10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(Mark One)

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

or

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________________

Commission file number: 001-34631

Armco Metals Holdings, Inc.

(Exact name of registrant as specified in its charter)

Nevada	26-0491904
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Waters Park Drive, Suite 98, San Mateo, CA	94403
(Address of principal executive offices)	(Zip Code)

(650) 212-7620

(Registrant's telephone number, including area code)

not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

☒Yes ☐No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☒Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

☐Yes ☒No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 52,739,661 shares of common stock are issued and outstanding as of May 16, 2014.

1

TABLE OF CONTENTS

		Page No.
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements.	F-1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	4
Item 3.	Quantative and Qualitative Disclosures About Market Risk.	15
Item 4.	Controls and Procedures.	15
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	15
Item 1A.	Risk Factors.	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	16
Item 3.	Defaults Upon Senior Securities.	17
Item 4.	Mine Safety Disclosures.	17
Item 5.	Other Information.	17
Item 6.	Exhibits.	17

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Throughout this report, or in other reports or registration statements filed from time to time with the Securities and Exchange Commission under the Securities Exchange Act of 1934, or under the Securities Act of 1933, as well as in documents we incorporate by reference or in press releases or oral statements made by our officers or representatives, we may make statements that express our opinions, expectations, or projections regarding future events or future results, in contrast with statements that reflect historical facts. These predictive statements, which we generally precede or accompany by such typical conditional words as “anticipate,” “intend,” “believe,” “estimate,” “plan,” “seek,” “project” or “expect,” or by the words “may,” “will,” or “should,” are intended to operate as “forward-looking statements” of the kind permitted by the Private Securities Litigation Reform Act of 1995, incorporated in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. That legislation protects such predictive statements by creating a “safe harbor” from liability in the event that a particular prediction does not turn out as anticipated.

While we always intend to express our best judgment when we make statements about what we believe will occur in the future, and although we base these statements on assumptions that we believe to be reasonable when made, these forward-looking statements are not a guarantee of performance, and you should not place undue reliance on such statements. Forward-looking statements are subject to many uncertainties and other variable circumstances, many of which are outside of our control, that could cause our actual results and experience to differ materially from those we thought would occur.

The following listing represents some, but not necessarily all, of the factors that may cause actual results to differ from those we may have anticipated or predicted:

● We operate in cyclical industries and we experience volatile demand for our products;

● Our ability to operate our scrap metal recycling facility efficiently and profitably;

● Our ability to obtain sufficient capital to fund a potential expansion of our scrap metal recycling facility;

● Our ability to consummate the pending acquisition of Draco Resources, Inc. and the success of its future business and operations;

● Our ability to establish adequate management, legal and financial controls in the United States and China;

2

● The availability to us of supplies of metal ore and scrap metal upon favorable terms;

● The availability of electricity to operate our scrap metal recycling facility;

● Fluctuations in raw material prices may affect our operating results as we may not be able to pass on cost increases to customers;

● The lack of various legal protections, which may be customarily contained in similar contracts among parties in the United States and are material to our operations, in certain agreements to which we are a party;

● Our dependence on our key management personnel;

● Our potential inability to meet the filing requirements imposed by the securities laws in the United States;

● Our ineffective internal control over financial reporting;

● The effect of changes resulting from the political and economic policies of the Chinese government on our assets and operations located in China;

● The limitation on our ability to receive and use our revenues effectively as a result of restrictions on currency exchange in China;

● The impact of future inflation in China on economic activities in China;

● Our ability to enforce our rights due to policies regarding the regulation of foreign investments in China;

● The restrictions imposed under regulations relating to offshore investment activities by Chinese residents, causing us increased administrative burdens and regulatory uncertainties, may limit or adversely affect our ability to complete any business combinations with our subsidiaries based in China;

● Our ability to comply with the United States Foreign Corrupt Practices Act which could subject us to penalties and other adverse consequences;

● The provisions of our articles of incorporation and by-laws that may delay or prevent a takeover may sometimes work against the best interests of our stockholders; and

● Our controlling stockholders may take actions that conflict with the interests of our stockholders.

You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in Part II, Item 1A. Risk Factors appearing later in this report, Part I. Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2013 and our other filings with the Securities and Exchange Commission. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

OTHER PERTINENT INFORMATION

Unless otherwise set forth to the contrary, when used in this report the terms the “Company,” "we," "us," "ours," and similar terms refers to Armco Metals Holdings, Inc., a Nevada corporation, and our subsidiaries, the term “MT” refers to metric tons, and the term “Recycling Facility” refers to our metal recycling facility located in the Banqiao Industrial Zone, part of Lianyungang Economic Development Zone in the Jiangsu province of China.

The information which appears on our web site at www.armcometals.com is not part of this report.

3

PART 1 - FINANCIAL INFORMATION

Item 1.          Financial Statements.

Armco Metals Holdings, Inc.

March 31, 2014 and 2013

Index to the Consolidated Financial Statements

Contents	Page(s)
Consolidated Balance Sheets at March 31, 2014 (Unaudited) and December 31, 2013	F-2
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2014 and 2013 (Unaudited)	F-3
Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2014 (Unaudited)	F-4
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and 2013 (Unaudited)	F-5
Notes to the Consolidated Financial Statements (Unaudited)	F-7

F-1

ARMCO METALS HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

	March 31, 2014			December 31, 2013
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	1,000,304		$	596,557
Pledged deposits		1,046,872			4,652,222
Marketable securities		541,067			519,129
Accounts receivable, net		18,459,055			25,595,516
Inventories		16,787,158			20,456,920
Advance on purchases		749,387			733,285
Prepayments and other current assets		2,136,796			1,181,371
Total Current Assets		40,720,639			53,735,000
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment		44,491,820			44,856,611
Accumulated depreciation		(9,988,674	)		(9,360,933	)
PROPERTY, PLANT AND EQUIPMENT, net		34,503,146			35,495,678
LAND USE RIGHTS
Land use rights		6,626,488			6,681,779
Accumulated amortization		(443,587	)		(416,478	)
LAND USE RIGHTS, net		6,182,901			6,265,301
Total Assets	$	81,406,686		$	95,495,979

F-2

ARMCO METALS HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

	March 31, 2104			December 31, 2013
	(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Loans payable	$	22,511,856		$	27,415,638
Banker's acceptance notes payable and letters of credit		3,116,049			8,473,217
Current maturities of capital lease obligation		897,501			904,990
Accounts payable		5,118,495			10,062,463
Advances received from Chairman and CEO		755,805			668,332
Due to related party		397,371			403,141
Customer deposits		2,821,930			649,488
Corporate income tax payable		820,036			822,207
Derivative liability		1,367,535			61,429
Value added tax and other taxes payable		1,831,056			2,202,331
Accrued expenses and other current liabilities		1,653,038			1,228,753
Total Current Liabilities		41,290,672			52,891,989
Total Liabilities		41,290,672			52,891,989
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued or outstanding		-			-
Common stock, $0.001 par value, 74,000,000 shares authorized, 33,770,176 and 29,876,327 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively		33,770			29,876
Additional paid-in capital		37,305,937			35,790,906
Retained earnings		(994,994	)		2,625,287
Accumulated other comprehensive income (loss):
Change in unrealized gain on marketable securities		(672,574	)		(694,512	)
Foreign currency translation gain		4,443,875			4,852,433
Total Stockholders' Equity		40,116,014			42,603,990
Total Liabilities and Stockholders' Equity	$	81,406,686		$	95,495,979

See accompanying notes to the unaudited consolidated financial statements.

F-3

ARMCO METALS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) 

	For the Three Months Ended March 31, 2014			For the three Months Ended March 31, 2013
	(Unaudited)			(Unaudited)
NET REVENUES	$	9,918,651		$	14,343,077
COST OF GOODS SOLD		11,082,455			13,698,412
GROSS MARGIN		(1,163,804	)		644,665
OPERATING EXPENSES:
Selling expenses		100,855			29,226
Professional fees		214,454			196,497
General and administrative expenses		1,438,126			1,046,694
Operating cost of idle manufacturing facility		534,972			423,221
Total operating expenses		2,288,407			1,695,638
LOSS FROM OPERATIONS		(3,452,211	)		(1,050,973	)
OTHER (INCOME) EXPENSE:
Interest income		(98,268	)		(2,725	)
Interest expense		672,942			729,372
Change in fair value of derivative liability		(477,909	)		(615,946	)
Loan guarantee expense		13,002			12,500
Other (income) expense		58,303			(75,896	)
Total other (income) expense		168,070			47,305
LOSS BEFORE INCOME TAXES PROVISION		(3,620,281	)		(1,098,278	)
INCOME TAX PROVISION		-			(8,510	)
NET LOSS		(3,620,281	)		(1,089,768	)
OTHER COMPREHENSIVE INCOME (LOSS):
Change in unrealized income (loss) of marketable securities		21,938			5,499
Foreign currency translation gain (loss)		(408,558	)		(239,518	)
COMPREHENSIVE LOSS	$	(4,006,901	)	$	(1,323,787	)
NET LOSS PER COMMON SHARE - BASIC AND DILUTED:
Net loss per common share - basic and diluted	$	(0.12	)	$	(0.05	)
Weighted Average Common Shares Outstanding - basic and diluted		30,052,787			23,304,334

See accompanying notes to the unaudited consolidated financial statements.

F-4

ARMCO METALS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Three Months Ended March 31, 2014

(Unaudited)

	Common Stock, $0.001 Par Value									Accumulated Other Comprehensive Income (Loss)
	Number of Shares		Amount		Additional Paid-in Capital		Retained Earnings			Change in Unrealized Loss on Marketable Securities			Foreign Currency Translation Gain			Total Stockholders' Equity
Balance, December 31, 2013		29,876,327	$	29,876	$	35,790,906	$	2,625,287		$	(694,512	)	$	4,852,433		$	42,603,990
Loan guarantee services received and quarterly shares vested from common shares issued to Chaoyang Steel on June 11, 2010 for 5 year loan guarantee services expiring June 30, 2016		33,338		34		12,968											13,002
Stock-based compensation		2,336,208		2,336		904,193											906,529
Issuance of common shares for consulting services to CDII for service of one year starting from November 1, 2013		250,000		250		97,250											97,500
Issuance of common stock in conversion of convertible notes		1,274,303		1,274		383,353											384,627
Reclassification of derivative liabilities due to conversion of convertible notes						117,267											117,267
Net Loss								(3,620,281	)								(3,620,281	)
Change in unrealized loss on marketable securities											21,938						21,938
Foreign currency translation loss														(408,558	)		(408,558	)
Balance, March 31, 2014		33,770,176	$	33,770	$	37,305,937	$	(994,994	)	$	(672,574	)	$	4,443,875		$	40,116,014

See accompanying notes to the unaudited consolidated financial statements.

F-5

ARMCO METALS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Three Months Ended March 31, 2014			For the Three Months Ended March 31, 2013
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(3,620,281	)	$	(1,089,768	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation expense		706,766			706,402
Amortization expense		30,782			59,190
Change in fair value of derivative liability		(477,909	)		(615,946	)
Amortization of debt discount		494,593			-
Stock-based compensation		1,017,031			411,625
Write-down of inventories		390,173			-
Changes in operating assets and liabilities
Bank acceptance notes receivable		-			(1,115,698	)
Accounts receivable		8,777,149			7,635,827
Inventories		3,136,203			(5,354,655	)
Advance on purchases		269,806			(1,130,362	)
Prepayments and other current assets		(1,080,644	)		(1,113,145	)
Accounts payable		(4,898,046	)		3,468,335
Customer deposits		501,493			1,733,345
Taxes payable		(354,926	)		(1,285,492	)
Accrued expenses and other current liabilities		152,365			980,317
NET CASH PROVIDED BY OPERATING ACTIVITIES		5,044,555			3,289,975
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from release of pledged deposits		5,409,660			3,756,871
Payment made towards pledged deposits		(1,816,273	)		(7,907,848	)
Purchase of property, plant and equipment		-			(97,858	)
NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES		3,593,387			(4,248,835	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans payable		6,082,898			9,503,386
Repayment of loans payable		(9,135,063	)		(16,504,984	)
Banker's acceptance notes payable		(5,326,288	)		5,674,121
Repayment of capital lease obligation		-			(71,329	)
Advances from (repayment to) Chairman and CEO		77,918			187,929
Advances from (repayment to) related party		78			-
Proceeds from related party loan		-			1,004,128
Proceeds from sales of common stock		-			1,621,356
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(8,300,997	)		1,414,607
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(66,802	)		(495,412	)
NET CHANGE IN CASH		403,747			(39,665	)
Cash at beginning of the period		596,557			1,367,171
Cash at end of the period	$	1,000,304		$	1,327,506
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Interest paid	$	175,553		$	729,372
Income tax paid	$	-		$	1,777
NON CASH FINANCING AND INVESTING ACTIVITIES:
Debt discount due to convertible features	$	1,901,282		$	-
Reclassification of derivative liability to additional paid-in capital	$	117,267		$	-
Change in fair value of marketable securities	$	21,938		$	-
Common shares issued for conversion of convertible notes and accrued interest	$	384,627		$	-

See accompanying notes to the unaudited consolidated financial statements.

F-6

Armco Metals Holdings, Inc.

March 31, 2014 and 2013

Notes to the Consolidated Financial Statements

(Unaudited)

Note 1 – Organization and Operations

Armco Metals Holdings, Inc. (formerly China Armco Metals, Inc. and Cox Distributing, Inc.)

Cox Distributing was founded as an unincorporated business in January 1984 and was incorporated as Cox Distributing, Inc. (“Cox Distributing”), a C corporation under the laws of the State of Nevada on April 6, 2007 at which time 9,100,000 shares of common stock were issued to the founder in exchange for the existing unincorporated business. No value was given to the stock issued by the newly formed corporation.  Therefore, the shares were recorded to reflect the $.001 par value and paid in capital was recorded as a negative amount ($9,100).

On June 27, 2008, Cox Distributing amended its Articles of Incorporation, and changed its name to China Armco Metals, Inc. (“Armco Metals” ) upon the acquisition of Armco Metals International Limited (formerly “Armco & Metawise (H.K) Limited” or “Armco HK”) and Subsidiaries to better identify the Company with the business conducted, through its wholly owned subsidiaries in China, import, export and distribution of ferrous and non-ferrous ores and metals, and processing and distribution of scrap steel.

On July 3, 2013, the Company changed its name from “China Armco Metals, Inc.” to “Armco Metals Holdings, Inc.”(“Armco Metals Holdings” or the “Company”).

Armco Metals International Limited (formerly Armco & Metawise (H.K) Limited) and Subsidiaries

Armco Metals International Limited (formerly Armco & Metawise (H.K) Limited)

Armco & Metawise (H.K) Limited was incorporated on July 13, 2001 under the laws of the Hong Kong Special Administrative Region (“HK SAR”) of the People’s Republic of China (“PRC”). Armco HK engages in the import, export and distribution of ferrous and non-ferrous ore and metals.

On March 22, 2011, Armco & Metawise (H.K) Limited amended its Memorandum and Articles of Association, and changed its name to Armco Metals International Limited (“Armco HK”).

Formation of Henan Armco and Metawise Trading Co., Ltd.

Henan Armco and Metawise Trading Co., Ltd. (“Henan”) was incorporated on June 6, 2002 in the City of Zhengzhou, Henan Province, PRC. Henan engages in the import, export and distribution of ferrous and non-ferrous ores and metals.

Formation of Armco (Lianyungang) Renewable Metals, Inc.

On January 9, 2007, Armco HK formed Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”), a wholly-owned foreign enterprise (“WOFE”) subsidiary in the City of Lianyungang, Jiangsu Province, PRC. Renewable Metals engages in the processing and distribution of scrap metal.

On December 1, 2008, Armco HK transferred its 100% equity interest in Renewable Metals to Armco Metals.

Merger of Henan with Renewable Metals, Companies under Common Control

On December 28, 2007, Armco HK entered into a Share Transfer Agreement with Renewable Metals, whereby Armco HK transferred to Renewable Metals all of its equity interest in Henan, a company under common control of Armco HK.

The acquisition of Henan has been recorded on the purchase method of accounting at historical amounts as Renewable Metals and Henan were under common control since June 2002. The consolidated financial statements have been presented as if the acquisition of Henan had occurred as of the first date of the first period presented.

F-7

Acquisition of Armco Metal International Limited and Subsidiaries (“Armco HK”) Recognized as a Reverse Acquisition

On June 27, 2008, the Company entered into and consummated a share purchase agreement (the “Share Purchase Agreement”) with Armco HK and Feng Gao, who owned 100% of the issued and outstanding shares of Armco HK. In connection with the consummation of the Share Purchase Agreement, (i) Stephen Cox surrendered 7,694,000 common shares, representing his controlling interest in the Company for cancellation and resigned as an officer and director; (ii) the Company purchased from the Armco HK Shareholder 100% of the issued and outstanding shares of Armco HK’s capital stock for $6,890,000 by delivery of the Company’s purchase money promissory note; (iii) issued to Ms. Gao (a) a stock option entitling Ms. Gao to purchase 5,300,000 shares of the Company’s common stock, par value $.001 per share (the “Common Stock”) with an exercise price of $1.30 per share expiring on December 31, 2008 and (b) a stock option entitling Ms. Gao to purchase 2,000,000 shares of the Company’s common stock with an exercise price of $5.00 per share expiring two (2) years from the date of issuance on June 27, 2010 (the “Gao Options”). On August 12, 2008, Ms. Gao exercised her option to purchase and the Company issued 5,300,000 shares of its common stock in exchange for the $6,890,000 note owed to Ms. Gao. The shares issued represented approximately 69.7% of the issued and outstanding common stock immediately after the consummation of the Share Purchase and exercise of the option to purchase 5,300,000 shares of the Company’s common stock at $1.30 per share.

As a result of the controlling financial interest of the former stockholder of Armco HK, for financial statement reporting purposes, the merger between the Company and Armco HK has been treated as a reverse acquisition with Armco HK deemed the accounting acquirer and the Company deemed the accounting acquiree under the acquisition method of accounting in accordance with section 805-10-55 of the FASB Accounting Standards Codification. The reverse acquisition is deemed a capital transaction and the net assets of Armco HK (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the acquisition. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of Armco HK which are recorded at their historical cost. The equity of the Company is the historical equity of Armco HK retroactively restated to reflect the number of shares issued by the Company in the transaction.

Formation of Armco (Lianyungang) Holdings, Inc.

On June 4, 2009, the Company formed Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”), a WOFE subsidiary in the City of Lianyungang, Jiangsu Province, PRC. Lianyungang Armco intends to engage in marketing and distribution of the recycled scrap steel.

Formation of Armco Metals (Shanghai) Holdings, Ltd.

On July 16, 2010, the Company formed Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) as a WOFE subsidiary in Shanghai, China. Armco Shanghai serves as the headquarters for the Company’s China operations and oversees the activities of the Company in financing and international trading.

Note 2 - Significant and Critical Accounting Policies and Practices

Basis of Presentation - Unaudited Interim Financial Information

The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented.  Interim results are not necessarily indicative of the results for the full year.  These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2013 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2014.

Principles of Consolidation

The Company applies the guidance of Topic 810 “Consolidation” of the FASB Accounting Standards Codification to determine whether and how to consolidate another entity. Pursuant to ASC Paragraph 810-10-15-10 all majority-owned subsidiaries—all entities in which a parent has a controlling financial interest—shall be consolidated except (1) when control does not rest with the parent, the majority owner; (2) if the parent is a broker-dealer within the scope of Topic 940 and control is likely to be temporary; (3) consolidation by an investment company within the scope of Topic 946 of a non-investment-company investee. Pursuant to ASC Paragraph 810-10-15-8 the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree. The Company consolidates all less-than-majority-owned subsidiaries, if any, in which the parent’s power to control exists.

F-8

The Company's consolidated subsidiaries and/or entities as of March 31, 2014 are as follows:

Name of consolidated subsidiary or entity	State or other jurisdiction of incorporation or organization	Date of incorporation or formation (date of acquisition, if applicable)	Attributable interest
Armco Metal International Limited (“Armco HK”)	Hong Kong SAR	July 13, 2001	100%
Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”)	PRC	June 6, 2002	100%
Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”)	PRC	January 9, 2007	100%
Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”)	PRC	June 4, 2009	100%
Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”)	PRC	July 16, 2010	100%

The consolidated financial statements include all accounts of the Company and the consolidated subsidiaries and/or entities as of reporting period ending date(s) and for the reporting period(s) then ended.

All inter-company balances and transactions have been eliminated.

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) 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 revenues and expenses during the reporting period. Management makes its best estimate of the outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, pledged deposits, accounts receivable, advance on purchases, prepayments and other current assets, accounts payable, customer deposits, corporate income/VAT tax payable, accrued expenses and other current liabilities approximate their fair values because of the short maturity of these instruments.

The Company’s loans payable, banker’s acceptance notes payable, and capital lease obligation approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at March 31, 2014 and December 31, 2013.

The Company’s Level 3 financial liabilities consist of convertible notes with embedded conversion feature issued in September 2013, November 2013, and January through March 2014, for which there are no current market for these securities such that the determination of fair value requires significant judgment or estimation.  The Company valued the automatic conditional conversion, re-pricing/down-round, change of control; default and follow-on offering provisions using a lattice model, with the assistance of a valuation specialist, for which management understands the methodologies. These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date.

