
Nine Months Ended | |||||||||||||||||||||
September 30, 2012 | |||||||||||||||||||||
Orient Paper HB | Orient Paper | Not Attributable | Elimination | Enterprise-wide, | |||||||||||||||||
Shengde | to Segments | of Inter-segment | Consolidated | ||||||||||||||||||
Revenues | $ | 102,277,317 | $ | 5,304,708 | $ | - | $ | - | $ | 107,582,025 | |||||||||||
Gross Profit | 19,013,163 | 1,345,726 | - | - | 20,358,889 | ||||||||||||||||
Depreciation and amortization | 5,072,530 | 1,150,070 | - | - | 6,222,600 | ||||||||||||||||
Interest income | 13,898 | 3,748 | 78 | - | 17,724 | ||||||||||||||||
Interest expense | 641,700 | - | 3,198 | - | 644,898 | ||||||||||||||||
Income tax expense | 4,356,289 | 314,437 | - | - | 4,670,726 | ||||||||||||||||
Net Income (Loss) | 12,747,873 | 914,059 | (1,001,459 | ) | 11,079 | 12,671,552 | |||||||||||||||
Year Ended | |||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||
Orient Paper HB | Orient Paper | Not Attributable | Elimination | Enterprise-wide, | |||||||||||||||||
Shengde | to Segments | of Inter-segment | Consolidated | ||||||||||||||||||
Total Assets | $ | 119,707,195 | $ | 43,076,428 | $ | 62,701 | $ | - | $ | 162,846,324 | |||||||||||
Organization_and_Business_Back2
Organization and Business Background (Details) | 9 Months Ended | |
Sep. 30, 2013 | ||
Dongfang Holding [Member] | ' | |
Schedule of company's subsidiaries and variable interest entities | ' | |
Entity Incorporation, Date Of Incorporation | 13-Nov-06 | |
Entity Incorporation State Country Name | 'BVI | |
Percentage of Ownership | 100.00% | |
Principal Activity | 'Inactive investment holding | |
Shengde Holding [Member] | ' | |
Schedule of company's subsidiaries and variable interest entities | ' | |
Entity Incorporation, Date Of Incorporation | 25-Feb-09 | |
Entity Incorporation State Country Name | 'State of Nevada | |
Percentage of Ownership | 100.00% | |
Principal Activity | 'Investment holding | |
Orient Paper Shengde [Member] | ' | |
Schedule of company's subsidiaries and variable interest entities | ' | |
Entity Incorporation, Date Of Incorporation | 1-Jun-09 | |
Entity Incorporation State Country Name | 'PRC | |
Percentage of Ownership | 100.00% | |
Principal Activity | 'Paper Production and distribution | |
Orient Paper HB [Member] | ' | |
Schedule of company's subsidiaries and variable interest entities | ' | |
Entity Incorporation, Date Of Incorporation | 10-Mar-96 | |
Entity Incorporation State Country Name | 'PRC | |
Percentage of Ownership | ' | [1] |
Principal Activity | 'Paper Production and distribution | |
[1] | Orient Paper HB is treated as a 100% controlled variable interest entity of the Company |
Organization_and_Business_Back3
Organization and Business Background (Details Textual) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||
Feb. 10, 2010 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Jun. 30, 2009 | Oct. 31, 2007 | Jul. 31, 2007 | Oct. 29, 2007 | Jun. 30, 2010 | Feb. 10, 2010 | Jun. 24, 2009 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Feb. 10, 2010 | Dec. 31, 2009 | |
CNY | USD ($) | USD ($) | Shengde Holdings [Member] | Dongfang Holding [Member] | Dongfang Holding [Member] | Dongfang Holding [Member] | Orient Paper Shengde [Member] | Orient Paper Shengde [Member] | Orient Paper Shengde [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | ||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||||
Organization and Business Background (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership | ' | ' | ' | ' | 100.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock issued to Dongfang Holding shareholders under Merger Agreement | ' | ' | ' | ' | ' | 7,450,497 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | ' | $0.00 | $0.00 | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Registered capital | ' | ' | ' | ' | ' | ' | ' | ' | $60,000,000 | ' | $10,000,000 | ' | ' | ' | ' | ' | ' | ' |
Service fees to Orient Paper Shengde percentage of Orient Paper HB total net profits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80.00% | ' |
Exercise price for the options | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount loaned by Orient Paper Shengde to Orient Paper HB equity holders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 |
