Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 16, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Orient Paper Inc. | ||
Entity Central Index Key | 1,358,190 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 21,668,049 | ||
Entity Common Stock, Shares Outstanding | 21,450,316 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 2,641,917 | $ 3,891,473 |
Restricted cash | 10,779,845 | 8,873,999 |
Accounts receivable (net of allowance for doubtful accounts of $38,865 and $76,125 as of December 31, 2015 and 2014, respectively) | 1,904,396 | 3,730,123 |
Inventories | 9,205,420 | 7,139,599 |
Prepayments and other current assets | 1,812,415 | 2,919,668 |
Total current assets | 26,343,993 | 26,554,862 |
Prepayment on property, plant and equipment | 1,404,460 | 1,490,440 |
Property, plant, and equipment, net | 206,191,158 | 208,213,198 |
Recoverable VAT | 3,266,454 | 3,228,075 |
Deferred tax asset - non-current | 1,420,854 | 281,010 |
Total Assets | 238,626,919 | 239,767,585 |
Current Liabilities | ||
Short-term bank loans | $ 13,859,800 | 9,805,524 |
Current portion of long-term loans from credit union | 147,083 | |
Current portion of long-term loans from a related party | (2,386,978) | |
Current obligations under capital lease | $ 6,860,412 | $ 12,258,488 |
Accounts payable | 253,425 | |
Notes payable | 13,859,800 | $ 16,113,744 |
Due to a related party | 368,751 | 227,900 |
Accrued payroll and employee benefits | 531,912 | 492,765 |
Other payables and accrued liabilities | 3,902,971 | 2,400,523 |
Income taxes payable | 600,876 | 637,143 |
Total current liabilities | 40,237,947 | 44,470,148 |
Loans from credit union | 5,174,325 | 5,760,745 |
Loans from a related party | 13,859,800 | 9,805,524 |
Deferred gain on sale-leaseback | 327,637 | 695,389 |
Long-term obligations under capital lease | 3,217,785 | 4,090,413 |
Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $62,775,049 and $64,789,076 as of December 31, 2015 and 2014, respectively) | $ 62,817,494 | $ 64,822,219 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Common stock, 500,000,000 shares authorized, $0.001 par value per share, 20,316,400 shares issued and outstanding as of December 31, 2015 and 2014 | $ 20,316 | $ 20,316 |
Additional paid-in capital | 49,218,982 | 49,218,982 |
Statutory earnings reserve | 6,080,574 | 6,080,574 |
Accumulated other comprehensive income | 6,343,019 | 17,021,165 |
Retained earnings | 114,146,534 | 102,604,329 |
Total stockholders' equity | 175,809,425 | 174,945,366 |
Total Liabilities and Stockholders' Equity | $ 238,626,919 | $ 239,767,585 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 38,865 | $ 76,125 |
Consolidated VIE, liabilities | $ 62,775,049 | $ 64,789,076 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 20,316,400 | 20,316,400 |
Common stock, shares outstanding | 20,316,400 | 20,316,400 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statements Of Income and Comprehensive Income [Abstract] | |||
Revenues | $ 135,303,173 | $ 137,041,447 | $ 125,717,630 |
Cost of Sales | (107,442,568) | (114,263,299) | (102,392,031) |
Gross Profit | 27,860,605 | 22,778,148 | 23,325,599 |
Selling, general and administrative expenses | $ (9,663,835) | (4,859,215) | $ (4,567,079) |
Gain from disposal of assets held for sale | 203,620 | ||
(Loss) Gain from disposal of property, plant and equipment | (709,647) | $ 84,972 | |
Income from Operations | $ 18,196,770 | 17,412,906 | 18,843,492 |
Other Income (Expense): | |||
Interest income | 70,319 | 149,783 | 90,260 |
Subsidy from government | 555,605 | 22,614 | 171,125 |
Interest expense | (3,157,524) | (1,446,439) | (995,694) |
Income before Income Taxes | 15,665,170 | 16,138,864 | 18,109,183 |
Provision for Income Taxes | (4,122,965) | (4,432,504) | (5,094,535) |
Net Income | 11,542,205 | 11,706,360 | 13,014,648 |
Other Comprehensive Income: | |||
Foreign currency translation adjustment | (10,678,146) | (125,143) | 4,818,869 |
Total Comprehensive Income | $ 864,059 | $ 11,581,217 | $ 17,833,517 |
Earnings Per Share: | |||
Basic Earnings per Share | $ 0.57 | $ 0.61 | $ 0.71 |
Fully Diluted Earnings per Share | $ 0.57 | $ 0.61 | $ 0.71 |
Weighted Average Number of Shares | |||
Outstanding - Basic | 20,316,400 | 19,270,394 | 18,458,446 |
Outstanding - Fully Diluted | 20,316,400 | 19,270,394 | 18,458,446 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Statutory Earnings Reserve | Accumulated Other Comprehensive Income | Retained Earnings |
Balance at Dec. 31, 2012 | $ 142,768,801 | $ 18,460 | $ 46,135,975 | $ 5,963,960 | $ 12,327,439 | $ 78,322,967 |
Balance, Shares at Dec. 31, 2012 | 18,459,775 | |||||
Issuance of shares to officer and directors | 790,020 | $ 297 | $ 789,723 | |||
Issuance of shares to officer and directors, Shares | 297,000 | |||||
Foreign currency translation adjustment | $ 4,818,869 | $ 4,818,869 | ||||
Transfer to statutory earnings reserve | $ 74,446 | $ (74,446) | ||||
Cancellation of certain 2011 director shares | $ (16,158) | $ (3) | $ (16,155) | |||
Cancellation of certain 2011 director shares, Shares | (2,875) | |||||
Cash dividend paid | (323,032) | $ (323,032) | ||||
Net income | 13,014,648 | 13,014,648 | ||||
Balance at Dec. 31, 2013 | 161,053,148 | $ 18,754 | $ 46,909,543 | $ 6,038,406 | $ 17,146,308 | $ 90,940,137 |
Balance, Shares at Dec. 31, 2013 | 18,753,900 | |||||
Issuance of shares | 1,495,810 | $ 1,562 | 1,494,248 | |||
Issuance of shares, Shares | 1,562,500 | |||||
Issuance of warrants | 815,191 | $ 815,191 | ||||
Foreign currency translation adjustment | $ (125,143) | $ (125,143) | ||||
Transfer to statutory earnings reserve | $ 42,168 | $ (42,168) | ||||
Net income | $ 11,706,360 | 11,706,360 | ||||
Balance at Dec. 31, 2014 | 174,945,366 | $ 20,316 | $ 49,218,982 | $ 6,080,574 | $ 17,021,165 | $ 102,604,329 |
Balance, Shares at Dec. 31, 2014 | 20,316,400 | |||||
Foreign currency translation adjustment | (10,678,146) | $ (10,678,146) | ||||
Net income | 11,542,205 | $ 11,542,205 | ||||
Balance at Dec. 31, 2015 | $ 175,809,425 | $ 20,316 | $ 49,218,982 | $ 6,080,574 | $ 6,343,019 | $ 114,146,534 |
Balance, Shares at Dec. 31, 2015 | 20,316,400 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities: | |||
Net income | $ 11,542,205 | $ 11,706,360 | $ 13,014,648 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | $ 13,398,990 | 8,289,320 | 7,794,743 |
Loss(Gain) from impairment and disposal of property, plant and equipment | 709,647 | $ (84,972) | |
Gain from disposal of assets held for sale | (203,620) | ||
(Recovery from)/ Allowance for bad debts | $ (34,204) | $ 8,571 | $ 7,990 |
Stock-based expense for service received | 773,862 | ||
Deferred tax | $ (1,203,019) | $ 398,385 | 409,665 |
Changes in operating assets and liabilities: | |||
Accounts and notes receivable | 1,710,176 | (413,159) | (402,709) |
Prepayments and other current assets | 744,454 | (1,799,514) | 1,211,679 |
Inventories | (2,578,342) | 4,257,805 | 4,105,876 |
Accounts payable | 263,720 | (921,580) | (117,308) |
Notes payable | (1,378,183) | 11,163,003 | 1,614,387 |
Accrued payroll and employee benefits | 70,319 | (4,950) | 194,795 |
Other payables and accrued liabilities | (1,332,039) | (299,932) | 1,599,375 |
Income taxes payable | 508 | (577,163) | (200,090) |
Net Cash Provided by Operating Activities | 21,204,585 | 32,313,173 | 29,921,941 |
Cash Flows from Investing Activities: | |||
Purchases of property, plant and equipment | $ (19,331,000) | (39,207,768) | (64,566,785) |
Proceeds from sale of assets held for sale | 2,684,703 | 1,614,387 | |
Proceeds from disposal of property, plant and equipment | 241,714 | 2,589,919 | |
Net Cash Used in Investing Activities | $ (19,331,000) | (36,281,351) | $ (60,362,479) |
Cash Flows from Financing Activities: | |||
Proceeds from issuing of common stock | 2,311,002 | ||
Proceeds from related party loans | $ 5,197,615 | 10,557,060 | $ 1,390,802 |
Repayment of related party loans | (2,730,654) | (793,500) | (1,390,802) |
Proceeds from bank loans | $ 14,422,846 | $ 11,366,410 | 10,703,389 |
Proceeds from sale-leaseback financing | 24,215,811 | ||
Repayments of bank loans | $ (10,023,878) | $ (8,111,890) | (8,281,807) |
Payment of capital lease obligation | (7,148,142) | (4,199,689) | (5,406,481) |
Restricted cash | $ (2,515,986) | $ (6,395,131) | (807,194) |
Dividend Paid | (323,032) | ||
Net Cash (Used in)/ Provided by Financing Activities | $ (2,798,199) | $ 4,734,262 | 20,100,686 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (324,942) | (5,774) | 330,727 |
Net Increase/ (Decrease) in Cash and Cash Equivalents | (1,249,556) | 760,310 | (10,009,125) |
Cash and Cash Equivalents - Beginning of Period | 3,891,473 | 3,131,163 | 13,140,288 |
Cash and Cash Equivalents - End of Period | 2,641,917 | 3,891,473 | 3,131,163 |
Supplemental Disclosure of Cash Flow Information: | |||
Cash paid for interest, net of capitalized interest cost | 3,255,478 | 1,826,460 | 708,089 |
Cash paid for income taxes | $ 5,325,477 | $ 4,611,282 | $ 4,884,961 |
Organization and Business Backg
Organization and Business Background | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Business Background [Abstract] | |
Organization and Business Background | (1) Organization and Business Background Orient Paper, Inc. was incorporated in the State of Nevada on December 9, 2005, under the name “Carlateral, Inc.” Through the steps described immediately below, we became the holding company for Hebei Baoding Orient Paper Milling Company Limited (“Orient Paper HB”), a producer and distributor of paper products in China, on October 29, 2007, and effective December 21, 2007, we changed our name to “Orient Paper, Inc.” to more accurately describe our business. On October 29, 2007, pursuant to an agreement and plan of merger (the “Merger Agreement”), the Company acquired Dongfang Zhiye Holding Limited (“Dongfang Holding”), a corporation formed on November 13, 2006 under the laws of the British Virgin Islands, and issued the shareholders of Dongfang Holding an aggregate of 7,450,497 (as adjusted for a four-for-one reverse stock split effected in November 2009) shares of our common stock, which shares were distributed pro-rata to the shareholders of Dongfang Holding in accordance with their respective ownership interests in Dongfang Holding. At the time of the Merger Agreement, Dongfang Holding owned all of the issued and outstanding stock and ownership of Orient Paper HB and such shares of Orient Paper HB were held in trust with Zhenyong Liu, Xiaodong Liu and Shuangxi Zhao, for Mr. Liu, Mr. Liu and Mr. Zhao (the original shareholders of Orient Paper HB) to 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 shares. As a result of the merger transaction, Dongfang Holding became a wholly owned subsidiary of the Company, and Dongfang Holding’s wholly owned subsidiary, Orient Paper HB, became an indirectly owned subsidiary of the Company. Dongfang Holding, as the 100% owner of Orient Paper HB, was unable to complete the registration of Orient Paper HB’s capital under its name within the proper time limits set forth under PRC law. In connection with the consummation of the restructuring transactions described below, Dongfang Holding directed the trustees to return the shares of Orient Paper HB to their original shareholders, and the original Orient Paper HB shareholders entered into certain agreements with Baoding Shengde Paper Co., Ltd. (“Orient Paper Shengde”) to transfer the control of Orient Paper HB over to Orient Paper Shengde. On June 24, 2009, the Company consummated a number of restructuring transactions pursuant to which it acquired all of the issued and outstanding shares of Shengde Holdings Inc, a Nevada corporation. Shengde Holdings Inc was incorporated in the State of Nevada on February 25, 2009. On June 1, 2009, Shengde Holdings Inc incorporated Orient Paper Shengde, a limited liability company organized under the laws of the PRC. Because Orient Paper Shengde is a wholly-owned subsidiary of Shengde Holdings Inc, it is regarded as a wholly foreign-owned entity under PRC law. 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 years ended December 31, 2015, 2014 and 2013 were 99.72%, 96.48% and 96.05%, respectively. Orient Paper HB also accounted for 85.96% and 84.05% of the total assets of the Company as at December 31, 2015 and 2014 respectively. As of December 31, 2015 and 2014, details of the Company’s subsidiaries and variable interest entity are as follows: Place of Date of Incorporation Incorporation or Percentage of Name or Establishment Establishment Ownership Principal Activity Subsidiary: Dongfang Holding November 13, 2006 BVI 100 % Inactive investment holding Shengde Holdings February 25, 2009 State of Nevada 100 % Investment holding Orient Paper Shengde June 1, 2009 PRC 100 % Paper Production and distribution Variable interest entity: Orient Paper HB March 10, 1996 PRC Control* Paper Production and distribution * Orient Paper HB is treated as a 100% controlled variable interest entity of the Company However, uncertainties in the PRC legal system could cause the Company’s current ownership structure to be found in violation of any existing and/or future PRC laws or regulations and could limit the Company’s ability, through the Primary Beneficiaries, to enforce its rights under these contractual arrangements. Furthermore, shareholders of the VIE may have interests that are different with those of the Company, which could potentially increase the risk that they would seek to act in contrary to the terms of the aforementioned agreements. In addition, if the current structure or any of the contractual arrangements were found to be in violation of any existing or future PRC law, the Company may be subject to penalties, which may include but not be limited to, the cancellation or revocation of the Company’s business and operating licenses, being required to restructure the Company’s operations or discontinue the Company’s operating activities. The imposition of any of these or other penalties may result in a material and adverse effect on the Company’s ability to conduct its operations. In such case, the Company may not be able to operate or control the VIE, which may result in deconsolidation of the VIE. The Company has aggregated the financial information of Orient Paper HB in the table below. The aggregate carrying value of Orient Paper HB’s assets and liabilities (after elimination of intercompany transactions and balances) in the Company’s consolidated balance sheets as of December 31, 2015 and 2014 are as follows: December 31, 2015 2014 ASSETS Current Assets Cash and cash equivalents $ 2,363,525 $ 3,288,654 Restricted cash 10,779,845 8,873,999 Accounts receivable 1,904,396 3,730,123 Inventories 8,741,974 6,941,161 Prepayments and other current assets 1,792,188 2,600,609 Total current assets 25,581,928 25,434,546 Prepayment on property, plant and equipment 1,404,460 1,490,440 Property, plant, and equipment, net 176,913,064 174,312,711 Deferred tax asset – non-current 1,217,896 281,010 Total Assets $ 205,117,348 $ 201,518,707 LIABILITIES Current Liabilities Short-term bank loans $ 13,859,800 $ 9,805,524 Current portion of long-term loans from credit union - 147,083 Current portion of long-term loans from a related party - 2,386,978 Current obligations under capital lease 6,860,412 12,258,488 Accounts payable 253,425 - Notes payable 13,859,800 16,113,744 Due to a related party 368,751 227,900 Accrued payroll and employee benefits 503,203 469,236 Other payables and accrued liabilities 3,889,235 2,390,909 Income taxes payable 600,876 637,143 Total current liabilities 40,195,502 44,437,005 Loans from credit union 5,174,325 5,760,745 Loans from a related party 13,859,800 9,805,524 Deferred gain on sale-leaseback 327,637 695,389 Long-term obligations under capital lease 3,217,785 4,090,413 Total liabilities $ 62,775,049 $ 64,789,076 No creditor (or beneficial interest holders) of the VIE have recourse to the general credit of the Primary Beneficiaries in normal. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | (2) Basis of Presentation and Significant Accounting Policies Basis of Consolidation The consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), and include the assets, liabilities, revenues, expenses and cash flows of all subsidiaries and variable interest entity. All significant inter-company balances, transactions and cash flows are eliminated on consolidation. Liquidity and Going Concern As of December 31, 2015, the Company had current assets of $26,343,993 and current liabilities of $40,237,947 (including amounts due to related parties of $920,866), resulting in a working capital deficit of approximately $13,893,954; while as of December 31, 2014, the Company had current assets of $26,554,862 and current liabilities of $44,470,148 (including amounts due to related parties of $3,376,120), resulting in a working capital deficit of approximately $17,915,286. We are currently seeking to restructure the term of our liabilities by raising funds through long-term loans to pay off liabilities with shorter terms. Our ability to continue as a going concern is dependent upon obtaining the necessary financing or negotiating the terms of the existing short-term liabilities to meet our current and future liquidity needs. On March 1, 2015, the Company entered an agreement with the Company’s Chairman and Chief Executive Officer (“CEO”) , On July 1, 2015, Orient Paper HB, Shijiazhuang Office of China Orient Asset Management Corporation (“China Orient”), the parent and assignee of the rights of CNFTFL, and other guarantors of Lease Financing Agreement, entered into an agreement (the “2015 Agreement”), to amend and restate the Lease Financing Agreement entered into in 2013. The 2015 Agreement sets forth a modified and extended payment schedule with respect to the remaining payment obligation, with principal payable on the 20th of December 2015, June 2016, December 2016 and final payment on June 21, 2017. (see Note (8) below). On July 13, 2015, the Company and Mr. Zhenyong Liu entered into an agreement to loan $4,619,933(RMB30,000,000) to the Company, with an annual interest rate based on the People’s Bank of China at of the time of receipt and was set at 5.25% per annum. (see Note (9) below). The accrued interest under this agreement owned to Mr. Zhenyong Liu was approximately $111,167, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of December 31, 2015 (see Note (11) below). On December 31, 2015, the Company paid off a loan of $2,249,279 from Mr. Zhenyong Liu due to expiry, together with the interest of $391,374 through year 2013 to 2015. (see Note (9) below). As a result, regarding to the loan, there was still approximately $440,948 of interest due to Mr. Zhenyong Liu which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of December 31, 2015 (see Note (11) below). On January 20, 2016, Mr. Zhenyong Liu agreed in writing to permit the Company to continue to postpone the repayment of the accrued interest on his loan to Orient Paper HB until the Company is able to pay its other creditors in its normal course of business. The accrued interest owned to Mr. Zhenyong Liu was approximately $552,115, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of December 31, 2015 (see Note (11) below). On January 21, 2016, Hebei Fangsheng agreed in writing to permit the Company to continue to postpone the repayment of the accrued rental charged to Orient Paper HB until the earliest date on which the Company's quarterly or annual financial statements filed with the SEC show a satisfactory working capital level. The accrued rental owned to Hebei Fangsheng was approximately $368,751 and $227,900, which was recorded in other payables and accrued liabilities as part of the current liabilities as of December 31, 2015 and 2014, respectively. (see Note (9) below). Although management believes it can secure financial resources to satisfy the Company's current liabilities and the capital expenditure needs in the next 12 months, there are no guarantees that these financial resources will be secured. Therefore, there is a substantial doubt about the ability of the Company to continue as a going concern that it may be unable to realize its assets and discharge its liabilities in the normal course of business. Our consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Foreign Currency Translation The Company accounts for foreign currency translation pursuant to ASC Topic 830, Foreign Currency Matters Under ASC Topic 830-30, all assets and liabilities are translated into United States dollars using the current exchange rate at the end of each fiscal period. The current exchange rates used by the Company as of December 31, 2015 and 2014 to translate the Chinese RMB to the U.S. Dollars are 6.49360:1, and 6.11900:1, respectively. Revenues and expenses are translated using the average exchange rates prevailing throughout the respective years at 6.24010:1, 6.14530:1 and 6.19430:1 for the years ended December 31, 2015, 2014 and 2013, respectively. Translation adjustments are included in other comprehensive income (loss). Use of Estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of December 31, 2015 and 2014, and revenues and expenses for the years ended December 31, 2015, 2014 and 2013. The most significant estimates relate to allowance for uncollectible accounts receivable, inventory valuation, useful lives and impairment for property, plant and equipment, valuation allowance for deferred tax assets and contingencies. Actual results could differ from those estimates made by management. Cash and Cash Equivalents For purposes of reporting within the statements of cash flows, Orient Paper considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents. Accounts Receivable Trade accounts receivable are recorded on shipment of products