Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Apr. 14, 2014 | Jun. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'UNSS | ' | ' |
Entity Registrant Name | 'Universal Solar Technology, Inc. | ' | ' |
Entity Central Index Key | '0001434389 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-Known Seasoned Issuer | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock Shares Outstanding | ' | 22,599,974 | ' |
Entity Public Float | ' | ' | $0 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $12,250 | $160,927 |
Accounts receivable, net | 19,145 | 171,439 |
Inventories | 764,267 | 1,198,096 |
Prepaid expenses and other current assets | 1,151,834 | 1,125,582 |
TOTAL CURRENT ASSETS | 1,947,496 | 2,656,044 |
Land use right, net of accumulated amortization of $52,222 and $41,864, respectively | 424,561 | 421,420 |
Property, plant and equipment, net of accumulated depreciation of $593,311 and $384,950, respectively | 2,914,789 | 3,003,289 |
Construction in process | 300,644 | 292,130 |
TOTAL ASSETS | 5,587,490 | 6,372,883 |
CURRENT LIABILITIES | ' | ' |
Accounts payable | 128,560 | 257,646 |
Accrued interests - related party | 1,348,701 | 826,928 |
Other accured expenses and other current liabilities | 283,879 | 402,838 |
TOTAL CURRENT LIABILITIES | 1,761,140 | 1,487,412 |
Due to related-parties - non-current portion | 14,489,456 | 14,077,389 |
TOTAL LIABILITIES | 16,250,596 | 15,564,801 |
STOCKHOLDERS' DEFICIENCY | ' | ' |
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding | ' | ' |
Common stock, $0.0001 par value, 22,599,974 shares issued and outstanding | 2,260 | 2,260 |
Additional paid-in capital | 620,812 | 620,812 |
Accumulated deficit | -11,175,906 | -9,887,181 |
Accumulated other comprehensive income | -110,272 | 72,191 |
TOTAL STOCKHOLDERS' DEFICIENCY | -10,663,106 | -9,191,918 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY | $5,587,490 | $6,372,883 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ' | ' |
Land use right, accumulated amortization | $52,222 | $41,864 |
Property, plant and equipment, accumulated depreciation | $593,311 | $384,950 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares issued | 22,599,974 | 22,599,974 |
Common stock, outstanding | 22,599,974 | 22,599,974 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | ' | ' |
SALES | $159,075 | $649,616 |
COST OF SALES | 493,310 | 1,354,488 |
GROSS LOSS | -334,235 | -704,872 |
OPERATING EXPENSES | ' | ' |
General and administrative expenses | 459,513 | 709,955 |
Selling expenses | 3,548 | 22,400 |
Impairment loss | ' | 3,755,416 |
TOTAL OPERATING EXPENSES | 463,061 | 4,487,771 |
LOSS FROM OPERATIONS | -797,296 | -5,192,643 |
Non-operating income | 8,829 | 16,132 |
Interest expense, net of interest income | -1,180 | -23,211 |
Interest expense - related party | -499,078 | -463,788 |
NET LOSS | -1,288,725 | -5,663,510 |
OTHER COMPREHENSIVE INCOME | ' | ' |
Foreign currency translation adjustment | -182,463 | -30,126 |
COMPREHENSIVE LOSS | ($1,471,188) | ($5,693,636) |
Loss per common share - basic and diluted | ($0.06) | ($0.25) |
Weighted average number of shares outstanding - basic and diluted | 22,599,974 | 22,599,974 |
CONSOLIDATED_STATEMENT_OF_CHAN
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (USD $) | Total | COMMON STOCK [Member] | ADDITIONAL PAID-IN CAPITAL [Member] | ACCUMULATED DEFICIT [Member] | OTHER COMPREHENSIVE INCOME [Member] |
Balance at Dec. 31, 2011 | ($3,498,282) | $2,260 | $620,812 | ($4,223,671) | $102,317 |
Balance, shares at Dec. 31, 2011 | ' | 22,599,974 | ' | ' | ' |
Foreign currency translation adjustment | -30,126 | ' | ' | ' | -30,126 |
Net loss | -5,663,510 | ' | ' | -5,663,510 | ' |
Balance at Dec. 31, 2012 | -9,191,918 | 2,260 | 620,812 | -9,887,181 | 72,191 |
Balance, shares at Dec. 31, 2012 | 22,599,974 | 22,599,974 | ' | ' | ' |
Foreign currency translation adjustment | -182,463 | ' | ' | ' | -182,463 |
Net loss | -1,288,725 | ' | ' | -1,288,725 | ' |
Balance at Dec. 31, 2013 | ($10,663,106) | $2,260 | $620,812 | ($11,175,906) | ($110,272) |
Balance, shares at Dec. 31, 2013 | 22,599,974 | 22,599,974 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
OPERATING ACTIVITIES: | ' | ' |
Net loss | ($1,288,725) | ($5,663,510) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation of property and equipment | 194,127 | 644,573 |
Amortization of land use right | 8,999 | 8,768 |
Bad debt provision | -25,008 | 60,614 |
Inventory allowance | 176,432 | 403,501 |
Impairment loss | ' | 3,755,416 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 179,892 | 100,797 |
Prepaid expenses and other assets | 6,444 | 13,604 |
Inventories | 285,136 | -852,813 |
Accounts payable | -134,505 | -55,728 |
Accrued expenses and other current liabilities | 372,832 | 295,641 |
NET CASH USED IN OPERATING ACTIVITIES | -224,376 | -1,289,137 |
CASH FLOWS USED IN INVESTING ACTIVITIES: | ' | ' |
Acquisition of property and equipment | -20,840 | -106,508 |
Government subsidy on property and equipment | ' | 150,572 |
NET CASH USED IN INVESTING ACTIVITIES | -20,840 | 44,064 |
CASH FLOWS PROVIDED BY FINANCING ACTIVITES: | ' | ' |
Repayment of short-term loans | ' | -475,491 |
Proceeds from related parties loans | 105,886 | 1,829,328 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 105,886 | 1,353,837 |
Effect of exchange rate changes on cash | -9,347 | 7,689 |
Increase (decrease) in cash | -148,677 | 116,453 |
CASH - BEGINNING OF YEAR | 160,927 | 44,474 |
CASH - END OF YEAR | 12,250 | 160,927 |
Supplemental disclosures of cash flow information: | ' | ' |
Interest paid | ' | 36,688 |
Income taxes paid | ' | ' |
BUSINESS_DESCRIPTION
BUSINESS DESCRIPTION | 12 Months Ended | |
Dec. 31, 2013 | ||
BUSINESS DESCRIPTION [Abstract] | ' | |
BUSINESS DESCRIPTION | ' | |
1 | BUSINESS DESCRIPTION | |
Universal Solar Technology, Inc. (the "Company") was incorporated in the State of Nevada on July 24, 2007. The Company operates through its wholly-owned subsidiaries, Kuong U Science & Technology (Group) Ltd. ("Kuong U"), a company incorporated in Macau, Peoples Republic of China ("PRC") on May 10, 2007, and Nanyang Universal Solar Technology Co., Ltd. ("NUST"), a company incorporated in Nanyang, PRC on September 8, 2008. The Company sells silicon wafers and solar photovoltaic ("PV") modules. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |
Dec. 31, 2013 | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |
2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | ||
The consolidated financial statements include the accounts of the Company and all of its subsidiaries. All significant inter-company accounts and transactions have been eliminated. These financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. | ||