Loans terminated | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10,000,000 | ' | ' | ' | ' | ' | ' | $10,000,000 | ' |
Percentage of distributable profit of Orient Paper HB entitled to Orient Paper Shengde | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of revenue from Orient Paper HB | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95.78% | 95.07% | 96.14% | 95.07% | ' | ' | ' |
Percentage of assets accounted by Orient Paper HB | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 78.32% | ' | 78.32% | ' | 73.51% | ' | ' |
Restricted_Cash_Details
Restricted Cash (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Restricted Cash (Textual) | ' | ' |
Restricted cash | ' | $1,585,138 |
Description of lifting of restricted cash | 'The restriction was lifted upon the maturity of the notes payable on June 18, 2013. | ' |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of inventories | ' | ' |
Raw materials, Gross | $11,217,173 | $13,785,595 |
Finished goods | 1,356,301 | 1,318,506 |
Totals | 12,573,474 | 15,104,101 |
Recycled paper board [Member] | ' | ' |
Schedule of inventories | ' | ' |
Raw materials, Gross | 7,426,624 | 11,274,383 |
Pulp [Member] | ' | ' |
Schedule of inventories | ' | ' |
Raw materials, Gross | 14,194 | 13,813 |
Recycled printed paper [Member] | ' | ' |
Schedule of inventories | ' | ' |
Raw materials, Gross | ' | 884,236 |
Recycled white scrap paper [Member] | ' | ' |
Schedule of inventories | ' | ' |
Raw materials, Gross | 3,035,234 | 766,144 |
Coal [Member] | ' | ' |
Schedule of inventories | ' | ' |
Raw materials, Gross | 501,081 | 621,107 |
Base paper and other raw materials [Member] | ' | ' |
Schedule of inventories | ' | ' |
Raw materials, Gross | $240,040 | $225,912 |
Prepayments_and_Other_Current_2
Prepayments and Other Current Assets (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Summary of prepayments and other current assets | ' | ' |
Prepaid AMEX annual fee | $15,000 | $6,875 |
Recoverable VAT | 500,000 | 4,784,074 |
Prepaid insurance | 123,058 | 55,922 |
Prepayment for purchase of materials | 6,792 | 77,445 |
Prepaid land lease | 53,751 | 475,541 |
Others | ' | 1,848 |
Prepayments and other current assets, Total | $698,601 | $5,401,705 |
Assets_held_for_sale_Details
Assets held for sale (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Dormitory | ||
Assets held for sale [Abstract] | ' | ' |
Assets Held-for-sale, Current | $4,116,497 | ' |
Number of employee dormitory buildings sold | 3 | ' |
Long Lived Assets Held-for-sale, Description | 'As the sale was not yet completed by the end of September 30, 2013, the dormitories were classified as held for sale in accordance with ASC 360-10-35. It was expected that the sales will be consummated by the end of year 2013. | ' |
Recovered_Sheet1
Prepayment on property, plant and equipment (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
sqm | ||
Prepayment on property, plant and equipment (Textual) | ' | ' |
Prepayment on property, plant and equipment | $1,485,487 | $1,445,645 |
Entitlement of land use rights in Xushui County, Baoding plant | 54,267 | ' |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of property, plant and equipment | ' | ' |
Property, Plant, and Equipment, Gross | $198,625,609 | $155,132,570 |
Less accumulated depreciation and amortization | -36,977,851 | -32,741,114 |
Property, Plant and Equipment, net | 161,647,758 | 122,391,456 |
Land use rights [Member] | ' | ' |
Schedule of property, plant and equipment | ' | ' |
Property, Plant, and Equipment, Gross | 7,727,124 | 9,895,081 |
Building and improvements [Member] | ' | ' |
Schedule of property, plant and equipment | ' | ' |
Property, Plant, and Equipment, Gross | 22,307,565 | 31,625,816 |
Machinery and equipment [Member] | ' | ' |
Schedule of property, plant and equipment | ' | ' |
Property, Plant, and Equipment, Gross | 120,552,470 | 111,857,002 |
Vehicles [Member] | ' | ' |
Schedule of property, plant and equipment | ' | ' |
Property, Plant, and Equipment, Gross | 485,616 | 439,007 |
Construction in progress [Member] | ' | ' |
Schedule of property, plant and equipment | ' | ' |
