Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

14. Commitments and Contingencies

Third Party Guarantees

During three months ended March 31, 2013 and the year ended December 31, 2012, the Company had agreements with third-party entities in which the Company has guaranteed certain debt of these entities, and these entities have guaranteed certain debt of the Company. As of March 31, 2013 and December 31, 2012, the Company was a debt guarantor to three third-party entities. The maximum guaranteed amount is approximately $26,490,000 as of March 31, 2013. The total guaranteed outstanding borrowings by these parties are approximately $22,181,000 as of March 31, 2013. All of the guarantee agreements are for debt with maturities of one year or less, and mature through March 31, 2014.

These same parties disclosed above also act as debt guarantors on certain of the Company’s debt with a maximum guaranteed amount of approximately $27,607,000 as of March 31, 2013. The Company’s loans guaranteed by these parties are approximately $16,755,000 as of March 31, 2013. The Company has not historically incurred any losses due to such debt guarantees, and the Company has determined that the fair value of the guarantees is not material. 

Leases

The Company has non-cancelable operating lease agreements principally for its office and factory facilities. These leases have terms expiring in 2013 and April 2014, and are renewable subject to negotiation.

During 2010, the Company entered into operating lease agreements with several county governments of Xinmi City to lease three parcels of land where the Company’s factories are located. These lease terms are for fifty years through August 2059. The rent for the land is approximately $53,115 per year.

Total rent expense for the leases as mentioned above was $67,533 and $92,852 for the three months ended March 31, 2013 and 2012, respectively. A summary of future minimum lease payments as of March 31, 2013 is presented below.

	Minimum
	Lease
	Payments
Year ending March 31:
2013	$	283,607
2014		109,672
2015		53,115
2016		53,115
2017		53,115
Thereafter		2,119,862
	$	2,672,486