Currency translation | ||
The reporting currency of the Company is the United States dollar. The functional currency of Kuong U is the Hong Kong dollar. The functional currency of NUST is the Chinese Yuan ("RMB"). Revenue and expense accounts of our two subsidiaries are translated into United States dollars at the average rates during the period, and balance sheet items are translated at year-end rates, except for equity accounts which are translated at historical rates. Translation adjustments arising from the use of differing exchange rates from period to period are included as a separate component of shareholders' equity. Gains and losses from foreign currency transactions are recognized in current operations. | ||
The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation. | ||
Uses of estimates in the preparation of financial statements | ||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses during each reporting period. Actual results could differ from those estimates. | ||
Cash | ||
The Company maintains cash with financial institutions both in the United States and the People's Republic of China ("PRC"). The financial institutions in PRC are not insured or otherwise protected. Should any of these institutions holding the Company's cash become insolvent, or if the Company is unable to withdraw funds for any reason, the Company could lose the cash on deposit with that institution. | ||
Accounts Receivable | ||
Accounts receivables represent customer accounts receivables. The allowance for doubtful accounts is based on a combination of current sales, historical charge-offs and specific accounts identified as high risk. Uncollectible accounts receivable are charged against the allowance for doubtful accounts when all reasonable efforts to collect the amounts due have been exhausted. Such allowances, if any, would be recorded in the period the impairment is identified. The Company performs ongoing credit evaluations of its customers and establishes an allowance for doubtful accounts when amounts are not considered fully collectable. The allowance for doubtful accounts was $37,776 and $61,384 for the year ended December 31, 2013 and 2012, respectively. | ||
Inventories | ||
Inventories are stated at the lower of cost, determined on the weighted average method, and net realizable value. Work in progress and finished goods are composed of direct material, direct labor and a portion of manufacturing overhead. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs to complete and dispose. The Company recorded inventory markdown allowance of $176,432 and $403,501 for the year 2013 and 2012, respectively. | ||
Property and equipment | ||
Property and equipment are recorded at cost. Once placed in service, depreciation is provided in amounts sufficient to amortize the cost of the related assets over their useful lives using the straight line method. | ||
Maintenance, repairs and minor renewals are charged to expense when incurred. Replacements and major renewals are capitalized. | ||
Impairment of long-lived assets | ||
Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. For assets that are to be held and used, an impairment is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. At the end of 2012, the Company determined that it could no longer justify recording the book value of the equipment at its carrying value and recorded an impairment charge of $3,755,416 on the book value of the equipment. | ||
Revenue recognition | ||
Revenue from product sales is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) the price is fixed or determinable, (3) collectibility is reasonably assured, and (4) delivery has occurred. Persuasive evidence of an arrangement and fixed price criteria are satisfied through purchase orders. Collectibility criterion is satisfied through credit approvals. Delivery criterion is satisfied when the products are shipped to a customer and title and risk of loss pass to the customer in accordance with the terms of sale. The Company has no obligation to accept the return of products sold other than for replacement of damaged products. Other than quantity price discounts negotiated with customers prior to billing and delivery (which are reflected as a reduction in sales), the Company does not offer any sales incentives or other rebate arrangements to customers. | ||
Research and development costs | ||
Research and development costs are charged to expenses as incurred. The research and development costs were zero for both the fiscal years of 2013 and 2012. | ||
Income Taxes | ||
The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, "Income Taxes." Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. | ||
ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. | ||
Income (loss) per common share | ||
Basic income (loss) per common share amounts is calculated by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted income (loss) per common share are calculated using weighted-average shares outstanding, adjusted for the dilutive effect of shares issuable upon the assumed exercise of common stock equivalents. As of December 31, 2013 and 2012 there were no common stock equivalents outstanding. | ||
Comprehensive income (loss) | ||
Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by shareholders and distributions to shareholders. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income (loss) are required to be reported in a financial statement that is presented with the same prominence as other financial statements. Comprehensive income includes net income (loss) and the foreign currency translation adjustment, net of tax. | ||
Fair value of financial instruments | ||
ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: | ||
Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||
Level 2 - Observable inputs other than Level 1 prices 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. | ||
The carrying values of cash and cash equivalents, trade receivables and payables, and accrued liabilities approximate their fair values due to their short maturities. | ||
There were no assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2013 and 2012. | ||
Recent accounting pronouncements | ||