Property, Plant, and Equipment, Gross | $47,552,834 | $1,315,664 |
Property_Plant_and_Equipment_D1
Property, Plant and Equipment (Details Textual) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jun. 16, 2013 | Jun. 16, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Sale-leaseback arrangement [Member] | Sale-leaseback arrangement [Member] | Sale-leaseback arrangement [Member] | Sale-leaseback arrangement [Member] | Land use rights [Member] | Land use rights [Member] | Land use right one [Member] | Land use right two [Member] | |
Dormitory | T | USD ($) | CNY | USD ($) | USD ($) | USD ($) | USD ($) | ||||||
Dormitory | Land_Use_Right | ||||||||||||
Property, Plant and Equipment (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '50 years | ' | ' |
Number of land use rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Lease expiration year | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2061 | ' | '2053 | '2061 |
Property plant and equipment pledged for long term loan | $22,439,622 | ' | $22,439,622 | ' | $9,316,645 | ' | ' | ' | ' | ' | $7,419,614 | ' | ' |
Total financing proceeds | ' | ' | ' | ' | ' | 24,000,000 | 150,000,000 | ' | ' | ' | ' | ' | ' |
Proceeds from sale of paper manufacturing equipment to leasing company | ' | ' | 24,148,756 | ' | ' | ' | 150,000,000 | ' | ' | ' | ' | ' | ' |
Term of lease | ' | ' | ' | ' | ' | '3 years | '3 years | ' | ' | ' | ' | ' | ' |
Nominal purchase price | ' | ' | ' | ' | ' | 2,400 | 15,000 | ' | ' | ' | ' | ' | ' |
Deferred gain on sale of leased equipment | 698,896 | ' | 698,896 | ' | ' | 758,257 | ' | ' | ' | ' | ' | ' | ' |
Capital lease equipment | 25,878,515 | ' | 25,878,515 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation of capital lease equipment | ' | ' | ' | ' | ' | ' | ' | 396,736 | 396,736 | ' | ' | ' | ' |
Accumulated depreciation of lease asset | ' | ' | ' | ' | ' | ' | ' | 401,396 | 401,396 | ' | ' | ' | ' |
Gain on sale leaseback realized transaction | ' | ' | 62,798 | ' | ' | ' | ' | 62,978 | 62,978 | ' | ' | ' | ' |
Unamortized deferred gain | ' | ' | ' | ' | ' | ' | ' | ' | 698,896 | ' | ' | ' | ' |
Amount of interest capitalized | 113,941 | ' | 152,036 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets held for sale | 4,116,497 | ' | 4,116,497 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of building sold | 3 | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assest pledged for the guarantee of Orient Paper HB's capital lease | 36,667,728 | ' | 36,667,728 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Production capacity of manufacturing equipment PM8 (per year) | ' | ' | 15,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of Long term loan of third party (paid off on June 3, 2013) | ' | ' | ' | ' | 7,419,614 | ' | ' | ' | ' | ' | ' | ' | ' |
Value of land use right pledged for sale-leaseback financing | 7,508,189 | ' | 7,508,189 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization | $2,059,270 | $2,171,851 | $5,980,720 | $6,222,600 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans_Payable_Details
Loans Payable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of short-term bank loans | ' | ' |
Short-term bank loans | $6,515,295 | $3,962,844 |
Industrial & Commercial Bank of China (a) [Member] | Factoring Facility [Member] | ' | ' |
Schedule of short-term bank loans | ' | ' |
Short-term bank loans | ' | 792,568 |
Industrial & Commercial Bank of China (b) [Member] | Factoring Facility [Member] | ' | ' |
Schedule of short-term bank loans | ' | ' |
Short-term bank loans | 1,628,824 | 1,585,138 |
Industrial & Commercial Bank of China (d) [Member] | Factoring Facility [Member] | ' | ' |
Schedule of short-term bank loans | ' | ' |
Short-term bank loans | 814,412 | ' |
Industrial & Commercial Bank of China (e) [Member] | Factoring Facility [Member] | ' | ' |
Schedule of short-term bank loans | ' | ' |
Short-term bank loans | 4,072,059 | ' |
Bank of Hebei (c) [Member] | ' | ' |
Schedule of short-term bank loans | ' | ' |
Short-term bank loans | ' | $1,585,138 |
Loans_Payable_Details_1
Loans Payable (Details 1) (USD $) | Sep. 30, 2013 |
Schedule of future minimum capital lease payments | ' |
2014 | $9,412,972 |
2015 | 8,905,152 |
2016 | 8,398,028 |