F-9

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

It is not, however, practical to determine the fair value of advances from significant stockholder and lease arrangement with the significant stockholder, if any, due to their related party nature.

Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis

Level 1 Financial Assets – Marketable Securities

The Company uses Level 1 of the fair value hierarchy to measure the fair value of the marketable securities and marks the available for sale marketable securities at fair value in the statement of financial position at each balance sheet date and reports the unrealized holding gains and losses for available-for-sale securities in other comprehensive income (loss) until realized provided the unrealized holding gains and losses is temporary. If the fair value of an investment is less than its cost basis at the balance sheet date of the reporting period for which impairment is assessed, and it is determined that the impairment is other than temporary, then an impairment loss is recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period.

Level 3 Financial Liabilities – Derivative Liabilities

The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liabilities at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable to the change in the fair value of the derivative liabilities.

The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as of March 31, 2014, and December 31, 2013:

Recurring Fair Value Measures	Level 1		Level 2		Level 3		Total
March 31, 2014
Derivative liability		-		-	$	1,367,535	$	1,367,535
Available-for-sale securities	$	541,067		-		-	$	541,067
December 31, 2013
Derivative liability		-		-	$	61,429	$	61,429
Available-for-sale securities	$	519,129		-		-	$	519,129

Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis

The Company’s non-financial assets include inventories. The Company identifies potentially excess and slow-moving inventories by evaluating turn rates, inventory levels and other factors. Excess quantities are identified through evaluation of inventory aging, review of inventory turns and historical sales experiences. The Company provides lower of cost or market reserves for such identified excess and slow-moving inventories. The Company establishes a reserve for inventory shrinkage, if any, based on the historical results of physical inventory cycle counts.

Foreign Currency Translation

The financial records of the Company's Chinese operating subsidiaries are maintained in their local currency, the Renminbi (“RMB”), which is the functional currency. Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial statements. Foreign currency translation gain (loss) resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the consolidated statement of stockholders’ equity.

RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. Commencing July 21, 2005, China adopted a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies. The exchange rate of the US dollar against the RMB was adjusted from approximately RMB 8.28 per U.S. dollar to approximately RMB 8.11 per U.S. dollar on July 21, 2005. Since then, the PBOC administers and regulates the exchange rate of the U.S. dollar against the RMB taking into account demand and supply of RMB, as well as domestic and foreign economic and financial conditions.

Unless otherwise noted, the rate presented below per U.S. $1.00 was the midpoint of the interbank rate as quoted by OANDA Corporation (www.oanda.com) contained in its consolidated financial statements. Management believes that the difference between RMB vs. U.S. dollar exchange rate quoted by the PBOC and RMB vs. U.S. dollar exchange rate reported by OANDA Corporation were immaterial. Translations do not imply that the RMB amounts actually represent, or have been or could be converted into, equivalent amounts in U.S. dollars. Translation of amounts from RMB into U.S. dollars has been made at the following exchange rates for the respective periods:

F-10

	March 31, 2014		December 31, 2013		March 31, 2013		December 31, 2012
Balance sheets		6.1632		6.1122		6.2741		6.3086
Statements of operations and comprehensive income (loss)		6.1178		6.1943		6.2814		6.3116

Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options, warrants and non-vested shares.

For the periods presented, the computation of diluted loss per share equaled basic loss per share as the inclusion of any dilutive instruments would have had an antidilutive effect on the earnings per share calculation in the periods presented.

Recently Issued Accounting Pronouncements

In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.” The ASU states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although “major” is not defined, the standard provides examples of when a disposal qualifies as a discontinued operation. The ASU also requires additional disclosures about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The ASU is effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years. The adoption of ASU 2014-08 is not expected to have a material impact on the Company’s consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the consolidated financial statements.

Note 3 – Pledged Deposits

Pledged deposits consist of cash held in financial institutions for (a) outstanding letters of credit and (b) open banker’s acceptance notes payable maturing between three (3) to nine (9) months from the date of issuance, and (c) capital lease obligation.

Pledged deposits consisted of the following:

F-11

	March 31, 2014		December 31, 2013
Armco HK
Letters of credit (i)	$	7,962	$	5,993
Sub-total – Armco HK		7,962		5,993
Renewable Metals
Bank acceptance notes payable		-		1,636,072
Letters of credit (ii)		551,839		2,517,621
Deposit for capital lease obligation (iii)		486,760		490,823
Sub-total – Renewable Metals		1,038,599		4,644,516
Henan Armco
Letters of credit (iv)		311		2,113
Sub-total – Henan Armco		311		2,113
	$	1,046,872	$	4,652,222

(i) $7,962 is to be released to the Company for payment towards fulfilled letters of credit when those letters of credit mature on April 15, 2014

(ii) $551,839 is to be released to the Company for payment towards fulfilled letters of credit when those letters of credit mature on April 8, 2014

(iii) $486,760 is to be released to the Company as part of the payment towards capital lease installment payment when the capital lease agreement matures on December 15, 2014.

(iv) $311 is to be released to the Company on April 30, 2014

Note 4 – Marketable Equity Securities, Available for Sale

As of March 31, 2014, the Company’s available for sale marketable securities were marked to market to its fair value of $541,067 and reported a $21,938 change in unrealized loss on marketable securities for the three months ended March 31, 2014 as other comprehensive income (loss) in its Stockholders’ Equity.

The table below provides a summary of the changes in the fair value of marketable securities, available for sale measured at fair value on a recurring basis using Level 1 of the fair value hierarchy to measure the fair value.

			Fair Value Measurement Using Level 1 Inputs
	Original cost		Impairment – Other Than Temporary			Accumulated Foreign Currency Transaction Gain (Loss)		Other Comprehensive Income (Loss) - Change in Unrealized Loss			Fair Value
Balance, December 31, 2013	$	3,396,658	$	(2,366,941	)	$	183,924	$	(694,512	)	$	519,129
Purchases, issuances and settlements
Total gains or losses (realized/unrealized) included in:
Other comprehensive income (loss): Changes in unrealized loss							-		21,938			21,938
Balance, March 31, 2014	$	3,396,658	$	(2,366,941	)	$	183,924	$	(672,574	)	$	541,067

Note 5 – Accounts Receivable

Accounts receivable consisted of the following:

	March 31, 2014			December 31, 2013
Accounts receivable	$	18,502,205		$	25,638,666
Allowance for doubtful accounts		(43,150	)		(43,150	)
	$	18,459,055		$	25,595,516

F-12

Note 6 – Inventories

Inventories consisted of the following:

	March 31, 2014			December 31, 2013
Raw materials – scrap metal	$	3,758,273		$	4,390,811
Finished goods – processed scrap metal		15,465,390			12,421,088
Purchased merchandise for resale		245,583			5,936,936
Write - down of inventories		(2,682,088	)		(2,291,915	)
	$	16,787,158		$	20,456,920

Renewable Metals raw materials and finished goods are collateralized for loans from the Bank of Communications Limited Lianyungang Branch. Raw materials consisted of scrap metals to be processed and finished goods were comprised of all of the processed scrap metal at Renewable Metals. Due to the short duration time for the processing of its scrap metal, there was no material work-in-process inventory at March 31, 2014 or December 31, 2013.

Slow-Moving or Obsolescence Markdowns

The Company recorded no inventory obsolescence adjustments for the three months ended March 31, 2014 and 2013.

Lower of Cost or Market Adjustments

There were $390,173 and $nil of lower of cost or market adjustments for the three months ended March 31, 2014 and 2013, respectively.

Note 7 – Loans and Convertible Notes Payable

Loans payable consisted of the following:

	March 31, 2014		December 31, 2013
Armco HK
Loan payable to RZB Austria Finance (Hong Kong) Limited, collateralized by certain of the Company’s inventory, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at the bank’s cost of funds plus 200 basis points per annum, with principal and interest due April 1, 2014 and repaid in full as of filing date	$	359,303	$	504,248
Loan payables to DBS, collateralized by certain of the Company’s inventory, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at an average of 3.47% per annum, balance is due April 1, 2014 and repaid in full as of filing date		13,342		2,602,115
Sub-total - Armco HK		372,645		3,106,363
Renewable Metals
Loan payable to Bank of Communications, Lianyungang Branch, under trade credit facilities, collateralized by Renewable Metals inventories and guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at 120% of the bank’s benchmark rate per annum (average 7.2%), balance due June 2, 2014		324,507		1,963,286
Loan payable to Bank of China, Lianyungang Branch, under trade credit facilities, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at 6.6% per annum payable monthly, balance due from April 12, 2014 through September 25, 2014		8,112,669		8,180,361
Loan payable to Pudong Development Bank, Lianyungang Branch, under trade credit facilities, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at 7.92% per annum payable monthly, balance due March 27, 2015		1,622,534		-
Short-term borrowing, with interest rate at 8% per annum		64,901		229,050
Loan payable, with interest at 6% per annum and due July 21, 2014		3,474,388		3,503,379
Sub-total – Renewable Metals		13,598,999		13,876,076
Henan Armco
Loan Payable to ICBC, with interest at 2.47% per annum, and repaid in full on March 28, 2014		-		2,755,926
Loan Payable to Guanhutun Credit Union, collateralized by Henan’s building and leasehold improvement, with interest at 9.6% per annum, balance due March 16, 2015		162,253		163,607
Loans payable, with interest at 8% per annum, and due in 2014. The creditors agreed to exchange $5,319,351 into convertible notes in January and February, 2014		-		5,999,957
Short-term borrowing, no interest bearing and due upon demand		2,856,471		-
Sub-total – Henan Armco		3,018,724		8,919,490
Armco Metals Holdings
Loans payable, with interest at 8% per annum, due from April 21, 2014 through May 8, 2014		790,000		1,050,000
Convertible notes payable, net of discount, with interest at 4-8% per annum, maturing from June 25, 2014 through March 3, 2015 and $5,777,967 was converted into shares in April and May 2014.		4,731,488		463,709
Sub-total – Armco Metals Holdings		5,521,488		1,513,709
	$	22,511,856	$	27,415,638

F-13

Collateralization of Property, Plant and Equipment

Both Renewable Metals and Lianyungang Armco’s property, plant and equipment representing substantially all of the Company’s property, plant and equipment are collateralized for loans from the Bank of China Lianyungang Branch.

Collateralization of Land Use Rights

Both Renewable Metals and Lianyungang Armco’s land use rights representing all of the Company’s land use rights are collateralized for loans from the Bank of China Lianyungang Branch.

Convertible notes payable

During 2013, the Company’s subsidiary borrowed an aggregate of approximately $6.2 million from 15 non-U.S. lenders who are not its affiliates under the terms of loan contracts. In January and  February 2014, the Company and its subsidiary entered into note exchange agreements with each of these lenders pursuant to which the Company exchanged the loan contracts for 8% convertible notes in the aggregate amount of RMB 33,512,936 (approximately $5.5 million net of discount of $1.3 million), which represented the remaining principal balance due under the loan contracts. The convertible notes bear interest at the rate of 8% per annum, mature nine months from the date of issuance, and are convertible at any time at the option of the holder into shares of the Company’s common stock at a conversion price of $0.317 per share.

The Company analyzed the modification of the term under ASC 470-60 “Trouble Debt Restructurings” and ASC 470-50 “Extinguishment of Debt”. The Company determined the modification is substantial and the transaction should be accounted for as an extinguishment with the old debt written off and the new debt initially recorded at fair value with a new effective interest rate. The Company also determined that the fair value of the new debt is the same as the fair value of the old debt. Thus no gain or loss was recognized upon the extinguishment.

Note 8 – Banker’s Acceptance Notes Payable and Letters of Credit

Banker’s acceptance notes payable consisted of the following:

	March 31, 2014		December 31, 2013
Renewable Metals
Banker’s acceptance notes payable matured on March 27, 2014	$	-	$	3,272,144
Letters of credit matured on April 6, 2014		3,116,049		5,201,073
	$	3,116,049	$	8,473,217

Note 9 – Related Party Transactions

The related parties consist of the following:

Kexuan Yao (“Mr. Yao”)                      The Company’s Chairman, Chief Executive Officer and principal stockholder

Keli Yao                                                   Kexuan Yao’s brother

Yi Chu                                                      Kexuan Yao’s wife

F-14

Advances from Chairman and CEO

From time to time, the Mr. Yao advances funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and due on demand. As of March 31, 2014 and December 31, 2013, the advance balance was $755,805 and $668,332, respectively.

Promissory Note from Chairman and CEO

On March 29, 2013, the Company executed a promissory note in the amount of RMB 6,300,000 (approximately $1,000,000) payable to Mr. Yao.  The note, which is due one year from the date of issuance, accrues interest at 8% per annum.  The proceeds are used for working capital purposes. The note was subsequently converted into shares of common stock of the Company in October 28, 2013. See more details in Note 13.

Operating Lease from Chairman and CEO

On January 1, 2006, Henan entered into a non-cancellable operating lease for its 176.37 square meters commercial office space in the City of Zhengzhou, Henan Province, PRC from Mr. Yao for RMB 10, 000 per month. The lease expired on December 31, 2008 and has been extended through December 31, 2014.  Rental expense incurred for the three months ended March 31, 2014 and 2013 was RMB 30,000 (approximately $4,868) and RMB 30,000 (approximately $4,843), respectively.

Due to Other Related Parties

Due to other related parties consists of the following:

	March 31, 2014		December 31, 2013
Keli Yao		147,501		116,828
Yi Chu		249,870		286,313
Total		397,371		403,141

The balance of $397,371 due to related parties represents the loan owed to the related parties, which is interest free, unsecured and repayable on demand.

Note 10 – Capital Lease Obligation

Capital lease obligation consisted of the following:

	March 31, 2014			December 31, 2013
Renewable Metals
(i)Capital lease obligation to a financing company for a term of three (3) years, collateralized by certain of Renewable Metals’ machinery and equipment, with interest at 11.0% per annum, with principal and interest due and payable in monthly installments of RMB 497,897 on the 23rd of each month.	$	333,284		$	336,065
Less current maturities		(333,284	)		(336,065	)
Capital lease obligation, net of current maturities		-			-
(ii)Capital lease obligation to a financing company for a term of three (3) years, collateralized by certain of Renewable Metals’ machinery and equipment, with interest at 11.0% per annum, with principal and interest due and payable in quarterly installments of RMB3,609,102 on the 15th of each quarter.		564,217			568,925
Less current maturities		(564,217	)		(568,925	)
Capital lease obligation, net of current maturities		-			-
Total capital lease obligation		897,501			904,990
Less current maturities		(897,501	)		(904,990	)
TOTAL CAPITAL LEASE OBLIGATION, net of current maturities	$	-		$	-

F-15

Note 11 – Derivative Instruments and the Fair Value of Financial Instruments

(i)     Warrants Issued in 2008 (“2008 Warrants)

Description of Warrants and Fair Value on Date of Grant

In connection with the four (4) rounds of private placements from July 25, 2008 through August 8, 2008 (the “2008 Unit Offering”), the Company issued (i) warrants to purchase 2,486,649 common shares of the Company to the investors and (ii) warrants to purchase 242,264 common shares of the Company to the brokers, or 2,728,913 common shares in aggregate (“2008 Warrants”) with an exercise price of $5.00 per share expiring on August 31, 2013, all of which have been earned upon issuance.

The Company estimated the fair value of 2008 warrants on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	July 25, 2008 through August 8, 2008
Expected life (year)		5.00
Expected volatility (*)		89.00	%
Risk-free interest rate		3.23	%
Expected annual rate of quarterly dividends		0.00	%

* Expected volatility is based on historical volatility of the Company’s common stock. The Company currently has no reason to believe future volatility over the expected life of these warrants is likely to differ materially from its historical volatility. The risk-free interest rate is based on a yield curve of U.S. treasury interest rates on the date of grant based on the expected term of the warrant. Expected annual rate of quarterly dividends is based on the Company’s dividend history and anticipated dividend policy.

The relative fair value of 2008 warrants, estimated on the date of grant, was $5,097,404, which was originally recorded as additional paid-in capital and the remaining balance of the net proceeds of $1,523,277 has been assigned to common stock.

Amendment No. 1 to the Subscription Agreement and Common Stock Purchase Warrant

In May, 2010 (the “Closing Date”), effective as of January 1, 2010, Armco Metals Holdings, Inc. ( the “Company”) (the “Company”) entered into an amendment (the “First Amendment”) to that certain Subscription Agreement and Common Stock Purchase Warrant (the “Original Agreements”) dated July 2008. Pursuant to the Original Agreements, the Company offered (the “Offering”) and issued securities to 82 investors for an aggregate purchase price of $6,896,229.

Pursuant to the First Amendment 34 investors (the “First Amendment Investors”) with warrants to purchase 1,031,715 shares of the Company’s common stock waived certain rights under, Section 6.6 Adjustment for Certain Transactions, of the Common Stock Purchase Warrant, and Section 12(b) Most Favored Nation Provision, of the Subscription Agreement, in exchange for certain covenants that so long as any Warrants are outstanding other than Excepted Issuances that it will not enter into an agreement to issue nor issue any shares of Common Stock or Common Stock Equivalents to any Third Party Purchasers at an effective price per share of less than $5.00 without the prior written consent of the Investor, which consent may be withheld for any reason.

The waiver of the anti-dilution or commonly known as a most favored nation clause made those warrants no longer derivative instruments, accordingly the Company reclassified $1,292,227 of the derivative liability to additional paid-in capital.

Amendment No. 2 to the Subscription Agreement and Common Stock Purchase Warrant

On January 11, 2013 (the “Closing Date”), China Armco Metals, Inc. (the “Company”) entered into a second amendment (the “Second Amendment”) to that certain Subscription Agreement and Common Stock Purchase Warrant (the “Original Agreements”) dated July 2008, as amended by certain Amendment No. 1 to the Original Agreements dated May 2010 (“First Amendment”). Pursuant to the Original Agreements, the Company offered (the “Offering”) and issued securities to 82 investors for an aggregate purchase price of $6,896,229.

F-16

This Second Amendment amended (i) the First Amendment to eliminate the Future Financing Restrictions, (ii) the Warrant to reinstate Section 6.6, Adjustment for Certain Transaction, and (iii) the Subscription Agreement to reinstate Section 12(b), Most Favored Nation Provision.

The Second Amendment provides that it shall only be effective upon execution of this Second Amendment by each of the investors that executed the First Amendment. At January 8, 2013, three (3) days prior to the Closing Date, after an exhaustive search and numerous attempts to reach all holders that signed the first amendment, all the First Amendment Investors that executed the First Amendment signed the Second Amendment except two (2) investors from whom the Company has been unable to reach or receive responses. These two (2) investors invested a total amount of $400,000. On January 8, 2013, the Company transmitted emails to all of the First Amendment Investors to notify them of the foregoing circumstance and conveyed to them the Company’s intent to declare the Second Amendment effective despite the absence of executions by the two (2) remaining investors. A two-day objection period was afforded to all the First Amendment Investors (including the two (2) unsigned investors) in such emails. As of January 10, 2013, the Company has received no indication from any of the First Amendment Investors that object to effectiveness of the Second Amendment, and no indications from the two unsigned investors that they will not sign the Second Amendment. Accordingly, on the Closing Date the Company declared the Second Amendment effective with respect to all the signed investors.

Amendment to the Common Stock Purchase Warrant in Connection with January 28, 2013 Security Offering

On January 28, 2013, the Company completed a public registered direct offering of an aggregate of 3,242,712 shares of the Company’s Common Stock, at a purchase price of $0.50 per share (the “January 2013 Offering”).

Pursuant to Section 12 of the Subscription Agreement and Section 6 of the Warrant, as a result of the January 2013 Offering, the Investor is now entitled to adjustments to the terms of the Warrant consisting of the followings:

(a) a lowered exercise price of $0.50 per share instead of $5.00 per share with respect to the unexercised and outstanding portion of the Warrant; and

(b) increased number of Warrant Shares, which shall cause (i)(x) the total number of new Warrant Shares pursuant to the unexercised and outstanding portion of the Warrant following such adjustment, multiplied by (y) the adjusted Exercise Price per share, to equal the dollar amount of (ii)(x) the total number of old Warrant Shares pursuant to the unexercised and outstanding portion of the Warrant before adjustment, multiplied by (y) the total Exercise Price before adjustment, i.e. 10 times of the unexercised and outstanding portion of the Warrant prior to such adjustment.

The Company reclassified warrants to purchase 1,031,715 common shares from non-derivative to derivative and related fair value at January 11, 2013 from additional paid-in capital to derivative liability to reflect the re-instatement of the derivative feature of these warrants.

Derivative Analysis

The exercise price of 2008 warrants and the number of shares issuable upon exercise is subject to reset adjustment in the event of stock splits, stock dividends, recapitalization, most favored nation clause and similar corporate events. Pursuant to the most favored nation provision of the 2008 Unit Offering, if the Company issues any common stock or securities other than the excepted issuances, to any person or entity at a purchase or exercise price per share less than the share purchase price of the 2008 Unit Offering without the consent of the subscriber holding purchased shares, warrants or warrant shares of the 2008 Unit Offering, then the subscriber shall have the right to apply the lowest such purchase price or exercise price of the offering or sale of such new securities to the purchase price of the purchased shares then held by the subscriber (and, if necessary, the Company will issue additional shares), the reset adjustments are also referred to as full reset adjustments.