In March 2013, the FASB issued Accounting Standards Update No. 2013-05, Foreign Currency Matters, (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (ASU 2013-05), to resolve a diversity in accounting for the cumulative translation adjustment of foreign currency upon derecognition of a foreign subsidiary or group of assets. ASU 2013-05 requires the parent to apply the guidance in Subtopic 830-30 to release any related cumulative translation adjustment into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. Further, ASU 2013-05 clarified that the parent should apply the guidance in subtopic 810-10 if there is a sale of an investment in a foreign entity, including both (1) events that result in the loss of a controlling financial interest in a foreign entity and (2) events that result in an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the acquisition date. Accordingly, the cumulative translation adjustment should be released into net income upon the occurrence of those events. ASU 2013-05 is effective prospectively for the Company in its first quarter of fiscal 2014, with early adoption permitted. The Company does not expect ASU 2013-05 to have a significant impact on its consolidated results of operations and financial condition. | ||
In July 2013, the FASB issued Accounting Standards Update No. 2013-11, Income Taxes (Topic 740)(ASU 2013-11). The amendments in this update provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, similar tax loss, or tax credit carryforward exists. These amendments provide that an unrecognized tax benefit, or a portion thereof, should be presented in the financial statements as a reduction of a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent that a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date to settle any additional income taxes that would result from disallowance of a tax position, or the tax law does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, then the unrecognized tax benefit should be presented as a liability. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The Company does not expect ASU 2013-11 to have a significant impact on its consolidated results of operations and financial condition. | ||
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's consolidated financial statements upon adoption. |
GOING_CONCERN
GOING CONCERN | 12 Months Ended | |
Dec. 31, 2013 | ||
GOING CONCERN [Abstract] | ' | |
GOING CONCERN | ' | |
3 | GOING CONCERN | |
The financial statements have been prepared on a "going concern" basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. At December 31, 2013, the Company had not generated cash from its operations, had a stockholders' deficiency of $10,663,106, and has incurred net losses of $11,175,906 since inception. These factors, among others, raise substantial doubt as to the Company's ability to continue as a going concern. The Company plans to improve its financial condition by raising capital in a private placement of its securities. However, there can be no assurance that the Company will be successful in accomplishing this objective. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. The Company's CEO, Mr. Wensheng Chen and companies that he controls intend to provide financial resources to meet the Company's daily cash needs. The Company plans to raise funds from domestic and foreign banks and/or financial institutions to increase working capital in order to meet capital demands. |
INVENTORIES
INVENTORIES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INVENTORIES [Abstract] | ' | ||||||||
INVENTORIES | ' | ||||||||
4 | INVENTORIES | ||||||||
As of December 31, 2013 and 2012, inventories, net, consist of: | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Raw materials | $ | 83,916 | $ | 273,737 | |||||
Finished goods | 589,405 | 813,508 | |||||||
Work in process | 65,414 | 67,117 | |||||||
Supply materials | 25,532 | 43,734 | |||||||
Inventories - net | $ | 764,267 | $ | 1,198,096 |
PREPAID_EXPENSES_AND_OTHER_CUR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS [Abstract] | ' | ||||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ' | ||||||||
5 | PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||||||
As of December 31, 2013 and 2012, prepaid expenses and other current assets consist of: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Input Value Added Tax | $ | 1,095,385 | $ | 1,063,826 | |||||
Other prepaid expenses | 56,449 | 61,756 | |||||||
Total | $ | 1,151,834 | $ | 1,125,582 | |||||
LANDUSE_RIGHT
LAND-USE RIGHT | 12 Months Ended | |
Dec. 31, 2013 | ||
LAND-USE RIGHT [Abstract] | ' | |
LAND-USE RIGHT | ' | |
6 | LAND-USE RIGHT | |
On December 1, 2008, NUST acquired the right to use a block of land of 71,345.70 square meters for fifty years the local government in the PRC, which is used for its office and production facilities. The cost of RMB 2,886,300 ($422,843 translated at the December 31, 2009 exchange rate) is being amortized using the straight line method over the fifty years' time. On July 27, 2010, the "Certificate of Right of Use of Land" has been issued to NUST. | ||
As of December 31, 2013 and 2012, the net value of land use right was $424,561 and $421,420, respectively. |
PROPERTY_PLANT_AND_EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
PROPERTY, PLANT AND EQUIPMENT [Abstract] | ' | |||||||||
PROPERTY, PLANT AND EQUIPMENT | ' | |||||||||
7 | PROPERTY, PLANT AND EQUIPMENT | |||||||||
As of December 31, 2013 and 2012, property, plant and equipment, net, consist of: | ||||||||||
31-Dec-13 | 31-Dec-12 | Life | ||||||||
Building | $ | 2,666,884 | $ | 2,570,809 | 20 - 30 years | |||||
Production equipment | 572,460 | 556,249 | 10 years | |||||||
Office equipment | 127,660 | 124,079 | 3 years | |||||||
Automobile | 141,096 | 137,102 | 3 - 5 years | |||||||
Total | 3,508,100 | 3,388,239 | ||||||||
Less accumulated depreciation | (593,311 | ) | (384,950 | ) | ||||||
Property, plant and equipment - net | $ | 2,914,789 | $ | 3,003,289 |
ACCRUED_EXPENSES_AND_OTHER_CUR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | ' | ||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ' | ||||||||
8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||||||||
As of December 31, 2013 and 2012, accrued expenses and other current liabilities consist of: | |||||||||
December, 31 | |||||||||
2013 | 2012 | ||||||||
Other payables | $ | 191,836 | $ | 238,652 | |||||
Accrued payroll and other accrued expenses | 92,043 | 164,186 | |||||||
Total | $ | 283,879 | $ | 402,838 |
DUE_TO_RELATED_PARTIES
DUE TO RELATED PARTIES | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
DUE TO RELATED PARTIES [Abstract] | ' | ||||||||||||||
DUE TO RELATED PARTIES | ' | ||||||||||||||
9 | DUE TO RELATED PARTIES | ||||||||||||||
Due to related parties consists of: | |||||||||||||||
December 31, | |||||||||||||||
Related parties | Maturity date | Interest rate | 2013 | 2012 | |||||||||||