Capital Leases, Future Payments | $26,716,152 |
Loans_Payable_Details_Textual
Loans Payable (Details Textual) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||||||||||||||||||||||||
Jul. 15, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 02, 2013 | Sep. 02, 2013 | Sep. 02, 2013 | Sep. 30, 2013 | Sep. 06, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Jun. 16, 2013 | Jun. 16, 2013 | Sep. 30, 2013 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Rural Credit Union of Xushui County [Member] | Rural Credit Union of Xushui County [Member] | Term Loan [Member] | Term Loan [Member] | New term loan agreement [Member] | New term loan agreement [Member] | Industrial & Commercial Bank of China [Member] | Industrial & Commercial Bank of China [Member] | Industrial & Commercial Bank of China [Member] | Industrial & Commercial Bank of China [Member] | Industrial & Commercial Bank of China [Member] | Industrial & Commercial Bank of China [Member] | Industrial & Commercial Bank of China (b) [Member] | Industrial & Commercial Bank of China (b) [Member] | Industrial & Commercial Bank of China (d) [Member] | Industrial & Commercial Bank of China (d) [Member] | Industrial & Commercial Bank of China (e) [Member] | Industrial & Commercial Bank of China (e) [Member] | Bank of Hebei (c) [Member] | Bank of Hebei (c) [Member] | China National Foreign Trade Financial & Leasing Co. [Member] | China National Foreign Trade Financial & Leasing Co. [Member] | China National Foreign Trade Financial & Leasing Co. [Member] | ||
USD ($) | USD ($) | Rural Credit Union of Xushui County [Member] | Rural Credit Union of Xushui County [Member] | Rural Credit Union of Xushui County [Member] | Rural Credit Union of Xushui County [Member] | USD ($) | June 15, 2014 [Member] | August 15, 2014 [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | Factoring Facility [Member] | USD ($) | USD ($) | Lease financing agreement [Member] | Lease financing agreement [Member] | Collateral Agreement [Member] | |||||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | CNY | USD ($) | ||||||||||||
sqm | |||||||||||||||||||||||||||||
Loans Payable (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum credit limit of short term loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $814,412 | $792,568 | $1,628,824 | $1,585,138 | ' | ' | ' | ' | ' | $1,585,138 | ' | ' | ' |
Unpaid balance of short term debt | ' | 6,515,295 | ' | 6,515,295 | ' | 3,962,844 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 792,568 | 1,628,824 | 1,585,138 | 814,412 | ' | 4,072,059 | ' | ' | 1,585,138 | ' | ' | ' |
Short-term bank loans, fixed interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.90% | ' | ' | ' | 6.60% | 6.60% | 6.60% | ' | ' | ' | ' | ' | ' | 6.60% | ' | ' | ' |
Short-term bank loans interest rate as percentage of prime rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 115.00% | ' | ' | ' | 110.00% | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Secured short-term bank loan | ' | 6,515,295 | ' | 6,515,295 | ' | 2,377,706 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unsecured short term loan | ' | ' | ' | ' | ' | 1,585,138 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes payable | ' | ' | ' | ' | ' | 3,170,276 | ' | ' | ' | ' | ' | ' | ' | 814,412 | 3,257,647 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,585,138 | ' | ' | ' |
Working capital loan drawn from banking facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,072,059 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,585,138 | ' | ' | ' |
Accounts receivable | ' | 2,476,418 | ' | 2,476,418 | ' | 2,836,335 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average short-term borrowing rates | ' | 6.65% | 8.46% | 6.62% | 8.28% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan from credit union | ' | 4,251,230 | ' | 4,251,230 | ' | 1,561,361 | 5,888,198 | 5,730,273 | 1,604,391 | 1,561,361 | 4,283,807 | 4,168,912 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt, Interest rate per month | ' | ' | ' | ' | ' | ' | ' | ' | 0.72% | ' | 0.72% | 0.72% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Security loan agreement by manufacturing equipment | ' | 22,439,622 | ' | 22,439,622 | ' | ' | ' | ' | ' | ' | ' | 9,316,645 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current portion of long-term loan from credit union | ' | 1,636,968 | ' | 1,636,968 | ' | 4,168,912 | ' | ' | 1,604,391 | ' | 32,577 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense for the short-term bank loans and long-term loans | ' | 207,807 | 185,495 | 592,184 | 543,468 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total financing proceeds | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,000,000 | 150,000,000 | ' |