to customers. The trade receivables are all without customer collateral and interest is not accrued on past due accounts. Periodically, management reviews the adequacy of its provision for doubtful accounts based on historical bad debt expense results and current economic conditions using factors based on the aging of its accounts receivable. Additionally, the Company may identify additional allowance requirements based on indications that a specific customer may be experiencing financial difficulties. Actual bad debt results could differ materially from these estimates. As of December 31, 2015 and 2014, the balance of allowance for doubtful accounts was $38,865 and $76,125, respectively; and the movement of the provision of the doubtful accounts is as below. While management uses the best information available upon which to base estimates, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used for the purposes of analysis. December 31, Allowance of doubtful accounts 2015 2014 Opening balance $ 76,125 $ 67,592 (Reversal of provision)/ Provision for the year (34,204 ) 8,571 Exchange difference (3,056 ) (38 ) Closing balance $ 38,865 $ 76,125 Inventories Inventories consist principally of raw materials and finished goods, and are stated at the lower of cost (average cost method) or market. Cost includes labor, raw materials, and allocated overhead. No provision in inventories has been provided for the fiscal years 2015, 2014 and 2013. Property, Plant, and Equipment Property, plant, and equipment are stated at cost less accumulated depreciation and any impairment losses. Major renewals, betterments, and improvements are capitalized to the asset accounts while replacements, maintenance, and repairs, which do not improve or extend the lives of the respective assets, are expensed to operations. At the time property, plant, and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation or amortization accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to operations. Construction-in-progress is stated at cost and capitalized as expenses are incurred or as payments are made pursuant to relevant construction contracts. Contract retention is recorded as accrued liability. Construction in progress is not depreciated until project completion and the constructed property being placed in service, at which time the capitalized balance will be transferred to appropriate account of property, plant and equipment. The Company depreciates property, plant, and equipment using the straight-line method as follows: Land use right Over the lease term Building and improvements 30 years Machinery and equipment 5-15 years Vehicles 15 years Valuation of long-lived asset The Company reviews the carrying value of long-lived assets to be held and used when events and circumstances warrants such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset and intangible assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets and intangible assets to be disposed are determined in a similar manner, except that fair market values are reduced for the cost to dispose. Statutory Reserves According to the laws and regulations in the PRC, the Company is required to provide for certain statutory funds, namely, reserve fund by an appropriation from net profit after taxation but before dividend distribution based on the local statutory financial statements of the PRC subsidiary and variable interest entity prepared in accordance with the PRC accounting principles and relevant financial regulations. The Company’s wholly owned subsidiary and variable interest entity in the PRC are required to allocate at least 10% of its net profit to the reserve fund until the balance of such fund has reached 50% of its registered capital. Appropriations of additional reserve fund are determined at the discretion of its directors. The reserve fund can only be used, upon approval by the relevant authority, to offset accumulated losses or increase capital. For the years ended December 31, 2015, 2014 and 2013, Orient Paper made transfers to this reserve fund in the amounts of $nil, $42,168, and $74,446, respectively. For the years ended December 31, 2014 and 2013, all transfers to statutory reserves were made by Orient Paper Shengde. As a result of net loss in fiscal year 2015 of Orient Paper Shengde, no statutory reserves were provided for the year ended December 31, 2015. The Company’s variable interest entity Orient Paper HB, which statutory reserve account has been fully funded for 50% of its registered capital in the amount of RMB 75,030,000 (or approximately $11,811,470) as of December 31, 2010, did not make any transfer to statutory reserves during the years ended December 31, 2015, 2014 and 2013. Employee Benefit Plan Full time employees of the PRC entities participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance and other welfare benefits are provided to employees. The total provision for such employee benefits was $nil, $nil and $nil for the years ended December 31, 2015, 2014 and 2013. Revenue Recognition Policy The Company recognizes revenue when goods are delivered, when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist, and collectability is reasonably assured. Goods are considered delivered when customer’s truck picks up goods at our finished goods inventory warehouse. Shipping Cost Substantially all customers use their own trucks or hire commercial trucking companies to pick up goods from the Company. The Company usually incurs no shipping cost for delivery of goods to customers. For those rare situations where products are not shipped utilizing customer specified shipping services, the Company charges customers a shipping fee which is included in net revenues and was not material. Freight-in and handling costs incurred by the Company with respect to purchased goods are recorded as a component of inventory cost and charged to cost of sales when the inventory items are sold. Advertising The Company expenses all advertising and promotion costs as incurred. The Company incurred $nil, $6,457 and $5,085 of advertising and promotion costs for the years ended December 31, 2015, 2014 and 2013, respectively. Research and development costs Research and development costs are expensed as incurred and included in selling, general and administrative expenses. Research and development expenses incurred $28,448, $20,276 and $25,125 for the years ended December 31, 2015, 2014 and 2013, respectively. Borrowing costs Borrowing costs attributable directly to the acquisition, construction or production of qualifying assets which require a substantial period of time to be ready for their intended use or sale, are capitalized as part of the cost of those assets. Income earned on temporary investments of specific borrowings pending their expenditure on those assets is deducted from borrowing costs capitalized. All other borrowing costs are recognized in interest expenses in the period in which they are incurred. Government subsidies A government subsidy is not recognized until there is reasonable assurance that: (a) the enterprise will comply with the conditions attached to the grant; and (b) the grant will be received. When the Company received the government subsidies but the conditions attached to the grants have not been fulfilled, such government subsidies are deferred and recorded under other payables and accrued expenses, and other long-term liability. The reclassification of short-term or long-term liabilities is depended on the management's expectation of when the conditions attached to the grant can be fulfilled. For the years ended December 31, 2015, 2014 and 2013, the Company received government subsidies of $555,605, $22,614 and $171,125, which are recognized as subsidy income in the consolidated statements of income in that fiscal year. Lease Obligations All non-cancellable leases with an initial term greater than one year are categorized as either capital or operating leases. For the lessee, a lease is a capital lease if any of the following conditions exist: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases. Assets recorded under capital leases are amortized according to the same depreciation methods employed for property, plant and equipment or over the term of the related lease, if shorter. The Company defers any profit or loss from a sale-leaseback transaction unless any of the following conditions exist: a) the seller-lessee relinquishes the right to substantially all of the remaining use of the property sold retaining only a minor portion of such use; b) the seller-lessee retains more than a minor part but less than substantially all of the use of the property through the leaseback and realizes a profit on the sale in excess of the recorded amount of the leased assets; or c) the fair value of the property at the time of the transaction is less than its undepreciated cost, in which circumstance a loss shall be recognized immediately. Income Taxes The Company accounts for income taxes pursuant to ASC Topic 740, Income Taxes. Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Any tax paid by subsidiaries during the year is recorded. Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. ASC Topic 740 also requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards. ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets, including those related to the U.S. net operating loss carry-forwards, are dependent upon future earnings, if any, of which the timing and amount are uncertain. The Company adopted ASC Topic 740-10-05, Income Tax The Company’s policy on classification of all interest and penalties related to unrecognized income tax positions, if any, is to present them as a component of income tax expense. Value Added Tax Both the PRC subsidiary and variable interest entity of the Company are subject to value added tax (“VAT”) imposed by the PRC government on its purchase and sales of goods. The output VAT is charged to customers who purchase goods from the Company and the input VAT is paid when it purchases goods from its vendors. VAT rate is 17% in general, depending on the types of products purchased and sold. The input VAT can be offset against the output VAT. Debit balance of VAT payable represents a credit against future collection of output VAT instead of a receivable. Comprehensive Income (Loss) The Company presents comprehensive income (loss) in accordance with ASC Topic 220, Comprehensive Income Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Share-Based Compensation The Company uses the fair value recognition provision of ASC Topic 718, Compensation-Stock Compensation, The Company also applies the provisions of ASC Topic 505-50, Equity Based Payments to Non-Employees Fair Value Measurements The Company has adopted ASC Topic 820, Fair Value Measurements and Disclosures Its establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts that the Company could realize in a current market exchange. As of December 31, 2015 and 2014, the carrying value of the Company’s short term financial instruments, such as cash and cash equivalents, accounts receivable, accounts and notes payable, short-term bank loans and balance due to a related party, approximate at their fair values because of the short maturity of these instruments; while loans from Credit union, loans from a related party and obligation under capital lease approximate at their fair value as the interest rates thereon are close to the market rates of interest published by the People’s Bank of China. The Company does not have any assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and 2014. Non-Recurring Fair Value Measurements The Company reviews long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate the possibility of impairment. For the continuing operations, long-lived assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. For discontinued operations, long-lived assets are measured at the lower of carrying amount or fair value less cost to sell. The fair value of these assets were determined using models with significant unobservable inputs which were classified as Level 3 inputs, primarily the discounted future cash flow. |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2015 | |
Restricted Cash [Abstract] | |
Restricted Cash | (3) Restricted Cash Restricted cash of $10,779,845 as of December 31, 2015 was presented for the cash deposited at the Bank of Hebei, and the Commercial Bank of the City of Zhangjiakou for purpose of securing the bank acceptance notes from these banks (see Note (10)). The restriction will be lifted upon the maturity of the notes payable from January 7, 2016 through April 23, 2016. Restricted cash of $8,873,999 as of December 31, 2014 was presented for the cash deposited at the Bank of Hebei, Shanghai Pudong Development Bank (“SPD Bank”) and the Commercial Bank of the City of Zhangjiakou for purpose of securing the bank acceptance notes from these banks (see Note (10)). The restriction has been lifted upon the maturity of the notes payable from January 7, 2015 through April 23, 2015. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2015 | |
Inventories [Abstract] | |
Inventories | (4) Inventories Raw materials inventory includes mainly recycled paper and coal. Finished goods include mainly products of corrugating medium paper and offset printing paper. Inventories consisted of the following as of and December 31, 2015 and 2014: December 31, 2015 2014 Raw Materials Recycled paper board $ 4,416,252 $ 4,388,069 Recycled white scrap paper 1,880,323 1,212,588 Coal 453,665 497,038 Base paper and other raw materials 296,272 95,053 7,046,512 6,142,748 Finished Goods 2,158,908 996,851 Totals $ 9,205,420 $ 7,139,599 |
Prepayments and Other Current A
Prepayments and Other Current Assets | 12 Months Ended |
Dec. 31, 2015 | |
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 December 31, 2015 and 2014: December 31, 2015 2014 Prepaid NYSE MKT annual fee $ - $ 7,500 Recoverable VAT 453,964 250,000 Prepaid insurance - 55,000 Prepayment for purchase of materials 884,932 1,910,643 Prepaid land lease 461,993 490,276 Others 11,526 206,249 $ 1,812,415 $ 2,919,668 |
Prepayment on Property, Plant a
Prepayment on Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Prepayment on Property, Plant and Equipment [Abstract] | |
Prepayment on property, plant and equipment | (6) Prepayment on property, plant and equipment As of December 31, 2015 and 2014, prepayment on property, plant and equipment consisted of $1,404,460 and $1,490,440, respectively in respect of prepaid land use right prepayment made on October 26, 2012 for the entitlement of land use right for some 65,023 square meters of land located in our Xushui County, Baoding plant. The purchase is expected to be completed in year 2016. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | (7) Property, plant and equipment As of December 31, 2015 and 2014, property, plant and equipment consisted of the following: December 31, 2015 2014 Property, Plant, and Equipment: Land use rights $ 7,305,641 $ 7,752,886 Building and improvements 99,299,487 44,889,395 Machinery and equipment 132,785,421 121,332,310 Vehicles 665,789 706,548 Construction in progress 21,697,207 78,484,066 261,753,545 253,165,205 Less: accumulated depreciation and amortization (55,562,387 ) (44,952,007 ) Property, Plant and Equipment, net $ 206,191,158 $ 208,213,198 As of December 31, 2015 and 2014, land use rights represented a parcel of state-owned land located in Xushui County of Hebei Province in China, with lease terms of 50 years expiring in 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 RMB 150 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 (“Leased 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 December 31, 2015 and 2014. As a result of the sale, a deferred gain on sale of Leased Equipment in the amount of $1,379,282 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. See “ Financing with Sale-Leaseback” On July 1, 2015, Orient Paper HB, China Orient, and other guarantors of Lease Financing Agreement, entered into the 2015 Agreement, to amend and restate the Lease Financing Agreement entered into in 2013. The 2015 Agreement sets forth a modified and extended payment schedule with respect to the remaining payment obligation, with the final repayment date extended to June 21, 2017. In accordance with ASC 840-30-35, the present balances of the capital lease assets and obligations under capital lease were adjusted by an amount equal to the difference between the present value of the future minimum lease payments under the revised agreement (computed using the interest rate used to recognize the lease initially), which was approximately $1,617,574 at the date of the 2015 Agreement. As a result, the capital lease asset cost was recorded at the new cost of $27,599,774 at the date of the 2015 Agreement. The capital lease asset cost were $25,990,183 and $25,964,790 as of December 31, 2015 and 2014, respectively. The depreciation of Leased Equipment has started in July 2013 and was included with the depreciation expense of the Company’s own assets in the consolidated statement of income. During the years ended December 31, 2015, 2014 and 2013, depreciation of Leased Equipment were $1,683,581, $1,650,649 and $818,796, respectively. The accumulated depreciation of the leased asset were $3,961,025 and $2,486,615 as of December 31, 2015 and 2014. During the years ended December 31, 2015, 2014 and 2013, the gain realized on sale-leaseback transaction were $340,947, $461,609 and $228,979, respectively. The gain realized was recorded in cost of sales as a reduction of depreciation expenses. The unamortized deferred gains on sale-lease back are $327,637 and $695,389 as of December 31, 2015 and 2014, respectively. Construction in progress mainly represents payments for the new 15,000 tonnes per year tissue paper manufacturing equipment PM8, the tissue paper workshops and general infrastructure and administrative facilities in the Wei County industrial park. The tissue paper development project at the Wei County Industrial Park is expected to be completed in the first half of 2016. For the years ended December 31, 2015, 2014 and 2013, the amount of interest capitalized is $154,930, $698,714 and $448,950, respectively. As of December 31, 2015 and 2014, certain property, plant and equipment of Orient Paper HB with net values of $14,236,083 and $19,300,765 have been pledged for the long-term loan from credit union of Orient Paper HB, respectively. As of December 31, 2015 and 2014, certain of the Company’s property, plant and equipment in the amount of $29,175 and $29,995 have been pledged for the facility obtained from Bank of Hebei. See “ Notes Payable” Financing with Sale-Leaseback” As of December 31, 2015 and December 31, 2014, essentially all production equipment of Orient Paper Shengde with net value of $28,745,628 and $33,287,324 has been pledged for the guarantee of Orient Paper HB’s performance under the capital lease. Depreciation and amortization of property, plant and equipment was $13,398,990 and $8,289,320 for the years ended December 31, 2015 and 2014, respectively. |
Loans Payable
Loans Payable | 12 Months Ended |
Dec. 31, 2015 | |
Loans Payable [Abstract] | |