Because these warrants have full reset adjustments tied to future issuances of equity securities by the Company, they are subject to derivative liability treatment under Section 815-40-15 of the FASB Accounting Standard Codification (“Section 815-40-15”) (formerly FASB Emerging Issues Task Force (“EITF”) Issue No. 07-5: Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock (“EITF 07-5”))). Section 815-40-15 became effective for the Company on January 1, 2009 and as of that date the Warrants issued in the 2008 Unit Offering have been measured at fair value using a lattice model at each reporting period with gains and losses from the change in fair value of derivative liabilities recognized on the consolidated statement of income and comprehensive income.

Valuation of Derivative Liability

(a) Valuation Methodology

F-17

The Company’s 2008 warrants do not trade in an active securities market, as such, the Company developed a lattice model that values the derivative liability of the warrants based on a probability weighted discounted cash flow model. This model is based on future projections of the various potential outcomes. The features that were analyzed and incorporated into the model included the exercise feature and the full ratchet reset.

Based on these features, there are two primary events that can occur; the Holder exercises the Warrants or the Warrants are held to expiration. The model analyzed the underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e. stock price, exercise price, volatility, etc.). Projections were then made on these underlying factors which led to a set of potential scenarios. As the result of the large Warrant overhang we accounted for the dilution affects, volatility and market cap to adjust the projections.

Probabilities were assigned to each of these scenarios based on management projections. This led to a cash flow projection and a probability associated with that cash flow. A discounted weighted average cash flow over the various scenarios was completed to determine the value of the derivative warrant liability.

(b) Valuation Assumptions

The Company’s 2008 derivative warrants were valued at each period ending date with the following assumptions:

● The underlying stock price was used as the fair value of the common stock on period end date;

● The stock price would fluctuate with the CNAM projected volatility. The projected volatility curve for each valuation period was based on the historical volatility of 14 comparable companies in the metal/industrial metals industries;

● The Holder would exercise the warrant at maturity if the stock price was above the exercise price;

● Reset events projected to occur are based on no future projected capital needs;

● The Holder would exercise the warrant as they become exercisable at target prices of $7.50 for the 2008 Offering, and lowering such target as the warrants approached maturity;

● The probability weighted cash flows are discounted using the risk free interest rates.

● The risk-free interest rate is based on a yield curve of U.S treasury interest rates on the date of valuation based on the contractual life of the warrants

● Expected annual rate of quarterly dividends is based on the Company’s dividend history and anticipated dividend policy.

(c) Fair Value of Derivative Warrants

The fair value of the 2008 derivative warrants were computed using the lattice model with the following assumptions:

	September 30, 2014
Expected life (year)		0.08
Expected volatility		57.00	%
Risk-free interest rate		0.02	%
Expected annual rate of quarterly dividends		0.00	%

The fair value of the embedded derivative warrants is marked-to-market at each balance sheet date and the change in the fair value of the embedded derivative warrants is recorded in the consolidated statements of operations and comprehensive income (loss) as other income or expense.

As of September 30, 2013, 2008 warrants were expired and the Company wrote off the derivative warrants liability of $10,179 to the consolidated statements of operations and comprehensive income (loss) as other income.

The table below provides a summary of the fair value of the remaining derivative warrant liability and the changes in the fair value of the remaining derivative warrants to purchase 12,180,210 shares of the Company’s common stock, including net transfers in and/or out, of derivative warrants measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

F-18

	Fair Value Measurement Using Level 3 Inputs
	Derivative warrants Assets (Liabilities)			Total
Balance, December 31, 2012		(306,708	)		(306,708	)
Purchases, issuances and settlements		(623,809	)		(623,809	)
Transfers in and/or out of Level 3		-			-
Total gains or losses (realized/unrealized) included in:
Net income (loss)		930,517			930,517
Other comprehensive income (loss)		-			-
Balance, September 30, 2013	$	-		$	-

Exercise and Extinguishment of Warrants

On January 30, 2009, the Company issued 5,000 shares of its common stock for cash at $5.00 per share and received a cash payment of $25,000 in connection with the exercise of the 2008 warrants for 5,000 shares with an exercise price of $5.00 per share by one (1) investor and 2008 warrants holder.

During the three months ended March 31, 2010, the Company issued 1,324,346 shares of its common stock for cash at $5.00 per share and received cash of $6,621,730 in connection with the exercise of the warrants to purchase 1,324,346 shares with an exercise price of $5.00 per share to fifty (50) of the 2008 warrant holders. In addition, the Company issued 78,217 shares of its common stock in connection with the exercise of the 2008 warrants to purchase 167,740 shares with an exercise price of $5.00 per share on a cashless basis to thirteen (13) of the 2008 warrant holders. The Company reclassified $1,665,011 and $210,095 of the derivative liability to additional paid-in capital, respectively.

During April 2010, four (4) of the 2008 warrant holders exercised their warrants to purchase 13,806 shares of the Company’s common stock at an exercise price of $5.00 per share resulting in cash proceeds of $69,030 to the Company, for which the Company issued 13,806 shares of its common stock to the 2008 warrant holders and reclassified $21,229 of the derivative liability to additional paid-in capital.

2008 Warrants Outstanding

As of September 30, 2013, all of 2008 warrants to purchase 12,180,210 shares of Company’s common stock were expired.

The table below summarizes the Company’s 2008 derivative warrant activity.

	2008 Warrant Activities											APIC		(Gain) Loss
	Derivative Shares		Non-derivative Shares			Total Warrant Shares			Fair Value of Derivative Warrants			Reclassification of Derivative Liability		Change in Fair Value of Derivative Liability
Derivative warrant at December 31, 2012		186,306		1,031,715			1,218,021			(306,708	)				306,505
Reclassification of warrants to purchase 1,031,715 common shares from additional paid-in capital to derivative liability at January 11, 2013 to reflect the re-instatement of the derivative feature		1,031,715		(1,031,715	)		(-	)		(623,809	)		623,809		(-	)
Increased number of warrant shares per Amendment No. 2 to the Subscription Agreement and Common Stock Purchase Warrant ("2008 Unit Offering Agreement") dated July 2008 and Amendment No. 1 to 2008 Unit Offering Agreement upon completion of January 2013 Offering.		10,962,189		-			10,962,189			(-	)				-
Mark to market										930,517					930,517
Warrants expired		12,180,210					12,180,210			-					-
Derivative warrant at September 30, 2013		-		-			-			-					-

F-19

(ii)     Warrants Issued in April 2010 (“2010 Warrants)

Description of Warrants

In connection with the sale of 1,538,464 shares of its common stock at $6.50 per share or $10,000,016 in gross proceeds to nine (9) accredited and institutional investors on April 20, 2010, the Company issued warrants to purchase an additional 1,538,464 shares of its common stock with an exercise price of $7.50 per share (“2010 Warrants”) expiring five (5) years from date of grant exercisable commencing 181 days following the date of issuance.  At the closing of the private offering, the Company paid Rodman & Renshaw, LLC, a FINRA member firm that served as placement agent for the Company in the offering, (i) a fee of $500,000 as compensation for their services and (ii) a warrant to purchase 76,923 shares of the Company’s common stock with an exercise price of $7.50 per share expiring five (5) years from date of grant exercisable commencing 181 days following the date of issuance, as well as a $15,000 non-accountable expense allowance to one of the nine (9) investors in the offering.

Warrants Valuation and Related Assumptions

The 2010 warrants were valued on the date of grant with the following assumptions:

● The underlying MYSE MKT stock price $6.95 was used as the fair value of the common stock on April 20, 2010;

● The stock price would fluctuate with the CNAM projected volatility. The projected volatility curve for each valuation period was based on the historical volatility of 14 comparable companies in the metal/industrial metals industries; At April 20, 2010 one (1) through five (5) years were 76%, 134%, 155%, 167% and 182%, respectively.

● The Holder would exercise the warrant at maturity if the stock price was above the exercise price;

● Reset events projected to occur are based on no future projected capital needs;

● The Holder would exercise the warrants as they become exercisable at target prices of $11.25 for the 2010 Offering, and lowering such target as the warrants approaches maturity;

● The probability weighted cash flows are discounted using the risk free interest rates.

● The risk-free interest rate is based on a yield curve of U.S treasury interest rates on the date of valuation based on the expected term of the warrants

● Expected annual rate of quarterly dividends is based on the Company’s dividend history and anticipated dividend policy.

The Company estimated the fair value of 2010 warrants on the date of grant using the lattice model with the Black-Scholes option-pricing model with the following weighted-average assumptions:

	April 20, 2010
Expected life (year)		5.00
Expected volatility		182.00	%
Risk-free interest rate		2.56	%
Expected annual rate of quarterly dividends		0.00	%

F-20

The fair value of the 2010 warrants, estimated on the date of issuance, was $2,483,938, which was recorded as additional paid-in capital and the remaining balance of the net proceeds of $6,629,036, net of issuance cost, has been assigned to common stock.

Derivative Analysis

The warrants issued as part of the April 20, 2010 private placement were analyzed to determine the appropriate treatment under ASC 815-40. The warrants meet the provisions of Section 815-40-15 of the FASB Accounting Standard Codification (“Section 815-40-15”) (formerly FASB Emerging Issues Task Force (“EITF”) Issue No. 07-5:Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock (“EITF 07-5”)) to be considered indexed to the Company’s own stock. In addition, the warrants meet all the criteria in Section 815-40-55 of the FASB Accounting Standard Codification (“Section 815-40-55”) (formerly FASB EITF Issue No. 00-19: Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock (“EITF 00-19”)) to be accounted for as equity.

2010 Warrants Outstanding

As of March 31, 2014, 2010 warrants to purchase 1,615,387 shares of its common stock remain outstanding.

The table below summarizes the Company’s 2010 non-derivative warrant activities through March 31, 2014:

	Number of Warrant Shares			Exercise Price Range Per Share		Weighted Average Exercise Price		Fair Value at Date of Issuance		Aggregate Intrinsic Value
Balance, December 31, 2013		1,615,387		$	7.50	$	7.5	$	-	$	-
Granted		-			-		-		-		-
Canceled for cashless exercise		(-	)		-		-		-		-
Exercised (Cashless)		(-	)		-		-		-		-
Exercised		(-	)		-		-		-		-
Expired		-			-		-		-		-
Balance, March 31, 2014		1,615,387		$	7.50	$	7.50	$	-	$	-
Earned and exercisable, March 31, 2014		1,615,387		$	7.50	$	7.50	$	-	$	-
Unvested, March 31, 2014		-		$	-	$	-	$	-	$	-

The following table summarizes information concerning outstanding and exercisable 2010 warrants as of March 31, 2014:

			Warrants Outstanding						Warrants Exercisable
Range of Exercise Prices			Number Outstanding		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price
$7.50				1,615,387		1.05	$	7.50		1,615,387		1.05	$	7.50
$0.50	-	$7.50		1,615,387		1.05	$	7.5		1,615,387		1.05	$	7.5

F-21

         (iii)       Convertible Notes  

On November 8, 2013, the Company signed a purchase agreement with Hanover Holdings I, LLC, a New York limited liability company, or Hanover, with an initial principal amount of $450,000, or the Initial Convertible Note (“Hanover Notes”), for a purchase price of $300,000. The outstanding principal of initial note is subject to filing date reduction and effective date reduction. Filing date reduction will reduce the outstanding principal of initial note by $50,000 if the Company files the S-1registration statement per the purchase agreement within 45 days of the note date. The Company failed to meet this filing date reduction term, and accordingly, the initial principal amount was not reduced by the $50,000. Effective date reduction will reduce the outstanding principal of the initial note by another $100,000 if the S-1 registration statement takes effective within 120 days of the note date. On December 26, 2013, the Company filed a S-1 registration statement pursuant to the purchase agreement which was effective on February 14, 2014. Thus, we successfully met the effective date reduction term. As a result, the principal amount of the note was reduced to $350,000 of which $50,000 was recorded as accrued liabilities as of December 31, 2013. Additionally, the Company has the right to require Hanover to purchase, on the 10th trading day after the effective date of the Registration Statement, or the Additional Closing Date, an additional senior convertible note with an initial principal amount of $500,000, or the Additional Convertible Note, for a purchase price of $500,000.  The Initial Convertible Note matures on November 8, 2014 (subject to extension as provided in the Initial Convertible Note) and accrues interest at the rate of 4.0% per annum. If issued, the Additional Convertible Note will mature on the date that is the one-year anniversary of the date of issuance of the Additional Convertible Note (subject to extension as provided in the Initial Convertible Note) and will accrue interest at the rate of 4.0% per annum. The Initial Convertible Note is convertible at any time, in whole or in part, at Hanover’s option, into shares of common stock, at a conversion price equal to the Variable Conversion Price. “Variable Conversion Price” means, as of any date of determination, the product of (A) the lowest volume weighted average price of the common stock of any of the five consecutive trading days ending and including the trading day immediately preceding such date of determination (subject to adjustment) , or the Variable Conversion Base Price; and (B) the applicable Variable Percentage. “Variable Percentage” means (i) if the applicable Variable Conversion Base Price is less than or equal to $0.45 (subject to adjustment), 85% or (ii) if the applicable Variable Conversion Base Price is greater than $0.45 (subject to adjustment), 80%. If issued, the Additional Convertible Note will be convertible at any time, in whole or in part, at Hanover’s option into shares of common stock at a conversion price that will be equal to the Variable Conversion Price.

On September 23, 2013 and December 10, 2013, the Company issued Notes (“Asher Notes”) to Asher Enterprises, Inc. (the “Holder”), which are convertible in 180 days (at which time they will require derivative treatment), in the amounts of $153,500 (1st tranche included no deferred financing cost or legal fees) and $63,000 (2nd tranche included no deferred financing cost or legal fees) (the “Convertible Note” or the “Note”). The 9/23/13 and 12/10/13 Asher Convertible Notes are convertible at 58% of the average 3 lowest closing bid prices for the last 10 trading days and contains a full ratchet reset. The holders have the right after 180 days following the Date of Issuance (on 3/22/14 the 9/23/13 note became convertible), and until any time until the Convertible Note is fully paid, to convert any outstanding and unpaid principal portion of the Convertible Note, and accrued interest, into fully paid and non-assessable shares of Common Stock. The Holder was not issued warrants with the Convertible Note. The Convertible Note: (a) bears interest at 8% per annum; (b) the principal and accrued interest is due and payable on 6/25/13 and 9/12/14; (c) is convertible optionally by the Holder at any time after 180 days; (d) bears 22% interest on default with a 150% payment penalty under specific default provisions; (e) redeemable at 115% through 140% for days 0-180; (f) and is subject to dilutive adjustments for share issuances (full ratchet reset feature). The embedded conversion feature in the Note should be accounted for as a derivative liability after 180 days (if not redeemed) due to the variable conversion provision based on guidance in FAS 133 and EITF 07-05.

On January 13, 2014, the Company issued convertible notes for a total of $2,472,127 to four foreign investors. The notes will mature on October 13, 2014. On February 4, 2014, the Company issued convertible notes for a total of $3,082,340 to another eleven foreign investors. The notes will mature on February 4, 2014. All these notes bear interest at 8% per annum, and convertible optionally by the holders at any time at a conversion price of $0.317. The derivative features of the Asher and Hanover Notes taint (due to the indeterminate number of shares) the convertible notes issued on January 13, and February 4, 2014. See more details in Note 7.

Conversions to Common Stock 

On February 27, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $25,000 plus interest of $4,628 of the note into 95,997 shares of the Company's common stock, at a conversion price of $0.308635 per share.

In March 2014, the Company issued a convertible note to Hanover in the amount of $500,000. The note bears interest at 4% per annum and matures on November 1, 2014.

On March 5, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $75,000 of the note due November 1, 2014 into 234,295 shares of the Company's common stock, at a conversion price of $0.32011 per share.

On March 14, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $50,000 of the note due November 1, 2014 into 155,085 shares of the Company's common stock, at a conversion price of $0.322405 per share.

On March 24, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $50,000 of the note due November 1, 2014 into 145,351 shares of the Company's common stock, at a conversion price of $0.343995 per share.

On March 26, 2014, the Company received a conversion notice from its convertible note holder, Hanover, to convert $100,000 of the note due November 1, 2014 into 288,493 shares of the Company's common stock, at a conversion price of $0.34663 per share.

On March 28, 2014, $80,000 of principal under the Asher Note was converted to 355,082 shares of the Company’s common stock and the remaining principal balance under the note is $73,500.

F-22

Valuation Methodology 

The Company analyzed the conversion feature with the reset provisions within the Convertible Note and has utilized a third party valuation consultant to assist the Company to fair value the compound embedded derivatives using a multinomial lattice models that values the derivative liabilities within the convertible notes based on a probability weighted discount cash flow model.

Valuation Assumptions – Initial valuation, Conversion and Change in Fair Value of Derivative Liability Related to Convertible Notes 

The following assumptions were used for the valuation of the derivative liability related to March 3, 2014 (issuance date), conversions, and the quarterly period ended March 31, 2014:

● The underlying stock price was used as the fair value of the common stock;

● An event of default would occur 5% of the time, increasing 1.00% per month to a maximum of 10% – to-date the 1 note is not in default and has not been converted by the holder nor redeemed by the Company;

● Capital raising events of $1,000,000 would occur in each quarter at 75% of market generating dilutive reset events at prices below the current exercise price or stock price;

● The projected annual volatility for each valuation period was based on the historical volatility of the Company which has been actively trading for the last 3 years:

1 Year

2/27/14 101%

3/3/14 101%

3/5/14 101%

3/14/14 102%

3/24/14 102%

3/26/14 102%

3/31/14 102%

● The Holder would redeem through maturity based on availability of alternative financing, 10% of the time increasing 1.0% monthly to a maximum of 20%; and;

● The Holder would automatically convert the note at maturity if the registration was effective and the company was not in default.

As of March 31, 2014, the estimated fair value of derivative liabilities on convertible notes was $1,367,535.

The following table summarizes the change of fair value of the derivative debt liabilities:

Balance at December 31, 2012	$	-
To record derivative liability as debt discount		60,795
Change in fair value of derivative liability		634
Balance at December 31, 2013	$	61,429
To record derivative liability as debt discount		1,901,282
Change in fair value of derivative liability		(477,909	)
Settlement of derivative liability due to conversion of related notes	$	(117,267	)
Balance at March 31, 2014		1,367,535

Note 12 – Commitments and Contingencies  

Litigation  

The Company and the directors are a party to a lawsuit filed on March 29, 2013 by Albert Perron in the District Court for Clark County, Nevada (Case No.: A-13-679151-C), which seeks a declaratory judgment, rescission, unspecified damages, equitable and injunctive relief, and attorney’s fees. The complaint alleges that the directors of the Company breached their fiduciary duties to the Company by exceeding their authority under the Company’s Amended and Restated 2009 Stock Incentive Plan, as further amended (the “Plan”), by issuing shares to Mr. Yao that exceeded that allowed under the Plan.

F-23

On August 12, 2013, the Company and certain directors filed an answer to the complaint denying all the allegations of wrongdoing. The case is currently in the discovery stage. The Company’s position is that the shares at issue in this matter granted to Mr. Yao were authorized under the Plan. The Company and the directors intend to vigorously defend this matter.

Uncommitted Trade Credit Facilities  

The Company entered into uncommitted trade credit facilities with certain financial institutions. Substantially all of the uncommitted trade credit facilities were guaranteed by Mr. Yao.

The uncommitted trade credit facilities at March 31, 2014 were as follows:

	Date of Expiration		Total Facilities			Facilities Used		Facilities Available
Armco HK
DBS (Hong Kong) Limited (i)	October 21, 2014		20,000,000			695,226		19,304,774
Sub-total - Armco HK			20,000,000			695,226		19,304,774
Henan Armco
Bank of China (ii)	May 23, 2014		4,867,601			-		4,867,601
China CITIC Bank (iii)	May 31, 2014		6,490,135			-		6,490,135
ICBC (iv)	September 09, 2014		3,245,607			-		3,245,607
Guangdong Development Bank Zhengzhou Branch (v)	May 6, 2015		12,655,763			-		12,665,763
Sub-total – Henan Armco			27,258,566			-		27,258,566
Renewable Metals
Bank of China Lianyungang Branch (vi)	December 27, 2015		8,112,669			8,112,669		-
Shanghai Pudong Development Bank (vii)	August 25, 2014		2,433,801			2,433,801		-
Bank of Communications Lianyungang Branch (viii)	August 8, 2014		11,682,243			2,920,561		8,761,683
Sub-total – Renewable Metals			22,228,713			13,467,031		8,761,683
		$	84,487,279		$	14,162,257	$	70,325,023
				%

(i) On December 21, 2011, Armco HK entered into a Banking Facilities Agreement with DBS Bank (Hong Kong) Limited of $20,000,000 for issuance of commercial letters of credit in connection with the Company’s purchase of metal ore.  The Company pays interest at LIBOR or DBS Bank’s cost of funds plus 2.50% per annum on issued letters of credit in addition to an export bill collection commission equal to 12.5% of the first $50,000 and 6.25% of the balance and an opening commission of 25% on the first $50,000 and 6.25% of the balance for each issuance.  Amounts advanced under this facility are repaid from the proceeds of the sale of metal ore.  The lender may terminate the facility at anytime at its sole discretion. The facility is secured by the charge on cash deposit of the borrower, the borrower’s restricted pledged deposit in the minimum amount of 3% of the letter of credit amount, the Company’s letter of comfort and the guarantee of Mr. Yao.