Proceeds from sale of paper manufacturing equipment to leasing company | ' | ' | ' | 24,148,756 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Nominal purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,400 | 15,000 | ' |
Lease service charge | ' | ' | ' | 'Equal to 5.55% of the amount financed. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Implicit interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.15% | 6.15% | ' |
Stated capital lease | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,750,170 | ' | ' |
Long-term obligations under capital lease | ' | 16,322,070 | ' | 16,322,070 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current obligations under capital lease | ' | 8,245,818 | ' | 8,245,818 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred gain on sale of leased equipment | ' | 698,896 | ' | 698,896 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net values of pledged for sale-leaseback financing | ' | 25,878,515 | ' | 25,878,515 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assest pledged for the guarantee of Orient Paper HB's capital lease | ' | 36,667,728 | ' | 36,667,728 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of land use right pledged for sale-leaseback financing | ' | 7,508,189 | ' | 7,508,189 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,508,189 |
Land collateral forcapital lease | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 58,566 |
Loan extension period | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Installment repayment description | 'Between December 21, 2013 and July 26, 2018. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total interest expenses for the sale-leaseback arrangement | ' | $114,041 | ' | $174,495 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||||
Aug. 07, 2013 | Aug. 09, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 02, 2013 | Nov. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Aug. 31, 2009 | Aug. 31, 2009 | Sep. 30, 2013 | |
Apartment | Dormitory | Hebei Fangsheng [Member] | Hebei Fangsheng [Member] | Mr. Zhenyong Liu [Member] | Mr. Zhenyong Liu [Member] | Mr. Zhenyong Liu [Member] | Mr. Zhenyong Liu [Member] | Mr. Zhenyong Liu [Member] | |||||
Orient Paper [Member] | Orient Paper HB [Member] | Orient Paper HB [Member] | |||||||||||
Related Party Transactions (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,000,000 | ' |
Restricted stock award, shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,204,347 | ' | ' |
Restricted stock award, Price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3.32 | ' | ' |
Loans payable to related parties | ' | ' | ' | ' | ' | ' | ' | ' | 2,379,046 | 2,315,239 | ' | ' | ' |
Proceeds from shareholder loan | ' | ' | 174,121 | ' | 953,507 | 890,000 | ' | ' | ' | ' | ' | ' | ' |
Interest rate on loans | ' | ' | ' | ' | ' | ' | ' | ' | 5.85% | ' | ' | ' | 6.15% |
Term of facility and loan payable | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | '3 years |
Loan from related parties, due date | ' | ' | ' | ' | ' | ' | 15-Aug-14 | ' | 31-Dec-12 | ' | ' | ' | ' |
Extended maturity date of loans from related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31-Dec-15 |
Proceeds earnest money deposit payment from related party | ' | ' | ' | ' | ' | ' | ' | 1,075,606 | ' | ' | ' | ' | ' |
Rental payment | 162,882 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Industrial building lease term | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of aparatments sold to qualified employees | 132 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount generated from the sale of Headquarters compound, Industrial building and Dormitories | ' | ' | ' | ' | 84,737 | ' | 4,072,059 | ' | ' | ' | ' | ' | ' |