Mr. Wensheng Chen, Chief Executive Officer, Chairman of Board | 31-Dec-16 | 3.50% | $ | 3,201,752 | $ | 3,204,603 | |||||||||
Ms. Ling Chen, President | December 31, 2016 | 3.50% | 1,167,964 | 1,134,893 | |||||||||||
Zhuhai Yuemao Laser Facility Engineering Co., Ltd. ("Yuemao Laser") | 31-Dec-16 | 3.50% | 481,242 | 475,284 | |||||||||||
Yuemao Science & Technology Group ("Yuemao Technology") | 31-Dec-16 | 3.50% | 9,638,498 | 9,262,609 | |||||||||||
Total | 14,489,456 | 14,077,389 | |||||||||||||
Both Yuemao Laser and Yuemao Technology are PRC companies and controlled by the Company's chairman and Chief Executive Officer, Mr. Wensheng Chen. | |||||||||||||||
Mr. Wensheng Chen, Chairman and Chief Executive Officer of the Company. | |||||||||||||||
As of December 31, 2013 and 2012, the amount due to Mr. Wensheng Chen was $3,201,752 and $3,204,603, respectively. During fiscal 2013 and 2012, all loans borrowed from Mr. Wensheng Chen bear an interest at the rate of 3.5% per annum, and the Company accrued interest on these loans of $117,773 and $116,775, respectively. Mr. Chen has agreed the Company can pay the accrued interest when the Company's cash flow allows. | |||||||||||||||
Ms. Ling Chen, President of the Company | |||||||||||||||
During fiscal 2012, Ms. Ling Chen paid various expenses on behalf of the Company, the amount due to Ms. Ling Chen was $1,167,964 and $1,134,893 as of December 31, 2013 and 2012, respectively. During fiscal 2013 and 2012, all loans borrowed from Ms. Ling Chen bear an interest at the rate of 3.5% per annum, and the Company accrued interest on these loans of $40,253 and $29,440, respectively. Ms. Chen has agreed that the Company can pay the accrued interest when its cash flow status allows. | |||||||||||||||
Yuemao Science & Technology Group ("Yuemao Technology") | |||||||||||||||
Yuemao Technology is a private company established under the laws of the PRC and controlled by our Chairman and Chief Executive Officer, Mr. Wensheng Chen. As of December 31, 2013 and 2012, the amount due to Yuemao Technology was $9,638,498 and $9,262,609, respectively. During fiscal 2013 and 2012, Yuemao Technology paid various expenses on behalf of the Company and all loans borrowed from Yuemao Technology bear an interest at the rate of 3.5% per annum. The Company accrued interest on these loans of $324,342 and $301,197, respectively. Yuemao Technology has agreed the Company can pay the accrued interest when the Company's cash flow allows. | |||||||||||||||
Zhuhai Yuemao Laser Facility Engineering Co., Ltd. ("Yuemao Laser") | |||||||||||||||
Yuemao Laser is a private company established under the laws of the PRC and controlled by our Chairman and Chief Executive Officer, Mr. Wensheng Chen. As of December 31, 2013 and 2012, the amount due to Yuemao Laser was $481,242 and $475,284, respectively. During fiscal 2013 and 2012, Yuemao Laser paid various expenses on behalf of the Company, and all loans borrowed from Yuemao Laser bear an interest at the rate of 3.5% per annum. The Company accrued interest on these loans of $16,727 and $16,499, respectively. Yuemao Laser has agreed the Company can pay the accrued interest when the Company's cash flow allows. |
MAJOR_CUSTOMERS
MAJOR CUSTOMERS | 12 Months Ended | |
Dec. 31, 2013 | ||
MAJOR CUSTOMERS [Abstract] | ' | |
MAJOR CUSTOMERS | ' | |
10 | MAJOR CUSTOMER | |
During the year 2013, four customers accounted for approximately 47.6%, 20.4%, 17.9% and 10.5% of sales, respectively. No other single customer accounted for over 10% of sales. During the twelve months ended December 31, 2012, the Company has sold all of its products to customers located in China. Two customers accounted for 51.6% and 24.5% of sales, respectively. | ||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INCOME TAXES [Abstract] | ' | ||||||||
INCOME TAXES | ' | ||||||||
11 | INCOME TAXES | ||||||||
The Company's Chinese subsidiaries are governed by Income Tax Law of the PRC concerning private-run enterprises, which are generally subject to taxes at a statutory rate of 25% on income reported in the statutory financial statements prepared in accordance with PRC GAAP after appropriate tax adjustments. Operating loss can be carryforwarded for five years in China and 20 years in the U.S. | |||||||||
As of December 31, 2013, the Company had approximately $10,500,000 and $600,000 of net operating loss carryforwards for income tax purposes in China and the United States, respectively, which will expire between 2014 and 2030. | |||||||||
Based on management's present assessment, the Company has determined that it is more likely than not a deferred tax asset attributable to the future utilization of the net operating loss carry-forward as of December 31, 2013 will not be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the financial statements at December 31, 2013. The Company will continue to review this valuation allowance and make adjustments as appropriate. | |||||||||
The comparison of income tax expense at the U.S. statutory rate of 35% in 2013 and 2012, to the Company's effective tax rate is as follows: | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
U.S. Statutory rate | $ | (451,054 | ) | $ | (1,982,229 | ) | |||
Tax rate difference between China and U.S. | 121,915 | 563,327 | |||||||
Change in Valuation Allowance | 329,139 | 1,418,902 | |||||||
Effective tax rate | $ | - | $ | - | |||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | |
Dec. 31, 2013 | ||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | |
COMMITMENTS AND CONTINGENCIES | ' | |
12 | COMMITMENTS AND CONTINGENCIES | |
Vulnerability due to operations in PRC | ||
The Company's operations may be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 20 years, there is no guarantee that the PRC government's pursuit of economic reforms will be consistent or effective. | ||
The PRC has adopted currency and capital transfer regulations. These regulations require that the Company comply with complex regulations for the movement of capital. Because most of the Company's future revenues will be in RMB, any inability to obtain the requisite approvals, or any future restrictions on currency exchanges, will limit the Company's ability to fund its business activities outside China or to pay dividends to its shareholders. | ||
The Company's assets will be predominantly located inside China. Under the laws governing foreign invested enterprises in China, dividend distribution and liquidation are allowed, but subject to special procedures under the relevant laws and rules. Any dividend payment will be subject to the decision of the board of directors and subject to foreign exchange rules governing such repatriation. Any liquidation is subject to the relevant government agency's approval and supervision, as well as the foreign exchange control. | ||