Loans Payable | (8) Loans Payable Short-term bank loans December 31, 2015 2014 Industrial & Commercial Bank of China (“ICBC”) Loan 1 (a) $ - $ 2,451,381 The Commercial Bank of the City of Zhangjiakou Loan 1 (b) - 3,268,508 ICBC Loan 2 (c) - 817,127 ICBC Loan 3 (d) - 3,268,508 ICBC Loan 4 (e) 3,079,956 - ICBC Loan 5 (f) 3,079,956 - The Commercial Bank of the City of Zhangjiakou Loan 2 (g) 7,699,888 - Total short-term bank loans $ 13,859,800 $ 9,805,524 (a) On June 26, 2014, the Company obtained an accounts receivable factoring facility from the ICBC of $2,451,381 as of December 31, 2014. 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 bore an interest rate of 6.6% per annum, which was 110% of the primary lending rate of the People’s Bank of China at the time of funding. The Company paid off the principal balance and interest by June 24, 2015 when the factoring facility expired. Concurrent with the signing of the new factoring agreement, the Company also entered into a financial service agreement with the ICBC, which provides accounts receivable management services to the Company during the terms of the underlying factoring facility. (b) On June 9, 2014, the Company obtained from the Commercial Bank of the City of Zhangjiakou a banking facility on bank loans and notes payable, which is guaranteed by the Company’s CEO and Shijiazhuang Baode Guarantee Service Company. In obtaining the guarantee from Shijiazhuang Baode Guarantee Service Company, Hebei Tengsheng Paper Co. Ltd (“Hebei Tengsheng”), a third party which owns the land use rights of about 330 acres (or 1.33 million square meters) of land in the Wei County and leases about one-fourth of the premises to Orient paper HB as our production bases of tissue paper and other future facilities, provided a guarantee with the land use rights and buildings as collateral. On July 18, 2014, the Company entered into a working capital loan agreement with the bank of $3,268,508 as of December 31, 2014. The loan bore a fixed interest rate of 11.88% per annum and was repaid on July 16, 2015. (c) On August 19, 2014, the Company obtained an accounts receivable factoring facility from the ICBC of $817,127 as of December 31, 2014. 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 bore an interest rate of 6.6% per annum, which was 110% of the primary lending rate of the People’s Bank of China at the time of funding. The Company paid off the principal balance and interest by June 10, 2015 when the factoring facility expired. (d) On November 20, 2014, the Company entered into a working capital loan agreement with the ICBC of $3,268,508 as of December 31, 2014. The working capital loan was guaranteed by Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. The loan bore an interest rate of 6.16% per annum, which was 110% of the primary lending rate of the People’s Bank of China at the time of funding. The Company paid off the principal balance and interest by December 3, 2015 when the loan expired. (e) On September 7, 2015, the Company entered into a working capital loan agreement with the ICBC of $3,079,956 as of December 31, 2015. The loan bears an interest rate of 5.06% per annum, which was 110% over the primary lending rate of the People’s Bank of China at the time of funding. The loan is due on September 6, 2016. The working capital loan was guaranteed by Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. (f) On December 11, 2015, the Company entered into a working capital loan agreement with the ICBC of $3,079,956 as of December 31, 2015. The loan bears an interest rate of 4.785% per annum at the time of funding. The loan is due on December 9, 2016. The working capital loan was guaranteed by Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. (g) On October 15, 2015, the Company entered into a working capital loan agreement with the Commercial Bank of the City of Zhangjiakou of $7,699,888 as of December 31, 2015. The loan bears a fixed interest rate of 11.88% per annum. The loan is due on October 15, 2016. The working capital loan was guaranteed by the Company’s CEO and his wife, as well as Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. As of December 31, 2015, there were guaranteed short-term borrowings of $13,859,800 and unsecured bank loans of $nil. As of December 31, 2014, there were guaranteed short-term borrowings of $3,268,508 and secured bank loans of $6,537,016. The factoring facility was secured by the Company’s accounts receivable in the amount of $nil and $3,730,123 as of December 31, 2015 and December 31, 2014, respectively. The average short-term borrowing rates for the years ended December 31, 2015, 2014 and 2013 were approximately 8.27%, 7.71% and 6.68%, respectively. Long-term loans from credit union As of December 31, 2015 and 2014, loans payable to Rural Credit Union of Xushui County, amounted to $5,174,325 and $5,907,828, respectively. On April 16, 2014, the Company entered into an agreement with the Rural Credit Union of Xushui County for a term of 5 years, which is repayable by various installments from June 21, 2014 to November 18, 2018. The loan is guaranteed by an independent third party. Interest payment is due quarterly and bears the rate of 0.72% per month. In August 2015, after giving the required notice to the bank in accordance with the terms on the agreement, the Company repaid a portion of the loan in an amount of $192,497, of which $130,898 were paid ahead of its original repayment schedule as of December 31, 2015. As of December 31, 2014, total outstanding loan balance was $1,609,740 and $65,370 that become due within one year was presented as current portion of long term loans from credit union in the consolidated balance sheet. As of December 31, 2015, total outstanding loan balance was $1,324,380 and was presented as non-current liabilities in the consolidated balance sheet. On July 15, 2013, the Company entered into an 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 equipment in the amount of $14,236,083 and $19,300,765 as of December 31, 2015 and 2014, respectively. Interest payment is due quarterly and bears a fixed rate of 0.72% per month. In August 2015, after giving the required notice to the bank in accordance with the terms on the agreement, the Company repaid a portion of the loan in an amount of $200,197, of which $123,198 were paid ahead of its original repayment schedule as of December 31, 2015. As of December 31, 2014, the total outstanding loan balance was $4,298,088, with $81,713 becoming due within one year and presented as current portion of long term loans from credit union in the consolidated balance sheet. As of December 31, 2015, the total outstanding loan balance was $3,849,945 and was presented as non-current liabilities in the consolidated balance sheet. Total interest expenses for the short-term bank loans and long-term loans for the years ended December 31, 2015, 2014 and 2013 were $1,209,293, $1,031,163 and $828,157, respectively. Financing with Sale-Leaseback The Company entered into a sale-leaseback arrangement (the “Lease Financing Agreement”) with CNFTFL on June 16, 2013, for a total financing proceeds in the amount of RMB 150 million (approximately US$24 million). Under the sale-leaseback arrangement, Orient Paper HB sold the Leased Equipment to CNFTFL for 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 for the periods presented; 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$1.36 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. Orient Paper HB made all payments due according to the schedule prior to December 15, 2014. On December 15, 2014, Orient Paper HB stopped making principal payments and entered into negotiations with the CNFTFL regarding a modified payment schedule for the remaining obligations. During the course of negotiations, Orient Paper HB continued to make interest payments due (as well as a payment of a liquidated damage of approximately $9,200 on December 26, 2014). No remedial measures were taken by the lessor or its parent company. On May 19, 2015 and June 15, 2015, the Company made payments to the lessor of RMB 5,000,000 (approximately $0.8 million) and RMB 20,000,000 (approximately $3 million), respectively. On July 1, 2015, Orient Paper HB, China Orient, and other guarantors of Lease Financing Agreement, entered into the 2015 Agreement, to amend and restate the Lease Financing Agreement entered into in 2013. The 2015 Agreement sets forth a modified and extended payment schedule with respect to the remaining payment obligation, with the final repayment date extended to June 21, 2017. Under the 2015 Agreement, the interest accrues at a rate of 15% per annum starting on June 16, 2015, and is payable on the 20th of every March, June, September and December until the principal is paid off, except for the first payment, which is due on July 31, 2015. The Company made all the payments on time according to the modified payment schedule under the 2015 Agreement in this period. In accordance with ASC 840-30-35, the present balances of the capital lease assets and obligations under capital lease were adjusted by an amount equal to the difference between the present value of the future minimum lease payments under the revised agreement (computed using the interest rate used to recognize the lease initially), which is approximately $1,617,574 at the date of the 2015 Agreement. The balance of the long-term obligations under capital lease were $3,217,785 and $4,090,413 as of December 31, 2015 and 2014, which is net of its current portion in the amount of $6,860,412 and $12,258,488, respectively. Total interest expenses for the sale-leaseback arrangement for the years ended December 31, 2015, 2014 and 2013 were $1,363,011, $919,298 and $471,472, respectively. As a result of the sale and leaseback of equipment on June 16, 2013, a deferred gain in the amount of $1,379,282 was recorded. The deferred gain is being amortized over the lease term and as an offset to depreciation of the Leased Equipment. In term of the extension of the new payment schedule, the deferred gain is being amortized over the remaining lease term up to June 21, 2017. 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 $6,769,894 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. The net book value of Orient Paper Shengde’s asset guarantee was $28,745,628 and $33,287,324 as of December 31, 2015 and 2014, respectively. The future minimum lease payments of the capital lease as of December 31 December 31, Amount 2016 $ 7,334,144 2017 3,313,519 Totals $ 10,647,663 Less: Unearned discount (569,466 ) 10,078,197 Less: Current portion of obligation under capital lease, net (6,860,412 ) Long-term obligation under capital lease, net $ 3,217,785 |
Related Parties Transactions
Related Parties Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Parties Transactions [Abstract] | |
Related Parties Transactions | (9) Related Parties Transactions The Company’s CEO loaned money to Orient Paper HB for working capital purposes over a period of time. On January 1, 2013, Orient Paper HB and Mr. Zhenyong Liu renewed the three-year term loan previously entered on January 1, 2010, and extended the maturity date further to December 31, 2015. On December 31, 2015, the Company paid off the loan of $2,249,279, together with the interest of $391,374 for the period from 2013 to 2015. An approximately $440,948 of interest was still due to Mr. Zhenyong Liu which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of December 31, 2015. The balance of the loan was $nil and $2,386,978 as of December 31, 2015 and 2014, respectively. Mr. Zhenyong Liu loaned $9,239,867 and $9,805,524 as of December 31, 2015 and 2014, to Orient Paper HB for working capital purpose with an interest rate of 5.25% per annum, which was based on the primary lending rate of People’s Bank of China. The unsecured loan was borrowed on December 10, 2014, and will be due on December 10, 2017. On March 1, 2015, the Company entered an agreement with Mr. Zhenyong Liu which allows Orient Paper HB to borrow from the CEO an amount up to $18,479,734 (RMB120,000,000) for working capital purposes. The advances or funding under the agreement are due three years from the date each amount is funded. The loan would be unsecured and carry an annual interest rate set on the basis of the primary lending rate of the People’s Bank of China at the time of the borrowing. On July 13, 2015, an unsecured loan of $4,619,933 was drawn from the facility, which carried an interest rate of 5.25%. The loan matures on July 12, 2018. As of December 31, 2015 and 2014, total amount of loans due to Mr. Zhenyong Liu were $13,859,800 and $12,192,502, respectively. The interest expenses incurred for such related party loans are $740,150, $194,692 and $145,015 for the years ended December 31, 2015, 2014 and 2013, respectively. On January 20, 2016, the Company’s CEO agreed in writing to permit the Company to postpone the repayment of the loan and accrued interest on his loan to Orient Paper HB until the earliest date on which the Company's quarterly or annual financial statements filed with the SEC show a satisfactory working capital level. The accrued interest owned to Mr. Zhenyong Liu was approximately $552,115 and $761,242, as of December 31, 2015 and 2014, respectively, which was recorded in other payables and accrued liabilities (see Note (11) below) as part of the current liabilities. During the years ended December 31, 2015, 2014 and 2013, the Company borrowed $439,000, $793,500 and $1,390,802, respectively, from a shareholder to pay for various expenses incurred in the U.S. The amount was due on demand with interest free. The Company repaid the entire balance by December 31, 2015. Sale of Headquarters Compound Real Properties to a Related Party 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 $2.77 million, $1.15 million, and $4.31 million respectively. In connection with the sale of the Industrial Buildings, Hebei Fangsheng agreed 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 $153,998 (RMB1,000,000). On January 21, 2016, Hebei Fangsheng agreed in writing to permit the Company to continue to postpone the repayment of the accrued rental charged to Orient Paper HB until the earliest date on which the Company's quarterly or annual financial statements filed with the SEC show a satisfactory working capital level. The accrued rental owned to Hebei Fangsheng was approximately $368,751 and $227,900, which was recorded as part of the current liabilities as of December 31, 2015 and 2014, respectively. 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 $2.77 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 $4.31 million, an independent appraisal shows that the value for the three buildings as employee dormitories was $4.64 million. As a condition for the sale of the Dormitories, Hebei Fangsheng agrees that it would 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. Sales of the LUR and the Industrial Buildings were completed in year 2013. Sales of the dormitories, which was classified as assets held for sale as of December 31, 2013, was consummated on August 15, 2014 with a gain on disposal of approximately $203,620 recognized during the year ended December 31, 2014. Land Use Right Pledged by Hebei Fangsheng Independent from the above related party sale transaction, on March 3, 2014, Hebei Fangsheng entered into a Collateral Agreement with SPD Bank in connection with the Company’s bank acceptance note obtained from the SPD Bank (see Note (10) below). Under the Collateral Agreement, Hebei Fangsheng pledged certain land-use-right on a parcel of land located in Wei County, Hebei for the benefit of the SPD Bank as collateral to secure the credit facility of the bank acceptance note during the period of March 3, 2014 to March 2, 2016. As explained above, Hebei Fangsheng is controlled by the Company’s CEO. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable [Abstract] | |
Notes payable | (10) Notes payable As of December 31, 2015, the Company had bank acceptance notes of $6,159,911 and $7,699,889 from the Bank of Hebei and the Commercial Bank of the City of Zhangjiakou, respectively, to one of its major suppliers for settling purchase of raw materials. The acceptance notes are used to essentially extend the payment of accounts payable and are issued under the banking facilities obtained from bank as well as the restricted bank deposit of $10,779,845 in the bank as mentioned in Note (3). The banking facility obtained from the Bank of Hebei was secured by certain of the Company’s property, plant and equipment in the amount of $29,175, and guaranteed by the Company’s CEO and his wife, two directors of the Company’s subsidiaries and five independent third parties. The bank acceptance notes from the bank bore interest rate at nil% per annum and 0.05% of notes amount as handling change. The acceptance notes will become due and payable on various dates starting from January 7, 2016 through April 23, 2016. As of December 31, 2014, the Company had eleven bank acceptance notes that totaled of $1,405,458, $6,537,016 and $8,171,270, respectively, from Bank of Hebei, SPD Bank and the Commercial Bank of the City of Zhangjiakou, respectively, to one of its major suppliers for settling purchase of raw materials. These acceptances notes were used to essentially extend the payment of accounts payable and were issued under the banking facilities obtained from these three banks as well as the restricted bank deposit of $8,873,999 in these three banks as mentioned in Note (3). In particular, the banking facility obtained from Bank of Hebei was secured by certain of the Company’s property, plant and equipment in the amount of $29,995 and guaranteed by the Company’s CEO and Hebei Fangsheng and two independent third parties. The banking facility obtained from SPD Bank was secured by land use right from a related party as mentioned in Note (9). The banking facility obtained from the Commercial Bank of the City of Zhangjiakou was guaranteed by the Company’s CEO and Shijiazhuang Baode Guarantee Service Company as mentioned in Note (8). The bank acceptance notes from those three banks bore interest rate at nil% per annum and 0.05% of notes amount as handling change. They were due and paid on various dates starting from January 7, 2015 to April 23, 2015. |
Other Payables and Accrued Liab
Other Payables and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Other Payables and Accrued Liabilities [Abstract] | |
Other payables and accrued liabilities | (11) Other payables and accrued liabilities Other payables and accrued liabilities consist of the following: December 31, 2015 2014 Accrued electricity $ 168,840 $ 334,212 Value-added tax payable - 841,556 Accrued interest to a related party 552,115 761,242 Accrued bank loan interest 73,970 - Payable for purchase of equipment 3,093,239 244,050 Others 14,807 219,463 Totals $ 3,902,971 $ 2,400,523 |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2015 | |
Common Stock [Abstract] | |
Common Stock | (12) Common Stock Issuance of common stock to investors On August 27, 2014, the Company issued 1,562,500 shares of our common stock and warrants to purchase up to 781,250 shares of our common stock (the “Offering”). Each share of common stock and accompanying warrant was sold at a price of $1.60. Please refer to Note (13), Stock Warrants, for details. |
Stock Warrants
Stock Warrants | 12 Months Ended |
Dec. 31, 2015 | |
Stock Warrants [Abstract] | |
Stock warrants | (13) Stock warrants On August 27, 2014, the Company issued 1,562,500 shares of our common stock and warrants to purchase up to 781,250 shares of our common stock. The warrants have an exercise price of $1.70 per share with two warrants being exercisable for one share of common stock. These warrants are exercisable immediately upon issuance on September 3, 2014 and have a term of exercise equal to five years from the date of issuance till September 2, 2019. The fair value of these shares which amounted to $780,000, is classified in the equity. The fair value of the warrants issued was estimated by using the Binominal pricing model with the following assumptions: Terms of warrants 5 years Expected volatility 72.0 % Risk-free interest rate 1.69 % Expected dividend yield 0.81 % In connection with the Offering, the Company issued warrants to its placement agent of this Offering, which can purchase an aggregate of up to 2.50% of the aggregate number of shares of common stock sold in the Offering, i.e. 39,062 shares. These warrants have substantially the same terms as the warrants issued to purchaser in the Offering, except that the exercise price is $2.00 per share and the expiration date is from September 3, 2014 to June 26, 2019. The fair value of these shares amounted to $35,191, is classified in the equity to net off the proceeds from the issuance of the shares and warrants. The fair value of the warrants issued was estimated by using the Binominal pricing model with the following assumptions: Terms of warrants 4.81 years Expected volatility 69.8 % Risk-free interest rate 1.62 % Expected dividend yield 0.81 % The Company applied judgment in estimating key assumptions in determining the fair value of the warrants on the date of issuance. The Company used historical data to estimate stock volatilities and expected dividend yield. The risk-free rates are consistent with the terms of the warrants and are based on the United States Treasury yield curve in effect at the time of issuance. A summary of stock warrant activities is as below: December 31, 2015 December 31, 2014 Number Weight average exercise price Number Weight average exercise price Outstanding and exercisable at beginning of the period 820,312 $ 1.71 - $ - Issued during the period - - 820,312 1.71 Exercised during the period - - - - Cancelled or expired during the period - - - - Outstanding and exercisable at end of the period 820,312 $ 1.71 820,312 $ 1.71 Range of exercise price $1.70 to $2.00 $1.70 to $2.00 The weighted average fair value of warrants granted for the year ended December 31, 2014 was $0.99 per share. No warrants were issued, exercised, cancelled or expired during the year ended December 31, 2015. As of December 31, 2015, the aggregated intrinsic value of warrants outstanding and exercisable was $nil. No warrants were exercised, cancelled or expired during the year ended December 31, 2014. As of December 31, 2014, the aggregated intrinsic value of warrants outstanding and exercisable was $nil. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | (14) Earnings Per Share For the years ended December 31, 2015, 2014 and 2013, basic and diluted net income per share are calculated as follows: Year Ended December 31, 2015 2014 2013 Basic income per share Net Income for the year - numerator $ 11,542,205 $ 11,706,360 $ 13,014,648 Weighted average common stock outstanding - denominator 20,316,400 19,270,394 18,458,446 Net income per share $ 0.57 $ 0.61 $ 0.71 Diluted income per share Net Income for the year - numerator $ 11, 542,205 $ 11,706,360 $ 13,014,648 Weighted average common stock outstanding - denominator 20,316,400 19, 270,394 18,458,446 Effect of dilution Warrant Weighted average common stock outstanding - denominator 20,316,400 19, 270,394 18,458,446 Diluted income per share $ 0.57 $ 0.61 $ 0.71 For the year ended December 31, 2013, there were no securities with dilutive effect issued and outstanding. For the year ended December 31, 2015 and 2014, 820,312 shares related to warrants are excluded from the calculations of dilutive net income per share as their effects would have been anti-dilutive since the average share price for the year ended December 31, 2015 and 2014 were lower than the warrants exercise price. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