Gross profit from sale of assets | ' | 4,116,497 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale price of industrial land use rights | 2,790,000 | ' | ' | ' | 2,790,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of valuation of land use rights higher than previous appraisal | ' | ' | ' | ' | 3.35% | ' | ' | ' | ' | ' | ' | ' | ' |
Sale price of industrial building | 1,150,000 | ' | ' | ' | 1,150,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Value of building | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of dormitory buildings | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' |
Original cost of construction of three dormitory buildings | 4,290,000 | ' | ' | ' | 4,290,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Valuation of three dormitory buildings done by valuer | ' | ' | ' | ' | 4,630,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Loan from related parties, interest expense | ' | ' | $36,478 | $33,768 | $108,460 | $101,430 | ' | ' | ' | ' | ' | ' | ' |
Notes_Payable_Details
Notes Payable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Notes payable (Textual) | ' | ' |
Notes payable | ' | $3,170,276 |
Restricted cash | ' | 1,585,138 |
Bank of Hebei (c) [Member] | ' | ' |
Notes payable (Textual) | ' | ' |
Number of bank acceptance notes | ' | 6 |
Working capital loan drawn from banking facility | ' | 1,585,138 |
Notes payable | ' | 3,170,276 |
Restricted cash | ' | $1,585,138 |
Handling charges of bank acceptance notes percentage | ' | 5.00% |
Other_Payables_and_Accrued_Lia2
Other Payables and Accrued Liabilities (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Summary of other payables and accrued liabilities | ' | ' |
Accrued electricity | $207,103 | $232,763 |
Accrued professional fees | 150,000 | 143,597 |
Value-added tax payable | 529,801 | ' |
Accrued interest | 769,157 | 656,623 |
Payable for purchase of equipment | ' | 152,173 |
Insurance premium payable | 124,079 | 56,773 |
Others | 131,646 | 20,355 |
Totals | $1,911,786 | $1,262,284 |
Common_Stock_Details
Common Stock (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | ||||
Apr. 04, 2013 | Dec. 06, 2012 | Sep. 04, 2012 | Jun. 01, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Jan. 12, 2012 | Aug. 28, 2011 | |
Director | 2011 Incentive Stock Plan [Member] | 2011 Incentive Stock Plan [Member] | ||||||
Common Stock (Textual) | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued under incentive stock plan | ' | ' | ' | ' | ' | ' | 109,584 | ' |
Share price | ' | ' | ' | ' | ' | ' | $3.45 | ' |
Number of shares authorized for issuance under stock incentive plan | ' | ' | ' | ' | ' | ' | ' | 375,000 |
Total fair value of stock | ' | ' | ' | ' | ' | ' | $378,065 | ' |
Common stock cancelled previously issued to directors | 2,875 | ' | ' | ' | ' | ' | ' | ' |
Number of directors whose shares are cancelled | 2 | ' | ' | ' | ' | ' | ' | ' |
Quarterly cash dividend approved | $0.01 | $0.01 | $0.01 | $0.01 | ' | ' | ' | ' |
Reversal of capital accounts and compensation expenses | ' | ' | ' | ' | $0 | $16,158 | ' | ' |
Earnings_per_Share_Details
Earnings per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Basic income per share | ' | ' | ' | ' |
Net income for the period - numerator | $5,534,844 | $4,379,071 | $9,494,035 | $12,671,552 |
Weighted average common stock outstanding - denominator | 18,456,900 | 18,459,775 | 18,457,879 | 18,455,776 |
Net income per share | $0.30 | $0.24 | $0.51 | $0.69 |
Diluted income per share | ' | ' | ' | ' |
Net income for the period - numerator | $5,534,844 | $4,379,071 | $9,494,035 | $12,671,552 |
Weighted average common stock outstanding - denominator | 18,456,900 | 18,459,775 | 18,457,879 | 18,455,776 |
Effect of dilution | ' | ' | ' | ' |
Weighted average common stock outstanding - denominator | 18,456,900 | 18,459,775 | 18,457,879 | 18,455,776 |
Diluted income per share | $0.30 | $0.24 | $0.51 | $0.69 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Provision for Income Taxes | ' | ' | ' | ' |
Current Tax Provision - PRC | $1,808,503 | $1,955,264 | $3,276,466 | $5,055,892 |
Deferred Tax Provision - PRC | 170,600 | -385,166 | 274,427 | -385,166 |