In addition, the results of business and prospects are subject, to a significant extent, to the economic, political and legal developments in China. | ||
While China's economy has experienced significant growth in the past twenty years, growth has been irregular, both geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall economy of China, but may also have a negative effect on the Company. The Company's sales and financial condition may be adversely affected by the government control over capital investments or changes in tax regulations. | ||
Foreign companies conducting operations in the PRC face significant political, economic and legal risks. The Communist regime in the PRC includes a stifling bureaucracy which may hinder Western investment. Any new government regulations or utility policies pertaining to the Company's PV products may result in significant additional expenses to the Company, Company distributors and end users and, as a result, could cause a significant reduction in demand for the Company's PV products. | ||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended | |
Dec. 31, 2013 | ||
SUBSEQUENT EVENTS [Abstract] | ' | |
SUBSEQUENT EVENTS | ' | |
13 | SUBSEQUENT EVENTS | |
In accordance with ASC 855, "Subsequent Events," the Company has evaluated subsequent events that have occurred after the date of the balance sheet through the date of issuance of these financial statements and has determined that there was no material event need to be disclosed, other than discussed above. | ||
Schedule_I
Schedule I | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | ' | ||||||||
Condensed Financial Information of Parent Company Only Disclosure | ' | ||||||||
Schedule I: Condensed Parent Only Financial Statements | |||||||||
UNIVERSAL SOLAR TECHNOLOGY, INC. | |||||||||
BALANCE SHEETS | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Assets | |||||||||
Cash | $ | 1,234 | $ | 1,234 | |||||
Total Assets | 1,234 | 1,234 | |||||||
Liabilities and Stockholders' Deficiency | |||||||||
Investment in and advances to Subsidiaries | 10,455,356 | 9,004,337 | |||||||
Accrued expenses and other payable | 61,298 | 41,129 | |||||||
Due to Stockholders and related parties | 147,686 | 147,686 | |||||||
Total Liabilities | 10,664,340 | 9,193,152 | |||||||
Stockholders' Deficiency | (10,663,106 | ) | (9,191,918 | ) | |||||
Total Liabilities and Stockholders' Deficiency | $ | 1,234 | $ | 1,234 | |||||
UNIVERSAL SOLAR TECHNOLOGY, INC. | |||||||||
STATEMENTS OF OPERATIONS | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
Loss from investment in subsidiaries | $ | (1,219,153 | ) | $ | (5,559,228 | ) | |||
Cost and Expenses | |||||||||
Selling, general and administrative expenses | 69,572 | 104,282 | |||||||
Total cost and expenses | 69,572 | 104,282 | |||||||
Net Loss | $ | (1,288,725 | ) | $ | (5,663,510 | ) | |||
UNIVERSAL SOLAR TECHNOLOGY, INC. | |||||||||
STATEMENTS OF CASH FLOWS | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
OPERATING ACTIVITES | $ | $ | |||||||
Net Loss | (1,288,725 | ) | (5,663,510 | ) | |||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Loss from investment in subsidiaries | 1,219,153 | 5,559,228 | |||||||
Accrued expenses and other payables | 20,169 | (7,820 | ) | ||||||
NET CASH USED IN OPERATING ACTIVITIES | (49,403 | ) | (112,102 | ) | |||||
INVESTING ACTIVITIES | |||||||||
(Investment in) repayment from subsidiaries | 49,403 | 112,102 | |||||||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 49,403 | 112,102 | |||||||
FINANCING ACTIVITIES | |||||||||
Loan from stockholders and related parties | - | - | |||||||
NET CASH FROM FINANCING ACTIVITIES | - | - | |||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | - | - | |||||||
DECREASE IN CASH | - | - | |||||||
CASH - BEGINNING OF YEAR | 1,234 | 1,234 | |||||||
CASH - END OF YEAR | $ | 1,234 | $ | 1,234 | |||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' |
Basis of presentation | ' |
Basis of presentation | |
The consolidated financial statements include the accounts of the Company and all of its subsidiaries. All significant inter-company accounts and transactions have been eliminated. These financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. | |
Currency translation | ' |
Currency translation | |
The reporting currency of the Company is the United States dollar. The functional currency of Kuong U is the Hong Kong dollar. The functional currency of NUST is the Chinese Yuan ("RMB"). Revenue and expense accounts of our two subsidiaries are translated into United States dollars at the average rates during the period, and balance sheet items are translated at year-end rates, except for equity accounts which are translated at historical rates. Translation adjustments arising from the use of differing exchange rates from period to period are included as a separate component of shareholders' equity. Gains and losses from foreign currency transactions are recognized in current operations. | |
The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation. | |
Uses of estimates in the preparation of financial statements | ' |
Uses of estimates in the preparation of financial statements | |
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses during each reporting period. Actual results could differ from those estimates. | |
Cash | ' |
Cash | |
The Company maintains cash with financial institutions both in the United States and the People's Republic of China ("PRC"). The financial institutions in PRC are not insured or otherwise protected. Should any of these institutions holding the Company's cash become insolvent, or if the Company is unable to withdraw funds for any reason, the Company could lose the cash on deposit with that institution. | |
Accounts Receivable | ' |
Accounts Receivable | |
Accounts receivables represent customer accounts receivables. The allowance for doubtful accounts is based on a combination of current sales, historical charge-offs and specific accounts identified as high risk. Uncollectible accounts receivable are charged against the allowance for doubtful accounts when all reasonable efforts to collect the amounts due have been exhausted. Such allowances, if any, would be recorded in the period the impairment is identified. The Company performs ongoing credit evaluations of its customers and establishes an allowance for doubtful accounts when amounts are not considered fully collectable. The allowance for doubtful accounts was $37,776 and $61,384 for the year ended December 31, 2013 and 2012, respectively. | |