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 provisions for income taxes for the years ended December 31, 2015, 2014 and 2013 were as follows: Year Ended December 31, 2015 2014 2013 Provision for Income Taxes Current Tax Provision – PRC $ 5,325,984 $ 4,034,119 $ 4,684,870 Deferred Tax Provision – PRC (1,203,019 ) 398,385 409,665 Total Provision for Income Taxes $ 4,122,965 $ 4,432,504 $ 5,094,535 In addition to the reversible future PRC income tax benefits stemming from the timing differences of items such as recognition of asset disposal gain or loss and asset depreciation, Orient Paper, Inc. was incorporated in the United States and has incurred aggregate net operating losses of approximately $4,269,713, $3,813,374 and $3,403,740 for U.S. income tax purposes for the years ended December 31, 2015, 2014 and 2013, respectively. The net operating loss carried forward may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, during the period of 2030 through 2035. Management believes that the realization of all the U.S. income tax benefits from these losses, which generally would generate a deferred tax asset if it can be expected to be utilized in the future, appears not more than likely due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the U.S. deferred tax asset benefit to reduce the total deferred tax asset to the amount realizable for the PRC income tax purposes. Management will review this valuation allowance periodically and make adjustments as warranted. A summary of the otherwise deductible (or taxable) deferred tax items is as follows: December 31, 2015 2014 Deferred tax assets (liabilities) Depreciation and amortization of property, plant and equipment $ 1,035,486 $ (1,248 ) Impairment of property, plant and equipment 344,202 308,175 Miscellaneous (23,428 ) (25,917 ) Net operating loss carryover of PRC company 64,594 - Net operating loss carryover for U.S. income tax purposes 2,281,718 2,000,539 Total deferred tax assets 3,702,572 2,281,549 Less: Valuation allowance (2,281,718 ) (2,000,539 ) Total deferred tax assets, net $ 1,420,854 $ 281,010 The following table reconciles the statutory rates to the Company's effective tax rate as of: Year ended December 31, 2015 2014 2013 PRC Statutory rate 25.0 % 25.0 % 25.0 % Effect of different tax jurisdiction (0.5 ) (0.8 ) (1.1 ) Effect of expenses not deductible for PRC tax purposes (0.1 ) - 1.5 Effect of income not taxable for PRC tax purposes - 0.1 - Under provision in previous year 0.1 0.1 - Change in valuation allowance 1.8 3.1 2.7 Effective income tax rate 26.3 % 27.5 % 28.1 % For U.S. tax purposes, the Company has cumulative undistributed earnings of foreign subsidiaries of approximately $126,527,569 and $114,158,370 as of December 31, 2015 and 2014 respectively, which are included in consolidated retained earnings and will continue to be indefinitely reinvested in international operations. Accordingly, no provision has been made for U.S. deferred taxes related to future repatriation of these earnings, nor is it practicable to estimate the amount of income taxes that would have to be provided if we concluded that such earnings will be remitted to the U.S. in the future. The Company does not believe that its future dividend policy and the available U.S. tax deductions and Net Operating Losses 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 believes 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. During the years ended December 31, 2015 , 2014 and 2013, the effective income tax rate was estimated by the Company to be 26.3%, 27.5% and 28.1%, respectively. The effective tax rate is lower than the U.S. statutory rate of 34% 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. The Company has adopted ASC Topic 740-10-05, Income Taxes. |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Dec. 31, 2015 | |
Stock Incentive Plans [Abstract] | |
Stock Incentive Plans | (16) Stock Incentive Plans Issuance of common stock pursuant to the 2011 Incentive Stock Plan and 2012 Incentive Stock Plan On August 28, 2011, the Company’s Annual General Meeting approved the 2011 Incentive Stock Plan of Orient Paper, Inc. (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 2, 2012, when the Compensation Committee granted 109,584 shares of restricted common stock to certain officers and directors of the Company 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. On September 10, 2012, the Company’s Annual General Meeting approved the 2012 Incentive Stock Plan of Orient Paper, Inc. (the “2012 ISP”) as previously adopted by the Board of Directors on July 4, 2012. 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. On December 31, 2013, the Compensation Committee granted restricted common shares of 297,000, out of which 265,416 shares were granted under the 2011 ISP and 31,584 shares under the 2012 ISP, to certain officers, directors and employees of the Company when the stock was at $2.66 per share, as compensation for their services in the past years. Total fair value of the stock was calculated at $790,020 as of the date of grant. No stock or option was issued under the 2012 ISP subsequently. 2015 Incentive Plan On August 29, 2015, the Company’s Annual General Meeting approved the 2015 Omnibus Equity Incentive Plan of Orient Paper, Inc. (the “2015 ISP”) as previously adopted by the Board of Directors on July 10, 2015. Under the 2015 ISP, the Company may grant an aggregate of 1,500,000 shares of the Company’s common stock to the directors, officers, employees and/or consultants of the Company and its subsidiaries. No stock was issued under the 2015 ISP on or before December 31, 2015. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
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 $18,480 (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 Province, 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 $554,392 (RMB 3,600,000). The Company is currently building two new tissue paper production lines and future production facilities in the leased Wei County land. As mentioned in Note (9) 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 $153,998 (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 before the relocation completed. Future minimum lease payments are as follows: December 31, Amount 2016 $ 662,704 2017 572,872 2018 572,872 2019 572,872 2010 572,872 Thereafter 3,529,629 Total operating lease payments $ 6,483,821 Capital commitment As of December 31, 2015, 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 $17,429,301 and $24,561,228 as of December 31, 2015 and 2014, respectively. The Company expected to pay off all the balances within 1 year. Guarantees and Indemnities The Company was a party to enter into contracts to indemnify a third party for certain liabilities, and as of December 31, 2015, the Company guaranteed the third party’s long-term loan from the financial institutions amounting to $8,623,876 (RMB56,000,000) that matured at various times in 2018 |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2015 | |
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 is as follows: Years Ended December 31, 2015 Orient Paper Orient Paper Not Attributable Elimination Enterprise-wide, HB Shengde to Segments of Inter-segment consolidated Revenues $ 134,927,208 $ 375,965 $ - $ - $ 135,303,173 Gross Profit (Loss) 28,104,243 (243,638 ) - - 27,860,605 Depreciation and amortization 10,623,900 2,775,090 - - 13,398,990 Interest income 68,752 1,567 - - 70,319 Interest expense 3,157,524 - - - 3,157,524 Income tax expense(benefit) 4,334,168 (211,203 ) - - 4,122,965 Net Income (Loss) 13,108,044 (738,844 ) (826,995 ) - 11,542,205 Total Assets 205,117,348 33,500,731 8,840 - 238,626,919 Years Ended December 31, 2014 Orient Paper Orient Paper Not Attributable Elimination Enterprise-wide, HB Shengde to Segments of Inter-segment consolidated Revenues $ 133,967,031 $ 4,829,046 $ - $ (1,754,630 ) $ 137,041,447 Gross Profit 20,401,820 2,376,328 - - 22,778,148 Depreciation and amortization 5,467,593 2,821,727 - - 8,289,320 Interest income 145,590 4,193 - - 149,783 Interest expense 1,446,439 - - - 1,446,439 Income tax expense 4,337,424 95,080 - - 4,432,504 Net Income (Loss) 11,299,155 1,900,145 (1,492,940 ) - 11,706,360 Total Assets 201,518,707 38,160,199 88,679 - 239,767,585 Year Ended December 31, 2013 Orient Paper Orient Paper Not Attributable Elimination Enterprise-wide, HB Shengde to Segments of Inter-segment consolidated Revenues $ 120,747,633 $ 4,969,997 $ - $ - $ 125,717,630 Gross Profit 22,318,739 1,006,860 - - 23,325,599 Depreciation and amortization 6,828,970 965,773 - - 7,794,743 Interest income 86,168 4,009 83 - 90,260 Interest expense 995,694 - - 995,694 Income tax expense 4,845,970 248,565 - - 5,094,535 Net Income (Loss) 14,604,244 638,031 (2,227,627 ) - 13,014,648 |
Concentration and Major Custome
Concentration and Major Customers and Suppliers | 12 Months Ended |
Dec. 31, 2015 | |
Concentration of Major Customers and Suppliers and Concentration of Credit Risk and Risks and Uncertainties [Abstract] | |
Concentration and Major Customers and Suppliers | (19) Concentration and Major Customers and Suppliers For the years ended December 31, 2015, 2014 and 2013, the Company had no single customer contributed over 10% of total sales. For the year ended December 31, 2015, the Company had two major suppliers accounted for 61% and 17% of total purchases. For the year ended December 31, 2014, the Company had three major suppliers accounted for 62%, 14% and 9% of total purchases. For the year ended December 31, 2013, the Company had three major suppliers accounted for 75%, 10% and 7% of total purchases. |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2015 | |
Concentration of Major Customers and Suppliers and Concentration of Credit Risk and Risks and Uncertainties [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 cash 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 as of December 31, 2015 and 2014. On May 1, 2015, the new “Deposit Insurance Regulations” was effective in the PRC that the maximum protection would be up to RMB500,000 (US$78,600) per depositor per insured financial intuition, including both principal and interest. For the cash placed in financial institutions in the United States, the Company’s U.S. bank accounts are all fully covered by the FDIC insurance as of December 31, 2015 and 2014, respectively, while for the cash placed in financial institutions in the PRC, the balances exceeding the maximum coverage of RMB500,000 amounted to RMB17,098,151 (US$2,633,077) as of December 31, 2015. |
Risks and Uncertainties
Risks and Uncertainties | 12 Months Ended |
Dec. 31, 2015 | |
Concentration of Major Customers and Suppliers and Concentration of Credit Risk and Risks and Uncertainties [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 Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2015 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | (22) Recent Accounting Pronouncements In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Currently, the Company is evaluating the impact of our pending adoption of ASU 2014-09 and ASU 2015-14 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard in year 2018. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The amendments in this update require an entity to measure inventory within the scope of ASU 2015-11 (the amendments in ASU 2015-11 do not apply to inventory that is measured using last-in, first-out or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out or average cost) at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is uncharged for inventory measured using last-in, first-out or the retail inventory method. The amendments in ASU 2015-11 more closely align the measurement of inventory in U.S. GAAP with the measurement of inventory in International Financial Reporting Standards (“IFRS”). ASU 2015-11 is effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments in ASU 2015-11 should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740): Changes to the balance sheet classification of deferred taxes. These changes simplify the presentation of deferred income taxes by requiring all deferred income tax assets and liabilities to be classified as noncurrent in a classified balance sheet. The Company has elected to early adopt ASU 2015-17 as of December 31, 2015 and retrospectively applied ASU 2015-17 to all periods presented. As of December 31, 2014, the Company did not have any deferred tax assets and liabilities previously classified as current in the consolidated balance sheet. The early adoption of ASU 2015-17 did not result any impact on the Company's consolidated balance sheet. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Event [Abstract] | |
Subsequent Event | (23) Subsequent Event On January 12, 2016, the compensation committee of the board of directors of the Company granted an aggregate of 1,133,916 shares of common stock under its compensatory incentive plans to nine officers, directors and employees of and a consultant to the Company, of which 168,416 shares of common stock were granted under the 2012 Incentive Stock Plan and 965,500 shares were granted under the 2015 Omnibus Equity Incentive Plan. |
Summarized Quarterly Financial
Summarized Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Summarized Quarterly Financial Data (Unaudited) [Abstract] | |
Summarized Quarterly Financial Data (Unaudited) | (24) Summarized Quarterly Financial Data (Unaudited) Quarterly financial information for 2015 and 2014 is as follows: Quarter 2015 First Second Third Fourth Revenues $ 26,504,344 $ 41,283,142 $ 32,406,877 $ 35,108,810 Gross Profit 4,986,733 6,416,561 5,973,797 Income from Operations 3,280,340 8,649,545 2,601,779 3,665,106 Net income 2,105,489 5,590,530 1,685,897 2,160,289 Net income per share: Basic $ 0.10 $ 0.28 $ 0.08 $ 0.11 Diluted $ 0.10 $ 0.28 $ 0.08 $ 0.11 Quarter 2014 First Second Third Fourth Revenues $ 25,753,864 $ 37,836,265 $ 40,754,205 $ 32,697,113 Gross Profit 4,670,836 6,121,007 6,410,848 5,575,457 Income from Operations 3,761,920 5,131,707 4,929,301 3,589,978 Net income 2,533,294 3,572,107 3,372,944 2,228,015 Net income per share: Basic $ 0.13 $ 0.19 $ 0.18 $ 0.11 Diluted $ 0.13 $ 0.19 $ 0.18 $ 0.11 |
Condensed Financial Information
Condensed Financial Information of the Parent Company | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of the Parent Company [Abstract] | |
Condensed Financial Information of the Parent Company | (25) Condensed Financial Information of the Parent Company The condensed financial statements of Orient Paper Inc. (“ONP”, the “parent company”) have been prepared in accordance with accounting principles generally accepted in the United States of America. Under the PRC laws and regulations, the Company’s PRC subsidiaries are restricted in their ability to transfer certain of their net assets to the parent company in the form of dividend payments, loans or advances. The amounts restricted include paid-in capital, capital surplus and statutory reserves, as determined pursuant to PRC generally accepted accounting principles, totaling $49,612,606 and $52,649,848 as of December 31, 2015 and 2014, respectively. The following represents condensed unconsolidated financial information of the parent company only: CONDENSED BALANCE SHEETS December 31, December 31, 2015 2014 ASSETS Current Assets Cash and cash equivalents $ 8,840 $ 26,179 Prepayments and other current assets - 62,500 Total current assets 8,840 88,679 Investment in subsidiaries 178,423,608 176,732,554 Total Assets $ 178,432,448 $ 176,821,233 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Inter-company payable $ 2,623,023 $ 1,875,867 Accrued payroll and employee benefit - - Accrued liabilities - - Insurance premium payable - - Total current liabilities 2,623,023 1,875,867 Total liabilities 2,623,023 1,875,867 Total stockholders' equity 175,809,425 174,945,366 Total Liabilities and Stockholders' Equity $ 178,432,448 $ 176,821,233 CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Year Ended December 31, 2015 2014 2013 Operating expenses Selling, general and administrative expenses $ 826,995 $ 1,492,940 $ 2,227,711 Loss from Operations (826,995 ) (1,492,940 ) (2,227,711 ) Equity in earnings of unconsolidated subsidiaries 12,369,200 13,199,300 15,242,276 Other Income (Expense) - - 83 Income before Income Taxes 11,542,205 11,706,360 13,014,648 Provision for Income Taxes - - - Net Income $ 11,542,205 $ 11,706,360 $ 13,014,648 Other comprehensive income /(loss) (10,678,146 ) (125,143 ) 4,818,869 Total Comprehensive Income $ 864,059 $ 11,581,217 $ 17,833,517 CONDENSED STATEMENTS OF CASH FLOWS Year Ended December 31, 2015 2014 2013 Net Cash (Used in) Provided by Operating Activities $ (764,495 ) $ (1,658,426 ) $ 365,720 Net Cash Used in Investing Activities - - - Net Cash Provided by (Used in) Financing Activities 747,156 1,642,013 (323,032 ) Net (Decrease) Increase in Cash and Cash Equivalents (17,339 ) (16,413 ) 42,688 Cash and Cash Equivalents - Beginning of Period 26,179 42,592 (96 ) Cash and Cash Equivalents - End of Period $ 8,840 $ 26,179 $ (42,592 ) BASIS OF PRESENTATION The condensed financial information has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the parent company has used equity method to account for its investments in the subsidiaries. |
Basis of Presentation and Sig32
Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), and include the assets, liabilities, revenues, expenses and cash flows of all subsidiaries and variable interest entity. All significant inter-company balances, transactions and cash flows are eliminated on consolidation. |
Liquidity and Going Concern | Liquidity and Going Concern As of December 31, 2015, the Company had current assets of $26,343,993 and current liabilities of $40,237,947 (including amounts due to related parties of $920,866), resulting in a working capital deficit of approximately $13,893,954; while as of December 31, 2014, the Company had current assets of $26,554,862 and current liabilities of $44,470,148 (including amounts due to related parties of $3,376,120), resulting in a working capital deficit of approximately $17,915,286. We are currently seeking to restructure the term of our liabilities by raising funds through long-term loans to pay off liabilities with shorter terms. Our ability to continue as a going concern is dependent upon obtaining the necessary financing or negotiating the terms of the existing short-term liabilities to meet our current and future liquidity needs. On March 1, 2015, the Company entered an agreement with the Company’s Chairman and Chief Executive Officer (“CEO”) , On July 1, 2015, Orient Paper HB, Shijiazhuang Office of China Orient Asset Management Corporation (“China Orient”), the parent and assignee of the rights of CNFTFL, and other guarantors of Lease Financing Agreement, entered into an agreement (the “2015 Agreement”), to amend and restate the Lease Financing Agreement entered into in 2013. The 2015 Agreement sets forth a modified and extended payment schedule with respect to the remaining payment obligation, with principal payable on the 20th of December 2015, June 2016, December 2016 and final payment on June 21, 2017. (see Note (8) below). On July 13, 2015, the Company and Mr. Zhenyong Liu entered into an agreement to loan $4,619,933(RMB30,000,000) to the Company, with an annual interest rate based on the People’s Bank of China at of the time of receipt and was set at 5.25% per annum. (see Note (9) below). The accrued interest under this agreement owned to Mr. Zhenyong Liu was approximately $111,167, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of December 31, 2015 (see Note (11) below). On December 31, 2015, the Company paid off a loan of $2,249,279 from Mr. Zhenyong Liu due to expiry, together with the interest of $391,374 through year 2013 to 2015. (see Note (9) below). As a result, regarding to the loan, there was still approximately $440,948 of interest due to Mr. Zhenyong Liu which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of December 31, 2015 (see Note (11) below). On January 20, 2016, Mr. Zhenyong Liu agreed in writing to permit the Company to continue to postpone the repayment of the accrued interest on his loan to Orient Paper HB until the Company is able to pay its other creditors in its normal course of business. The accrued interest owned to Mr. Zhenyong Liu was approximately $552,115, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of December 31, 2015 (see Note (11) below). On January 21, 2016, Hebei Fangsheng agreed in writing to permit the Company to continue to postpone the repayment of the accrued rental charged to Orient Paper HB until the earliest date on which the Company's quarterly or annual financial statements filed with the SEC show a satisfactory working capital level. The accrued rental owned to Hebei Fangsheng was approximately $368,751 and $227,900, which was recorded in other payables and accrued liabilities as part of the current liabilities as of December 31, 2015 and 2014, respectively. (see Note (9) below). Although management believes it can secure financial resources to satisfy the Company's current liabilities and the capital expenditure needs in the next 12 months, there are no guarantees that these financial resources will be secured. Therefore, there is a substantial doubt about the ability of the Company to continue as a going concern that it may be unable to realize its assets and discharge its liabilities in the normal course of business. Our consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. |