Total Provision for Income Taxes | $1,979,103 | $1,570,098 | $3,550,893 | $4,670,726 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jun. 01, 2012 | Sep. 30, 2013 | |
PRC [Member] | PRC [Member] | ||||||
Income Taxes (Textual) | ' | ' | ' | ' | ' | ' | ' |
Statutory tax rate | ' | ' | 34.00% | ' | ' | ' | 25.00% |
State tax rate | ' | ' | 0.00% | ' | ' | ' | ' |
Effective income tax rate | 26.30% | 26.40% | 26.90% | 27.20% | ' | ' | ' |
First record date of dividend | ' | ' | ' | ' | ' | 15-Jun-12 | ' |
Quarterly cash dividend declared by Board of Directors | ' | ' | ' | ' | ' | $0.01 | ' |
Expected aggregate cash dividends payable for four quarters | $922,989 | ' | $922,989 | ' | ' | ' | ' |
Ordinary tax deductions and accumulated Net Operating Losses (NOLs) | ' | ' | ' | ' | $4,526,391 | ' | ' |
Income tax, statute of limitations period | ' | ' | '5 years | ' | ' | ' | ' |
Stock_Incentive_Plan_Details
Stock Incentive Plan (Details) | 0 Months Ended | ||
Jan. 12, 2012 | Aug. 28, 2011 | Sep. 10, 2012 | |
2011 Incentive Stock Plan [Member] | 2011 Incentive Stock Plan [Member] | 2012 incentive stock plan [Member] | |
Stock Incentive Plans (Textual) | ' | ' | ' |
Number of shares authorized for issuance under stock incentive plan | ' | 375,000 | 200,000 |
Shares issued under incentive stock plan | 109,584 | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Sep. 30, 2013 |
Schedule of future minimum lease payments | ' |
2014 | $768,805 |
2015 | 768,805 |
2016 | 741,658 |
2017 | 605,922 |
2018 | 605,922 |
Thereafter | 5,531,485 |
Total operating lease payments | $9,022,597 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Nov. 27, 2012 | Nov. 27, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Minimum [Member] | Maximum [Member] | Land use rights [Member] | Land use rights [Member] | Local government, Xushui County [Member] | Local government, Xushui County [Member] | Investment Company [Member] | Investment Company [Member] | Hebei Fangsheng [Member] | Hebei Fangsheng [Member] | |
USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | ||||||||
acre | acre | ||||||||||||||
Commitments and Contingencies (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Area of land leased | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32.95 | 32.95 | 49.4 | 49.4 | ' | ' |
Lease expiration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 years | '30 years | '15 years | '15 years | '3 years | '3 years |
Lease expiration date | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31-Dec-31 | 31-Dec-31 | ' | ' | ' | ' |
Operating lease annual rental payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | $19,546 | 120,000 | $586,377 | 3,600,000 | $162,882 | 1,000,000 |
Operating lease renewable term | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Orient Paper leases 32.95 acres of land from a local government in Xushui County, Baoding City, Hebei, China through a real estate lease with a 30-year term | 'Orient Paper leases 32.95 acres of land from a local government in Xushui County, Baoding City, Hebei, China through a real estate lease with a 30-year term | ' | ' | ' | ' |
Land use right pledged for long term loan | 22,439,622 | ' | 22,439,622 | ' | 9,316,645 | ' | ' | ' | 7,419,614 | ' | ' | ' | ' | ' | ' |
Performance holdback on new tissue paper, percentage | ' | ' | ' | ' | ' | 5.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Rental expenses | 177,898 | 4,742 | 475,999 | 14,245 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding commitments for construction of equipment and facilities | 37,518,080 | ' | 37,518,080 | ' | 5,243,636 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Performance holdback on new tissue paper payment, description | ' | ' | 'Exception of a 5%-10% performance holdback (approximately $6,076,490) on the construction of equipment and facilities is payable in 2014 and 2015, the Company expected to pay off all the balances by the end of year 2014. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Performance holdback on new tissue paper, value | ' | ' | 6,076,490 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of Long term loan of third party (paid off on June 3, 2013) | ' | ' | ' | ' | 7,419,614 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cross guarantee for long term loan of third party | ' | ' | ' | ' | $1,585,138 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long term loan of third party expiration date | ' | ' | ' | ' | 3-Jun-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Summarized financial information for reportable segments | ' | ' | ' | ' | ' |