(ii) On June 8, 2013, Henan Armco obtained a RMB 30,000,000 (approximately $4.8 million) line of credit from Bank of China for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring May 23, 2014. The facility is secured by the guarantee provided by Renewable Metals and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore.

(iii) On June 18, 2012, Henan Armco obtained a RMB 40,000,000 (approximately $6.5 million) line of credit from China Citic Bank, Zhengzhou Branch, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring one (1) year from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Yao, the Company’s Chairman and Chief Executive Officer.

F-24

(iv) On September 10, 2013, Henan Armco obtained a RMB 20,000,000 (approximately $3.2 million) line of credit from ICBC, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring one (1) year from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Yao.

(v) On September 19, 2012, Henan Armco obtained a RMB 78,000,000 (approximately $12.6 million) line of credit from Guangdong Development Bank Zhengzhou Branch for issuance of letters of credit to finance the purchase of metal ore.  The Company pays interest at 120% of the applicable base rate for lending published by the People’s Bank of China (“PBC”) at the time the loan is made on issued letters of credit.  The facility is secured by the guarantee provided by Mr. Yao and Renewable Metals jointly and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore.

(vi) On March 15, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB50,000,000 (approximately $8.1 million) from Bank of China, Lianyungang Branch for the purchase of raw materials. The facility is expiring December 27, 2015 with interest at 7.872% per annum. The facility is secured by Renewable metals properties, machinery and equipment and land use rights, and guaranteed by Mr. Yao, Ms. Yi Chu, and Henan Armco, respectively.

(vii) On July 24, 2012, Renewable Metals entered into a line of credit facility in the amount of RMB 15,000,000 (approximately $2.4 million) from Shanghai Pudong Development Bank for the purchase of raw materials. The term of the facility is 12 months with interest at 120% of the applicable base rate for lending published by the People’s Bank of China (“PBOC”) at the time the loan is drawn down per annum. The facility is secured by Armco machinery’s land use right and guarantees provided by Mr. Yao and Ms. Yi Chu.

(viii) On July 1, 2011, Renewable Metals obtained a RMB 72,000,000 (approximately $11.7 million) line of credit from Bank of Communications, Lianyungang Branch expiring two (2) years from the date of issuance, for issuance of letters of credit in connection with the purchase of scrap metal. The letters of credit require Renewable Metals to pledge cash deposit equal to 20% of the letter of credit for letters of credit at sight, or 30% for other domestic letters of credit and for extended domestic letters of credit, the collateral of inventory equal to 166% of the letter of credit. The facility is secured by Renewable Metals inventories and guarantee provided by Mr. Yao.

Employment with the Chairman and CEO

On February 8, 2012, the Company and Mr. Yao, entered into an Employment Agreement (the “Employment Agreement”), to employ Mr. Yao as the Company’s Chairman of the Board of Directors, President, and Chief Executive Officer. The initial term of employment under the agreement is from January 1, 2012 (the “Effective Date”) until December 31, 2014, unless sooner terminated in accordance with the terms of the Employment Agreement. Pursuant to the Employment Agreement, Mr. Yao is entitled to, among others, the following compensation and benefits:

a. Base Salary.  The Company shall pay the Executive a salary at a minimum rate of (i) $250,000 per annum for the period beginning on the Effective Date through December 31, 2012; (ii) $275,000 per annum for the period beginning on January 1, 2013 through December 31, 2013; and (iii) $300,000 per annum for the period beginning on January 1, 2014 through December 31, 2014 (the “Base Salary”).  Base Salary shall be payable in accordance with the customary payroll practices of the Company applicable to senior executives.

b. Bonus.  Each year during the Term, in addition to Base Salary, the Executive shall be entitled to an annual cash bonus in an amount equal to 50% of the Executive’s Base Salary for such year. Any such bonus shall be payable no later than 2.5 months following the year with respect to which the Base Salary is payable.

c. Restricted Shares.  On the Effective Date, Executive shall receive 1,500,000 shares of the Company’s common stock (“Restricted Shares”) subject to the terms and conditions of the Amended and Restated China Armco Metals, Inc. 2009 Stock Incentive Plan (the "Incentive Plan"). The Restricted Shares shall vest according to Vesting Schedule attached the Employment Agreement as Exhibit A; provided, however, if the Executive is terminated pursuant to Section 5 of this Agreement, the Executive shall forfeit all the unvested Restricted Shares as of such termination.

d. Equity Incentive Compensation.  The Executive shall be entitled to participate in any equity compensation plan of the Company in which he is eligible to participate, and may, without limitation, be granted in accordance with any such plan options to purchase shares of Company’s common stock, shares of restricted stock and other equity awards in the discretion of the Board or the Committee. Any equity incentive compensation shall be payable no later than 2.5 months of the following tax year in which such compensation is granted

F-25

e. Eligibility to participate in the Company’s benefit plans that are generally provided for executive employees.

Operating Leases 

(i)     Operating Lease - Office Space

On July 16, 2012, Armco Shanghai entered into a non-cancelable operating lease for office space that will expire on July 31, 2014. The annual lease payment is RMB 656,357 (approximately $106,496).

On December 17, 2010, Armco Metals Holdings entered into a non-cancelable operating lease for office space that expired on December 31, 2013. The monthly rental payment is $ 4,004 in 2013. After the contract expired, the Company continued the lease with the same landlord on a month by month basis.

(ii) Operating Lease of Property, Plant and Equipment and Facilities

Initial Lease Signed on June 24, 2010

On June 24, 2011, Renewable Metals entered into a non-cancelable operating lease agreement with an independent third party for property, plant, equipment and facilities expiring one (1) year from date of signing. Renewable Metals is required to pay RMB 30 per metric ton of scrap metal processed at this facility over the term of the lease, which were accrued and included in the inventory of finished goods – processed scrap metal and transferred to cost of goods sold upon shipment of processed scrap metal.

First Renewal on April 13, 2012

On April 13, 2012, Renewable Metals renewed the aforementioned non-cancelable operating lease agreement for property, plant, equipment and facilities for an additional two-year term commencing on June 25, 2012, in consideration for (i) the issuance of one (1) million shares of the Company’s common stock and (ii) the payment of RMB1,000,000 (approximately $159,000) in cash. Pursuant to the lease agreement, the Company issued one million shares to the third party on April 13, 2012.  The cash amount is to be paid during the second year of the lease term

On March 31, 2013, Renewable Metals terminated this operating lease agreement. Under the terms and conditions of the Termination Agreement, Hebang agreed to forgive the cash amount to be paid under the amended Leasing Agreement and Renewable Metals agreed to let Hebang keep the 1 million shares. Also see Note 13.

Note 13 – Stockholders’ Equity

Shares Authorized

Upon formation the aggregate number of shares which the Corporation shall have authority to issue is seventy five million (75,000,000) shares, consisting of two classes to be designated, respectively, “Common Stock” and “Preferred Stock,” with all of such shares having a par value of $.001 per share. The total number of shares of Preferred Stock that the Corporation shall have authority to issue is one million (1,000,000) shares. The total number of shares of Common Stock that the Corporation shall have authority to issue is seventy four million (74,000,000) shares.

Common Stock

Immediately prior to the consummation of the Share Purchase Agreement on July 27, 2008, the Company had 10,000,000 common shares issued and outstanding.

On July 27, 2008, upon the consummation of the Share Purchase Agreement, (i) Stephen Cox surrendered 7,694,000 common shares, representing his controlling interest in the Company for cancellation and resigned as an officer and director; (ii) the Company issued a promissory note of $6,890,000 (the “Share Purchase Note”) to purchase from Ms. Gao, the sole stockholder of Armco HK, the 100% of the issued and outstanding capital stock of Armco HK; and (iii) (a) a stock option entitling Ms. Gao to purchase 5,300,000 shares of its common stock, par value $.001 per share (the “Common Stock”) with an exercise price of $1.30 per share expiring on September 30, 2008 and (b) a stock option entitling Ms. Gao to purchase 2,000,000 shares of its common stock with an exercise price of $5.00 per share expiring two (2) years from the date of issuance on June 27, 2010, vested immediately (the “Gao Options”). The Company did not record the fair value of the Gao Options as the options were included as part of the reverse acquisition and recapitalization.

On August 12, 2008, Ms. Gao exercised her option to purchase and the Company issued 5,300,000 shares of its common stock in exchange for the $6,890,000 note owed to Ms. Gao.

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On April 12, 2010, Mr. Yao purchased the Gao option to purchase 2,000,000 shares of the Company’s common stock with an exercise price of $5.00 per share originally granted to and owned by Ms. Feng Gao pursuant to a share purchase agreement to consummate the reverse merger capital transaction with Armco HK on June 27, 2008. In addition, on April 12, 2010 and June 25, 2010, Mr. Yao exercised part of the option and purchased 1,000,000 and 400,000 shares of the Company’s common stock at $5.00 per share resulting in net proceeds of $4,500,000, forgiveness of debt of $500,000 and $2,000,000 to the Company, respectively. The balance of the stock option to purchase the remaining 600,000 common shares expired on June 27, 2010.

Sale of Common Stock or Equity Unit Inclusive of Common Stock and Warrants

July and August 2008 Issuances

On July 25, 2008 and July 31, 2008, the Company closed the first and second rounds of a private placement by raising $6,896,229 from eighty-two (82) investors through the sale of 22.9 units of its securities at an offering price of $300,000 per unit in a private placement. Each unit sold in the offering consisted of 100,000 shares of the Company’s common stock, $.001 par value per share at a per share purchase price of $3.00, and five (5) year warrants to purchase 100,000 shares of common stock with an exercise price of $5.00 per share (the “Warrants“).

On August 8, 2008 the Company closed the third round of the offering by raising $523,500 from ten (10) investors through the sale of 1.745 units of its securities at an offering price of $300,000 per unit.

On August 11, 2008 the Company closed the fourth round of the offering by raising $40,200 from five (5) investors through the sale of 0.134 units of its securities at an offering price of $300,000 per unit.

The Company paid (i) FINRA member broker-dealers cash commissions of $162,660 and issued those firms five (5) year warrants to purchase a total of 99,650 shares of its common stock at $5.00 per share as compensation for services to the Company, (ii) due diligence fees to certain investors or their advisors in connection with the Offering aggregating $579,316 in cash and issued those firms five (5) year warrants to purchase a total of 142,614 shares of its common stock at $5.00 per share as compensation for services to the Company, and (iii) professional fees in the amount of $97,689 paid in cash in connection with the Offering. The recipients of these fees included China Direct Investments, Inc., a subsidiary of China Direct, Inc. and a principal stockholder of the company..

In aggregate, the Company raised $7,459,929 in the offering from ninety-seven (97) investors through the sale of 24.87 units and after payment of cash commissions, broker dealer fee, due diligence fees and other costs associated with the Offering, the Company received net proceeds of $6,620,681, all of which were used for construction of a scrap steel recycling facility in the City of Lianyungang, Jiangsu Province, China as previously disclosed by the Company and general corporate working capital purposes.

April 2010 Issuance

On April 20, 2010, the Company entered into a Securities Purchase Agreement with nine (9) accredited and institutional investors for the sale of 1,538,464 shares of its common stock at an offering price of $6.50 per share resulting in gross proceeds to the Company of $10,000,016.  At closing the Company issued the investors warrants to purchase an additional 1,538,464 shares of its common stock at an exercise price of $7.50 per share expiring five (5) years from the date of grant.  The warrants are exercisable commencing 181 days after the date of issuance.  The private offering, which was made under an exemption from the registration requirements of the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that act and Rule 506 of Regulation D.  At closing, the Company paid Rodman & Renshaw, LLC, a FINRA member firm that served as placement agent for the Company in the offering, (i) a fee of $500,000 as compensation for its services and (ii) a warrant to purchase 76,923 shares of the Company’s common stock at an exercise price of $7.50 per share expiring five (5) years from the date of issuance which are exercisable commencing 181 days after the date of issuance, as well as a $15,000 non-accountable expense allowance to one (1) of the investors in the offering.  The Company used the net proceeds from this offering for its working capital.

January 2013 Offering

On January 28, 2013 (the “Closing Date”), the Company completed a public offering of an aggregate of 3,242,712 shares of the Company’s common stock in a registered direct public offering (the “January 2013 Offering”) for approximately $1.6 million proceeds in cash.  The shares offered in this January 2013 Offering were sold by the Company directly to the investors.  No underwriter or agents was involved in connection with this Offering to solicit offers to purchase the shares.

On the Closing Date, the Company entered into Subscription Agreements (the “Subscription Agreements”) with certain investors (the “Investors”) in connection with the January 2013 Offering, pursuant to which the Company agreed to sell an aggregate of 3,242,712 shares of its common stock at a purchase price of $0.50 per share to the Investors for aggregate gross proceeds, before deducting the estimated offering expenses payable by the Company, of approximately $1,621,356.

The purchase and issuance of the securities in the Registered Direct Offering are completed on January 28, 2013.

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The January 2013 Offering was effectuated as a takedown off the Company’s shelf registration statement on Form S-3, as amended (File No. 333-184354), which became effective on December 14, 2012 (the “Registration Statement”), pursuant to a prospectus supplement filed with the Securities and Exchange Commission (the “SEC”) on January 28, 2013.

Conversion of Advances from Chairman and CEO to Common Shares

On December 31, 2012, Mr. Yao proposed to the Company to convert the amount of unpaid Principals of the Loans owed him, into shares of common stock of the Company, at a conversation price equal to the current market price at which the Company's common stock trades on NYSE MKT; and the Board of the Directors of the Company considered that it is in the best interest of the Company and its stockholders for the Company to authorize the conversion of the amount of unpaid Principals of the Loans, into shares of common stock of the Company, at a conversation price equal to the average of the three (3) closing bid prices during the three (3) trading days immediately prior the date hereof at which the Company's common stock trades on NYSE MKT. Upon authorization by the Board of Directors of the Company, Mr. Yao converted unpaid Principals of the Loans of $353,753 owed him, into common shares of the Company, at a conversation price of $0.4933 per share, the average of the three (3) closing bid prices during the three (3) trading days immediately prior the date hereof at which the Company's common stock trades on NYSE MKT, or 717,067 shares of the Company’s common stock.

Conversion of Loan from Chairman and CEO to Common Shares

On October 22, 2013, Mr. Yao proposed to the Company to convert the amount of unpaid Principals of the Loans owed him, into shares of common stock of the Company, at a conversation price equal to the current market price at which the Company's common stock trades on NYSE MKT; and the Board of the Directors of the Company considered that it is in the best interest of the Company and its stockholders for the Company to authorize the conversion of the amount of unpaid Principals of the Loans, into shares of common stock of the Company, at a conversation price equal to the average of the three (3) closing bid prices during the three (3) trading days immediately prior the date hereof at which the Company's common stock trades on NYSE MKT. Upon authorization by the Board of Directors of the Company, Mr. Yao converted unpaid Principals of the Loans and interest in the amount of $1,045,369 owed him, into common shares of the Company, at a conversation price of $0.52 per share, the average of the three (3) closing bid prices during the three (3) trading days immediately prior the date hereof at which the Company's common stock trades on NYSE MKT, or 2,010,327 shares of the Company’s common stock.

Conversion of Short Term Loan to Common Shares

On October 28, 2013, a non-affiliated investor (the “Investor”) proposed to the Company to convert the amount of unpaid Principals of the Loans owed her in the amount of $816,593 into common shares of the Company, at a conversion price of $0.52 per share, or 1,570,371 share of the Company’s common stock.

Issuance of Common Stock to Parties Other Than Employees for Acquiring Goods or Services

Loan Guarantee - Henan Chaoyang Steel Co., Ltd.

On June 11, 2010 the Company entered into a Guaranty Cooperation Agreement with Henan Chaoyang Steel Co., Ltd. (“Henan Chaoyang”) to provide additional liquidity to meet anticipated working capital requirements of Renewable Metals’ scrap metal recycling facility. Under the terms of the guaranty, Henan Chaoyang agreed to provide loan guarantees to Renewable Metals’ existing and pending bank lines of credit of up to 300 million RMB in the aggregate (approximately $45,400,000) for five (5) years expiring June 30, 2015. As consideration for the guaranty, the Company issued a designee of Henan Chaoyang 500,000 shares of its common stock. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the guarantor.

Mr. Heping Ma, a former member of the Company’s Board of Directors, is a founder, Chairman and owns an 85% equity interest of Henan Chaoyang Steel Co., Ltd. Co, a corporation incorporated under the laws of the PRC. This transaction was approved by the members of the Board of Directors of the Company who were independent in the matter in accordance with the Company’s Related Persons Transaction Policy. On September 16, 2010, Mr. Ma resigned from the Company’s Board of Directors.

Shares Earned during the Year Ending December 31, 2012

33,333 common shares earned for the quarter ended March 31, 2012 were valued at $0.50 per share, or $16,667, which was recorded as loan guarantee expense.

33,333 common shares earned for the quarter ended June 30, 2012 were valued at $0.4289 per share, or $14,297, which was recorded as loan guarantee expense.

33,333 common shares earned for the quarter ended September 30, 2012 were valued at $0.3795 per share, or $12,650, which was recorded as loan guarantee expense.

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33,333 common shares earned for the quarter ended December 31, 2012 were valued at $0.4839 per share, or $16,130, which was recorded as loan guarantee expense.

Shares Earned during the Year Ending December 31, 2013

33,333 common shares earned for the quarter ended March 31, 2013 were valued at $0.375 per share, or $12,500, which was recorded as loan guarantee expense.

33,333 common shares earned for the quarter ended June 30, 2013 were valued at $0.31 per share, or $10,333, which was recorded as loan guarantee expense.

33,333 common shares earned for the quarter ended September 30, 2013 were valued at $0.38 per share, or $12,667, which was recorded as loan guarantee expense.

33,333 common shares earned for the quarter ended December 31, 2013 were valued at $0.307 per share, or $10,2337, which was recorded as loan guarantee expense.

Shares Earned during the Year Ending December 31, 2014

33,338 common shares earned for the quarter ended March 31, 2014 were valued at $0.39 per share, or $13,002, which was recorded as loan guarantee expense.

Legal Services Agreement – All Bright Law Offices

On March 3, 2012, the Company entered into a Legal Services Agreement (“Legal Agreement”) with All Bright Law Office (“All Bright”), a PRC law firm located in Shanghai, China. Pursuant to the Legal Agreement, All Bright agreed to provide Chinese-law related legal counsel services from April 1, 2012 to March 31, 2013 in exchange for 300,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the All Bright.

Shares Earned during the Year Ending December 31, 2012

75,000 common shares earned for the quarter ended June 30, 2012 were valued at $0.4289 per share, or $32,168, which was recorded as legal expenses.

75,000 common shares earned for the quarter ended September 30, 2012 were valued at $0.3795 per share, or $28,463, which was recorded as legal fees.

75,000 common shares earned for the quarter ended December 31, 2012 were valued at $0.4839 per share, or $36,293, which was recorded as legal fees.

Shares Earned during the Year Ending December 31, 2013

75,000 common shares earned for the quarter ended March 31, 2013 were valued at $0.375 per share, or $28,125, which was recorded as legal expenses.

Consulting Services Agreement – Broad Max Holding

On December 1, 2012, the Company entered into a Consulting Services Agreement (“Consulting Agreement”) with Broad Max Holding (“Broad Max”), a HK firm located in Hong Kong, China. Pursuant to the Consulting Agreement, Broad Max agreed to provide consulting services from December 1, 2012 to May 31, 2013 in exchange for 100,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the Broad Max.

Shares Earned during the Year Ending December 31, 2012

16,667 common shares earned for the quarter ended December 31, 2012 were valued at $0.4839 per share, or $8,065, which was recorded as consulting fees.

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Shares Earned during the Year Ending December 31, 2013

50,000 common shares earned for the quarter ended March 31, 2013 were valued at $0.375 per share, or $18,750, which was recorded as consulting fees.

33,333 common shares earned for the quarter ended June 30, 2013 were valued at $0.31 per share, or $10,333, which was recorded as consulting fees.

Facility and Equipment Lease Agreement – Hebang Renewable Resources Co., Ltd.

On April 13, 2012, the Company entered into a Facility and Equipment Leasing Agreement (“Leasing Agreement”) with Lianyungang Hebang Renewable Resources Co., Ltd. (“Hebang”), a PRC company located in the City of Lianyungang, Jiangsu Province, China. Pursuant to the Leasing Agreement, Hebang agreed to lease its entire facility and all of its equipment for the Company’s exclusive use and operation for a two-year term commencing on June 25, 2012, in consideration for the issuance of one (1) million shares of common stock of the Company to Hebang and the payment of RMB one (1) million (approximately $159,000) in cash. Pursuant to the Leasing Agreement, the Company issued the Shares to a designee of Hebang on April 13, 2012 (the “Hebang Stock Issuance”).  The cash amount is to be paid out to Hebang during the second year of the lease term. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by Hebang.

On March 31, 2013, Renewable Metals and Hebang terminated the Leasing Agreement ("Termination Agreement"). Under the terms and conditions of the Termination Agreement, Hebang agreed to forgive the cash amount to be paid under the amended Leasing Agreement and Renewable Metals agreed to let Hebang to keep the remaining unearned 625,000 common shares, which was valued at $0.375 per share or $234,375, which was recorded as facility leasing expenses.