Foreign Currency Translation | Foreign Currency Translation The Company accounts for foreign currency translation pursuant to ASC Topic 830, Foreign Currency Matters Under ASC Topic 830-30, all assets and liabilities are translated into United States dollars using the current exchange rate at the end of each fiscal period. The current exchange rates used by the Company as of December 31, 2015 and 2014 to translate the Chinese RMB to the U.S. Dollars are 6.49360:1, and 6.11900:1, respectively. Revenues and expenses are translated using the average exchange rates prevailing throughout the respective years at 6.24010:1, 6.14530:1 and 6.19430:1 for the years ended December 31, 2015, 2014 and 2013, respectively. Translation adjustments are included in other comprehensive income (loss). |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of December 31, 2015 and 2014, and revenues and expenses for the years ended December 31, 2015, 2014 and 2013. The most significant estimates relate to allowance for uncollectible accounts receivable, inventory valuation, useful lives and impairment for property, plant and equipment, valuation allowance for deferred tax assets and contingencies. Actual results could differ from those estimates made by management. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting within the statements of cash flows, Orient Paper considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded on shipment of products to customers. The trade receivables are all without customer collateral and interest is not accrued on past due accounts. Periodically, management reviews the adequacy of its provision for doubtful accounts based on historical bad debt expense results and current economic conditions using factors based on the aging of its accounts receivable. Additionally, the Company may identify additional allowance requirements based on indications that a specific customer may be experiencing financial difficulties. Actual bad debt results could differ materially from these estimates. As of December 31, 2015 and 2014, the balance of allowance for doubtful accounts was $38,865 and $76,125, respectively; and the movement of the provision of the doubtful accounts is as below. While management uses the best information available upon which to base estimates, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used for the purposes of analysis. December 31, Allowance of doubtful accounts 2015 2014 Opening balance $ 76,125 $ 67,592 (Reversal of provision)/ Provision for the year (34,204 ) 8,571 Exchange difference (3,056 ) (38 ) Closing balance $ 38,865 $ 76,125 |
Inventories | Inventories Inventories consist principally of raw materials and finished goods, and are stated at the lower of cost (average cost method) or market. Cost includes labor, raw materials, and allocated overhead. No provision in inventories has been provided for the fiscal years 2015, 2014 and 2013. |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant, and equipment are stated at cost less accumulated depreciation and any impairment losses. Major renewals, betterments, and improvements are capitalized to the asset accounts while replacements, maintenance, and repairs, which do not improve or extend the lives of the respective assets, are expensed to operations. At the time property, plant, and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation or amortization accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to operations. Construction-in-progress is stated at cost and capitalized as expenses are incurred or as payments are made pursuant to relevant construction contracts. Contract retention is recorded as accrued liability. Construction in progress is not depreciated until project completion and the constructed property being placed in service, at which time the capitalized balance will be transferred to appropriate account of property, plant and equipment. The Company depreciates property, plant, and equipment using the straight-line method as follows: Land use right Over the lease term Building and improvements 30 years Machinery and equipment 5-15 years Vehicles 15 years |
Valuation of long-lived asset | Valuation of long-lived asset The Company reviews the carrying value of long-lived assets to be held and used when events and circumstances warrants such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset and intangible assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets and intangible assets to be disposed are determined in a similar manner, except that fair market values are reduced for the cost to dispose. |
Statutory Reserves | Statutory Reserves According to the laws and regulations in the PRC, the Company is required to provide for certain statutory funds, namely, reserve fund by an appropriation from net profit after taxation but before dividend distribution based on the local statutory financial statements of the PRC subsidiary and variable interest entity prepared in accordance with the PRC accounting principles and relevant financial regulations. The Company’s wholly owned subsidiary and variable interest entity in the PRC are required to allocate at least 10% of its net profit to the reserve fund until the balance of such fund has reached 50% of its registered capital. Appropriations of additional reserve fund are determined at the discretion of its directors. The reserve fund can only be used, upon approval by the relevant authority, to offset accumulated losses or increase capital. For the years ended December 31, 2015, 2014 and 2013, Orient Paper made transfers to this reserve fund in the amounts of $nil, $42,168, and $74,446, respectively. For the years ended December 31, 2014 and 2013, all transfers to statutory reserves were made by Orient Paper Shengde. As a result of net loss in fiscal year 2015 of Orient Paper Shengde, no statutory reserves were provided for the year ended December 31, 2015. The Company’s variable interest entity Orient Paper HB, which statutory reserve account has been fully funded for 50% of its registered capital in the amount of RMB 75,030,000 (or approximately $11,811,470) as of December 31, 2010, did not make any transfer to statutory reserves during the years ended December 31, 2015, 2014 and 2013. |
Employee Benefit Plan | Employee Benefit Plan Full time employees of the PRC entities participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance and other welfare benefits are provided to employees. The total provision for such employee benefits was $nil, $nil and $nil for the years ended December 31, 2015, 2014 and 2013. |
Revenue Recognition Policy | Revenue Recognition Policy The Company recognizes revenue when goods are delivered, when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist, and collectability is reasonably assured. Goods are considered delivered when customer’s truck picks up goods at our finished goods inventory warehouse. |
Shipping Cost | Shipping Cost Substantially all customers use their own trucks or hire commercial trucking companies to pick up goods from the Company. The Company usually incurs no shipping cost for delivery of goods to customers. For those rare situations where products are not shipped utilizing customer specified shipping services, the Company charges customers a shipping fee which is included in net revenues and was not material. Freight-in and handling costs incurred by the Company with respect to purchased goods are recorded as a component of inventory cost and charged to cost of sales when the inventory items are sold. |
Advertising | Advertising The Company expenses all advertising and promotion costs as incurred. The Company incurred $nil, $6,457 and $5,085 of advertising and promotion costs for the years ended December 31, 2015, 2014 and 2013, respectively. |
Research and development costs | Research and development costs Research and development costs are expensed as incurred and included in selling, general and administrative expenses. Research and development expenses incurred $28,448, $20,276 and $25,125 for the years ended December 31, 2015, 2014 and 2013, respectively. |
Borrowing costs | Borrowing costs Borrowing costs attributable directly to the acquisition, construction or production of qualifying assets which require a substantial period of time to be ready for their intended use or sale, are capitalized as part of the cost of those assets. Income earned on temporary investments of specific borrowings pending their expenditure on those assets is deducted from borrowing costs capitalized. All other borrowing costs are recognized in interest expenses in the period in which they are incurred. |
Government subsidies | Government subsidies A government subsidy is not recognized until there is reasonable assurance that: (a) the enterprise will comply with the conditions attached to the grant; and (b) the grant will be received. When the Company received the government subsidies but the conditions attached to the grants have not been fulfilled, such government subsidies are deferred and recorded under other payables and accrued expenses, and other long-term liability. The reclassification of short-term or long-term liabilities is depended on the management's expectation of when the conditions attached to the grant can be fulfilled. For the years ended December 31, 2015, 2014 and 2013, the Company received government subsidies of $555,605, $22,614 and $171,125, which are recognized as subsidy income in the consolidated statements of income in that fiscal year. |
Lease Obligations | Lease Obligations All non-cancellable leases with an initial term greater than one year are categorized as either capital or operating leases. For the lessee, a lease is a capital lease if any of the following conditions exist: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases. Assets recorded under capital leases are amortized according to the same depreciation methods employed for property, plant and equipment or over the term of the related lease, if shorter. The Company defers any profit or loss from a sale-leaseback transaction unless any of the following conditions exist: a) the seller-lessee relinquishes the right to substantially all of the remaining use of the property sold retaining only a minor portion of such use; b) the seller-lessee retains more than a minor part but less than substantially all of the use of the property through the leaseback and realizes a profit on the sale in excess of the recorded amount of the leased assets; or c) the fair value of the property at the time of the transaction is less than its undepreciated cost, in which circumstance a loss shall be recognized immediately. |
Income Taxes | Income Taxes The Company accounts for income taxes pursuant to ASC Topic 740, Income Taxes. Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Any tax paid by subsidiaries during the year is recorded. Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. ASC Topic 740 also requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards. ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets, including those related to the U.S. net operating loss carry-forwards, are dependent upon future earnings, if any, of which the timing and amount are uncertain. The Company adopted ASC Topic 740-10-05, Income Tax The Company’s policy on classification of all interest and penalties related to unrecognized income tax positions, if any, is to present them as a component of income tax expense. |
Value Added Tax | Value Added Tax Both the PRC subsidiary and variable interest entity of the Company are subject to value added tax (“VAT”) imposed by the PRC government on its purchase and sales of goods. The output VAT is charged to customers who purchase goods from the Company and the input VAT is paid when it purchases goods from its vendors. VAT rate is 17% in general, depending on the types of products purchased and sold. The input VAT can be offset against the output VAT. Debit balance of VAT payable represents a credit against future collection of output VAT instead of a receivable. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company presents comprehensive income (loss) in accordance with ASC Topic 220, Comprehensive Income |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. |
Share-Based Compensation | Share-Based Compensation The Company uses the fair value recognition provision of ASC Topic 718, Compensation-Stock Compensation, The Company also applies the provisions of ASC Topic 505-50, Equity Based Payments to Non-Employees |
Fair Value Measurements | Fair Value Measurements The Company has adopted ASC Topic 820, Fair Value Measurements and Disclosures Its establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts that the Company could realize in a current market exchange. As of December 31, 2015 and 2014, the carrying value of the Company’s short term financial instruments, such as cash and cash equivalents, accounts receivable, accounts and notes payable, short-term bank loans and balance due to a related party, approximate at their fair values because of the short maturity of these instruments; while loans from Credit union, loans from a related party and obligation under capital lease approximate at their fair value as the interest rates thereon are close to the market rates of interest published by the People’s Bank of China. The Company does not have any assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and 2014. |
Non-Recurring Fair Value Measurements | Non-Recurring Fair Value Measurements The Company reviews long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate the possibility of impairment. For the continuing operations, long-lived assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. For discontinued operations, long-lived assets are measured at the lower of carrying amount or fair value less cost to sell. The fair value of these assets were determined using models with significant unobservable inputs which were classified as Level 3 inputs, primarily the discounted future cash flow. |
Organization and Business Bac33
Organization and Business Background (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Business Background [Abstract] | |
Subsidiaries and variable interest entities | Place of Date of Incorporation Incorporation or Percentage of Name or Establishment Establishment Ownership Principal Activity Subsidiary: Dongfang Holding November 13, 2006 BVI 100 % Inactive investment holding Shengde Holdings February 25, 2009 State of Nevada 100 % Investment holding Orient Paper Shengde June 1, 2009 PRC 100 % Paper Production and distribution Variable interest entity: Orient Paper HB March 10, 1996 PRC Control* Paper Production and distribution * Orient Paper HB is treated as a 100% controlled variable interest entity of the Company |
Schedule of aggregate financial information of assets and liabilities | December 31, 2015 2014 ASSETS Current Assets Cash and cash equivalents $ 2,363,525 $ 3,288,654 Restricted cash 10,779,845 8,873,999 Accounts receivable 1,904,396 3,730,123 Inventories 8,741,974 6,941,161 Prepayments and other current assets 1,792,188 2,600,609 Total current assets 25,581,928 25,434,546 Prepayment on property, plant and equipment 1,404,460 1,490,440 Property, plant, and equipment, net 176,913,064 174,312,711 Deferred tax asset – non-current 1,217,896 281,010 Total Assets $ 205,117,348 $ 201,518,707 LIABILITIES Current Liabilities Short-term bank loans $ 13,859,800 $ 9,805,524 Current portion of long-term loans from credit union - 147,083 Current portion of long-term loans from a related party - 2,386,978 Current obligations under capital lease 6,860,412 12,258,488 Accounts payable 253,425 - Notes payable 13,859,800 16,113,744 Due to a related party 368,751 227,900 Accrued payroll and employee benefits 503,203 469,236 Other payables and accrued liabilities 3,889,235 2,390,909 Income taxes payable 600,876 637,143 Total current liabilities 40,195,502 44,437,005 Loans from credit union 5,174,325 5,760,745 Loans from a related party 13,859,800 9,805,524 Deferred gain on sale-leaseback 327,637 695,389 Long-term obligations under capital lease 3,217,785 4,090,413 Total liabilities $ 62,775,049 $ 64,789,076 |
Basis of Presentation and Sig34
Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Schedule of allowance for doubtful accounts | December 31, Allowance of doubtful accounts 2015 2014 Opening balance $ 76,125 $ 67,592 (Reversal of provision)/ Provision for the year (34,204 ) 8,571 Exchange difference (3,056 ) (38 ) Closing balance $ 38,865 $ 76,125 |
Scheudle of property plant and equipment estimated useful lives | Land use right Over the lease term Building and improvements 30 years Machinery and equipment 5-15 years Vehicles 15 years |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventories [Abstract] | |
Schedule of inventories | December 31, 2015 2014 Raw Materials Recycled paper board $ 4,416,252 $ 4,388,069 Recycled white scrap paper 1,880,323 1,212,588 Coal 453,665 497,038 Base paper and other raw materials 296,272 95,053 7,046,512 6,142,748 Finished Goods 2,158,908 996,851 Totals $ 9,205,420 $ 7,139,599 |
Prepayments and Other Current36
Prepayments and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Prepayments and Other Current Assets [Abstract] | |
Summary of prepayments and other current assets | December 31, 2015 2014 Prepaid NYSE MKT annual fee $ - $ 7,500 Recoverable VAT 453,964 250,000 Prepaid insurance - 55,000 Prepayment for purchase of materials 884,932 1,910,643 Prepaid land lease 461,993 490,276 Others 11,526 206,249 $ 1,812,415 $ 2,919,668 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | December 31, 2015 2014 Property, Plant, and Equipment: Land use rights $ 7,305,641 $ 7,752,886 Building and improvements 99,299,487 44,889,395 Machinery and equipment 132,785,421 121,332,310 Vehicles 665,789 706,548 Construction in progress 21,697,207 78,484,066 261,753,545 253,165,205 Less: accumulated depreciation and amortization (55,562,387 ) (44,952,007 ) Property, Plant and Equipment, net $ 206,191,158 $ 208,213,198 |
Loans Payable (Tables)
Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Loans Payable [Abstract] | |
Schedule of short-term bank loans | December 31, 2015 2014 Industrial & Commercial Bank of China (“ICBC”) Loan 1 (a) $ - $ 2,451,381 The Commercial Bank of the City of Zhangjiakou Loan 1 (b) - 3,268,508 ICBC Loan 2 (c) - 817,127 ICBC Loan 3 (d) - 3,268,508 ICBC Loan 4 (e) 3,079,956 - ICBC Loan 5 (f) 3,079,956 - The Commercial Bank of the City of Zhangjiakou Loan 2 (g) 7,699,888 - Total short-term bank loans $ 13,859,800 $ 9,805,524 (a) On June 26, 2014, the Company obtained an accounts receivable factoring facility from the ICBC of $2,451,381 as of December 31, 2014. 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 bore an interest rate of 6.6% per annum, which was 110% of the primary lending rate of the People’s Bank of China at the time of funding. The Company paid off the principal balance and interest by June 24, 2015 when the factoring facility expired. Concurrent with the signing of the new factoring agreement, the Company also entered into a financial service agreement with the ICBC, which provides accounts receivable management services to the Company during the terms of the underlying factoring facility. (b) On June 9, 2014, the Company obtained from the Commercial Bank of the City of Zhangjiakou a banking facility on bank loans and notes payable, which is guaranteed by the Company’s CEO and Shijiazhuang Baode Guarantee Service Company. In obtaining the guarantee from Shijiazhuang Baode Guarantee Service Company, Hebei Tengsheng Paper Co. Ltd (“Hebei Tengsheng”), a third party which owns the land use rights of about 330 acres (or 1.33 million square meters) of land in the Wei County and leases about one-fourth of the premises to Orient paper HB as our production bases of tissue paper and other future facilities, provided a guarantee with the land use rights and buildings as collateral. On July 18, 2014, the Company entered into a working capital loan agreement with the bank of $3,268,508 as of December 31, 2014. The loan bore a fixed interest rate of 11.88% per annum and was repaid on July 16, 2015. (c) On August 19, 2014, the Company obtained an accounts receivable factoring facility from the ICBC of $817,127 as of December 31, 2014. 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 bore an interest rate of 6.6% per annum, which was 110% of the primary lending rate of the People’s Bank of China at the time of funding. The Company paid off the principal balance and interest by June 10, 2015 when the factoring facility expired. (d) On November 20, 2014, the Company entered into a working capital loan agreement with the ICBC of $3,268,508 as of December 31, 2014. The working capital loan was guaranteed by Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. The loan bore an interest rate of 6.16% per annum, which was 110% of the primary lending rate of the People’s Bank of China at the time of funding. The Company paid off the principal balance and interest by December 3, 2015 when the loan expired. (e) On September 7, 2015, the Company entered into a working capital loan agreement with the ICBC of $3,079,956 as of December 31, 2015. The loan bears an interest rate of 5.06% per annum, which was 110% over the primary lending rate of the People’s Bank of China at the time of funding. The loan is due on September 6, 2016. The working capital loan was guaranteed by Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. (f) On December 11, 2015, the Company entered into a working capital loan agreement with the ICBC of $3,079,956 as of December 31, 2015. The loan bears an interest rate of 4.785% per annum at the time of funding. The loan is due on December 9, 2016. The working capital loan was guaranteed by Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. (g) On October 15, 2015, the Company entered into a working capital loan agreement with the Commercial Bank of the City of Zhangjiakou of $7,699,888 as of December 31, 2015. The loan bears a fixed interest rate of 11.88% per annum. The loan is due on October 15, 2016. The working capital loan was guaranteed by the Company’s CEO and his wife, as well as Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. |
Schedule of future minimum lease payments of capital lease | December 31, Amount 2016 $ 7,334,144 2017 3,313,519 Totals $ 10,647,663 Less: Unearned discount (569,466 ) 10,078,197 Less: Current portion of obligation under capital lease, net (6,860,412 ) Long-term obligation under capital lease, net $ 3,217,785 |
Other Payables and Accrued Li39