Inventories | ' |
Inventories | |
Inventories are stated at the lower of cost, determined on the weighted average method, and net realizable value. Work in progress and finished goods are composed of direct material, direct labor and a portion of manufacturing overhead. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs to complete and dispose. The Company recorded inventory markdown allowance of $176,432 and $403,501 for the year 2013 and 2012, respectively. | |
Property and equipment | ' |
Property and equipment | |
Property and equipment are recorded at cost. Once placed in service, depreciation is provided in amounts sufficient to amortize the cost of the related assets over their useful lives using the straight line method. | |
Maintenance, repairs and minor renewals are charged to expense when incurred. Replacements and major renewals are capitalized. | |
Impairment of long-lived assets | ' |
Impairment of long-lived assets | |
Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. For assets that are to be held and used, an impairment is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. At the end of 2012, the Company determined that it could no longer justify recording the book value of the equipment at its carrying value and recorded an impairment charge of $3,755,416 on the book value of the equipment. | |
Revenue recognition | ' |
Revenue recognition | |
Revenue from product sales is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) the price is fixed or determinable, (3) collectibility is reasonably assured, and (4) delivery has occurred. Persuasive evidence of an arrangement and fixed price criteria are satisfied through purchase orders. Collectibility criterion is satisfied through credit approvals. Delivery criterion is satisfied when the products are shipped to a customer and title and risk of loss pass to the customer in accordance with the terms of sale. The Company has no obligation to accept the return of products sold other than for replacement of damaged products. Other than quantity price discounts negotiated with customers prior to billing and delivery (which are reflected as a reduction in sales), the Company does not offer any sales incentives or other rebate arrangements to customers. | |
Research and development costs | ' |
Research and development costs | |
Research and development costs are charged to expenses as incurred. The research and development costs were zero for both the fiscal years of 2013 and 2012. | |
Income Taxes | ' |
Income Taxes | |
The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, "Income Taxes." Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. | |
ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. | |
Income (loss) per common share | ' |
Income (loss) per common share | |
Basic income (loss) per common share amounts is calculated by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted income (loss) per common share are calculated using weighted-average shares outstanding, adjusted for the dilutive effect of shares issuable upon the assumed exercise of common stock equivalents. As of December 31, 2013 and 2012 there were no common stock equivalents outstanding. | |
Comprehensive income (loss) | ' |
Comprehensive income (loss) | |
Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by shareholders and distributions to shareholders. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income (loss) are required to be reported in a financial statement that is presented with the same prominence as other financial statements. Comprehensive income includes net income (loss) and the foreign currency translation adjustment, net of tax. | |
Fair value of financial instruments | ' |
Fair value of financial instruments | |
ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: | |
Level 1 - Quoted prices in active markets for identical assets or liabilities. | |
Level 2 - Observable inputs other than Level 1 prices 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. | |
The carrying values of cash and cash equivalents, trade receivables and payables, and accrued liabilities approximate their fair values due to their short maturities. | |
There were no assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2013 and 2012. | |
Recent accounting pronouncements | ' |
Recent accounting pronouncements | |
In March 2013, the FASB issued Accounting Standards Update No. 2013-05, Foreign Currency Matters, (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (ASU 2013-05), to resolve a diversity in accounting for the cumulative translation adjustment of foreign currency upon derecognition of a foreign subsidiary or group of assets. ASU 2013-05 requires the parent to apply the guidance in Subtopic 830-30 to release any related cumulative translation adjustment into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. Further, ASU 2013-05 clarified that the parent should apply the guidance in subtopic 810-10 if there is a sale of an investment in a foreign entity, including both (1) events that result in the loss of a controlling financial interest in a foreign entity and (2) events that result in an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the acquisition date. Accordingly, the cumulative translation adjustment should be released into net income upon the occurrence of those events. ASU 2013-05 is effective prospectively for the Company in its first quarter of fiscal 2014, with early adoption permitted. The Company does not expect ASU 2013-05 to have a significant impact on its consolidated results of operations and financial condition. | |
In July 2013, the FASB issued Accounting Standards Update No. 2013-11, Income Taxes (Topic 740)(ASU 2013-11). The amendments in this update provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, similar tax loss, or tax credit carryforward exists. These amendments provide that an unrecognized tax benefit, or a portion thereof, should be presented in the financial statements as a reduction of a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent that a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date to settle any additional income taxes that would result from disallowance of a tax position, or the tax law does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, then the unrecognized tax benefit should be presented as a liability. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The Company does not expect ASU 2013-11 to have a significant impact on its consolidated results of operations and financial condition. | |