Shares Earned during the Year Ending December 31, 2012

125,000 common shares earned for the quarter ended September 30, 2012 were valued at $0.3795 per share, or $47,438, which was recorded as facility leasing expenses.

125,000 common shares earned for the quarter ended December 31, 2012 were valued at $0.4839 per share, or $60,488, which was recorded as facility leasing expenses.

Shares Earned during the Year Ending December 31, 2013

125,000 common shares earned for the quarter ended March 31, 2013 were valued at $0.375 per share, or $46,875, which was recorded as facility leasing expenses.

Under the terms and conditions of the Termination Agreement, Hebang agreed to forgive the cash amount to be paid under the amended Leasing Agreement and Renewable Metals agreed to let Hebang to keep the remaining unearned 625,000 common shares, which was valued at $0.375 per share or $234,375 and recorded as facility leasing expenses.

Consulting Services Agreement – CD International Enterprise Inc

On November 8, 2013, the Company entered into a Consulting Services Agreement (“Consulting Agreement”) with CD International Enterprise Inc (“CDI”), a US company. Pursuant to the Consulting Agreement, CDI agreed to provide consulting services from November 1, 2013 to October 31, 2014 in exchange for 1,000,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the CDI.

Shares Earned during the Year Ending December 31, 2013

250,000 common shares earned for the quarter ended December 31, 2013 were valued at $0.307 per share, or $76,750, which was recorded as consulting expenses.

Shares Earned during the Year Ending December 31, 2014

250,000 common shares earned for the quarter ended March 31, 2014 were valued at $0.39 per share, or $97,500, which was recorded as consulting expenses.

Financing Cost – Hangover

On November 8, 2013, the Company issued 47,022 shares of common stock to Hanover Holdings I, LLC, (“Hanover”), as commitment shares for entering into that certain securities purchase agreement dated November 4, 2013 by and between the Company and Hanover. The shares were valued at $0.4499 per share, or $21,155, which was recorded as financing cost.

F-30

2009 Stock Incentive Plan as Amended

Adoption of 2009 Stock Incentive Plan

On October 26, 2009, the Board of Directors of the Company adopted the 2009 Stock Incentive Plan, whereby the Board of Directors authorized 1,200,000 shares of the Company’s common stock to be reserved for issuance (the “2009 Stock Incentive Plan”). The purpose of the 2009 Stock Incentive Plan is to advance the interests of the Company by providing an incentive to attract, retain and motivate highly qualified and competent persons who are important to us and upon whose efforts and judgment the success of the Company is largely dependent. Grants to be made under the 2009 Stock Incentive Plan are limited to the Company’s employees, including employees of the Company’s subsidiaries, the Company’s directors and consultants to the Company. The recipient of any grant under the 2009 Stock Incentive Plan, and the amount and terms of a specific grant, are determined by the Board of Directors of the Company. Should any option granted or stock awarded under the 2009 Stock Incentive Plan expire or become un-exercisable for any reason without having been exercised in full or fail to vest, the shares subject to the portion of the option not so exercised or lapsed will become available for subsequent stock or option grants.

2011 Amendment to the 2009 Stock Incentive Plan

On May 19, 2011, the Company’s Board of Directors adopted and approved the Amended and Restated 2009 Stock Incentive Plan to increase the number of shares of the Company’s common stock available for issuance thereunder by 1,000,000 shares to 2,200,000 shares of the Company’s common stock among other material terms, subject to stockholder approval at the Annual Meeting. At the 2011 Annual Meeting of Stockholders (the “2011 Annual Meeting”) of the Company held on July 9, 2011, the Company’s stockholders approved the amendment and restatement of the Company’s 2009 Stock Incentive Plan (the “Amended and Restated 2009 Stock Incentive Plan”).

Common shares

The Amended and Restated Incentive Plan contains limitations on the number of shares available for issuance with respect to specified types of awards as specified in Section 6.2 Limitation on Shares of Stock Subject to Awards and Cash Awards. During any time when the Company has a class of equity securities registered under Section 12 of the Securities Exchange Act:

● the maximum number of shares of the Company’s common stock subject to stock options or SARs that may be granted under the Amended and Restated Incentive Plan in a calendar year to any person eligible for an award will be 1,300,000 shares;

● the maximum number of shares of the Company’s common stock that may be granted under the Amended and Restated Incentive Plan, other than pursuant to stock options or SARs, in a calendar year to any person eligible for an award will be 1,300,000 shares; and

● the maximum amount that may be paid as a cash-settled performance-based award will be $1,000,000 for a performance period of 12 months or less and $5,000,000 for a performance period of greater than 12 months.

The maximum number of shares available for issuance pursuant to incentive stock options granted under the Amended and Restated Incentive Plan will be the same as the number of shares available for issuance under the Amended and Restated Incentive Plan.

Options

Under the Amended and Restated Incentive Plan, the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, may grant both incentive stock options ("ISOs") intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), and options that are not qualified as incentive stock options ("NSOs"). ISOs may only be granted to persons who are employees of the Company or a subsidiary of the Company and the fair market value at the date of grant of the shares of stock with respect to which all ISO’s held by a particular grantee become exercisable for the first time during any calendar year does not exceed $100,000. ISOs and NSOs must be granted a an exercise price that is at least the fair market value of the common stock on the date of grant and the term of these options cannot exceed ten years from the date of grant. The exercise price of an ISO granted to a holder of more than 10% of the common stock of the Company must be at least 110% of the fair market value of the Common Stock on the date of grant, and the term of these options cannot exceed five years. All of the authorized shares of common stock under the Amended and Restated Incentive Plan are available for grant as ISOs.

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Stock Appreciation Rights

Under the Amended and Restated Incentive Plan, the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, may grant stock appreciation rights (“SARs”), that confer on the grantee a right to receive, upon exercise thereof, the excess of (a) the fair market value of one share of common stock of the Company on the date of exercise over (b) the grant price of the SAR (which shall be at least the grant date fair market value of a share of common stock of the Company) as determined by the board of directors or the committee to which it grants authority under the Amended and Restated Incentive Plan.  The term of each SAR is ten years from the date of grant of the SAR.

Stock Awards

Under the stock component of the Amended and Restated Incentive Plan, the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, may, in selected cases, grant to a plan participant a given number of shares of restricted stock, stock units or unrestricted stock. Restricted stock under the Amended and Restated Incentive Plan is common stock restricted as to sale pending fulfillment of such vesting schedule and requirements as the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, shall determine. Prior to the lifting of the restrictions, the participant will nevertheless be entitled to receive dividends on, and to vote the shares of, the restricted stock. Stock units are a right to be delivered shares of common stock upon fulfillment of such vesting schedule and requirements as the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, shall determine.  Grantees of stock units will have no voting or dividend rights or other rights associated with stock ownership, although the board of directors, or the committee may award dividend equivalent rights on such units.

Shares Awarded during 2009

On October 26, 2009, the Company awarded 200,000 shares of its restricted common stock, par value $.001 per share, pursuant to the 2009 Stock Incentive Plan, to Mr. Kexuan Yao, the Company’s Chief Executive Officer, vesting 66,667 shares on December 15, 2010, 66,667 shares on December 15, 2011 and 66,666 shares on December 15, 2012. These shares were valued at $3.28 per share or $656,000 on the date of grant and were amortized over the vesting period, or $54,667 per quarter.

On October 26, 2009, the Company agreed to pay Mr. William Thomson the sum of $20,000 and awarded 6,250 shares of the Company’s restricted common stock to Mr. William Thomson in conjunction with his appointment to the Company's board of directors vesting 25% on , 2010, 25% on June 30, 2010, 25% on September 30, 2010 and 25% on December 31, 2010.  These shares were valued at $3.28 per share or $20,500 on the date of grant and were amortized over the vesting period, all of which was earned and recorded as stock based compensation for the year ended December 31, 2010.

Shares and Options Awarded during 2010

On September 16, 2010, the Company agreed to pay Mr. K.P. Chan the sum of $20,000 and awarded 6,250 shares of the Company’s restricted common stock to Mr. Chan in conjunction with his appointment to the Company's board of directors vesting 50% on March 10, 2011 and 50% on September 10, 2011.  These shares were valued at $3.12 per share or $19,500 on the date of grant and were amortized over the vesting period, or $4,875 per quarter.

On October 5, 2010, the Company awarded a stock option to purchase 40,000 shares of the Company’s common stock exercisable at $5.00 per share expiring five (5) years from the date of grant to an employee in conjunction with his employment agreement as the Company's Director of Administration, vested upon grant. The Company estimated the fair value of option granted, estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	October 5, 2010
Expected life (year)		5.00
Expected volatility		187.00	%
Risk-free interest rate		1.21	%
Expected annual rate of quarterly dividends		0.00	%

Expected volatility is based on historical volatility for the Company’s common stock. The Company currently has no reason to believe future volatility over the expected life of the option is likely to differ materially from its historical volatility. The risk-free interest rate is based on a yield curve of U.S treasury interest rates on the date of valuation based on the expected term of the share options or equity instruments. Expected dividend yield is based on our dividend history and anticipated dividend policy.

The fair value of share options or equity instruments granted, estimated on the date of grant, using the Black-Scholes option-pricing model, was $138,000. The Company recorded the entire amount as stock based compensation expense on the date of grant.

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Shares Awarded during 2011

On January 25, 2011, the Company issued 55,378 shares of its common stock to certain of its employees for their 2010 services of approximately $187,180 in lieu of cash, which was recorded as compensation expenses in 2010 and credited the same to the accrued expenses at December 31, 2010.

On March 29, 2011, the Company awarded 10,000 shares of the Company’s common stock to an employee for his 2011 employment service vesting on July 1, 2011. These shares were valued at $2.74 per share or $27,400 on the date of grant and are being amortized over the service period of one year in 2011.

On December 15, 2011, the Company issued 10,000 and 50,000 shares of its common stock to two (2) of its outside directors for their 2011 services, respectively. These shares were valued at $0.27 per share, $2,700 and $13,500 or $16,200 in aggregate on the date of grant, which was recorded as stock based compensation.

On December 15, 2011, the Company issued 264,379 shares of its common stock to certain of its employees for their 2011 services of approximately $71,383, in lieu of cash, which was recorded as compensation expense in 2011.

On December 16, 2011, the Company agreed to pay Director Mr. Kam Ping Chan 6,250 shares of the Company’s restricted common stock in conjunction with his appointment to the Company's board of directors vesting 50% on June 30, 2012 and 50% on December 31, 2012, effectively January 1, 2012.  The restricted stock vests only if Mr. Chan is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $0.2851 per share or $1,782 on the date of grant and are being amortized over the vesting period, or $446 per quarter in 2012.

On December 20, 2011, the Company issued 50,000 shares of its common stock to Mr. Tao Pang, one of its outside directors for his 2012 services, effectively January 1, 2012. These shares were valued at $0.28 per share, or $14,000 on the date of grant, which was deferred to 2012 to be recognized as stock based compensation. On May 4, 2012 those shares were cancelled upon Mr. Pang's resignation as a member of the board of directors. Mr. Pang was compensated in cash in lieu of common shares for such period served as a director.

2012 Amendment to the 2009 Stock Incentive Plan

At the 2012 Annual Meeting of Stockholders (the “2012 Annual Meeting”) of the Company held on July 13, 2012, the Company’s stockholders approved an amendment and restatement of the Company’s 2009 Stock Incentive Plan to increase the number of shares of the Company’s common stock available for issuance hereunder by 3,000,000 shares to 5,200,000 shares of the Company’s common stock.

Shares Awarded during 2012

On February 6, 2012, the Company issued 57,743 shares of its common stock to certain of its employees for their 2011 services of approximately $33,318, in lieu of cash, which was recorded as compensation expense and credited to common shares to be issued at December 31, 2011.

On February 8, 2012, the Company awarded 1,500,000 shares of its restricted common stock, par value $.001 per share, pursuant to the Amended and Restated 2009 Stock Incentive Plan, to Mr. Kexuan Yao, the Company’s Chief Executive Officer. The term of employment under the agreement is from January 1, 2012 (the “Effective Date”) until December 31, 2014, unless sooner terminated in accordance with the terms of the Employment Agreement. These shares were valued at $0.499 per share or $748,500 on the date of grant and are amortized over the vesting period, or $62,375 per quarter.

On May 4, 2012, the Company agreed to pay Director Mr. Weiping Shen 50,000 shares of the Company’s restricted common stock in conjunction with his appointment to the Company's board of directors vesting 50% on December 31, 2012 and 50% on May 3, 2013.  The restricted stock vests only if Mr. Shen is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $0.69 per share or $34,500 on the date of grant and are being amortized over the vesting period, or $8,625 per quarter.

On July 30, 2012, the Company issued 561,640 shares of its common stock to certain of its employees for the first half year of their 2012 service of approximately $185,341, in lieu of cash, all of which was recorded as compensation expense for the quarter ended June 30, 2012.

On July 30, 2012, the Company granted 400,000 shares of its common stock to certain of its employees for the second half year of their 2012 service of approximately $132,000, in lieu of cash, which were recorded as compensation expense for the year ended December 31, 2012.

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On November 12, 2012, the Company granted 980,991 shares of its common stock to certain of its employees for the second half year of their 2012 service of approximately $343,347, in lieu of cash, which were recorded as compensation expense for the quarter ended December 31, 2012.

2013 Amendment to the 2009 Stock Incentive Plan

At the 2013 Annual Meeting of Stockholders (the “2013 Annual Meeting”) of the Company held on July 2, 2013, the Company’s stockholders approved an amendment and restatement of the Company’s 2009 Stock Incentive Plan to increase the number of shares of the Company’s common stock available for issuance hereunder by 3,000,000 shares to 8,200,000 shares of the Company’s common stock.

Shares Awarded during 2013

On May 2, 2013, the Company agreed to pay Director Mr. Kam Ping Chan 6,250 shares of the Company’s restricted common stock in conjunction with his re-appointment to the Company's board of directors vesting 50% on June 30, 2013 and 50% on December 31, 2013, effectively January 1, 2013.  The restricted stock vests only if Mr. Chan is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $0.3301 per share or $2,063 on the date of grant and are being amortized over the vesting period, or $516 per quarter in 2013.

On May 3, 2013, the Company agreed to pay Director Mr. Weiping Shen 50,000 shares of the Company’s restricted common stock in conjunction with his re-appointment to the Company's board of directors vesting 50% on September 30, 2013 and 50% on May 3, 2014.  The restricted stock vests only if Mr. Shen is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $0.389 per share or $19,450 on the date of grant and are being amortized over the vesting period, or $4,863 per quarter.

On November 5, 2013, the Company granted 1,363,282 shares of its common stock to certain of its employees for the year of their 2013 service of approximately $640,743, in lieu of cash, which were recorded as compensation expense for the quarter ended December 31, 2013.

Shares Awarded during 2014

On January 2, 2014, the Company agreed to pay Director Mr. Kam Ping Chan 6,250 shares of the Company’s restricted common stock in conjunction with his re-appointment to the Company's board of directors vesting 50% on June 30, 2014 and 50% on December 31, 2014, effectively January 1, 2014.  The restricted stock vests only if Mr. Chan is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $0.323 per share or $2,019 on the date of grant and are being amortized over the vesting period, or $505 per quarter in 2014.

On April 9, 2014, the Company granted 2,329,958 shares of its common stock to certain of its employees for the first quarter of their 2014 service of approximately $838,785, in lieu of cash, which were recorded as compensation expense for the quarter ended March 31, 2014.

Summary of the Company’s Amended and Restated 2009 Stock Incentive Plan Activities

The table below summarizes the Company’s Amended and Restated 2009 Stock Incentive Plan activities:

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	Number of Shares or Options			Fair Value at Date of Grant
Balance, December 31, 2012		4,198,881		$	2,614,951
Options – granted		-			-
Options – canceled		-			-
Shares – granted		1,419,532			662,256
Shares – canceled		(-	)		(-	)
Balance, December 31, 2013		5,618,413		$	3,277,207
Vested, December 31, 2013		5,101,746			3,023,732
Unvested, December 31, 2013		516,667		$	253,475
Options – granted		-			-
Options – canceled		-			-
Shares – granted		2,336,208			840,804
Shares – canceled		(-	)		(-	)
Balance, March 31, 2014		7,954,621		$	4,118,011
Vested, March 31, 2014		7,556,704			3,924,892
Unvested, March 31, 2014		397,917		$	193,119

As of March 31, 2014, there were 245,379 shares of common stock remaining available for issuance under the Amended and Restated 2009 Stock Incentive Plan.

Note 14 – Income Taxes

Armco Metals Holdings is a non-operating holding company. Armco HK, the Company’s Hong Kong Subsidiary is subject to Hong Kong SAR income taxes. Henan Armco, Renewable Metals, Lianyungang Armco and Armco Shanghai, the Company’s PRC subsidiaries are subject to PRC income taxes, file income tax returns under the Income Tax Law of the People’s Republic of China concerning Foreign Investment Enterprises and Foreign Enterprises and local income tax laws (the “PRC Income Tax Law”) accordingly. Henan Armco, Renewable Metals, Lianyungang Armco and Armco Shanghai derive substantially all of their income (loss) before income taxed and related tax expenses from PRC sources.

United States Income Tax

Armco Metals Holdings is incorporated in the State of Nevada and is subjected to United Sates of America tax law.

Hong Kong SAR Income Tax

Armco HK is registered and operates in the Hong Kong Special Administrative Region (“HK SAR”) of the People’s Republic of

China (“PRC”) and is subject to HK SAR tax law. Armco HK’s statutory income tax rate is 16.5%.

PRC Income Tax

Henan Armco, Renewable Metals, Lianyungang Armco and Armco Shanghai are governed by and file separate income tax returns under the PRC Income Tax Law, which, until January 2008, generally subject to tax at a statutory rate of 33% (30% state income tax plus 3% local income tax) on income reported in the statutory financial statements after appropriate tax adjustments. On March 16, 2007, the National People’s Congress of China approved the Corporate Income Tax Law of the People’s Republic of China (the “New CIT Law”), effective January 1, 2008. Under the New CIT Law, the corporate income tax rate applicable to all Companies, including both domestic and foreign-invested companies, will be 25%. However, tax concession granted to eligible companies prior to March 16, 2007 will be grand fathered in.

The effective tax rate is 0% and -0.77% for the three months ended March 31, 2014 and March 31, 2013, respectively.

Note 15 – Concentrations and Credit Risk

Credit Risk Arising from Financial Instruments

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents.

As of March 31, 2014 and December 31, 2013, substantially all of the Company’s cash and cash equivalents were held by major financial institutions located in the PRC, none of which are insured. However, the Company has not experienced losses on these accounts and management believes that the Company is not exposed to significant risks on such accounts.

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Customers and Credit Concentrations

Customer concentrations and credit concentrations are as follows:

	Net Sales for the Three Months Ended						Accounts Receivable at
	March 31, 2014			March 31, 2013			March 31, 2014			December 31, 2013
Customer A		-	%		54.6	%		32.4	%		33.8	%
Customer B		22.6	%		-	%		27.2	%		25.1	%
Customer C		-	%		-	%		-	%		18.3	%
Customer D		-	%		-	%		10.4	%		-	%
Customer E		-	%		-	%		19.6	%		-	%
Customer F		37.2	%		-	%		-	%		-	%
Customer G		12.3	%		-	%		-	%		-	%
Customer H		11.8	%		-	%		-	%		-	%
		83.9	%		54.6	%		89.6	%		77.2	%

A reduction in sales from or loss of such customers would have a material adverse effect on the Company’s results of operations and financial condition.

Vendor Concentrations

Vendor purchase concentrations and accounts payable concentration as follows:

	Net Purchases for the Three Months Ended						Accounts Payable at
	March 31, 2014			March 31, 2013			March 31, 2014			December 31, 2013
Vendor A		38.4	%		82.6	%		40.2	%		86.0	%
Vendor B		37.0	%		-	%		25.8	%		-	%
		75.4	%		82.6	%		66.0	%		86.0	%

Note 16 – Subsequent Events

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued.  The Management of the Company determined that there were certain reportable subsequent events to be disclosed as follows:

On April 8, 2014, the convertible note holders of an aggregate of $5,554,467 principal converted the principal and accrued unpaid interest due under those notes into an aggregate of 17,521,978 shares of the Company’s common stock.

On September 23, 2013, the Company issued a convertible promissory note to Asher Enterprises, Inc. in the amounts of $153,500 with annual interest rate of 8%.  The note is convertible at 58% of the average 3 lowest closing bid prices for the last 10 trading days after 180 days following the Date of Issuance. On March 28, 2014, $80,000 of principal under the note was converted to 355,082 shares of the Company’s common stock. On April 8, 2014, $73,500 of principal under the note was converted to 363,635 shares of the Company’s common stock and the remaining principal balance under the note is zero.

On April 16, 2014, the Company received a conversion notice from its convertible note holder, Hanover, to convert $100,000 principal of the note due March 3, 2015, along with $1,525 accrued interest, into a total of 374,425 shares of the Company's common stock, at a conversion price of $0.271150 per share. On May 7, 2014, the Company received a conversion notice from Hanover to convert $25,000 principal of the note due March 3, 2015, along with $277.78 accrued interest, into a total of $105,756 shares of the Company’s common stock, at a conversion price of $0.23902 per share. On May 14, 2014, the Company received a conversion notice from Hanover to convert $25,000 principal of the note due March 3, 2015, along with $77.78 accrued interest, into a total of $109,923 shares of the Company’s common stock, at a conversion price of $0.22814 per share.