Other Payables and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Payables and Accrued Liabilities [Abstract] | |
Summary of other payables and accrued liabilities | December 31, 2015 2014 Accrued electricity $ 168,840 $ 334,212 Value-added tax payable - 841,556 Accrued interest to a related party 552,115 761,242 Accrued bank loan interest 73,970 - Payable for purchase of equipment 3,093,239 244,050 Others 14,807 219,463 Totals $ 3,902,971 $ 2,400,523 |
Stock Warrants (Tables)
Stock Warrants (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock Warrants [Line Items] | |
Summary of stock warrant activities | December 31, 2015 December 31, 2014 Number Weight average exercise price Number Weight average exercise price Outstanding and exercisable at beginning of the period 820,312 $ 1.71 - $ - Issued during the period - - 820,312 1.71 Exercised during the period - - - - Cancelled or expired during the period - - - - Outstanding and exercisable at end of the period 820,312 $ 1.71 820,312 $ 1.71 Range of exercise price $1.70 to $2.00 $1.70 to $2.00 |
Date of Issuance August 27, 2014 to September 2, 2019 [Member] | |
Stock Warrants [Line Items] | |
Fair value of warrants issued was estimated by using the Binominal pricing model | Terms of warrants 5 years Expected volatility 72.0 % Risk-free interest rate 1.69 % Expected dividend yield 0.81 % |
Date of Issuance September 3, 2014 to June 26, 2019 [Member] | |
Stock Warrants [Line Items] | |
Fair value of warrants issued was estimated by using the Binominal pricing model | Terms of warrants 4.81 years Expected volatility 69.8 % Risk-free interest rate 1.62 % Expected dividend yield 0.81 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Summary of basic and diluted net income per share | Year Ended December 31, 2015 2014 2013 Basic income per share Net Income for the year - numerator $ 11,542,205 $ 11,706,360 $ 13,014,648 Weighted average common stock outstanding - denominator 20,316,400 19,270,394 18,458,446 Net income per share $ 0.57 $ 0.61 $ 0.71 Diluted income per share Net Income for the year - numerator $ 11, 542,205 $ 11,706,360 $ 13,014,648 Weighted average common stock outstanding - denominator 20,316,400 19, 270,394 18,458,446 Effect of dilution Warrant Weighted average common stock outstanding - denominator 20,316,400 19, 270,394 18,458,446 Diluted income per share $ 0.57 $ 0.61 $ 0.71 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Schedule of provisions for income taxes | Year Ended December 31, 2015 2014 2013 Provision for Income Taxes Current Tax Provision – PRC $ 5,325,984 $ 4,034,119 $ 4,684,870 Deferred Tax Provision – PRC (1,203,019 ) 398,385 409,665 Total Provision for Income Taxes $ 4,122,965 $ 4,432,504 $ 5,094,535 |
Schedule of deferred tax assets (liabilities) | December 31, 2015 2014 Deferred tax assets (liabilities) Depreciation and amortization of property, plant and equipment $ 1,035,486 $ (1,248 ) Impairment of property, plant and equipment 344,202 308,175 Miscellaneous (23,428 ) (25,917 ) Net operating loss carryover of PRC company 64,594 - Net operating loss carryover for U.S. income tax purposes 2,281,718 2,000,539 Total deferred tax assets 3,702,572 2,281,549 Less: Valuation allowance (2,281,718 ) (2,000,539 ) Total deferred tax assets, net $ 1,420,854 $ 281,010 |
Schedule of reconciliation of statutory rates to Company's effective tax rate | Year ended December 31, 2015 2014 2013 PRC Statutory rate 25.0 % 25.0 % 25.0 % Effect of different tax jurisdiction (0.5 ) (0.8 ) (1.1 ) Effect of expenses not deductible for PRC tax purposes (0.1 ) - 1.5 Effect of income not taxable for PRC tax purposes - 0.1 - Under provision in previous year 0.1 0.1 - Change in valuation allowance 1.8 3.1 2.7 Effective income tax rate 26.3 % 27.5 % 28.1 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Schedule of future minimum lease payments of operating lease | December 31, Amount 2016 $ 662,704 2017 572,872 2018 572,872 2019 572,872 2010 572,872 Thereafter 3,529,629 Total operating lease payments $ 6,483,821 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Summarized financial information for reportable segments | Years Ended December 31, 2015 Orient Paper Orient Paper Not Attributable Elimination Enterprise-wide, HB Shengde to Segments of Inter-segment consolidated Revenues $ 134,927,208 $ 375,965 $ - $ - $ 135,303,173 Gross Profit (Loss) 28,104,243 (243,638 ) - - 27,860,605 Depreciation and amortization 10,623,900 2,775,090 - - 13,398,990 Interest income 68,752 1,567 - - 70,319 Interest expense 3,157,524 - - - 3,157,524 Income tax expense(benefit) 4,334,168 (211,203 ) - - 4,122,965 Net Income (Loss) 13,108,044 (738,844 ) (826,995 ) - 11,542,205 Total Assets 205,117,348 33,500,731 8,840 - 238,626,919 Years Ended December 31, 2014 Orient Paper Orient Paper Not Attributable Elimination Enterprise-wide, HB Shengde to Segments of Inter-segment consolidated Revenues $ 133,967,031 $ 4,829,046 $ - $ (1,754,630 ) $ 137,041,447 Gross Profit 20,401,820 2,376,328 - - 22,778,148 Depreciation and amortization 5,467,593 2,821,727 - - 8,289,320 Interest income 145,590 4,193 - - 149,783 Interest expense 1,446,439 - - - 1,446,439 Income tax expense 4,337,424 95,080 - - 4,432,504 Net Income (Loss) 11,299,155 1,900,145 (1,492,940 ) - 11,706,360 Total Assets 201,518,707 38,160,199 88,679 - 239,767,585 Year Ended December 31, 2013 Orient Paper Orient Paper Not Attributable Elimination Enterprise-wide, HB Shengde to Segments of Inter-segment consolidated Revenues $ 120,747,633 $ 4,969,997 $ - $ - $ 125,717,630 Gross Profit 22,318,739 1,006,860 - - 23,325,599 Depreciation and amortization 6,828,970 965,773 - - 7,794,743 Interest income 86,168 4,009 83 - 90,260 Interest expense 995,694 - - 995,694 Income tax expense 4,845,970 248,565 - - 5,094,535 Net Income (Loss) 14,604,244 638,031 (2,227,627 ) - 13,014,648 |
Summarized Quarterly Financia45
Summarized Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summarized Quarterly Financial Data (Unaudited) [Abstract] | |
Schedule of quarterly financial information | Quarter 2015 First Second Third Fourth Revenues $ 26,504,344 $ 41,283,142 $ 32,406,877 $ 35,108,810 Gross Profit 4,986,733 10,483,514 6,416,561 5,973,797 Income from Operations 3,280,340 8,649,545 2,601,779 3,665,106 Net income 2,105,489 5,590,530 1,685,897 2,160,289 Net income per share: Basic $ 0.10 $ 0.28 $ 0.08 $ 0.11 Diluted $ 0.10 $ 0.28 $ 0.08 $ 0.11 Quarter 2014 First Second Third Fourth Revenues $ 25,753,864 $ 37,836,265 $ 40,754,205 $ 32,697,113 Gross Profit 4,670,836 6,121,007 6,410,848 5,575,457 Income from Operations 3,761,920 5,131,707 4,929,301 3,589,978 Net income 2,533,294 3,572,107 3,372,944 2,228,015 Net income per share: Basic $ 0.13 $ 0.19 $ 0.18 $ 0.11 Diluted $ 0.13 $ 0.19 $ 0.18 $ 0.11 |
Condensed Financial Informati46
Condensed Financial Information of the Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of the Parent Company [Abstract] | |
Schedule of condensed balance sheet | December 31, December 31, 2015 2014 ASSETS Current Assets Cash and cash equivalents $ 8,840 $ 26,179 Prepayments and other current assets - 62,500 Total current assets 8,840 88,679 Investment in subsidiaries 178,423,608 176,732,554 Total Assets $ 178,432,448 $ 176,821,233 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Inter-company payable $ 2,623,023 $ 1,875,867 Accrued payroll and employee benefit - - Accrued liabilities - - Insurance premium payable - - Total current liabilities 2,623,023 1,875,867 Total liabilities 2,623,023 1,875,867 Total stockholders' equity 175,809,425 174,945,366 Total Liabilities and Stockholders' Equity $ 178,432,448 $ 176,821,233 |
Schedule of income statement | Year Ended December 31, 2015 2014 2013 Operating expenses Selling, general and administrative expenses $ 826,995 $ 1,492,940 $ 2,227,711 Loss from Operations (826,995 ) (1,492,940 ) (2,227,711 ) Equity in earnings of unconsolidated subsidiaries 12,369,200 13,199,300 15,242,276 Other Income (Expense) - - 83 Income before Income Taxes 11,542,205 11,706,360 13,014,648 Provision for Income Taxes - - - Net Income $ 11,542,205 $ 11,706,360 $ 13,014,648 Other comprehensive income /(loss) (10,678,146 ) (125,143 ) 4,818,869 Total Comprehensive Income $ 864,059 $ 11,581,217 $ 17,833,517 |
Schedule of condensed cash flow statement | Year Ended December 31, 2015 2014 2013 Net Cash (Used in) Provided by Operating Activities $ (764,495 ) $ (1,658,426 ) $ 365,720 Net Cash Used in Investing Activities - - - Net Cash Provided by (Used in) Financing Activities 747,156 1,642,013 (323,032 ) Net (Decrease) Increase in Cash and Cash Equivalents (17,339 ) (16,413 ) 42,688 Cash and Cash Equivalents - Beginning of Period 26,179 42,592 (96 ) Cash and Cash Equivalents - End of Period $ 8,840 $ 26,179 $ (42,592 ) |
Organization and Business Bac47
Organization and Business Background (Details) | 12 Months Ended | |
Dec. 31, 2015 | ||
Dongfang Holding [Member] | ||
Schedule of company's subsidiaries and variable interest entities | ||
Entity Incorporation, Date Of Incorporation | Nov. 13, 2006 | |
Entity Incorporation State Country Name | BVI | |
Percentage of Ownership | 100.00% | |
Principal Activity | Inactive investment holding | |
Shengde Holdings [Member] | ||
Schedule of company's subsidiaries and variable interest entities | ||
Entity Incorporation, Date Of Incorporation | Feb. 25, 2009 | |
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 | Jun. 1, 2009 | |
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 | Mar. 10, 1996 | |
Entity Incorporation State Country Name | PRC | |
Percentage of Ownership | 0.00% | [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 Bac48
Organization and Business Background (Details 1) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current Assets | ||||
Cash and cash equivalents | $ 2,641,917 | $ 3,891,473 | $ 3,131,163 | $ 13,140,288 |
Restricted cash | 10,779,845 | 8,873,999 | ||
Accounts receivable | 1,904,396 | 3,730,123 | ||
Inventories | 9,205,420 | 7,139,599 | ||
Prepayments and other current assets | 1,812,415 | 2,919,668 | ||
Total current assets | 26,343,993 | 26,554,862 | ||
Prepayment on property, plant and equipment | 1,404,460 | 1,490,440 | ||
Property, plant, and equipment, net | 206,191,158 | 208,213,198 | ||
Deferred tax asset - non-current | 1,420,854 | 281,010 | ||
Total Assets | 238,626,919 | 239,767,585 | ||
Current Liabilities | ||||
Short-term bank loans | $ 13,859,800 | 9,805,524 | ||
Current portion of long-term loans from credit union | 147,083 | |||
Current portion of long-term loans from a related party | 2,386,978 | |||
Current obligations under capital lease | $ 6,860,412 | $ 12,258,488 | ||
Accounts payable | 253,425 | |||
Notes payable | 13,859,800 | $ 16,113,744 | ||
Due to a related party | 368,751 | 227,900 | ||
Accrued payroll and employee benefits | 531,912 | 492,765 | ||
Other payables and accrued liabilities | 3,902,971 | 2,400,523 | ||
Income taxes payable | 600,876 | 637,143 | ||
Total current liabilities | 40,237,947 | 44,470,148 | ||
Loans from credit union | 5,174,325 | 5,760,745 | ||
Loans from a related party | 13,859,800 | 9,805,524 | ||
Deferred gain on sale-leaseback | 327,637 | 695,389 | ||
Long-term obligations under capital lease | 3,217,785 | 4,090,413 | ||
Total liabilities | 62,817,494 | 64,822,219 | ||
Orient Paper HB [Member] | ||||
Current Assets | ||||
Cash and cash equivalents | 2,363,525 | 3,288,654 | ||
Restricted cash | 10,779,845 | 8,873,999 | ||
Accounts receivable | 1,904,396 | 3,730,123 | ||
Inventories | 8,741,974 | 6,941,161 | ||
Prepayments and other current assets | 1,792,188 | 2,600,609 | ||
Total current assets | 25,581,928 | 25,434,546 | ||
Prepayment on property, plant and equipment | 1,404,460 | 1,490,440 | ||
Property, plant, and equipment, net | 176,913,064 | 174,312,711 | ||
Deferred tax asset - non-current | 1,217,896 | 281,010 | ||
Total Assets | 205,117,348 | 201,518,707 | ||
Current Liabilities | ||||
Short-term bank loans | $ 13,859,800 | 9,805,524 | ||
Current portion of long-term loans from credit union | 147,083 | |||
Current portion of long-term loans from a related party | 2,386,978 | |||
Current obligations under capital lease | $ 6,860,412 | $ 12,258,488 | ||
Accounts payable | 253,425 | |||
Notes payable | 13,859,800 | $ 16,113,744 | ||
Due to a related party | 368,751 | 227,900 | ||
Accrued payroll and employee benefits | 503,203 | 469,236 | ||
Other payables and accrued liabilities | 3,889,235 | 2,390,909 | ||
Income taxes payable | 600,876 | 637,143 | ||
Total current liabilities | 40,195,502 | 44,437,005 | ||
Loans from credit union | 5,174,325 | 5,760,745 | ||
Loans from a related party | 13,859,800 | 9,805,524 | ||
Deferred gain on sale-leaseback | 327,637 | 695,389 | ||
Long-term obligations under capital lease | 3,217,785 | 4,090,413 | ||
Total liabilities | $ 62,775,049 | $ 64,789,076 |
Organization and Business Bac49
Organization and Business Background (Details Textual) | Feb. 10, 2010USD ($)¥ / shares | Jun. 30, 2009 | Oct. 29, 2007shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2010 | Jun. 30, 2010USD ($) | Jun. 24, 2009USD ($) |
Organization and Business Background (Textual) | |||||||||
Exercise price for the options | ¥ / shares | ¥ 1 | ||||||||
Percentage of distributable profit of Orient Paper HB | 100.00% | ||||||||
Shengde Holdings [Member] | |||||||||
Organization and Business Background (Textual) | |||||||||
Percentage of ownership | 100.00% | ||||||||
Dongfang Holding [Member] | |||||||||
Organization and Business Background (Textual) | |||||||||
Percentage of ownership | 100.00% | ||||||||
Shares of common stock issued to Dongfang Holding shareholders under merger agreement | shares | 7,450,497 | ||||||||
Orient Paper Shengde [Member] | |||||||||
Organization and Business Background (Textual) | |||||||||
Registered capital | $ 60,000,000 | $ 10,000,000 | |||||||
Loans terminated | ¥ 10,000,000 | ||||||||
Orient Paper HB [Member] | |||||||||
Organization and Business Background (Textual) | |||||||||
Service fees percentage of annual net profit | 80.00% | ||||||||
Loans terminated | ¥ 10,000,000 | ||||||||
Percentage of revenue | 99.72% | 96.48% | 96.05% | ||||||
Percentage of assets accounted by Orient Paper HB | 85.96% | 84.05% |
Basis of Presentation and Sig50
Basis of Presentation and Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Opening balance | $ 76,125 | $ 67,592 |
(Reversal of provision)/ Provision for the year | (34,204) | 8,571 |
Exchange difference | (3,056) | (38) |
Closing balance | $ 38,865 | $ 76,125 |
Basis of Presentation and Sig51
Basis of Presentation and Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2015 | |
Land use right [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment, Useful life | Over the lease term |
Building and improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment, Useful life | 30 years |
Machinery and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment, Useful life | 5 years |
Machinery and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment, Useful life | 15 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment, Useful life | 15 years |
Basis of Presentation and Sig52
Basis of Presentation and Significant Accounting Policies (Details Textual) | Jul. 13, 2015USD ($) | Dec. 30, 2010USD ($) | Dec. 30, 2010CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Jan. 20, 2016USD ($) | Jul. 13, 2015CNY (¥) | Mar. 01, 2015USD ($) | Mar. 01, 2015CNY (¥) |
Basis of Presentation and Significant Accounting Policies (Textual) | ||||||||||
Current assets | $ 26,343,993 | $ 26,554,862 | ||||||||
Current liabilities | 40,237,947 | 44,470,148 | ||||||||
Current liabilities including amounts due to related parties | 920,866 | 3,376,120 | ||||||||
Working capital deficit | 13,893,954 | 17,915,286 | ||||||||
Accrued interest | $ 552,115 | 761,242 | ||||||||
Loans payable to related party | 2,386,978 | |||||||||
Long-term obligations under capital lease | $ 3,217,785 | $ 4,090,413 | ||||||||
Drawn from facility | $ 4,619,933 | |||||||||
Currency average exchange rate to translate Chinese RMB to U.S. Dollars | 6.24010 | 6.14530 | 6.19430 | |||||||
Statutory reserve fund | $ 42,168 | $ 74,446 | ||||||||
Net profit transferred to statutory reserve fund | $ 11,811,470 | ¥ 75,030,000 | ||||||||
Allowance for doubtful accounts | $ 38,865 | $ 76,125 | $ 67,592 | |||||||
Provision for such employee benefits | ||||||||||
Advertising and promotion costs | $ 6,457 | $ 5,085 | ||||||||
Research and development costs | $ 28,448 | 20,276 | 25,125 | |||||||
Subsidy from government | $ 555,605 | 22,614 | 171,125 | |||||||
Lease obligations description | The lease term is at least 75% of the property's estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. | |||||||||
Interest paid | $ 3,255,478 | 1,826,460 | 708,089 | |||||||
Current exchange rates | The current exchange rates used by the Company as of December 31, 2015 and 2014 to translate the Chinese RMB to the U.S. Dollars are 6.49360:1, and 6.11900:1, respectively. Revenues and expenses are translated using the average exchange rates prevailing throughout the respective years at 6.24010:1, 6.14530:1 and 6.19430:1 for the years ended December 31, 2015, 2014 and 2013, respectively. | |||||||||
Hebei Fangsheng [Member] | ||||||||||
Basis of Presentation and Significant Accounting Policies (Textual) | ||||||||||
Accrued rental | $ 368,751 | 227,900 | ||||||||
Chief Executive Officer [Member] | ||||||||||
Basis of Presentation and Significant Accounting Policies (Textual) | ||||||||||
Accrued interest | 111,167 | |||||||||
Loans payable to related party | $ 4,619,933 | ¥ 30,000,000 | $ 18,479,734 | ¥ 120,000,000 | ||||||
Unsecured loan interest rate | 5.25 | |||||||||
Mr. Zhenyong Liu [Member] | ||||||||||
Basis of Presentation and Significant Accounting Policies (Textual) | ||||||||||
Accrued interest | 391,374 | 391,374 | 391,374 | |||||||
Loans payable to related party | 13,859,800 | 12,192,502 | ||||||||
Other payables and accrued liabilities | 440,948 | |||||||||
Loan paid off | 2,249,279 | |||||||||
Interest paid | $ 391,374 | $ 391,374 | $ 391,374 | |||||||
Mr. Zhenyong Liu [Member] | Subsequent Event [Member] | ||||||||||
Basis of Presentation and Significant Accounting Policies (Textual) | ||||||||||
Accrued interest | $ 552,115 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Restricted Cash (Textual) | ||
Restricted cash | $ 10,779,845 | $ 8,873,999 |
Description of lifting of restricted cash | The restriction will be lifted upon the maturity of the notes payable from January 7, 2016 through April 23, 2016. | The restriction has been lifted upon the maturity of the notes payable from January 7, 2015 through April 23, 2015. |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of inventories | ||
Raw materials, Gross | $ 7,046,512 | $ 6,142,748 |
Finished goods | 2,158,908 | 996,851 |
Totals | 9,205,420 | 7,139,599 |
Recycled paper board [Member] | ||
Schedule of inventories | ||
Raw materials, Gross | 4,416,252 | 4,338,069 |
Recycled white scrap paper [Member] | ||
Schedule of inventories | ||
Raw materials, Gross | 1,880,323 | 1,212,588 |
Coal [Member] | ||
Schedule of inventories | ||
Raw materials, Gross | 453,665 | 497,038 |
Base paper and other raw materials [Member] | ||
Schedule of inventories | ||
Raw materials, Gross | $ 296,272 | $ 95,053 |
Prepayments and Other Current55
Prepayments and Other Current Assets (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of prepayments and other current assets | ||
Prepaid NYSE MKT annual fee | $ 7,500 | |
Recoverable VAT | $ 453,964 | 250,000 |
Prepaid insurance | 55,000 | |
Prepayment for purchase of materials | $ 884,932 | 1,910,643 |
Prepaid land lease | 461,993 | 490,276 |
Others | 11,526 | 206,249 |
Totals | $ 1,812,415 | $ 2,919,668 |
Prepayment on Property, Plant56
Prepayment on Property, Plant and Equipment (Details) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Oct. 26, 2012m² |
Prepayment on property, plant and equipment (Textual) | |||
Prepayment on property, plant and equipment | $ | $ 1,404,460 | $ 1,490,440 | |
Entitlement of land use rights in Xushui County, Baoding plant | m² | 65,023 |
Property, Plant and Equipment57
Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of property, plant and equipment | ||
Totals | $ 261,753,545 | $ 253,165,205 |
Less: accumulated depreciation and amortization | (55,562,387) | (44,952,007) |
Property, Plant and Equipment, net | 206,191,158 | 208,213,198 |
Land use rights [Member] | ||
Schedule of property, plant and equipment | ||
Totals | 7,305,641 | 7,752,886 |
Building and improvements [Member] | ||
Schedule of property, plant and equipment | ||
Totals | 99,299,487 | 44,889,395 |
Machinery and equipment [Member] | ||
Schedule of property, plant and equipment | ||
Totals | 132,785,421 | 121,332,310 |
Vehicles [Member] | ||
Schedule of property, plant and equipment | ||
Totals | 665,789 | 706,548 |
Construction in progress [Member] | ||
Schedule of property, plant and equipment | ||
Totals | $ 21,697,207 | $ 78,484,066 |
Property, Plant and Equipment58
Property, Plant and Equipment (Details Textual) | Jun. 16, 2013USD ($) | Jun. 16, 2013CNY (¥) | Dec. 31, 2015USD ($)T | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Jul. 01, 2015USD ($) | Jun. 16, 2013CNY (¥) |
Property, Plant and Equipment (Textual) | |||||||
Deferred gain on sale of leased equipment | $ 327,637 | $ 695,389 | |||||
Production capacity of manufacturing equipment PM8 (per year) | T | 15,000 | ||||||
Amount of interest capitalized | $ 154,930 | 698,714 | $ 448,950 | ||||
Assets pledged for the guarantee of Orient Paper HB's capital lease | 28,745,628 | 33,287,324 | |||||
Value of land use right pledged for sale-leaseback financing | 6,769,894 | 7,339,399 | |||||
Depreciation and amortization | 13,398,990 | 8,289,320 | 7,794,743 | ||||