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's consolidated financial statements upon adoption. |
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INVENTORIES [Abstract] | ' | ||||||||
Schedule of Inventories, Net | ' | ||||||||
As of December 31, 2013 and 2012, inventories, net, consist of: | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Raw materials | $ | 83,916 | $ | 273,737 | |||||
Finished goods | 589,405 | 813,508 | |||||||
Work in process | 65,414 | 67,117 | |||||||
Supply materials | 25,532 | 43,734 | |||||||
Inventories - net | $ | 764,267 | $ | 1,198,096 |
PREPAID_EXPENSES_AND_OTHER_CUR1
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS [Abstract] | ' | ||||||||
Schedule of Prepaid Expenses and Other Current Assets | ' | ||||||||
As of December 31, 2013 and 2012, prepaid expenses and other current assets consist of: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Input Value Added Tax | $ | 1,095,385 | $ | 1,063,826 | |||||
Other prepaid expenses | 56,449 | 61,756 | |||||||
Total | $ | 1,151,834 | $ | 1,125,582 | |||||
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
PROPERTY, PLANT AND EQUIPMENT [Abstract] | ' | |||||||||
Schedule of Property, Plant and Equipment | ' | |||||||||
As of December 31, 2013 and 2012, property, plant and equipment, net, consist of: | ||||||||||
31-Dec-13 | 31-Dec-12 | Life | ||||||||
Building | $ | 2,666,884 | $ | 2,570,809 | 20 - 30 years | |||||
Production equipment | 572,460 | 556,249 | 10 years | |||||||
Office equipment | 127,660 | 124,079 | 3 years | |||||||
Automobile | 141,096 | 137,102 | 3 - 5 years | |||||||
Total | 3,508,100 | 3,388,239 | ||||||||
Less accumulated depreciation | (593,311 | ) | (384,950 | ) | ||||||
Property, plant and equipment - net | $ | 2,914,789 | $ | 3,003,289 |
ACCRUED_EXPENSES_AND_OTHER_CUR1
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | ' | ||||||||
Schedule of Accrued Expenses and Other Current Liabilities | ' | ||||||||
As of December 31, 2013 and 2012, accrued expenses and other current liabilities consist of: | |||||||||
December, 31 | |||||||||
2013 | 2012 | ||||||||
Other payables | $ | 191,836 | $ | 238,652 | |||||
Accrued payroll and other accrued expenses | 92,043 | 164,186 | |||||||
Total | $ | 283,879 | $ | 402,838 |
DUE_TO_RELATED_PARTIES_Tables
DUE TO RELATED PARTIES (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
DUE TO RELATED PARTIES [Abstract] | ' | ||||||||||||||
Schedule of Due to Related Parties | ' | ||||||||||||||
Due to related parties consists of: | |||||||||||||||
December 31, | |||||||||||||||
Related parties | Maturity date | Interest rate | 2013 | 2012 | |||||||||||
Mr. Wensheng Chen, Chief Executive Officer, Chairman of Board | 31-Dec-16 | 3.50% | $ | 3,201,752 | $ | 3,204,603 | |||||||||
Ms. Ling Chen, President | December 31, 2016 | 3.50% | 1,167,964 | 1,134,893 | |||||||||||
Zhuhai Yuemao Laser Facility Engineering Co., Ltd. ("Yuemao Laser") | 31-Dec-16 | 3.50% | 481,242 | 475,284 | |||||||||||
Yuemao Science & Technology Group ("Yuemao Technology") | 31-Dec-16 | 3.50% | 9,638,498 | 9,262,609 | |||||||||||
Total | 14,489,456 | 14,077,389 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INCOME TAXES [Abstract] | ' | ||||||||
Schedule of Effective Tax Rate | ' | ||||||||
The comparison of income tax expense at the U.S. statutory rate of 35% in 2013 and 2012, to the Company's effective tax rate is as follows: | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
U.S. Statutory rate | $ | (451,054 | ) | $ | (1,982,229 | ) | |||
Tax rate difference between China and U.S. | 121,915 | 563,327 | |||||||
Change in Valuation Allowance | 329,139 | 1,418,902 | |||||||
Effective tax rate | $ | - | $ | - | |||||
SUMMERY_OF_SIGNIFICANT_ACCOUNT
SUMMERY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ' |
Allowance for doubtful accounts | $37,776 | $61,384 |
Inventory allowance | 176,432 | 403,501 |
Impairment loss | ' | 3,755,416 |
Research and development costs | ' | ' |
GOING_CONCERN_Details
GOING CONCERN (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
GOING CONCERN [Abstract] | ' | ' | ' |
Stockholders' deficiency | $10,663,106 | $9,191,918 | $3,498,282 |
Accumulated deficit | $11,175,906 | $9,887,181 | ' |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
INVENTORIES [Abstract] | ' | ' |
Raw materials | $83,916 | $273,737 |
Finished goods | 589,405 | 813,508 |
Work in process | 65,414 | 67,117 |
Supply materials | 25,532 | 43,734 |
Inventories - net | $764,267 | $1,198,096 |
PREPAID_EXPENSES_AND_OTHER_CUR2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS [Abstract] | ' | ' |
Input Value Added Tax | $1,095,385 | $1,063,826 |
Other prepaid expenses | 56,449 | 61,756 |
Total | $1,151,834 | $1,125,582 |
LANDUSE_RIGHT_Details
LAND-USE RIGHT (Details) | 1 Months Ended | |||
Dec. 01, 2008 | Dec. 01, 2008 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | CNY | USD ($) | USD ($) | |
sqm | sqm | |||
LAND-USE RIGHT [Abstract] | ' | ' | ' | ' |
Area of land use right | 71,345.70 | 71,345.70 | ' | ' |
Duration of land use right | '50 years | '50 years | ' | ' |
Land use right cost | $422,843 | 2,886,300 | ' | ' |
Amortization method | 'Straight line | 'Straight line | ' | ' |
Amortization period | '50 years | '50 years | ' | ' |
Land use right, net | ' | ' | $424,561 | $421,420 |
PROPERTY_PLANT_AND_EQUIPMENT_D
PROPERTY, PLANT AND EQUIPMENT (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | $3,508,100 | $3,388,239 |
Less accumulated depreciation | -593,311 | -384,950 |
Property, plant and equipment - net | 2,914,789 | 3,003,289 |
Building [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | 2,666,884 | 2,570,809 |
Building [Member] | Minimum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Life | '20 years | ' |
Building [Member] | Maximum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Life | '30 years | ' |
Production Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | 572,460 | 556,249 |
Life | '10 years | ' |
Office Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | 127,660 | 124,079 |
Life | '3 years | ' |
Automobile [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total | $141,096 | $137,102 |
Automobile [Member] | Minimum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Life | '3 years | ' |
Automobile [Member] | Maximum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Life | '5 years | ' |
ACCRUED_EXPENSES_AND_OTHER_CUR2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | ' | ' |
Other payables | $191,836 | $238,652 |
Accrued payroll and other accrued expenses | 92,043 | 164,186 |
Total | $283,879 | $402,838 |
DUE_TO_RELATED_PARTIES_Schedul