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On April 7, 2014, the Company entered into a Legal Services Agreement (“Legal Agreement”) with All Bright Law Office (“All Bright”), a PRC law firm located in Shanghai, China. Pursuant to the Legal Agreement, All Bright agreed to provide Chinese-law related legal counsel services from April 1, 2014 to March 31, 2015 in exchange for 500,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the All Bright.

On April 15, 2014, the Company entered into a Share Exchange Agreement (the “Agreement”) with Draco Resources, Inc., a California corporation ("Draco Resources") and its shareholders (the “Draco Resources Shareholders”).   Pursuant to the terms of the Agreement between the parties, the Company plans to acquire 100% of the issued and outstanding capital stock of Draco Resources in exchange for the Company's common stock valued at $51,615,000 based on the closing market price of its common stock on the exchange prior to the date of the Agreement (the "Purchase Price") and a Series C stock purchase warrant. The parties made customary representations and warranties and agreed to customary covenants in the Agreement. Upon the completion of the acquisition, the number of shares which Draco Resources Shareholders will receive from the Company represents approximately 74.64% of the issued and outstanding common stock of the Company. The closing of the acquisition is subject to approvals by the shareholders, the New York Stock Exchange and any applicable governmental regulatory agencies.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 

The following discussion and analysis of our consolidated financial condition and results of operations for the three months ended March 31, 2014 and 2013 should be read in conjunction with the consolidated financial statements, including footnotes, and other information presented elsewhere in this report. 

Overview 

Our Business and Recent Developments 

We import, sell and distribute to the metal refinery industry in China a variety of metal ore, including iron, chrome, nickel, titanium, copper and manganese ore, as well as non-ferrous metals and coal.  We obtain these raw materials from global suppliers in Brazil, India, Oman, Turkey, Nigeria, Indonesia, and the Philippines and distribute them in the PRC.  We also recycle scrap metal used by steel mills in the production of recycled steel.

The first quarter of 2014 has been the hardest time for China's iron and steel industry since 2000, as more steel mills saw deficits and steel output continues to rise, indicated the data release by China Iron and Steel Association (CISA). In the first three months of 2014, steel firms tracked by CISA saw a total loss of 2.33 billion yuan ($373 million), compared to a 3.28 billion yuan ($525 million) profit gained in the same period of 2013, according to the first quarter report released by CISA. The first quarter has always been a slow season due to the low demand caused by cold weather which is hard to transport materials and production activity is reduced and the Spring Festival holidays, however, the steel price at the end of March 2014 saw a 11.28 percent year-on-year decline and the price has been dropping for seven consecutive months, according to the report. Another sign of weak market demand is the surging steel inventory registered in the first quarter. At the end of March 2014, the steel inventory reached 19.41 million tons, 43.65 percent higher than the beginning of January 2014, according to the report. The rapidly increasing inventory indicates production overcapacity. The market demand for steel will not pick up against the backdrop of an economy facing downward pressure and the output will not see a big fall because of the large base of overcapacity according to the analysis of the CISA report. In a bid to tackle overcapacity, China's State Council has already released a guideline in October 2013, tightening control of capacity expansion and phasing out obsolete plants that fail to meet environment protection standards. Under pressure from overcapacity and the government's requirements for capacity control, it became harder for steel enterprises to get loans from banks which banks have scaled down loans to steel companies and have also raised lending rates, weighing on steel mills' liquidity. As a result, the prices of major metal mores including iron ore, manganese ore, and chrome ore, and scrap steel declined significantly in the first quarter of this year. Such drop in the price, combined with the inactivity of the market during the several-week long Chinese New Year holiday in the first quarter of 2014, have adversely affected our recycling business resulting in significant decline in our recycling revenue and gross margin from the first quarter of 2013, especially the price decline in scrap steel resulting an approximately $0.4 million of inventory deprecation in our recycling business. Our trading business, however, saw increases both in revenue and gross profit at decent rates compared to same period of last year mainly attributable to the improvement in our trading business operation.

We have been taking the initiative in the changing market to maintain our operation flexibility in our trading business and to refine our business model in response to unpredictable fluctuations in market prices.  We seek to secure longer term supply contracts in response to known opportunities rather than sell goods purchased in the spot market.  Where possible, we structure transaction-specific terms with our customers in order to better manage risk and ensure an acceptable profit margin.  While this process may limit certain trading opportunities, we believe that it will enhance our competitive position in the long run. We have developed pre-selling model to supplement our cash flow. We continued to develop our “Commodity Financing” model, first introduced in the third quarter of 2012, that enables us to provide financing service for our clients and liquidate the ore inventories stockpiled at the ports. We are also evaluating other potential methods such as hedging that can help us to manage market risks.

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We formally commenced the operation of our scrap metal recycling facility in the Banqiao Industrial Zone of Lianyungang Economic Development Zone in the Jiangsu province, China, in the late third quarter of 2010.    The facility recycles automobiles, machinery, building materials, dismantled ships and various other scrap metals.  We sell and distribute the recycled scrap metal to the metal refinery industry in the PRC utilizing our existing network of metal ore customers while continuing to seek new customers. During the first quarter of 2014, the amount of scrap metals recycled at our Recycling Facility decreased by 56% to 19,090 MT compared to 43,795 MT in the same period of last year. For the first quarter of 2014, our scrap metal business sold approximately 8,049 MT of scrap metals, generating approximately $2.6 million in revenue and (- $1.4) million in gross profit, compared to the first quarter of 2013 where our scrap metal business sold approximately 23,001 MT of scrap metals, generating approximately $9.0 million of revenue and $0.63 million of gross profit. Historically, the first quarter of each year sees a lower production of scrap metal due to the Chinese New Year holiday, when facilities are shut down and special restrictions are enforced on the transportation of scrap metals materials.  

We continue to believe that our recycling business will become a strong driver in our Company’s growth as natural resources continue to be depleted and larger amounts of unprocessed scrap metal become available as a result of increases in consumer demand. We also believe that the profit margin of our recycling business will gradually stabilize as we gain more experience in operating our recycling facility , marketing our products, and establishing our reputation and presence in the recycled scrap metal industry. We have conducted a series of tests and analysis to improve our cost control and eventually implement precise management at our recycling facility. We have also developed strategies to expand our sources for raw materials and establish a local supply chain to increase and stabilize the availability of raw materials near our recycling operation. In addition, as an effort to improve our operation and profitability of the recycling business, we strived to obtain a series of qualifications from Chinese government. We expect to continue to expand our overseas supply channels through potential business cooperation with suppliers in Japan and the United States. We also continue to expand our customer base with our sales increase in recycling business. In addition, in 2013 we developed a new business model, “platform model”, in our recycling operation which our business partners and customers involved in the entire recycling process from participating in acquisition and preparation of raw materials to delivering of processed scrap products. Our profits, by nature, mainly generate from the process fees by taking advantage of our facility and equipment as a platform for recycling scrap metals. By this unique sales and operation model, we work with our customers more closely, lower our market risks by sharing them with our customers, increase our sales with less or without additional working capital, and improve the efficiency and utilization of our facility and equipment by reducing the operating cost of idle facility. Recently we have signed long-term contract with Mitsui & Co. (Shanghai) Ltd. under this business model and we are working with several other customers and expect to get more similar contracts in 2014.

We utilize bank facilities and sales of our debt securities to finance our operations and expansions. We maintain nine bank facilities, which provide for the issuance of commercial lines of credit for letters of credit in the aggregate amount of $84 million, of which approximately $70 million is available to us at March 31, 2014. 

Pending Acquisition of Draco Resources, Inc. 

Furthermore, in an effort to leveraging its current customer base, we intend to explore potential merger and acquisition opportunities in businesses related to the steel industry in 2014. On April 15, 2014, we entered into a Share Exchange Agreement with Draco Resources, Inc., a California corporation ("Draco Resources") and its shareholders. Draco Resources is currently a wholly-owned subsidiary of Metawise Group, Inc. (“Metawise”). Metawise has certain rights to sell approximately five million metric tons of iron ore fines located at a facility in Theodore, Alabama under an agreement expiring in May 2015, and has entered into a Commodity Distribution Agreement with Draco Resources. Draco Resources will purchase these iron ore fines from Metawise and expects to generate revenues through the resale of these iron ore fines to third parties.

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Under the terms of the Share Exchange Agreement, upon the closing of the transaction we will acquire 100% of Draco Resources in exchange for 12,750,000 shares (post-split) of our newly issued common stock (the “Acquisition Shares”) and a warrant to purchase an additional 3,000,000 shares (post-split) of our common stock with an exercise price of $3.40 per share (the “Acquisition Warrant”) to be issued to the Draco Resources shareholders. At closing we will also issue two finders an aggregate of 1,200,000 shares (post-split) of our newly issued common stock as compensation for their services to Draco in connection with the Draco Acquisition. The shares of our common stock to be issued to in exchange for the Draco Resources shares and as compensation to the finders are valued at $43,450,000. Following the completion of the acquisition, the former Draco Resources shareholders will own, by virtue of the issuance of the Acquisition Shares, approximately 77% of our then outstanding common stock, giving effect to reverse stock split of our common stock which will occur prior to closing and the issuance of the Compensation Shares, but excluding any additional shares of our common stock issuable upon the exercise of the Acquisition Warrant or any other outstanding options or warrants.

The closing of the Share Exchange Agreement is subject to a number of conditions precedent, including the approval of our stockholders. We expect to submit a proposal to our stockholders to approve this transaction at our 2014 annual meeting to be held later in 2014. The closing of the Draco Resources acquisition will result in a change of control of our company and may be considered a reverse merger by NYSE MKT. Based upon our preliminary discussions with the exchange, in order to continue the listing of our common stock on the NYSE MKT following the closing of the Draco Resources acquisition, our company will need to comply with the initial listing standards of the exchange. We believe we currently comply with all of these standards under Alternative 2, other than the minimum bid price of our common stock which must be at least $3.00 per share. We expect to effect a 1:10 reverse stock split of our common stock immediately prior to the closing of the Draco Resources acquisition in order to meet this quantative initial listing standard. This reverse stock split has previously been approved by our stockholders at a special meeting held on March 27, 2014.

There are no assurances that this pending transaction will be approved by our stockholders, or that NYSE MKT will approve the continued listing of our common stock. See Part II, Item 1A. Risk Factors.

Our Performance 

              During the first quarter of 2014, our net revenues decreased 31% compared to the same period in 2013 which was mainly caused by the significant decrease of $6.4 million or 71% in sales of recycling business.   Our gross profit margin also decreased during the current period to -11.7%, compared to 4.5% during the same period in 2013. The gross profit margins for our recycling business and trading business for the first quarter of 2014 were -53.9% and 3.5%, respectively. Our trading business has historically experienced fluctuations in gross profit as a result of fluctuations in the market prices of ore and metals that we sell. In this regard, gross profit margins ranged from -3.2 % for the first quarter of 2013, to 5.21% for the second quarter of 2013, to -0.07% for the third quarter of 2013, and to 1.8% for the fourth quarter of 2013.

              As noted above, our recycling business had a gross profit margin of -53.8% for the first quarter of 2014, which represents a significant decrease from the 9.1% for same period in 2013. As described above, our scrap metal recycling business was adversely affected by the recession of domestic steel market and slowdown of economy growth in the PRC, especially the reduction of usage of scrap metals by steel mills for cost control, resulting in significant decreases in both our recycling business revenue and gross profit margin.

              We had a net loss of $3.62 million during the first quarter of 2014, an increase of 232%, compared to a net loss of $1.09 million during the same period in 2013.  Our total current assets at March 31, 2014 decreased approximately 24%, compared to December 31, 2013, as a result of a $7.1 million decrease in account receivable, a $3.7 million decrease in inventories, and a $3.6 million decrease in pledged deposits, offset by an $1.0 million increase in prepayments and other current assets, a $0.016 million increase in advance on purchases, a $0.02 million increase in marketable securities and an $0.4 million increase in cash.

              In addition to our current maturities of capital lease obligation of $0.9 million, we borrowed $25.6 million as of March 31, 2014 from banks in the PRC on a short term basis to finance the purchase of inventory related to execute resale contracts. These borrowings are secured by the inventory we purchase and the contracts for their sale. This indebtedness is repaid upon receipt of payment from our customers.

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Our Outlook 

             As described above, the first quarter of 2014 has been the hardest time for China's iron and steel industry since 2000 which the industry suffered big losses overall, in the short term, the market was increasingly precarious due to serious overcapacity, sluggish demand, declining profits and stricter environment standards confronted by the industry; however, in the middle and long term, we believe the low-income housing construction, on-going urbanization and increasing domestic consumption in China will continue to support the growth of the steel industry, evidencing a higher demand for our products with an associated revenue growth. We also expect our recycling business to benefit from the measures and policies to be implemented gradually by the Chinese government according to its 12th Five Year Plan (2011-2015).  Under this plan, China intends to restructure its iron and steel industry to be more energy efficient and have increased environmental protection by adopting and developing the most advanced technology in the world.

              Metal Ore Trading. The metal ore prices declined during the first quarter of 2014, especially iron ore. The price drop was attributed to flagging domestic demands for metal ore products amid economic slowdown in China. We expect the metal ore market in China will be stable at current level in the short term.  We continued to firm our business relationship with worldwide suppliers and stabilize our supply capacity. We believe our effort to build our supply capacity will benefit us in the long term and strengthen our market position in the industry in China. Moreover, we continued to develop our “Commodity Financing” model and expect to make some major progresses which we have obtained support from several banks.

              Scrap Metal Recycling. The gross profit margin for our recycling business decreased to -53.8% for the first quarter in 2014 compared to 7% for same period of 2013 as a result of the deteriorated market described above . The net revenue generating in first quarter decreased approximately 70% compared to first quarter of 2013. The weak market for steel scrap may continue in 2014 while steel price is expected to stabilize after sharp decline in the first quarter of 2014. [However, in the long-term, we believe the country's ongoing urbanization process will increase new steel demand which will definitely drive the steel scrap market during the 13th Five-Year-Plan period which is from 2016 to 2021. Through the past three years’ operation, we have achieved many major goals such as optimizing production process, improving cost control and management, developing and streamlining supply chain, establishing long term strategic partnership with key clients, obtaining various qualifications and licenses, and building our brand in the industry. We believe that we will benefit from the Chinese governmental mandates to increase the use of scrap metal steel as it encourages the use of scrap as opposed to the use of iron ore to satisfy the demand for steel products per China’s Five Year Plan and related national policies. We intend to devote a significant amount of our resources towards the improvement of our operations and if appropriate, its expansion. At the same time, we will continue to pursue our strategy to create a local network of raw material suppliers for our recycling facility and expand our oversea supply channels. In addition, we will continue to develop our new sale and operation model in recycling business described above to obtain more customers and business opportunities under the model in the coming years.

               While we believe our business is well positioned to grow in the coming years, we will need to continue our efforts to provide capital liquidity to support that growth, although we can offer no assurances that we can acquire such capital on terms acceptable to us.

RESULTS OF OPERATIONS   

               The table below summarizes the consolidated operating results for the three months ended March 31, 2014 and 2013.  The percentages represent each line item as an approximate percentage of net revenues unless otherwise noted.

	For the Three Months Ended March 31,
	2014					2013					$ Change			% Change
Net revenues	$	9,918,651		100	%	$	14,343,077		100	%	$	(4,424,426	)		(30.9	)%
Cost of goods sold		11,082,455		111.7	%		13,698,412		95.5	%		(2,615,957	)		(19.1	)%
Gross profit		(1,163,804	)	(11.73	)%		644,665		4.49	%		(1,808,469	)		(281	)%
Total operating expenses		2,288,407		23.07	%		1,695,638		11.8	%		592,769			35.0	%
Operating income (loss)		(3,452,211	)	(34.8	)%		(1,050,973	)	(7.3	)%		(2,401,238	)	228.48		%

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Net Revenues 

              Net revenues for the first quarter of 2014 decreased 31% compared to the same period in 2013, primarily due to a decrease of $7.6 million in the sales of scrap metals and a decrease of $1.2 million in the sales of manganese ore, partially offset by an increase of $1.2 million in the sales of billet and an increase of $0.2 million in the sales of chrome ore. During the quarter, our recycling business and trading business generated revenue of $2.6 million and $7.3 million, accounting for 26% and 74% of our total revenue, respectively.

Cost of Goods Sold 

              Cost of goods sold includes the cost of the products we purchase from our vendors and shipping and handling costs on shipments from such vendors. Cost of goods sold for the first quarter of 2014 was $11.1 million, representing a gross profit margin of - 11.7%, compared to a gross profit margin of 4.5% in the same period in 2013. The gross profit margin of -11.7% in the first quarter of 2014 represents a compound margin for our trading and recycling businesses, which generated gross profit margins of 3.5% and -53.9% for the period, respectively. Our trading business and recycling business generated a gross profit margin of 0.3% and 7% for the same period of 2013, respectively. The significant increase in cost of goods sold in our recycling business was mainly due to the sharp decline in scrap price and approximately $0.4 million of inventory write-off during the quarter.

Total Operating Expenses 

              Operating expenses for the first quarter of 2014 increased to approximately $2.3 million compared to $1.7 million for the same period in 2013, resulted from an increase of $0.39 million in general and administrative expenses,  an increase of $0.11 million in operating cost of idle manufacturing facility, an increase in of $0.07 million in selling expenses, and an increase of $0.02 million in professional fees.

              General and administrative expenses include salaries and office expenses. Our general and administrative costs increased by $0.39 million, or 37%, for the first quarter of 2014 as compared to the same period in 2013 primarily due to an increase of $0.84 million  stock compensation to management and employees. These increases were partially offset by a decrease of $0.28 million stock based recycling facility leasing fee resulted from termination of the leasing agreement, a decrease of $0.08 million in general and administrative expenses of our recycling facilities, a decrease of $0.054 million in general and administrative expenses of our other China subsidiaries.

               Professional fees include legal, accounting, SEC filing consultant, investor relation and public relation consultant fees. Our professional fees increased by $0.02 million, or 9% in the first quarter compared to same period of 2013 primarily due to an increase of stock based consulting fee $0.08 million and legal fees of $0.025 million , partially offset by a decrease of audit and reviews fee of $0.07 million and stock based legal fees of $0.028 million.

              Operating costs of idle facility increased by approximately $0.11 million to $0.53 million for the first quarter of 2014 compared to same period of 2013, mainly due to decreased production. The costs were mainly depreciation expenses of idle manufacturing facilities due to under utilization of the production facility in the periods.

8

               Selling expenses include commissions, salaries, and travel for our sales agents.  Selling expenses as a percentage of net revenues were 1.0% for the first quarter of 2014 as compared to 0.2% for the first quarter of 2013.  Selling expenses increased by $0.07 million mainly due to increases in advertising fee and transportation fee for the first quarter of 2014 as compared to the same period of 2013.

Total Other (Income) Expense 

              Total other expense of $0.17 million for the first quarter of 2014 increased $0.12 million from the comparable period in 2013, during which we had total other expense of $0.047 million.  The increase in total other expense was primarily due to a decrease of $0.14 million of gain in change in fair value of derivative liability, a non-cash expense, and an increase of $0.12 million in other (income) expense , These expense increases were partially offset by an increase of $0.10 million in interest income and a decrease of $0.06 million in interest expense.

Income Tax Expense 

              Income tax expense was $0 for the first quarter of 2014, compared to income tax refund of $8,510 for the first quarter of 2013.

Net Income (Loss) 

              Net income (loss) of ($3.62 million) for the first quarter of 2014 and the loss increased by $2.53 million, compared to net loss of ($1.09 million) for the same period in 2013, primarily due to a significant decrease of $1.8 million in gross profit, an increase of $0.6 million in operating expense and an increase of $0.12 million in other expense during the first quarter.

LIQUIDITY AND CAPITAL RESOURCES 

              Liquidity is the ability of a company to generate adequate amounts of cash to meet its cash needs.

              At March 31, 2014 and December 31, 2013, we had cash and cash equivalents of approximately $ 1.0 million and $0.6 million, respectively.  At March 31, 2014, our working capital (deficit) was $(0.6) million as compared to $0.8 million at December 31,2013. During the second quarter of 2014, we have increased working capital approximately of $5.8 million by issuing common stock for conversion of convertible notes described below.

              Our current assets at March 31, 2014 were $40.7 million, a decrease of 24% from December 31, 2013.  This overall decrease reflects decreases primarily in account receivable of $7.1 million, inventories of $3.7 million, and pledged deposits of $3.6 million. These decreases were partially offset by increases in prepayments and other current assets of $0.96 million, cash of $0.4 million, advance on purchases of $0.016 million and marketable securities of $0.02 million.  

              Pledged deposits at March 31, 2014 of $1.0 million represent deposits with financial institutions as collateral to letters of credit and bank acceptable notes payable we provide to suppliers for the purchase of inventories.  The amounts will be released to pay vendors upon acceptance of goods.

               Marketable securities at March 31, 2014 of $0.54 million represent the estimated value of our investment in Appollo Mineral calculated at market price by using Australia quoted market prices on Apollo Minerals stock.