Property plant and equipment pledged for long term loan | 14,236,083 | 19,300,765 | |||||
Property plant and equipment loan drawn from banking facility | 29,175 | 29,995 | |||||
Capital lease asset cost | 27,599,774 | ||||||
Sale-leaseback arrangement [Member] | |||||||
Property, Plant and Equipment (Textual) | |||||||
Total financing proceeds | $ 24,000,000 | ¥ 150,000,000 | |||||
Proceeds from sale of paper manufacturing equipment to leasing company | $ 24,000,000 | ¥ 150,000,000 | |||||
Term of lease | 3 years | 3 years | |||||
Nominal purchase price | $ 2,400 | ¥ 15,000 | |||||
Deferred gain on sale of leased equipment | $ 1,379,282 | ||||||
Depreciation of capital lease equipment | 1,683,581 | 1,650,649 | 818,796 | ||||
Accumulated depreciation of lease asset | 3,961,025 | 2,486,615 | |||||
Gain on sale leaseback realized transaction | 340,947 | 461,609 | $ 228,979 | ||||
Future minimum lease payment | $ 1,617,574 | ||||||
Unamortized deferred gain | 327,637 | 695,389 | |||||
Capital lease asset cost | $ 25,990,183 | $ 25,964,790 | |||||
Land use rights [Member] | |||||||
Property, Plant and Equipment (Textual) | |||||||
Lease expiration year | 2,061 | ||||||
Term of lease | 50 years |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of short-term bank loans | |||
Short-term bank loans | $ 13,859,800 | $ 9,805,524 | |
Industrial & Commercial Bank of China (''ICBC'') Loan 1[Member] | Factoring Facility [Member] | |||
Schedule of short-term bank loans | |||
Short-term bank loans | [1] | 2,451,381 | |
The Commercial Bank of the City of Zhangjiakou Loan 1 [Member] | Factoring Facility [Member] | |||
Schedule of short-term bank loans | |||
Short-term bank loans | [2] | 3,268,508 | |
ICBC Loan 2 [Member] | Factoring Facility [Member] | |||
Schedule of short-term bank loans | |||
Short-term bank loans | [3] | 817,127 | |
ICBC Loan 3 [Member] | Factoring Facility [Member] | |||
Schedule of short-term bank loans | |||
Short-term bank loans | [4] | $ 3,268,508 | |
ICBC Loan 4 [Member] | Factoring Facility [Member] | |||
Schedule of short-term bank loans | |||
Short-term bank loans | [5] | $ 3,079,956 | |
ICBC Loan 5 [Member] | Factoring Facility [Member] | |||
Schedule of short-term bank loans | |||
Short-term bank loans | [6] | 3,079,956 | |
The Commercial Bank of the City of Zhangjiakou Loan 2 [Member] | Factoring Facility [Member] | |||
Schedule of short-term bank loans | |||
Short-term bank loans | [7] | $ 7,699,888 | |
[1] | On June 26, 2014, the Company obtained an accounts receivable factoring facility from the ICBC of $2,451,381 as of December 31, 2014. 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 bore an interest rate of 6.6% per annum, which was 110% of the primary lending rate of the People's Bank of China at the time of funding. The Company paid off the principal balance and interest by June 24, 2015 when the factoring facility expired. Concurrent with the signing of the new factoring agreement, the Company also entered into a financial service agreement with the ICBC, which provides accounts receivable management services to the Company during the terms of the underlying factoring facility. | ||
[2] | On June 9, 2014, the Company obtained from the Commercial Bank of the City of Zhangjiakou a banking facility on bank loans and notes payable, which is guaranteed by the Company's CEO and Shijiazhuang Baode Guarantee Service Company. In obtaining the guarantee from Shijiazhuang Baode Guarantee Service Company, Hebei Tengsheng Paper Co. Ltd ("Hebei Tengsheng"), a third party which owns the land use rights of about 330 acres (or 1.33 million square meters) of land in the Wei County and leases about one-fourth of the premises to Orient paper HB as our production bases of tissue paper and other future facilities, provided a guarantee with the land use rights and buildings as collateral. On July 18, 2014, the Company entered into a working capital loan agreement with the bank of $3,268,508 as of December 31, 2014. The loan bore a fixed interest rate of 11.88% per annum and was repaid on July 16, 2015. | ||
[3] | On August 19, 2014, the Company obtained an accounts receivable factoring facility from the ICBC of $817,127 as of December 31, 2014. 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 bore an interest rate of 6.6% per annum, which was 110% of the primary lending rate of the People's Bank of China at the time of funding. The Company paid off the principal balance and interest by June 10, 2015 when the factoring facility expired. | ||
[4] | On November 20, 2014, the Company entered into a working capital loan agreement with the ICBC of $3,268,508 as of December 31, 2014. The working capital loan was guaranteed by Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. The loan bore an interest rate of 6.16% per annum, which was 110% of the primary lending rate of the People's Bank of China at the time of funding. The Company paid off the principal balance and interest by December 3, 2015 when the loan expired. | ||
[5] | On September 7, 2015, the Company entered into a working capital loan agreement with the ICBC of $3,079,956 as of December 31, 2015. The loan bears an interest rate of 5.06% per annum, which was 110% over the primary lending rate of the People's Bank of China at the time of funding. The loan is due on September 6, 2016. The working capital loan was guaranteed by Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. | ||
[6] | On December 11, 2015, the Company entered into a working capital loan agreement with the ICBC of $3,079,956 as of December 31, 2015. The loan bears an interest rate of 4.785% per annum at the time of funding. The loan is due on December 9, 2016. The working capital loan was guaranteed by Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. | ||
[7] | On October 15, 2015, the Company entered into a working capital loan agreement with the Commercial Bank of the City of Zhangjiakou of $7,699,888 as of December 31, 2015. The loan bears a fixed interest rate of 11.88% per annum. The loan is due on October 15, 2016. The working capital loan was guaranteed by the Company's CEO and his wife, as well as Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. |
Loans Payable (Details 1)
Loans Payable (Details 1) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of future minimum capital lease payments | ||
2,016 | $ 7,334,144 | |
2,017 | 3,313,519 | |
Totals | 10,647,663 | |
Less: Unearned discount | (569,466) | |
Capital lease total | 10,078,197 | |
Current portion of obligation under capital lease, net | (6,860,412) | |
Long-term obligations under capital lease | $ 3,217,785 | $ 4,090,413 |
Loans Payable (Details Textual)
Loans Payable (Details Textual) | Dec. 11, 2015 | Oct. 15, 2015 | Sep. 07, 2015 | Jul. 01, 2015USD ($) | Jun. 15, 2015USD ($) | Jun. 15, 2015CNY (¥) | Nov. 20, 2014 | Aug. 19, 2014 | Jun. 26, 2014 | Jun. 09, 2014a | Apr. 16, 2014 | Jul. 15, 2013 | Jun. 16, 2013USD ($) | Jun. 16, 2013CNY (¥) | Aug. 31, 2015USD ($) | May. 19, 2015USD ($) | May. 19, 2015CNY (¥) | Dec. 31, 2015USD ($)m² | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 26, 2014USD ($) | Jun. 16, 2013CNY (¥) | ||
Loans Payable (Textual) | ||||||||||||||||||||||||
Unpaid balance of short term debt | $ 13,859,800 | $ 9,805,524 | ||||||||||||||||||||||
Unsecured bank loans | ||||||||||||||||||||||||
Secured bank loans | 6,537,016 | |||||||||||||||||||||||
Accounts receivable | $ 1,904,396 | $ 3,730,123 | ||||||||||||||||||||||
Average short-term borrowing rates | 8.27% | 7.71% | 6.68% | |||||||||||||||||||||
Interest expense for the short-term bank loans and long-term loans | $ 1,209,293 | $ 1,031,163 | $ 828,157 | |||||||||||||||||||||
Long-term obligations under capital lease | 3,217,785 | 4,090,413 | ||||||||||||||||||||||
Current obligations under capital lease | 6,860,412 | 12,258,488 | ||||||||||||||||||||||
Total interest expenses for the sale-leaseback arrangement | 1,363,011 | 919,298 | 471,472 | |||||||||||||||||||||
Deferred gain on sale of leased equipment | 327,637 | 695,389 | ||||||||||||||||||||||
Value of land use right pledged for sale-leaseback financing | 6,769,894 | 7,339,399 | ||||||||||||||||||||||
Assets pledged for the guarantee of Orient Paper HB's capital lease | 28,745,628 | 33,287,324 | ||||||||||||||||||||||
Payments to lessor | 7,148,142 | 4,199,689 | $ 5,406,481 | |||||||||||||||||||||
Repayments of loan | 4,619,933 | |||||||||||||||||||||||
Sale-leaseback arrangement [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Total financing proceeds | $ 24,000,000 | ¥ 150,000,000 | ||||||||||||||||||||||
Proceeds from sale of paper manufacturing equipment to leasing company | 24,000,000 | 150,000,000 | ||||||||||||||||||||||
Nominal purchase price | 2,400 | ¥ 15,000 | ||||||||||||||||||||||
Deferred gain on sale of leased equipment | 1,379,282 | |||||||||||||||||||||||
Future minimum lease payment | $ 1,617,574 | |||||||||||||||||||||||
Rural Credit Union of Xushui County [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Loans from credit union | 5,174,325 | 5,907,828 | ||||||||||||||||||||||
Term Loan [Member] | Rural Credit Union of Xushui County [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Loans from credit union | 1,324,380 | 1,609,740 | ||||||||||||||||||||||
Long-term debt, Interest rate per month | 0.72% | |||||||||||||||||||||||
Installment repayment description | The Rural Credit Union of Xushui County for a term of 5 years, which is repayable by various installments from June 21, 2014 to November 18, 2018. | |||||||||||||||||||||||
Current portion of long-term loan from credit union | 65,370 | |||||||||||||||||||||||
Loan extension period | 5 years | |||||||||||||||||||||||
Maturities repayment terms | The Company repaid a portion of the loan in an amount of $192,497, of which $130,898 were paid ahead of its original repayment schedule as of December 31, 2015. | |||||||||||||||||||||||
Early repayment of bank loan | $ 130,898 | |||||||||||||||||||||||
Repayments of loan | $ 192,497 | |||||||||||||||||||||||
New term loan agreement [Member] | Rural Credit Union of Xushui County [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Loans from credit union | $ 3,849,945 | 4,298,088 | ||||||||||||||||||||||
Long-term debt, Interest rate per month | 0.72% | |||||||||||||||||||||||
Installment repayment description | Between December 21, 2013 and July 26, 2018. | |||||||||||||||||||||||
Current portion of long-term loan from credit union | 81,713 | |||||||||||||||||||||||
Loan extension period | 5 years | |||||||||||||||||||||||
Security loan agreement by manufacturing equipment | $ 14,236,083 | 19,300,765 | ||||||||||||||||||||||
Maturities repayment terms | The Company repaid a portion of the loan in an amount of $200,197, of which $123,198 were paid ahead of its original repayment schedule as of December 31, 2015. | |||||||||||||||||||||||
Early repayment of bank loan | $ 123,198 | |||||||||||||||||||||||
Repayments of loan | $ 200,197 | |||||||||||||||||||||||
Lease financing agreement [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Maturities repayment terms | The 2015 Agreement sets forth a modified and extended payment schedule with respect to the remaining payment obligation, with the final repayment date extended to June 21, 2017. Under the 2015 Agreement, the interest accrues at a rate of 15% per annum starting on June 16, 2015, and is payable on the 20th of every March, June, September and December until the principal is paid off, except for the first payment, which is due on July 31, 2015. | |||||||||||||||||||||||
Deferred gain on sale of leased equipment | 1,379,282 | |||||||||||||||||||||||
ICBC Loan 1 [Member] | Factoring Facility [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Unpaid balance of short term debt | [1] | 2,451,381 | ||||||||||||||||||||||
Short-term bank loans, fixed interest rate | 6.60% | |||||||||||||||||||||||
Short-term bank loans interest rate as percentage of prime rate | 110.00% | |||||||||||||||||||||||
Loan, maturity date | Jun. 24, 2015 | |||||||||||||||||||||||
The Commercial Bank of the City of Zhangjiakou [Member] | Factoring Facility [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Unpaid balance of short term debt | [2] | 3,268,508 | ||||||||||||||||||||||
Short-term bank loans, fixed interest rate | 11.88% | |||||||||||||||||||||||
Loan, maturity date | Jul. 16, 2015 | |||||||||||||||||||||||
Area of land | a | 330 | |||||||||||||||||||||||
ICBC Loan 2 [Member] | Factoring Facility [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Unpaid balance of short term debt | 817,127 | [3] | ||||||||||||||||||||||
Short-term bank loans, fixed interest rate | 6.60% | |||||||||||||||||||||||
Short-term bank loans interest rate as percentage of prime rate | 110.00% | |||||||||||||||||||||||
Loan, maturity date | Jun. 10, 2015 | |||||||||||||||||||||||
ICBC Loan 2 [Member] | Factoring Facility [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Unpaid balance of short term debt | [3] | $ 817,127 | ||||||||||||||||||||||
Short-term bank loans, fixed interest rate | 6.16% | |||||||||||||||||||||||
Short-term bank loans interest rate as percentage of prime rate | 110.00% | |||||||||||||||||||||||
Loan, maturity date | Dec. 3, 2015 | |||||||||||||||||||||||
China National Foreign Trade Financial & Leasing Co. [Member] | Lease financing agreement [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Total financing proceeds | 24,000,000 | 150,000,000 | ||||||||||||||||||||||
Proceeds from sale of paper manufacturing equipment to leasing company | 24,000,000 | ¥ 150,000,000 | ||||||||||||||||||||||
Nominal purchase price | $ 2,400 | ¥ 15,000 | ||||||||||||||||||||||
Lease service charge, Description | Equal to 5.55% of the amount financed. | |||||||||||||||||||||||
Lease service expense | $ 1,360,000 | |||||||||||||||||||||||
Implicit interest rate | 6.15% | 6.15% | ||||||||||||||||||||||
Stated capital lease | $ 25,750,170 | |||||||||||||||||||||||
Payment for liquidated damage | $ 9,200 | |||||||||||||||||||||||
Payments to lessor | $ 3,000,000 | ¥ 20,000,000 | $ 800,000 | ¥ 5,000,000 | ||||||||||||||||||||
China National Foreign Trade Financial & Leasing Co. [Member] | Collateral Agreement [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Value of land use right pledged for sale-leaseback financing | $ 6,769,894 | |||||||||||||||||||||||
Land collateral for capital lease | m² | 58,566 | |||||||||||||||||||||||
ICBC Loan 4 [Member] | Factoring Facility [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Unpaid balance of short term debt | [4] | $ 3,079,956 | ||||||||||||||||||||||
Short-term bank loans, fixed interest rate | 5.06% | |||||||||||||||||||||||
Short-term bank loans interest rate as percentage of prime rate | 110.00% | |||||||||||||||||||||||
Loan, maturity date | Sep. 6, 2016 | |||||||||||||||||||||||
ICBC Loan 5 [Member] | Factoring Facility [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Unpaid balance of short term debt | [5] | 3,079,956 | ||||||||||||||||||||||
Short-term bank loans, fixed interest rate | 4.785% | |||||||||||||||||||||||
Loan, maturity date | Dec. 9, 2016 | |||||||||||||||||||||||
The Commercial Bank of the City of Zhangjiakou Loan 2 [Member] | Factoring Facility [Member] | ||||||||||||||||||||||||
Loans Payable (Textual) | ||||||||||||||||||||||||
Unpaid balance of short term debt | [6] | $ 7,699,888 | ||||||||||||||||||||||
Short-term bank loans, fixed interest rate | 11.88% | |||||||||||||||||||||||
Loan, maturity date | Oct. 15, 2016 | |||||||||||||||||||||||
[1] | On June 26, 2014, the Company obtained an accounts receivable factoring facility from the ICBC of $2,451,381 as of December 31, 2014. 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 bore an interest rate of 6.6% per annum, which was 110% of the primary lending rate of the People's Bank of China at the time of funding. The Company paid off the principal balance and interest by June 24, 2015 when the factoring facility expired. Concurrent with the signing of the new factoring agreement, the Company also entered into a financial service agreement with the ICBC, which provides accounts receivable management services to the Company during the terms of the underlying factoring facility. | |||||||||||||||||||||||
[2] | On June 9, 2014, the Company obtained from the Commercial Bank of the City of Zhangjiakou a banking facility on bank loans and notes payable, which is guaranteed by the Company's CEO and Shijiazhuang Baode Guarantee Service Company. In obtaining the guarantee from Shijiazhuang Baode Guarantee Service Company, Hebei Tengsheng Paper Co. Ltd ("Hebei Tengsheng"), a third party which owns the land use rights of about 330 acres (or 1.33 million square meters) of land in the Wei County and leases about one-fourth of the premises to Orient paper HB as our production bases of tissue paper and other future facilities, provided a guarantee with the land use rights and buildings as collateral. On July 18, 2014, the Company entered into a working capital loan agreement with the bank of $3,268,508 as of December 31, 2014. The loan bore a fixed interest rate of 11.88% per annum and was repaid on July 16, 2015. | |||||||||||||||||||||||
[3] | On August 19, 2014, the Company obtained an accounts receivable factoring facility from the ICBC of $817,127 as of December 31, 2014. 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 bore an interest rate of 6.6% per annum, which was 110% of the primary lending rate of the People's Bank of China at the time of funding. The Company paid off the principal balance and interest by June 10, 2015 when the factoring facility expired. | |||||||||||||||||||||||
[4] | On September 7, 2015, the Company entered into a working capital loan agreement with the ICBC of $3,079,956 as of December 31, 2015. The loan bears an interest rate of 5.06% per annum, which was 110% over the primary lending rate of the People's Bank of China at the time of funding. The loan is due on September 6, 2016. The working capital loan was guaranteed by Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. | |||||||||||||||||||||||
[5] | On December 11, 2015, the Company entered into a working capital loan agreement with the ICBC of $3,079,956 as of December 31, 2015. The loan bears an interest rate of 4.785% per annum at the time of funding. The loan is due on December 9, 2016. The working capital loan was guaranteed by Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. | |||||||||||||||||||||||
[6] | On October 15, 2015, the Company entered into a working capital loan agreement with the Commercial Bank of the City of Zhangjiakou of $7,699,888 as of December 31, 2015. The loan bears a fixed interest rate of 11.88% per annum. The loan is due on October 15, 2016. The working capital loan was guaranteed by the Company's CEO and his wife, as well as Hebei Tengsheng with its land use right and real estates pledged by Hebei Tengsheng as collateral for the benefit of the bank. |
Related Parties Transactions (D
Related Parties Transactions (Details) | Jul. 13, 2015USD ($) | Dec. 10, 2014 | Aug. 07, 2013USD ($)Apartment | Aug. 07, 2013CNY (¥)Apartment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Jul. 13, 2015CNY (¥) | Mar. 01, 2015USD ($) | Mar. 01, 2015CNY (¥) |
Related Party Transactions (Textual) | ||||||||||
Loans payable to related party | $ 2,386,978 | |||||||||
Proceeds from shareholder loan | $ 439,000 | 793,500 | $ 1,390,802 | |||||||
Extended maturity date of loans from related party | Dec. 31, 2015 | Dec. 31, 2015 | ||||||||
Rental payment | $ 153,998 | ¥ 1,000,000 | ||||||||
Industrial building lease term | 3 years | 3 years | ||||||||
Number of dormitory buildings | Apartment | 3 | 3 | ||||||||
Loan from related parties, interest expense | 740,150 | 194,692 | $ 145,015 | |||||||
Accrued interest | 552,115 | 761,242 | ||||||||
Sale price of industrial land use rights | 2,770,000 | |||||||||
Sale price of industrial building | 1,150,000 | |||||||||
Original cost of construction of three dormitory buildings | $ 4,310,000 | |||||||||
Unsecured loan | ||||||||||
Dormitory buildings value | $ 4,640,000 | |||||||||
Appraisal commission | 3.35% | |||||||||
Gain from disposal of assets held for sale | 203,620 | |||||||||
Chief Executive Officer [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Loans payable to related party | $ 4,619,933 | ¥ 30,000,000 | $ 18,479,734 | ¥ 120,000,000 | ||||||
Accrued interest | $ 111,167 | |||||||||
Dormitory buildings value | $ 4,619,933 | |||||||||
Orient Paper HB [Member] | Chief Executive Officer [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Interest rate on loans | 5.25% | |||||||||
Unsecured loan epiration date | Jul. 12, 2018 | |||||||||
Hebei Fangsheng [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Accrued rental | 368,751 | 227,900 | ||||||||
Mr. Liu [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Loans payable to related party | 13,859,800 | 12,192,502 | ||||||||
Loan paid off | 2,249,279 | |||||||||
Other Accrued Liabilities, Noncurrent | 440,948 | |||||||||
Accrued interest | 391,374 | $ 391,374 | $ 391,374 | |||||||
Other payables and accrued liabilities | $ 440,948 | |||||||||
Mr. Liu [Member] | Orient Paper HB [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Interest rate on loans | 5.25% |
Notes Payable (Details)
Notes Payable (Details) | 12 Months Ended | |
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)Apartment | |
Notes payable (Textual) | ||
Notes payable | $ 13,859,800 | $ 16,113,744 |
Restricted cash | 10,779,845 | 8,873,999 |
Secured debt | 6,537,016 | |
Property plant and equipment loan drawn from banking facility | 29,175 | $ 29,995 |
Description of maturity of loans payable | Due and paid on various dates starting from January 7, 2015 to April 23, 2015. | |