DUE TO RELATED PARTIES (Schedule of Due to Related Parties) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Related Party Transaction [Line Items] | ' | ' |
Total | $14,489,456 | $14,077,389 |
Mr. Wensheng Chen [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Maturity date | 31-Dec-16 | ' |
Interest rate | 3.50% | ' |
Total | 3,201,752 | 3,204,603 |
Ms. Ling Chen [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Maturity date | 31-Dec-16 | ' |
Interest rate | 3.50% | ' |
Total | 1,167,964 | 1,134,893 |
Yuemao Laser [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Maturity date | 31-Dec-16 | ' |
Interest rate | 3.50% | ' |
Total | 481,242 | 475,284 |
Yuemao Technology [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Maturity date | 31-Dec-16 | ' |
Interest rate | 3.50% | ' |
Total | $9,638,498 | $9,262,609 |
DUE_TO_RELATED_PARTIES_Narrati
DUE TO RELATED PARTIES (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Related Party Transaction [Line Items] | ' | ' |
Due to Related Parties | $14,489,456 | $14,077,389 |
Mr. Wensheng Chen [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to Related Parties | 3,201,752 | 3,204,603 |
Interest rate | 3.50% | ' |
Accrued interest | 117,773 | 116,775 |
Ms. Ling Chen [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to Related Parties | 1,167,964 | 1,134,893 |
Interest rate | 3.50% | ' |
Accrued interest | 40,253 | 29,440 |
Yuemao Technology [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to Related Parties | 9,638,498 | 9,262,609 |
Interest rate | 3.50% | ' |
Accrued interest | 324,342 | 301,197 |
Yuemao Laser [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to Related Parties | 481,242 | 475,284 |
Interest rate | 3.50% | ' |
Accrued interest | $16,727 | $16,499 |
MAJOR_CUSTOMERS_Details
MAJOR CUSTOMERS (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Customer 1 [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 47.60% |
Customer 2 [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 20.40% |
Customer 3 [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 17.90% |
Customer 4 [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 10.50% |
Sales [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 10.00% |
Sales [Member] | Customer 1 [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 51.60% |
Sales [Member] | Customer 2 [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 24.50% |
INCOME_TAXES_Reconciliation_of
INCOME TAXES (Reconciliation of Income Tax) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
INCOME TAXES [Abstract] | ' | ' |
U.S. Statutory rate | ($451,054) | ($1,982,229) |
Tax rate difference between China and U.S. | 121,915 | 563,327 |
Change in Valuation Allowance | 329,139 | 1,418,902 |
Effective tax rate | ' | ' |
INCOME_TAXES_Narrative_Details
INCOME TAXES (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Operating Loss Carryforwards [Line Items] | ' | ' |
Deferred tax asset valuation allowance percentage | 100.00% | ' |
Minimum [Member] | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' |
Operating loss carryforwards, expiration date | 31-Dec-14 | ' |
Maximum [Member] | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' |
Operating loss carryforwards, expiration date | 31-Dec-30 | ' |
China [Member] | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' |
Statutory income tax rate | 25.00% | ' |
Operating loss carryforwards period | '5 years | ' |
Operating loss carryforwards, net | $10,500,000 | ' |
United States [Member] | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' |
Statutory income tax rate | 35.00% | 35.00% |
Operating loss carryforwards period | '20 years | ' |
Operating loss carryforwards, net | $600,000 | ' |
Operating loss carryforwards, expiration date | 31-Dec-30 | ' |
Schedule_I_BALANCE_SHEETS_Deta
Schedule I - BALANCE SHEETS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
ASSETS | ' | ' | ' |
Cash | $12,250 | $160,927 | $44,474 |
Total Assets | 5,587,490 | 6,372,883 | ' |
Liabilities and Stockholders' Deficiency | ' | ' | ' |
Due to Stockholders and related parties | 14,489,456 | 14,077,389 | ' |
Total Liabilities | 16,250,596 | 15,564,801 | ' |
Stockholders' Deficiency | -10,663,106 | -9,191,918 | -3,498,282 |
Total Liabilities and Stockholders' Deficiency | 5,587,490 | 6,372,883 | ' |
Parent Company | ' | ' | ' |
ASSETS | ' | ' | ' |
Cash | 1,234 | 1,234 | 1,234 |
Total Assets | 1,234 | 1,234 | ' |
Liabilities and Stockholders' Deficiency | ' | ' | ' |
Investment in and advances to Subsidiaries | 10,455,356 | 9,004,337 | ' |
Accrued expenses and other payable | 61,298 | 41,129 | ' |
Due to Stockholders and related parties | 147,686 | 147,686 | ' |
Total Liabilities | 10,664,340 | 9,193,152 | ' |
Stockholders' Deficiency | -10,663,106 | -9,191,918 | ' |
Total Liabilities and Stockholders' Deficiency | $1,234 | $1,234 | ' |
Schedule_I_STATEMENTS_OF_OPERA
Schedule I - STATEMENTS OF OPERATIONS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cost and Expenses | ' | ' |
Total cost and expenses | $463,061 | $4,487,771 |
Net loss | -1,288,725 | -5,663,510 |
Parent Company | ' | ' |
Loss from investment in subsidiaries | -1,219,153 | -5,559,228 |
Cost and Expenses | ' | ' |
Selling, general and administrative expenses | 69,572 | 104,282 |
Total cost and expenses | 69,572 | 104,282 |
Net loss | ($1,288,725) | ($5,663,510) |
Schedule_I_STATEMENTS_OF_CASH_
Schedule I - STATEMENTS OF CASH FLOWS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
OPERATING ACTIVITES | ' | ' |
Net loss | ($1,288,725) | ($5,663,510) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Accrued expenses and other payables | 372,832 | 295,641 |
FINANCING ACTIVITIES | ' | ' |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | -9,347 | 7,689 |
DECREASE IN CASH | -148,677 | 116,453 |
CASH - BEGINNING OF YEAR | 160,927 | 44,474 |
CASH - END OF YEAR | 12,250 | 160,927 |
Parent Company | ' | ' |
OPERATING ACTIVITES | ' | ' |
Net loss | -1,288,725 | -5,663,510 |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Loss from investment in subsidiaries | 1,219,153 | 5,559,228 |
Accrued expenses and other payables | 20,169 | -7,820 |
NET CASH USED IN OPERATING ACTIVITIES | -49,403 | -112,102 |
INVESTING ACTIVITIES | ' | ' |
(Investment in) repayment from subsidiaries | 49,403 | 112,102 |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 49,403 | 112,102 |
FINANCING ACTIVITIES | ' | ' |
Loan from stockholders and related parties | ' | ' |
NET CASH FROM FINANCING ACTIVITIES | ' | ' |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | ' | ' |
DECREASE IN CASH | ' | ' |
CASH - BEGINNING OF YEAR | 1,234 | 1,234 |
CASH - END OF YEAR | $1,234 | $1,234 |