                Our accounts receivable decreased $7.1 million at March 31, 2014 from December 31, 2013 mainly due to the timing difference between the sales and collections of sales and our collections of scrap metals sales during the quarter.

                Inventories decreased $3.7 million at March 31, 2014 from December 31, 2013, primarily due to our sales of inventories and the decreased scrap metal production during the first quarter.

               Advances on purchases increased $0.016 million at March 31, 2014 from December 31, 2013, and consisted of prepayments to vendors for merchandise and deposits on pending purchases.  These advances on purchases are customary in our business and help us secure inventory below prevailing market prices, thereby providing us with a better opportunity to increase our gross profit margins. 

9

               Our prepayments and other current assets increased $0.96 million at March 31, 2014 compared to December 31, 2013, primarily due to the increases in prepayments and deposits for our metal ore trading business and deposits related to our scrap metal recycling operations.  

               Our current liabilities decreased $11.6 million at March 31, 2014 from December 31, 2013, which is mainly attributable to a decrease in banker's acceptance notes payable and letters of credit of $5.4 million, and a decrease in accounts payable of $4.9 million, a decrease in loans payable of $4.9 million, a value added tax and other tax payable of $0.4 million. These decreases were partially offset by increases in customer deposits of $2.2 million, derivative warrant liability of $1.3 million, accrued expenses and other current liabilities of $0.4 million, and advances received from Chairman and CEO of $0.09 million.  

                Loans payable decreased $4.9 million at March 31, 2014, compared to December 31, 2013, primarily due to our repayment of short-term borrowing under our letter of credit facilities in the first quarter of 2014.   The short-term borrowing usually is used to finance the payment of our purchase and is paid when we collected the payment from our customer. We used collections of accounts receivable to repay these short-term borrowings.

                Accounts payable decreased $4.9 million at March 31, 2014 compared to December 31, 2013 mainly due to our payment made to previous purchases during the first quarter.

               Banker's acceptance notes payable and letters of credit decreased $5.4 million at March 31, 2014 compared to December 31, 2013 primarily due to a decrease in short-term borrowings used in raw material acquisitions.

              Customer deposits increased $2.2 million at March 31, 2014, compared to December 31, 2013.  This increase is due to timing of customer orders and amounts that we require for deposits and the orders we delivered against the customer deposits.  We recognize customer deposits as revenue when the goods have been delivered and the risk of loss has transferred to the customer either at the port of origin or port of destination based on the shipping terms we agree to with our customer.

               Accrued expenses and other current liabilities increased $0.4 million at March 31, 2014 from December 31,2013.  Accrued expenses consist of accrued expenses and other payables related to shipping fees.  These expenses are due to timing differences of shipments and payments of our payables as compared to 2013.

               Value added tax and other taxes payable decreased $0.4 million at March 31, 2014 from December 31, 2013 mainly due to the offset by our newly increased purchases in the first quarter of 2014.

               Derivative warrant liability increased $1.3 million at March 31, 2014 from December 31, 2013. The increase is mainly due to the derivative treatment on the convertible notes valued at March 31, 2014. As described above, most of the convertible notes have been converted after first quarter and no more derivative liability valuation is needed.

               We do not have any commitments for capital expenditures at March 31, 2014. 

              As of March 31, 2014, we had invested a total of approximately $51.1 million for the acquisition of land use rights, construction and equipment purchases for the facilities we operate. We expect to expand the production capacity at the facilities in the future and to build or acquire additional facilities in the future, depending on market conditions.   We have not set a timeframe for this expansion.

              Moreover, we have not yet determined how we plan to finance this future expansion if we determine to proceed with it. Unless we can obtain additional financing on terms we deem favorable to us, we will be unable to complete any such expansion or construct additional facilities in the future, and there can be no assurance that we will be successful in obtaining any such additional financing, or that such financing would be on terms deemed to be desirable or favorable to our management.  Furthermore, in the event we do obtain such financing, there can be no assurance that such investment will result in enhanced operating performance or produce significant revenues and related profits in the future.

                In addition, we need to continue to fund future capital expenditures for our existing operations, to service our debt and to purchase the raw materials required in our recycling operations.  We have historically financed our cash needs primarily through the sales of our common stock and warrants, internally generated funds and debt financing.  We collect cash from our customers based on our sales to them and their respective payment terms.

10

We have bank facilities which provide for cash borrowings or the issuance of commercial letters of credit that we require in our metal ore trading business in the aggregate amount of $84 million.   Approximately $70 million was available under these facilities at March 31, 2014. We have approximately $24 million of debt which become due within the next 12 months. We expect to satisfy these obligations through our operation.

Substantially all of our cash reserves are held in the form of RMB in bank accounts at financial institutions located in the PRC.  Cash held in banks in the PRC is not insured.  The Chinese regulatory authorities impose a number of restrictions regarding RMB conversions and restrictions on foreign investments.  Accordingly, our cash on deposit in banks in the PRC is not readily deployable by us for purposes outside of China.

We have entered into a number of bank financing and debt arrangements which provide working capital, including:

On November 8, 2013, we consummated the transactions contemplated by the Purchase Agreement dated November 4, 2013 with Hanover Holdings I, LLC and issued a senior convertible note pursuant to the Purchase Agreement. The full disclosure is included in the Form 8K filed with SEC on November 13, 2013. On November 13, 2013, we issued 47,022 commitment shares to the investor as per the Purchase Agreement. On December 26, 2013, we filed a S-1 registration statement pursuant to the Purchase Agreement which was effective on February 14, 2014. We received total proceeds of $800,000 under the note in two tranches, $300,000 on November 8, 2013 and $500,000 on March 3, 2014. As of May 14, 2014, 1,509,324 shares were issued for conversion of $450,000 principal and $6,509 interest under the convertible notes and the remaining principal balance of the note was $400,000 including $50,000 penalty due to delay on filing of registration statement.

Between May 2013 and September 2013 our subsidiary Henan Armco & Metawise Trading Co. Ltd. (“Henan Armco”) borrowed an aggregate of RMB 19,700,000 (approximately $3.26 million) from four lenders who are not our affiliates under the terms of loan contracts. These loans matured between May 2013 and December 2013. Our subsidiary used the funds for working capital. In January 2014 we and our subsidiary entered into note exchange agreements with each of these lenders pursuant to which we exchanged the loan contracts for 8% convertible notes in the aggregate amount of RMB 15,100,000 (approximately $2.5 million) which represented the remaining principal balance due under the loan contracts. We refer to these notes as the January 2014 Convertible Notes. The lenders waived any accrued but unpaid interest due prior to this exchange. The January 2014 Convertible Notes, which bear interest at the rate of 8% per annum, mature nine months from the date of issuance and, approved at the special shareholder meeting held on March 27, 2014, these notes are convertible at any time prior to maturity at the option of the holder into shares of our common stock at a conversion price of $0.317 per share. Interest is payable at maturity or conversion, and we have the right to prepay the notes at any time without penalty to us.

              In unrelated transactions, between November 2013 and December 2013 Henan Armco & Metawise Trading Co. Ltd. also borrowed an additional RMB18,827,240 (approximately US $3.1 million) from 11 non-U.S. lenders who are not our affiliates under the terms of loan contracts. These loans initially matured between August 2014 and September 2014. Our subsidiary used the funds for working capital. In February 2014 we and our subsidiary entered into note exchange agreements with each of these lenders pursuant to which we exchanged the loan contracts for 8% convertible notes in the aggregate amount of RMB18,827,240 (approximately US$3.1 million) which represented the remaining principal balance due under the loan contracts. We refer to these notes as the February 2014 Convertible Notes. The lenders waived any accrued but unpaid interest due prior to this exchange. The convertible notes, which bear interest at the rate of 8% per annum, mature nine months from the date of issuance and, approved at the special shareholder meeting held on March 27, 2014, these notes are also convertible at any time prior to maturity at the option of the holder into shares of our common stock at a conversion price of $0.317 per share. Interest is payable at maturity or conversion, and we have the right to prepay the notes at any time without penalty to us

            On April 8, 2014 the holders of an aggregate of $5,554,467 principal amount of our convertible notes issued in January 2014 and February 2014 converted the principal and accrued unpaid interest due under those notes into an aggregate of 17,521,978 shares of our common stock.

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            On October 22, 2013, our subsidiary Armco Metals International Limited (“Armco HK”) extended the Banking Facilities Agreement with DBS Bank (Hong Kong) Limited (originally entered on December 21, 2011) of $20,000,000 for issuance of commercial letters of credit in connection with the Company’s purchase of metal ore.  The Company pays interest at LIBOR or DBS Bank’s cost of funds plus 2.50% per annum on issued letters of credit in addition to an export bill collection commission equal to 12.5% of the first $50,000 and 6.25% of the balance and an opening commission of 25% on the first $50,000 and 6.25% of the balance for each issuance.  Amounts advanced under this facility are repaid from the proceeds of the sale of metal ore.  The lender may terminate the facility at anytime at its sole discretion. The facility is secured by the charge on cash deposit of the borrower, the borrower’s restricted pledged deposit in the minimum amount of 3% of the letter of credit amount, the Company’s letter of comfort and the guarantee of Mr. Kexuan Yao.  At March, 2014, the balance outstanding under this facility was $695,226. 

              On March 25, 2014, Armco HK extended the uncommitted Trade Finance Facility with RZB Austria Finance (Hong Kong) Limited (originally entered on March 25, 2009 and Amendment No. 3 was entered on November 13, 2013). The facility provides for the issuance of $15,000,000 of commercial letters of credit in connection with the purchase of metal ore. The Company pays interest at 200 basis points per annum plus the lender’s cost of funds per annum on issued letters of credit in addition to fees upon issuance of the letter of credit of 1/16% for issuance commissions, negotiation commissions, commission-in-lieu and collection commissions. Amounts advanced under this facility are repaid from the proceeds of the sale of metal ore. The lender may, however, terminate the facility at any time or at its sole discretion upon the occurrence of any event which causes a material market disruption in respect of unusual movement in the level of funding costs to the lender or the unusual loss of liquidity in the funding market. The lender has the sole discretion to decide whether or not such event has occurred. The facility is secured by restricted cash deposits held by the lender, the personal guarantee of Mr. Kexuan Yao, the Company’s guarantee, and a security interest in the contract for the purchase of the ore for which the letter of credit has been issued and the contract for the sale of the ore. At March 31, 2014, no balance was outstanding under this facility.  

                On June 8, 2013, Henan Armco obtained a RMB 30,000,000 (approximately $4.8 million) line of credit from Bank of China for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring May 23, 2014. The facility is secured by the guarantee provided by our subsidiary, Armco HK formed Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”) and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore. At March 31, 2014, no balance was outstanding under this facility. 

On May 31, 2013, Henan Armco extended the RMB 40,000,000 (approximately $6.5 million) line of credit (originally obtained on June 18, 2012) from China Citic Bank, Zhengzhou Branch, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring one (1) year from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Kexuan Yao, the Company’s Chairman and Chief Executive Officer. At March 31, 2014, no balance was outstanding under this facility.

              On September 10, 2013, Henan Armco obtained a RMB 20,000,000 (approximately $3.2 million) line of credit from ICBC, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring one (1) year from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Kexuan Yao, the Company’s Chairman and Chief Executive Officer. At March 31, 2014, no balance was outstanding under this facility. 

              On September 19, 2012, Henan Armco obtained a RMB 78,000,000 (approximately $12.7 million) line of credit from Guangdong Development Bank Zhengzhou Branch for issuance of letters of credit to finance the purchase of metal ore.  The Company pays interest at 120% of the applicable base rate for lending published by the PBC at the time the loan is made on issued letters of credit.  The facility is secured by the guarantee provided by Mr. Kexuan Yao and Renewable Metals jointly and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore. The facility was renewed on May 7, 2014 with same term. At March 31, 2014, no balance was outstanding under this facility.

              On March 15, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB50, 000,000 (approximately $8.1 million) from Bank of China, Lianyungang Branch for the purchase of raw materials. The facility is expiring December 27, 2015 with interest at 7.872% per annum. The facility is secured by Renewable Metals properties, machinery and equipment and land use rights, and guaranteed by Mr. Kexuan Yao, Ms. Yi Chu, and Henan Armco, respectively. At March 31, 2014, the balance outstanding under this facility was $8,112,669.

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              On September 10, 2013, Renewable Metals extended (originally entered into on July 24, 2012) a line of credit facility in the amount of RMB 15,000,000 (approximately $2.4 million) from Shanghai Pudong Development Bank for the purchase of raw materials. The term of the facility is 12 months with interest at 120% of the applicable base rate for lending published by the PBOC at the time the loan is drawn down per annum. The facility is secured by Armco machinery’s land use right and guarantees provided Mr. Kexuan Yao, Ms. Yi Chu. At March 31, 2014, the balance outstanding under this facility was $2,433,801.  

              On July 1, 2011, Renewable Metals obtained a RMB 72,000,000 (approximately $11.7 million) line of credit from Bank of Communications, Lianyungang Branch expiring two (2) years from the date of issuance, for issuance of letters of credit in connection with the purchase of scrap metal. The letters of credit require Renewable Metals to pledge cash deposit equal to 20% of the letter of credit for letters of credit at sight, or 30% for other domestic letters of credit and for extended domestic letters of credit, the collateral of inventory equal to 166% of the letter of credit. The facility is secured by Renewable Metals inventories and guarantee provided by Mr. Kexuan Yao, the Company’s Chairman and Chief Executive Officer. At March 31, 2014, the balance outstanding under this facility was $2,920,561.  

Statements of Cash Flows 

                Our cash increased $403,747 during the first quarter of 2014 as compared to a decrease of $39,665 during the comparable period in 2013. During the current quarter we were provided $5.0 million of cash from operating activities and $3.6 million from investing activities, and we used cash of $8.2 million in financing activities. In comparable period in 2013 we were provided $3.3 million of cash from operating activities and $1.4 million from financing activities, and we used cash of $4.2 million in investing activities.

Net Cash Provided by (Used in) Operating Activities 

                 In the first quarter of 2014, net cash provided by operating activities of $5.0 million was mainly comprised inflows related to a decrease in accounts receivable of $8.8 million, a decrease in inventory of $3.1 million, an increases in customer deposits of $0.5 million, a decrease in advance on purchases of $0.3 million, and an increase in accrued expenses and other current liabilities of $0.15 million.   These inflows were partially offset by cash outflows associated with a decrease in accounts payable of $4.9 million, an increase, a decrease in taxes payable of $0.4 million, and an increase in prepayments and other current assets of $1.0 million.

                 In the first quarter of 2013, net cash provided by operating activities of $3.3 million was mainly comprised inflows related to a decrease in accounts receivable of $7.6 million, an increase in accounts payable of $3.5 million, an increases in customer deposits of $1.7 million, and an increase in accrued expenses and other current liabilities of $1.0 million.  These inflows were partially offset by cash outflows associated with an increase in inventory of $5.4 million, a decrease in taxes payable of $1.3 million, an increase in advance on purchases of $1.1 million, an increase in prepayments and other current assets of $1.1 million, and an increase in bank acceptance notes receivable of $1.1 million.

Cash Provided by Investing Activities 

                  In the first quarter of 2014 cash provided by investing activities of $3.6 million was due to proceeds from release of pledged deposits of $5.4 million, partially offset by payment made towards pledged deposits of $1.8 million and purchase of property .

                  In the first quarter of 2013 cash used in investing activities of $4.2 million was due to payment made towards pledged deposits of $7.9 million and purchase of property and equipment of $0.98 million, offset by proceeds from release of pledged deposits of $3.8 million.

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Cash Used in Financing Activities 

                  In the first quarter of 2014 cash used in financing activities of $8.3 million consisted of repayment of loans payable of $9.1 million and repayment of Banker's acceptance notes payable of $5.3 million, which was partially offset by proceeds from loans payable of $6.1 million and advance from Chairman and CEO of $0.08 million.

                  In the first quarter of 2013 cash provided by financing activities of $1.4 million consisted of proceeds from loans payable of $9.5 million and Banker's acceptance notes payable of $5.7 million, proceeds from sales of common stock $1.6 million, proceeds from related party loan of $1.0 million, and advance from Chairman and CEO of $0.19 million, which was partially offset by repayment of loans payable of $16.5 million and repayment of capital lease obligation of $0.071 million.

Off Balance Sheet Arrangements 

                 Under SEC regulations, we are required to disclose our off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. An off-balance sheet arrangement means a transaction, agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which we have:

● Any obligation under certain guarantee contracts;

● Any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets;

● Any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in stockholder’s equity in our statement of financial position; and

● Any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us.

             We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

Contractual Obligations and Commitments 

At March 31, 2014, our long-term debt and financial obligations and commitments by due dates were as follows:

	Payments due by period
Contractual obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Banker's acceptance notes payable and letters of credit	$	3,116,049	$	3,116,049	$	-	$	-	$	-
Short-Term Loans Payable		22,511,856		22,511,856		-		-		-
Capital Lease Obligations		897,501		897,501		-		-		-
Operating Lease Obligations		50,211		50,211		-		-		-
Purchase Obligations		-		-		-		-		-
Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP		-		-		-		-		-
Total	$	26,575,617	$	26,575,617	$	-	$	-	$	-

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 Critical Accounting Policies  

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We believe the critical accounting policies in Note 1 to the consolidated financial statements appearing elsewhere in this report affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. Actual results may differ from these estimates under different assumptions and conditions.

Item 3.          Quantitative and Qualitative Disclosures About Market Risk. 

Not applicable for a smaller reporting company.

Item 4.          Controls and Procedures. 

Evaluation of Disclosure Controls and Procedures. We are required to maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Based on their evaluation as of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective such that the information relating to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of continuing weaknesses in our internal control over financial reporting.

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013, based on management’s assessment of the effectiveness of our internal controls over financial reporting, management concluded that our internal controls over financial reporting were not effective as of December 31, 2013, due to insufficiently qualified accounting and other finance personnel with an appropriate level of U.S. GAAP knowledge and experience. Management believes that our lack of experience with U.S. GAAP constitutes a material weakness in our internal control over financial reporting. Until such time, if ever, that we remediate the material weakness in our internal control over financial reporting we expect that the material weaknesses in our disclosure controls and procedures will continue.

Changes in Internal Control over Financial Reporting. There have been no changes in our internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION 

Item 1.          Legal Proceedings. 

None.

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Item 1A.       Risk Factors. 

In addition to the new risk factor set forth below, the most significant risk factors applicable to the Company are described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2013. There have been no material changes to those risk factors.

There are no assurances we will close the pending acquisition of Draco Resources, which will result in a change of control of our company and require a reverse stock split of our common stock to effect. Even if we close the transaction, there are no assurances the acquisition will ultimately be successful. 

There are a number of conditions precedent to the closing of the pending acquisition of Draco Resources, including the approval of our stockholders and the approval of the continued listing of our common stock on the NYSE MKT. There are no assurances our stockholders will approve the issuance of the shares in the acquisition consideration which is required under the NYSE MKT Company Guide. We expect to include a proposal for the approval of the issuance of the securities in the proxy statement for our 2014 annual meeting of stockholders to be held later this year.

In addition, because this transaction will result in a change of control of our company, the approval of NYSE MKT is required for the continued listing of our common stock which is also a condition precedent to closing. Given Draco Resources’ limited assets, lack of operating history and material dependence on a contract between its current parent company and a third party which expires in May 2015, there are no assurances that the exchange will approve the continued listing of our common stock. In that event, and assuming Draco Resources determines to waive the condition precedent to closing, our common stock would be quoted in the over the counter market which would adversely impact it liquidity. Even if the exchange should approve the continued listing, we will need to effective a 1:10 reverse stock split of our common stock prior to the closing which will adversely impact the holdings of our current stockholders.

Finally, even if we ultimately close the Draco Resources acquisition, there are no assurances that company will generate any significant revenues or that this proposed transaction will otherwise benefit our company. Investors are encouraged to carefully read the proxy statement for our 2014 annual meeting, including all of the risks associated with the acquisition and the proposed business and operations of Draco Resources, once the proxy statement has been filed with the Securities and Exchange Commission and mailed to our stockholders. Investors should not place undue reliance on this proposed transaction which making an investment decision concerning our company.

Item 2.          Unregistered Sales of Equity Securities and Use of Proceeds. 

                   On September 23, 2013, the Company issued a convertible promissory note to Asher Enterprises, Inc. in the amounts of $153,500 with annual interest rate of 8%.  The note is convertible at 58% of the average 3 lowest closing bid prices for the last 10 trading days after 180 days following the Date of Issuance. On March 28, 2014, $80,000 of principal under the note was converted to 355,082 shares of the Company’s common stock. On April 8, 2014, $73,500 of principal under the note was converted to 363,635 shares of the Company’s common stock and the remaining principal balance under the note is zero. The recipient was an accredited investor and the issuances were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) in reliance on exemptions under Section 3(a)(9) of that act.

                    On April 7, 2014, the Company entered into a Legal Services Agreement (“Legal Agreement”) with All Bright Law Office (“All Bright”), a PRC law firm located in Shanghai, China. Pursuant to the Legal Agreement, All Bright agreed to provide Chinese-law related legal counsel services from April 1, 2014 to March 31, 2015 in exchange for 500,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the All Bright. The recipient was an accredited investor and the issuances are exempt from registration under the Securities Act in reliance on an exemption under Section 4(a)(2) of that act.