Bank of Hebei [Member] | ||
Notes payable (Textual) | ||
Number of bank acceptance notes | Apartment | 11 | |
Notes payable | 6,159,911 | $ 1,405,458 |
Property plant and equipment loan drawn from banking facility | $ 29,175 | $ 29,995 |
Short-term bank loans, fixed interest rate | 0.00% | 0.05% |
Handling charges of bank acceptance notes percentage | 0.05% | |
Description of maturity of loans payable | The acceptance notes will become due and payable on various dates starting from January 7, 2016 through April 23, 2016. | |
SPD Bank [Member] | ||
Notes payable (Textual) | ||
Notes payable | $ 6,537,016 | |
Short-term bank loans, fixed interest rate | 0.05% | |
Commercial Bank of the City of Zhangjiakou [Member] | ||
Notes payable (Textual) | ||
Notes payable | $ 7,699,889 | $ 8,171,270 |
Short-term bank loans, fixed interest rate | 0.05% |
Other Payables and Accrued Li64
Other Payables and Accrued Liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of other payables and accrued liabilities | ||
Accrued electricity | $ 168,840 | $ 334,212 |
Value-added tax payable | 841,556 | |
Accrued interest to a related party | $ 552,115 | $ 761,242 |
Accrued bank loan interest | 73,970 | |
Payable for purchase of equipment | 3,093,239 | $ 244,050 |
Others | 14,807 | 219,463 |
Totals | $ 3,902,971 | $ 2,400,523 |
Common Stock (Details)
Common Stock (Details) - $ / shares | Aug. 27, 2014 | Dec. 31, 2013 | Aug. 28, 2011 |
Common Stock (Textual) | |||
Share price | $ 1.60 | $ 2.66 | $ 3.45 |
Warrant [Member] | |||
Common Stock (Textual) | |||
Issuance of common stock and warrants | 1,562,500 | ||
Shares issued to purchase common stock | 781,250 |
Stock Warrants (Details)
Stock Warrants (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Date of Issuance August 27, 2014 to September 2, 2019 [Member] | |
Stock Warrants [Line Items] | |
Terms of warrants | 5 years |
Expected volatility | 72.00% |
Risk-free interest rate | 1.69% |
Expected dividend yield | 0.81% |
Date of Issuance September 3, 2014 to June 26, 2019 [Member] | |
Stock Warrants [Line Items] | |
Terms of warrants | 4 years 9 months 22 days |
Expected volatility | 69.80% |
Risk-free interest rate | 1.62% |
Expected dividend yield | 0.81% |
Stock Warrants (Details 1)
Stock Warrants (Details 1) - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number | ||
Outstanding and exercisable at beginning of the period | 820,312 | |
Issued during the period | 820,312 | |
Exercised during the period | ||
Cancelled or expired during the period | ||
Outstanding and exercisable at end of the period | 820,312 | 820,312 |
Weighted average exercise price | ||
Outstanding and exercisable at beginning of the period | $ 1.71 | |
Issued during the period | $ 1.71 | |
Exercised during the period | ||
Cancelled or expired during the period | ||
Outstanding and exercisable at beginning of the period | $ 1.71 | $ 1.71 |
Range of exercise price, Lower range limit | 1.70 | 1.70 |
Range of exercise price, Upper range limit | $ 2 | $ 2 |
Stock Warrants (Details Textual
Stock Warrants (Details Textual) - Warrant [Member] - USD ($) | Aug. 27, 2014 | Dec. 31, 2015 | Dec. 31, 2014 |
Stock Warrants (Textual) | |||
Issuance of common stock and warrants | 1,562,500 | ||
Shares issued to purchase common stock | 781,250 | ||
Exercise price | $ 1.70 | $ 2 | |
Warrants expiration date | Sep. 2, 2019 | Jun. 26, 2019 | |
Warrants exercisable term | 5 years | ||
Aggregate percentage of common stock sold under offering | 2.50% | ||
Aggregate number of shares of common stock sold | 39,062 | ||
Fair value of common stock sold | $ 780,000 | $ 35,191 | |
Aggregated intrinsic value of warrants outstanding and exercisable | |||
Weighted average fair value of warrants granted | $ 0.99 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Basic income per share | |||||||||||
Net Income for the year - numerator | $ 2,160,289 | $ 1,685,897 | $ 5,590,530 | $ 2,105,489 | $ 2,228,015 | $ 3,372,944 | $ 3,572,107 | $ 2,533,294 | $ 11,542,205 | $ 11,706,360 | $ 13,014,648 |
Weighted average common stock outstanding - denominator | 20,316,400 | 19,270,394 | 18,458,446 | ||||||||
Net income per share | $ 0.11 | $ 0.08 | $ 0.28 | $ 0.10 | $ 0.11 | $ 0.18 | $ 0.19 | $ 0.13 | $ 0.57 | $ 0.61 | $ 0.71 |
Diluted income per share | |||||||||||
Net Income for the year - numerator | $ 2,160,289 | $ 1,685,897 | $ 5,590,530 | $ 2,105,489 | $ 2,228,015 | $ 3,372,944 | $ 3,572,107 | $ 2,533,294 | $ 11,542,205 | $ 11,706,360 | $ 13,014,648 |
Weighted average common stock outstanding - denominator | 20,316,400 | 19,270,394 | 18,458,446 | ||||||||
Effect of dilution | |||||||||||
Warrant | |||||||||||
Weighted average common stock outstanding - denominator | 20,316,400 | 19,270,394 | 18,458,446 | ||||||||
Diluted income per share | $ 0.11 | $ 0.08 | $ 0.28 | $ 0.10 | $ 0.11 | $ 0.18 | $ 0.19 | $ 0.13 | $ 0.57 | $ 0.61 | $ 0.71 |
Earnings Per Share (Details Tex
Earnings Per Share (Details Textual) - shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share (Textual) | ||
Shares excluded from calculations of dilutive net income per share | 820,312 | 820,312 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Provision for Income Taxes | |||
Current Tax Provision - PRC | $ 5,325,984 | $ 4,034,119 | $ 4,684,870 |
Deferred Tax Provision - PRC | (1,203,019) | 398,385 | 409,665 |
Total Provision for Income Taxes | $ 4,122,965 | $ 4,432,504 | $ 5,094,535 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets (liabilities) | ||
Depreciation and amortization of property, plant and equipment | $ 1,035,486 | $ (1,248) |
Impairment of property, plant and equipment | 344,202 | 308,175 |
Miscellaneous | (23,428) | $ (25,917) |
Net operating loss carryover of PRC company | 64,594 | |
Net operating loss carryover for U.S. income tax purposes | 2,281,718 | $ 2,000,539 |
Total deferred tax assets | 3,702,572 | 2,281,549 |
Less: Valuation allowance | (2,281,718) | (2,000,539) |
Total deferred tax assets, net | $ 1,420,854 | $ 281,010 |
Income Taxes (Details 2)
Income Taxes (Details 2) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of reconciliation of statutory rates to Company's effective tax rate | |||
PRC Statutory rate | 25.00% | 25.00% | 25.00% |
Effect of different tax jurisdiction | (0.50%) | (0.80%) | (1.10%) |
Effect of expenses not deductible for PRC tax purposes | (0.10%) | 1.50% | |
Effect of income not taxable for PRC tax purposes | 0.10% | ||
Under provision in previous year | 0.10% | 0.10% | |
Change in valuation allowance | 1.80% | 3.10% | 2.70% |
Effective income tax rate | 26.30% | 27.50% | 28.10% |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes (Textual) | |||
Statutory tax rate | 25.00% | 25.00% | 25.00% |
Income tax, statute of limitations period | 5 years | ||
Effective income tax rate | 26.30% | 27.50% | 28.10% |
United States [Member] | |||
Income Taxes (Textual) | |||
Statutory tax rate | 34.00% | ||
State tax rate | 0.00% | ||
Effective income tax rate | 34.00% | ||
PRC [Member] | |||
Income Taxes (Textual) | |||
Statutory tax rate | 25.00% | ||
Percentage of valuation allowance | 100.00% | ||
Net Operating Losses | $ 4,269,713 | $ 3,813,374 | $ 3,403,740 |
Cumulative undistributed earnings of foreign subsidiaries | $ 126,527,569 | $ 114,158,370 |
Stock Incentive Plans (Details)
Stock Incentive Plans (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Aug. 28, 2011 | Dec. 31, 2013 | Aug. 29, 2015 | Aug. 27, 2014 | Sep. 10, 2012 | |
Stock Incentive Plans (Textual) | |||||
Shares issued under incentive stock plan | 109,584 | 297,000 | |||
Share price | $ 3.45 | $ 2.66 | $ 1.60 | ||
Issuance of shares to officer and directors | $ 378,065 | $ 790,020 | |||
2012 ISP [Member] | |||||
Stock Incentive Plans (Textual) | |||||
Number of shares authorized for issuance under stock incentive plan | 200,000 | ||||
Shares issued under incentive stock plan | 31,584 | ||||
2011 ISP [Member] | |||||
Stock Incentive Plans (Textual) | |||||
Number of shares authorized for issuance under stock incentive plan | 375,000 | ||||
Shares issued under incentive stock plan | 265,416 | ||||
2015 Incentive Plan [Member] | |||||
Stock Incentive Plans (Textual) | |||||
Number of shares authorized for issuance under stock incentive plan | 1,500,000 |
Commitments and Contingencies76
Commitments and Contingencies (Details) | Dec. 31, 2015USD ($) |
Schedule of future minimum lease payments | |
2,016 | $ 662,704 |
2,017 | 572,872 |
2,018 | 572,872 |
2,019 | 572,872 |
2,020 | 572,872 |
Thereafter | 3,529,629 |
Total operating lease payments | $ 6,483,821 |
Commitments and Contingencies77
Commitments and Contingencies (Details Textual) | 1 Months Ended | 12 Months Ended | ||||
Nov. 27, 2012USD ($)a | Nov. 27, 2012CNY (¥)a | Dec. 31, 2015USD ($)a | Dec. 31, 2015CNY (¥) | Dec. 31, 2015CNY (¥)a | Dec. 31, 2014USD ($) | |
Commitments and Contingencies (Textual) | ||||||
Outstanding commitments for construction of equipment and facilities | $ | $ 17,429,301 | $ 24,561,228 | ||||
Performance holdback on new tissue paper payment, description | The Company expected to pay off all the balances within 1 year. | The Company expected to pay off all the balances within 1 year. | ||||
Long term loan from financial institutions | $ 8,623,876 | ¥ 56,000,000 | ||||
Long term loan maturity, description | The Company guaranteed the third party’s long-term loan from the financial institutions amounting to $8,696,192(RMB56,000,000) that matured at various times in 2018, as a guarantor. | The Company guaranteed the third party’s long-term loan from the financial institutions amounting to $8,696,192(RMB56,000,000) that matured at various times in 2018, as a guarantor. | ||||
Local government, Xushui County [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Area of land | 32.95 | 32.95 | ||||
Lease expiration period | 30 years | 30 years | ||||
Lease expiration date | Dec. 31, 2031 | Dec. 31, 2031 | ||||
Operating lease annual rental payment | $ 18,480 | ¥ 120,000 | ||||
Investment Company [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Area of land | 49.4 | 49.4 | ||||
Lease expiration period | 15 years | 15 years | ||||
Operating lease annual rental payment | $ 554,392 | ¥ 3,600,000 | ||||
Hebei Fangsheng [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Lease expiration period | 3 years | 3 years | ||||
Operating lease annual rental payment | $ 153,998 | ¥ 1,000,000 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summarized financial information for reportable segments | |||||||||||
Revenues | $ 35,108,810 | $ 32,406,877 | $ 41,283,142 | $ 26,504,344 | $ 32,697,113 | $ 40,754,205 | $ 37,836,265 | $ 25,753,864 | $ 135,303,173 | $ 137,041,447 | $ 125,717,630 |
Gross Profit (Loss) | 5,973,797 | 6,416,561 | 10,483,514 | 4,986,733 | 5,575,457 | 6,410,848 | 6,121,007 | 4,670,836 | 27,860,605 | 22,778,148 | 23,325,599 |
Depreciation and amortization | 13,398,990 | 8,289,320 | 7,794,743 | ||||||||
Interest income | 70,319 | 149,783 | 90,260 | ||||||||
Interest expense | 3,157,524 | 1,446,439 | 995,694 | ||||||||
Income tax expense(benefit) | 4,122,965 | 4,432,504 | 5,094,535 | ||||||||
Net Income (Loss) | 2,160,289 | $ 1,685,897 | $ 5,590,530 | $ 2,105,489 | 2,228,015 | $ 3,372,944 | $ 3,572,107 | $ 2,533,294 | 11,542,205 | 11,706,360 | 13,014,648 |
Total Assets | 238,626,919 | 239,767,585 | 238,626,919 | 239,767,585 | |||||||
Orient Paper HB [Member] | |||||||||||
Summarized financial information for reportable segments | |||||||||||
Revenues | 134,927,208 | 133,967,031 | 120,747,633 | ||||||||
Gross Profit (Loss) | 28,104,243 | 20,401,820 | 22,318,739 | ||||||||
Depreciation and amortization | 10,623,900 | 5,467,593 | 6,828,970 | ||||||||
Interest income | 68,752 | 145,590 | 86,168 | ||||||||
Interest expense | 3,157,524 | 1,446,439 | 995,694 | ||||||||
Income tax expense(benefit) | 4,334,168 | 4,337,424 | 4,845,970 | ||||||||
Net Income (Loss) | 13,108,044 | 11,299,155 | 14,604,244 | ||||||||
Total Assets | 205,117,348 | 201,518,707 | 205,117,348 | 201,518,707 | |||||||
Orient Paper Shengde [Member] | |||||||||||
Summarized financial information for reportable segments | |||||||||||
Revenues | 375,965 | 4,829,046 | 4,969,997 | ||||||||
Gross Profit (Loss) | (243,638) | 2,376,328 | 1,006,860 | ||||||||
Depreciation and amortization | 2,775,090 | 2,821,727 | 965,773 | ||||||||
Interest income | $ 1,567 | $ 4,193 | 4,009 | ||||||||
Interest expense | |||||||||||
Income tax expense(benefit) | $ (211,203) | $ 95,080 | 248,565 | ||||||||
Net Income (Loss) | (738,844) | 1,900,145 | $ 638,031 | ||||||||
Total Assets | 33,500,731 | 38,160,199 | $ 33,500,731 | $ 38,160,199 | |||||||
Not Attributable to Segments [Member] | |||||||||||
Summarized financial information for reportable segments | |||||||||||
Revenues | |||||||||||
Gross Profit (Loss) | |||||||||||
Depreciation and amortization | |||||||||||
Interest income | $ 83 | ||||||||||
Interest expense | |||||||||||
Income tax expense(benefit) | |||||||||||
Net Income (Loss) | $ (826,995) | $ (1,492,940) | $ (2,227,627) | ||||||||
Total Assets | $ 8,840 | $ 88,679 | $ 8,840 | 88,679 | |||||||
Elimination of Inter-segment [Member] | |||||||||||
Summarized financial information for reportable segments | |||||||||||
Revenues | $ (1,754,630) | ||||||||||
Gross Profit (Loss) | |||||||||||
Depreciation and amortization | |||||||||||
Interest income | |||||||||||
Interest expense | |||||||||||
Income tax expense(benefit) | |||||||||||
Net Income (Loss) | |||||||||||
Total Assets | |||||||||||
Enterprise-wide, consolidated [Member] | |||||||||||
Summarized financial information for reportable segments | |||||||||||
Revenues | $ 135,303,173 | $ 137,041,447 | $ 125,717,630 | ||||||||
Gross Profit (Loss) | 27,860,605 | 22,778,148 | 23,325,599 | ||||||||
Depreciation and amortization | 13,398,990 | 8,289,320 | 7,794,743 | ||||||||
Interest income | 70,319 | 149,783 | 90,260 | ||||||||
Interest expense | 3,157,524 | 1,446,439 | 995,694 | ||||||||
Income tax expense(benefit) | 4,122,965 | 4,432,504 | 5,094,535 | ||||||||
Net Income (Loss) | 11,542,205 | 11,706,360 | $ 13,014,648 | ||||||||
Total Assets | $ 238,626,919 | $ 239,767,585 | $ 238,626,919 | $ 239,767,585 |
Segment Reporting (Details Text
Segment Reporting (Details Textual) | 12 Months Ended |
Dec. 31, 2015Segment | |
Segment Reporting (Textual) | |
Number of business operating segments | 2 |
Number of reportable segment | 2 |
Concentration and Major Custo80
Concentration and Major Customers and Suppliers (Details) - Customers | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Concentration and major customers and suppliers (Textual) | |||
Number of major suppliers | 2 | 3 | 3 |
Number of customer contributed over 10% of total sales | |||
Revenue [Member] | |||
Concentration and major customers and suppliers (Textual) | |||
Percentage of revenue | 10.00% | ||
Supplier A [Member] | |||
Concentration and major customers and suppliers (Textual) | |||
Percentage of revenue | 61.00% | 62.00% | 75.00% |
Supplier B [Member] | |||
Concentration and major customers and suppliers (Textual) | |||
Percentage of revenue | 17.00% | 14.00% | 10.00% |
Supplier C [Member] | |||
Concentration and major customers and suppliers (Textual) | |||
Percentage of revenue | 9.00% | 7.00% |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) | May. 01, 2015USD ($) | May. 01, 2015CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) |
Concentration of Credit Risk (Textual) | ||||
Federal deposit insurance corporation | $ 78,600 | ¥ 500,000 | $ 2,633,077 | ¥ 17,098,151 |
Maximum [Member] | ||||
Concentration of Credit Risk (Textual) | ||||
Federal deposit insurance corporation | ¥ 500,000 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event [Member] | Jan. 12, 2016shares |
Compensatory Incentive Plans [Member] | |
Subsequent Event [Line Items] | |
Common stock granted | 1,133,916 |
Incentive Stock Plan [Member] | |
Subsequent Event [Line Items] | |
Common stock granted | 168,416 |
Omnibus Equity Incentive Plan [Member] | |
Subsequent Event [Line Items] | |
Common stock granted | 965,500 |
Summarized Quarterly Financia83
Summarized Quarterly Financial Data (Unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summarized Quarterly Financial Data (Unaudited) [Abstract] | |||||||||||
Revenues | $ 35,108,810 | $ 32,406,877 | $ 41,283,142 | $ 26,504,344 | $ 32,697,113 | $ 40,754,205 | $ 37,836,265 | $ 25,753,864 | $ 135,303,173 | $ 137,041,447 | $ 125,717,630 |
Gross Profit | 5,973,797 | 6,416,561 | 10,483,514 | 4,986,733 | 5,575,457 | 6,410,848 | 6,121,007 | 4,670,836 | 27,860,605 | 22,778,148 | 23,325,599 |
Income from Operations | 3,665,106 | 2,601,779 | 8,649,545 | 3,280,340 | 3,589,978 | 4,929,301 | 5,131,707 | 3,761,920 | 18,196,770 | 17,412,906 | 18,843,492 |
Net income | $ 2,160,289 | $ 1,685,897 | $ 5,590,530 | $ 2,105,489 | $ 2,228,015 | $ 3,372,944 | $ 3,572,107 | $ 2,533,294 | $ 11,542,205 | $ 11,706,360 | $ 13,014,648 |
Net income per share: | |||||||||||
Basic | $ 0.11 | $ 0.08 | $ 0.28 | $ 0.10 | $ 0.11 | $ 0.18 | $ 0.19 | $ 0.13 | $ 0.57 | $ 0.61 | $ 0.71 |
Diluted | $ 0.11 | $ 0.08 | $ 0.28 | $ 0.10 | $ 0.11 | $ 0.18 | $ 0.19 | $ 0.13 | $ 0.57 | $ 0.61 | $ 0.71 |
Condensed Financial Informati84
Condensed Financial Information of the Parent Company (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current Assets | ||||
Cash and cash equivalents | $ 2,641,917 | $ 3,891,473 | $ 3,131,163 | $ 13,140,288 |
Prepayments and other current assets | 1,812,415 | 2,919,668 | ||
Total current assets | 26,343,993 | 26,554,862 | ||
Total Assets | 238,626,919 | 239,767,585 | ||
Current Liabilities | ||||
Accrued payroll and employee benefit | 531,912 | 492,765 | ||
Total current liabilities | 40,237,947 | 44,470,148 | ||
Total liabilities | 62,817,494 | 64,822,219 | ||
Total stockholders' equity | 175,809,425 | 174,945,366 | 161,053,148 | 142,768,801 |
Total Liabilities and Stockholders' Equity | 238,626,919 | 239,767,585 | ||
Orient Paper [Member] | ||||
Current Assets | ||||
Cash and cash equivalents | $ 8,840 | 26,179 | $ 42,592 | $ (96) |
Prepayments and other current assets | 62,500 | |||
Total current assets | $ 8,840 | 88,679 | ||
Investment in subsidiaries | 178,423,608 | 176,732,554 | ||
Total Assets | 178,432,448 | 176,821,233 | ||
Current Liabilities | ||||
Inter-company payable | $ 2,623,023 | $ 1,875,867 | ||
Accrued payroll and employee benefit | ||||
Accrued liabilities | ||||
Insurance premium payable | ||||
Total current liabilities | $ 2,623,023 | $ 1,875,867 | ||
Total liabilities | 2,623,023 | 1,875,867 | ||
Total stockholders' equity | 175,809,425 | 174,945,366 | ||
Total Liabilities and Stockholders' Equity | $ 178,432,448 | $ 176,821,233 |
Condensed Financial Informati85
Condensed Financial Information of the Parent Company (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating expenses | |||||||||||
Selling, general and administrative expenses | $ 9,663,835 | $ 4,859,215 | $ 4,567,079 | ||||||||
Loss from Operations | $ 3,665,106 | $ 2,601,779 | $ 8,649,545 | $ 3,280,340 | $ 3,589,978 | $ 4,929,301 | $ 5,131,707 | $ 3,761,920 | 18,196,770 | 17,412,906 | 18,843,492 |
Income before Income Taxes | 15,665,170 | 16,138,864 | 18,109,183 | ||||||||
Provision for Income Taxes | 4,122,965 | 4,432,504 | 5,094,535 | ||||||||
Net Income | $ 2,160,289 | $ 1,685,897 | $ 5,590,530 | $ 2,105,489 | $ 2,228,015 | $ 3,372,944 | $ 3,572,107 | $ 2,533,294 | 11,542,205 | 11,706,360 | 13,014,648 |
Total Comprehensive Income | 864,059 | 11,581,217 | 17,833,517 | ||||||||
Orient Paper [Member] | |||||||||||
Operating expenses | |||||||||||
Selling, general and administrative expenses | 826,995 | 1,492,940 | 2,227,711 | ||||||||
Loss from Operations | (826,995) | (1,492,940) | (2,227,711) | ||||||||
Equity in earnings of unconsolidated subsidiaries | $ 12,369,200 | $ 13,199,300 | 15,242,276 | ||||||||
Other Income (Expense) | 83 | ||||||||||
Income before Income Taxes | $ 11,542,205 | $ 11,706,360 | $ 13,014,648 | ||||||||
Provision for Income Taxes | |||||||||||
Net Income | $ 11,542,205 | $ 11,706,360 | $ 13,014,648 | ||||||||
Other comprehensive income /(loss) | (10,678,146) | (125,143) | 4,818,869 | ||||||||
Total Comprehensive Income | $ 864,059 | $ 11,581,217 | $ 17,833,517 |
Condensed Financial Informati86
Condensed Financial Information of the Parent Company (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Condensed Statements of Cash Flows [Abstract] | |||
Net Cash (Used in) Provided by Operating Activities | $ 21,204,585 | $ 32,313,173 | $ 29,921,941 |
Net Cash Used in Investing Activities | (19,331,000) | (36,281,351) | (60,362,479) |
Net Cash Provided by (Used in) Financing Activities | (2,798,199) | 4,734,262 | 20,100,686 |
Net (Decrease) Increase in Cash and Cash Equivalents | (1,249,556) | 760,310 | (10,009,125) |
Cash and Cash Equivalents - Beginning of Period | 3,891,473 | 3,131,163 | 13,140,288 |
Cash and Cash Equivalents - End of Period | 2,641,917 | 3,891,473 | 3,131,163 |
Orient Paper [Member] | |||
Schedule of Condensed Statements of Cash Flows [Abstract] | |||
Net Cash (Used in) Provided by Operating Activities | $ (764,495) | $ (1,658,426) | $ 365,720 |
Net Cash Used in Investing Activities | |||
Net Cash Provided by (Used in) Financing Activities | $ 747,156 | $ 1,642,013 | $ (323,032) |
Net (Decrease) Increase in Cash and Cash Equivalents | (17,339) | (16,413) | 42,688 |
Cash and Cash Equivalents - Beginning of Period | 26,179 | 42,592 | (96) |
Cash and Cash Equivalents - End of Period | $ 8,840 | $ 26,179 | $ 42,592 |
Condensed Financial Informati87
Condensed Financial Information of the Parent Company (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Financial Information of the Parent Company (Textual) | ||
Restricted stock including paid-in capital, capital surplus and statutory reserves | $ 49,612,606 | $ 52,649,848 |