Revenues | $37,686,114 | $37,651,354 | $90,471,282 | $107,582,025 | ' |
Gross Profit | 8,435,814 | 6,820,053 | 16,164,446 | 20,358,889 | ' |
Depreciation and amortization | 2,059,270 | 2,171,851 | 5,980,720 | 6,222,600 | ' |
Interest income | 24,159 | 7,014 | 78,948 | 17,724 | ' |
Interest expense | 244,385 | 219,263 | 723,103 | 644,898 | ' |
Income tax expense | 1,979,103 | 1,570,098 | 3,550,893 | 4,670,726 | ' |
Net Income (Loss) | 5,534,844 | 4,379,071 | 9,494,035 | 12,671,552 | ' |
Total Assets | 201,007,441 | ' | 201,007,441 | ' | 162,846,324 |
Orient Paper HB [Member] | ' | ' | ' | ' | ' |
Summarized financial information for reportable segments | ' | ' | ' | ' | ' |
Revenues | 36,097,505 | 35,795,860 | 86,982,167 | 102,277,317 | ' |
Gross Profit | 8,029,435 | 6,359,616 | 15,536,788 | 19,013,163 | ' |
Depreciation and amortization | 1,364,219 | 1,495,447 | 3,914,115 | 5,072,530 | ' |
Interest income | 22,871 | 6,434 | 76,599 | 13,898 | ' |
Interest expense | 242,740 | 216,065 | 719,593 | 641,700 | ' |
Income tax expense | 1,879,452 | 1,461,159 | 3,397,122 | 4,356,289 | ' |
Net Income (Loss) | 5,649,511 | 4,385,536 | 10,247,650 | 12,747,873 | ' |
Total Assets | 157,419,273 | ' | 157,419,273 | ' | 119,707,195 |
Orient Paper Shengde [Member] | ' | ' | ' | ' | ' |
Summarized financial information for reportable segments | ' | ' | ' | ' | ' |
Revenues | 1,588,609 | 1,855,494 | 3,489,115 | 5,304,708 | ' |
Gross Profit | 406,379 | 460,437 | 627,658 | 1,345,726 | ' |
Depreciation and amortization | 695,051 | 676,404 | 2,066,605 | 1,150,070 | ' |
Interest income | 1,265 | 557 | 2,300 | 3,748 | ' |
Interest expense | ' | ' | ' | ' | ' |
Income tax expense | 99,651 | 108,939 | 153,771 | 314,437 | ' |
Net Income (Loss) | 270,450 | 301,474 | 371,382 | 914,059 | ' |
Total Assets | 43,411,503 | ' | 43,411,503 | ' | 43,076,428 |
Not Attributable to Segments [Member] | ' | ' | ' | ' | ' |
Summarized financial information for reportable segments | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' |
Gross Profit | ' | ' | ' | ' | ' |
Depreciation and amortization | ' | ' | ' | ' | ' |
Interest income | 23 | 23 | 49 | 78 | ' |
Interest expense | 1,645 | 3,198 | 3,510 | 3,198 | ' |
Income tax expense | ' | ' | ' | ' | ' |
Net Income (Loss) | -385,117 | -326,937 | -1,124,997 | -1,001,459 | ' |
Total Assets | 176,665 | ' | 176,665 | ' | 62,701 |
Elimination of Inter-segment [Member] | ' | ' | ' | ' | ' |
Summarized financial information for reportable segments | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' |
Gross Profit | ' | ' | ' | ' | ' |
Depreciation and amortization | ' | ' | ' | ' | ' |
Interest income | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' |
Income tax expense | ' | ' | ' | ' | ' |
Net Income (Loss) | ' | 18,998 | ' | 11,079 | ' |
Total Assets | ' | ' | ' | ' | ' |
Segment_Reporting_Details_Text
Segment Reporting (Details Textual) | 9 Months Ended |
Sep. 30, 2013 | |
Segments | |
Segment Reporting (Textual) | ' |
Number of business operating segments | 2 |
Number of reportable segment | 2 |
Concentration_of_Major_Custome1
Concentration of Major Customers and Suppliers (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Supplier | Supplier | Supplier | Supplier | |
Concentration and major customers and suppliers (Textual) | ' | ' | ' | ' |
Number of major suppliers | 2 | 2 | 2 | 2 |
Number of customer contributed over 10% of total sales | ' | ' | ' | ' |
Supplier A [Member] | ' | ' | ' | ' |
Concentration and major customers and suppliers (Textual) | ' | ' | ' | ' |
Percentage of revenue from Orient Paper HB | 77.00% | 76.00% | 75.00% | 76.00% |
Supplier B [Member] | ' | ' | ' | ' |
Concentration and major customers and suppliers (Textual) | ' | ' | ' | ' |
Percentage of revenue from Orient Paper HB | 8.00% | 8.00% | 10.00% | 7.00% |