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Item 3.          Defaults Upon Senior Securities. 

None. 

Item 4.          Mine Safety Disclosures. 

Not applicable to our company’s operations.

Item 5.          Other Information. 

Item 6.          Exhibits. 

No.	Description
10.9	Share Exchange Agreement dated April 15, 2014 by and among Armco Metals Holdings, Inc. and Draco Resources, Inc. and its shareholders (incorporated by reference to the Current Report on Form 8-K filed on April 22, 2014)
31.1	Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer *
31.2	Rule 13a-14(a)/ 15d-14(a) Certification of Chief Financial Officer*
32.1	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer*
101.INS	XBRL Instance Document **
101.SCH	XBRL Taxonomy Extension Schema **
101.CAL	XBRL Taxonomy Extension Calculation **
101.DEF	XBRL Taxonomy Extension Definition Linkbase **
101.LAB	XBRL Taxonomy Extension Label Linkbase **
101.PRE	XBRL Taxonomy Extension Presentation **

* filed herewith

** In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 to this report shall be deemed furnished and not filed.

SIGNATURES 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Armco Metals Holdings, Inc.
May 20, 2014	By: /s/ Kexuan Yao
	Kexuan Yao, Chief Executive Officer
	By: /s/ Fengtao Wen
	Fengtao Wen, Chief Financial Officer

17

EX-31

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a) Certification

I, Kexuan Yao, certify that:

1. I have reviewed this report on Form 10-Q for the period ended March 31, 2014 of Armco Metals Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Dated:  May 20, 2014			/s/ Kexuan Yao Kexuan Yao, Chief Executive Officer, principal executive officer

EX-31

EXHIBIT 31.2

Rule 13a-14(a)/15d-14(a) Certification

I, Fengtao Wen, certify that:

1. I have reviewed this report on Form 10-Q for the period ended March 31, 2014 of Armco Metals Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Dated: May 20, 2014			/s/ Fengtao Wen Fengtao Wen, Chief Financial Officer, principal financial and accounting officer

EX-32

EXHIBIT 32.1

Section 1350 Certification

In connection with the Quarterly Report of Armco Metals Holdings, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2014 as filed with the Securities and Exchange Commission (the “Report”), I, Kexuan Yao, Chief Executive Officer, and Fengtao Wen, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to SS. 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2. The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.

Dated: May 20, 2014	/s/ Kexuan Yao Kexuan Yao, Chief Executive Officer, principal executive officer
	/s/ Fengtao Wen Fengtao Wen, Chief Financial Officer, principal financial and accounting officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Consolidation Information	3 Months Ended
	Mar. 31, 2014
Armco HK [Member]
Variable Interest Entity [Line Items]
Jurisdiction	Hong Kong SAR
Date of Incorporation	Jul. 13, 2001
Attributable Interest	100.00%
Henan Armco [Member]
Variable Interest Entity [Line Items]
Jurisdiction	PRC
Date of Incorporation	Jun. 06, 2002
Attributable Interest	100.00%
Renewable Metals [Member]
Variable Interest Entity [Line Items]
Jurisdiction	PRC
Date of Incorporation	Jan. 09, 2007
Attributable Interest	100.00%
Lianyungang Armco [Member]
Variable Interest Entity [Line Items]
Jurisdiction	PRC
Date of Incorporation	Jun. 04, 2009
Attributable Interest	100.00%
Armco Shanghai [Member]
Variable Interest Entity [Line Items]
Jurisdiction	PRC
Date of Incorporation	Jul. 16, 2010
Attributable Interest	100.00%

XML

Note 9 - Related Party Transactions (Details) - Due to Other Related Parties (USD $)	Mar. 31, 2014	Dec. 31, 2012
Related Party Transaction [Line Items]
Due to Related Parties	$ 397,371	$ 403,141
Keli Yao [Member]
Related Party Transaction [Line Items]
Due to Related Parties	147,501	116,828
Yi Chu [Member]
Related Party Transaction [Line Items]
Due to Related Parties	$ 249,870	$ 286,313

XML

Note 6 - Inventories (Details) - Inventories (USD $)	Mar. 31, 2014	Dec. 31, 2013
Inventories [Abstract]
Raw materials – scrap metal	$ 3,758,273	$ 4,390,811
Finished goods – processed scrap metal	15,465,390	12,421,088
Purchased merchandise for resale	245,583	5,936,936
Write - down of inventories	(2,682,088)	(2,291,915)
	$ 16,787,158	$ 20,456,920

XML

Note 15 - Concentrations and Credit Risk (Details) - Customer and Credit Concentrations	3 Months Ended
	Mar. 31, 2013 Customer A [Member] Customer Concentration Risk [Member] Sales Revenue, Net [Member]	Mar. 31, 2014 Customer A [Member] Customer Concentration Risk [Member] Accounts Receivable [Member]	Dec. 31, 2013 Customer A [Member] Customer Concentration Risk [Member] Accounts Receivable [Member]	Mar. 31, 2014 Customer B [Member] Customer Concentration Risk [Member] Sales Revenue, Net [Member]	Mar. 31, 2014 Customer B [Member] Customer Concentration Risk [Member] Accounts Receivable [Member]	Dec. 31, 2013 Customer B [Member] Customer Concentration Risk [Member] Accounts Receivable [Member]	Dec. 31, 2013 Customer C [Member] Customer Concentration Risk [Member] Accounts Receivable [Member]	Mar. 31, 2014 Customer D [Member] Customer Concentration Risk [Member] Accounts Receivable [Member]	Mar. 31, 2014 Customer E [Member] Customer Concentration Risk [Member] Accounts Receivable [Member]	Mar. 31, 2014 Customer F [Member] Customer Concentration Risk [Member] Sales Revenue, Net [Member]	Mar. 31, 2014 Customer G [Member] Customer Concentration Risk [Member] Sales Revenue, Net [Member]	Mar. 31, 2014 Customer H [Member] Customer Concentration Risk [Member] Sales Revenue, Net [Member]	Mar. 31, 2014 Sales Revenue, Net [Member]	Mar. 31, 2013 Sales Revenue, Net [Member]	Mar. 31, 2014 Accounts Receivable [Member]	Dec. 31, 2013 Accounts Receivable [Member]
Revenue, Major Customer [Line Items]
Customer	54.60%	32.40%	33.80%	22.60%	27.20%	25.10%	18.30%	10.40%	19.60%	37.20%	12.30%	11.80%	83.90%	54.60%	89.60%	77.20%

XML

Note 10 - Capital Lease Obligation (Details) - Capital Lease Obligation (USD $)	Mar. 31, 2014	Dec. 31, 2013
Capital Leased Assets [Line Items]
Capital lease obligation	$ 897,501	$ 904,990
Less current maturities	(897,501)	(904,990)
Machinery and Equipment [Member]
Capital Leased Assets [Line Items]
Capital lease obligation, net of current maturities	333,284	336,065
Less current maturities	(333,284)	(336,065)
Other Machinery and Equipment [Member]
Capital Leased Assets [Line Items]
Capital lease obligation	564,217	568,925
Less current maturities	$ (564,217)	$ (568,925)

XML

Note 5 - Accounts Receivable (Details) - Accounts Receivable (USD $)	Mar. 31, 2014	Dec. 31, 2013
Accounts Receivable [Abstract]
Accounts receivable	$ 18,502,205	$ 25,638,666
Allowance for doubtful accounts	(43,150)	(43,150)
	$ 18,459,055	$ 25,595,516

XML

Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Tables) [Line Items]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	October 5, 2010
Expected life (year)		5.00
Expected volatility		187.00	%
Risk-free interest rate		1.21	%
Expected annual rate of quarterly dividends		0.00	%

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	2008 Warrant Activities											APIC		(Gain) Loss
	Derivative Shares		Non-derivative Shares			Total Warrant Shares			Fair Value of Derivative Warrants			Reclassification of Derivative Liability		Change in Fair Value of Derivative Liability
Derivative warrant at December 31, 2012		186,306		1,031,715			1,218,021			(306,708	)				306,505
Reclassification of warrants to purchase 1,031,715 common shares from additional paid-in capital to derivative liability at January 11, 2013 to reflect the re-instatement of the derivative feature		1,031,715		(1,031,715	)		(-	)		(623,809	)		623,809		(-	)
Increased number of warrant shares per Amendment No. 2 to the Subscription Agreement and Common Stock Purchase Warrant ("2008 Unit Offering Agreement") dated July 2008 and Amendment No. 1 to 2008 Unit Offering Agreement upon completion of January 2013 Offering.		10,962,189		-			10,962,189			(-	)				-
Mark to market										930,517					930,517
Warrants expired		12,180,210					12,180,210			-					-
Derivative warrant at September 30, 2013		-		-			-			-					-

Schedule of Share-based Compensation, Activity [Table Text Block]

	Number of Warrant Shares			Exercise Price Range Per Share		Weighted Average Exercise Price		Fair Value at Date of Issuance		Aggregate Intrinsic Value
Balance, December 31, 2013		1,615,387		$	7.50	$	7.5	$	-	$	-
Granted		-			-		-		-		-
Canceled for cashless exercise		(-	)		-		-		-		-
Exercised (Cashless)		(-	)		-		-		-		-
Exercised		(-	)		-		-		-		-
Expired		-			-		-		-		-
Balance, March 31, 2014		1,615,387		$	7.50	$	7.50	$	-	$	-
Earned and exercisable, March 31, 2014		1,615,387		$	7.50	$	7.50	$	-	$	-
Unvested, March 31, 2014		-		$	-	$	-	$	-	$	-

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

			Warrants Outstanding						Warrants Exercisable
Range of Exercise Prices			Number Outstanding		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price
$7.50				1,615,387		1.05	$	7.50		1,615,387		1.05	$	7.50
$0.50	-	$7.50		1,615,387		1.05	$	7.5		1,615,387		1.05	$	7.5

Schedule of Derivative Liabilities at Fair Value [Table Text Block]

Balance at December 31, 2012	$	-
To record derivative liability as debt discount		60,795
Change in fair value of derivative liability		634
Balance at December 31, 2013	$	61,429
To record derivative liability as debt discount		1,901,282
Change in fair value of derivative liability		(477,909	)
Settlement of derivative liability due to conversion of related notes	$	(117,267	)
Balance at March 31, 2014		1,367,535

Warrant [Member]

Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Tables) [Line Items]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	July 25, 2008 through August 8, 2008
Expected life (year)		5.00
Expected volatility (*)		89.00	%
Risk-free interest rate		3.23	%
Expected annual rate of quarterly dividends		0.00	%

	September 30, 2014
Expected life (year)		0.08
Expected volatility		57.00	%
Risk-free interest rate		0.02	%
Expected annual rate of quarterly dividends		0.00	%

	April 20, 2010
Expected life (year)		5.00
Expected volatility		182.00	%
Risk-free interest rate		2.56	%
Expected annual rate of quarterly dividends		0.00	%

Fair Value, Inputs, Level 3 [Member]

Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Tables) [Line Items]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	Fair Value Measurement Using Level 3 Inputs
	Derivative warrants Assets (Liabilities)			Total
Balance, December 31, 2012		(306,708	)		(306,708	)
Purchases, issuances and settlements		(623,809	)		(623,809	)
Transfers in and/or out of Level 3		-			-
Total gains or losses (realized/unrealized) included in:
Net income (loss)		930,517			930,517
Other comprehensive income (loss)		-			-
Balance, September 30, 2013	$	-		$	-

XML

Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details)	0 Months Ended			1 Months Ended						0 Months Ended	1 Months Ended		3 Months Ended		9 Months Ended	12 Months Ended								0 Months Ended			1 Months Ended	0 Months Ended	1 Months Ended	0 Months Ended		0 Months Ended								1 Months Ended					1 Months Ended			3 Months Ended	12 Months Ended			1 Months Ended	12 Months Ended	1 Months Ended	3 Months Ended	12 Months Ended					6 Months Ended			6 Months Ended			3 Months Ended							0 Months Ended	1 Months Ended	0 Months Ended	1 Months Ended		12 Months Ended		0 Months Ended
	Mar. 03, 2014	Mar. 05, 2014	Mar. 14, 2014	Mar. 24, 2014	Mar. 26, 2014	Feb. 27, 2014	Jan. 28, 2013 USD ($)	Apr. 30, 2010 USD ($)	Jan. 30, 2009 USD ($)	Aug. 08, 2008 USD ($)	Mar. 31, 2014 USD ($)	May 31, 2010 USD ($)	Mar. 31, 2014 USD ($)	Mar. 31, 2013 USD ($)	Sep. 30, 2013 USD ($)	Dec. 31, 2008 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CNY	Jan. 31, 2013	Dec. 20, 2012 USD ($)	Jun. 30, 2010	Apr. 20, 2010 USD ($)	Dec. 31, 2013 Subsequent Event [Member] Filing S-1 Within 120 Days of Note Date [Member] USD ($)	May 14, 2014 Subsequent Event [Member] Hanover Holdings I, LLC [Member] USD ($)	May 07, 2014 Subsequent Event [Member] Hanover Holdings I, LLC [Member] USD ($)	Apr. 16, 2014 Subsequent Event [Member] Hanover Holdings I, LLC [Member] USD ($)	Sep. 23, 2013 Subsequent Event [Member] Hanover Holdings I, LLC [Member]	Apr. 08, 2014 Subsequent Event [Member] Asher Enterprises, Inc [Member] USD ($)	Mar. 28, 2014 Subsequent Event [Member] Asher Enterprises, Inc [Member]	Apr. 08, 2014 Subsequent Event [Member]	Sep. 23, 2013 Subsequent Event [Member]	Nov. 08, 2013 Filing S-1 Within 45 Days of Note Date [Member] Hanover Holdings I, LLC [Member] USD ($)	Nov. 08, 2013 Filing S-1 Within 120 Days of Note Date [Member] Hanover Holdings I, LLC [Member] USD ($)	Nov. 08, 2013 Right to Require Purchase on 10th Trading Day After Registration Statement or Additional Closing Date [Member] Hanover Holdings I, LLC [Member] USD ($)	Nov. 08, 2013 Variable Conversion Base Price Less Than or Equal to $0.45 [Member] Convertible Notes Payable [Member] Hanover Holdings I, LLC [Member]	Nov. 08, 2013 Variable Conversion Base Price Greater Than $0.45 [Member] Convertible Notes Payable [Member] Hanover Holdings I, LLC [Member]	Mar. 05, 2014 Convertible Notes Payable [Member] Hanover Holdings I, LLC [Member] USD ($)	Mar. 14, 2014 Convertible Notes Payable [Member] Hanover Holdings I, LLC [Member] USD ($)	Nov. 08, 2013 Convertible Notes Payable [Member] Hanover Holdings I, LLC [Member] USD ($)	Mar. 24, 2014 Convertible Notes Payable [Member] Hanover Holdings I, LLC [Member] USD ($)	Mar. 26, 2014 Convertible Notes Payable [Member] Hanover Holdings I, LLC [Member] USD ($)	Feb. 27, 2014 Convertible Notes Payable [Member] Hanover Holdings I, LLC [Member] USD ($)	Mar. 31, 2014 Convertible Notes Payable [Member] Hanover Holdings I, LLC [Member]	Mar. 26, 2014 Convertible Notes Payable [Member] Asher and Hanover [Member] USD ($)	Mar. 28, 2014 Convertible Notes Payable [Member] Asher Enterprises, Inc [Member] USD ($)	Mar. 26, 2014 Convertible Notes Payable [Member] Default Rate [Member]	Mar. 26, 2014 Convertible Notes Payable [Member] Default Prepayment Rate [Member]	Mar. 31, 2014 Convertible Notes Payable [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] USD ($)	Mar. 26, 2014 Convertible Notes Payable [Member]	Sep. 23, 2013 Convertible Notes Payable [Member] USD ($)	Mar. 26, 2014 Convertible Notes Payable [Member] Minimum [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Minimum [Member]	Mar. 26, 2014 Convertible Notes Payable [Member] Maximum [Member]	Mar. 31, 2014 Convertible Notes Payable [Member] Maximum [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Maximum [Member]	Sep. 30, 2013 Target Price [Member]	Aug. 08, 2008 Target Price [Member]	Sep. 30, 2013 Remaining Derivative Warrants [Member]	Jan. 11, 2013 Remaining Derivative Warrants [Member]	Jun. 30, 2010 Warrants 2008 [Member] USD ($)	Dec. 31, 2013 Warrants 2008 [Member]	Apr. 30, 2010 Warrants 2008 [Member]	Jun. 30, 2010 Warrants 2008 2 [Member] USD ($)	Dec. 31, 2013 Warrants 2010 [Member]	Apr. 30, 2010 Warrants 2010 [Member]	Apr. 20, 2010 Volatility Period 1 [Member]	Apr. 20, 2010 Volatility Period 2 [Member]	Apr. 20, 2010 Volatility Period 3 [Member]	Apr. 20, 2010 Volatility Period 4 [Member]	Apr. 20, 2010 Volatility Period 5 [Member]	Aug. 08, 2008 Private Placement [Member] Investors [Member]	Aug. 08, 2008 Private Placement [Member] Brokers [Member]	Aug. 11, 2008 Private Placement [Member]	Apr. 20, 2010 Private Placement [Member] USD ($)	Aug. 08, 2008 Private Placement [Member]	Apr. 30, 2010 Private Placement [Member] USD ($)	Jul. 31, 2008 Private Placement [Member] USD ($)	Dec. 31, 2008 Private Placement [Member] USD ($)	Jun. 30, 2010 Warrants 2008 [Member]	Jan. 08, 2013 Two Investors [Member] USD ($)	Nov. 08, 2013 Hanover Holdings I, LLC [Member] USD ($)	Mar. 31, 2014 Hanover Holdings I, LLC [Member] USD ($)	Jan. 13, 2014 Four Foreign Investors [Member] USD ($)	Feb. 04, 2014 Eleven Foreign Investors [Member] USD ($)	Mar. 28, 2014 Asher Enterprises, Inc [Member] USD ($)
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)												1,031,715									167,740																																						12,180,210	1,031,715	1,324,346	12,180,210			1,615,387							2,486,649	242,264		1,538,464	2,728,913		100,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item)							0.50		5.00			5.00							5.00																																						11.25	7.50					5.00			7.50									7.50	5.00	7.50	5.00		5.00
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share)										$ 5,097,404
Proceeds from Issuance of Common Stock										$ 1,523,277				$ 1,621,356																																																													$ 10,000,016
Proceeds from Issuance of Warrants												6,896,229
Adjustments to Additional Paid in Capital, Warrant Issued								21,229				1,292,227			623,809																																														1,665,011			210,095
Proceeds from Warrant Exercises								6,629,036	25,000																																																																								400,000
Stock Issued During Period, Shares, New Issues (in Shares)							3,242,712	1,538,464																																																																		0.134	1,538,464	1.745		22.9	24.87
Sale of Stock, Price Per Share (in Dollars per share)							$ 0.50	$ 6.50																																																																			$ 6.50			$ 3.00
Derivative Liability Write-off															10,179
Stock Issued During Period, Shares, Conversion of Convertible Securities (in Shares)								13,806	5,000																																																							78,217
Stock Issued During Period, Value, Conversion of Convertible Securities								69,030					384,627																																																6,621,730
Stock Issued During Period, Value, New Issues								10,000,016
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Warrants Issued (in Shares)								1,538,464
Asset Management Fees																																																																													500,000		579,316
Share-based Goods and Nonemployee Services Transaction, Quantity of Securities Issued (in Shares)								76,923
Professional Fees													214,454	196,497		97,689																																																													15,000
Share Price (in Dollars per share)																				$ 0.28		$ 6.95																																																								$ 300,000
Fair Value Assumptions, Expected Volatility Rate	101.00%	101.00%	102.00%	102.00%	102.00%	101.00%					102.00%																																																								76.00%	134.00%	155.00%	167.00%	182.00%
Warrants and Rights Outstanding								2,483,938
Convertible Notes Payable																	5,500,000	33,512,936					350,000											500,000																																																450,000	500,000	2,472,127	3,082,340	73,500
Proceeds from Convertible Debt																																		500,000																																																300,000
Convertible Notes Payable, Reduction Amount																																50,000	100,000
Accrued Liabilities																							50,000
Debt Instrument, Interest Rate, Stated Percentage																	8.00%	8.00%													8.00%								4.00%				4.00%			22.00%	150.00%			8.00%
Variable Conversion Base Price (in Dollars per share)																																							$ 0.45
Variable Percentage																																			85.00%	80.00%
Debt Instrument, Face Amount																	6,200,000																																63,000		153,500
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed																																																				115.00%		140.00%
Debt Instrument, Convertible, Conversion Price (in Dollars per share)																	$ 0.317							$ 0.22814	$ 0.23902	$ 0.271150		$ 0									$ 0.32011	$ 0.322405		$ 0.343995	$ 0.34663	$ 0.308635		$ 0.317
Debt Conversion, Converted Instrument, Amount																																					75,000	50,000		50,000	100,000	25,000			80,000
Interest on Convertible Debt, Net of Tax																																										4,628
Debt Conversion, Converted Instrument, Shares Issued (in Shares)																								109,923	105,756	374,425	3	363,635	355,082	17,521,978							234,295	155,085		145,351	288,493	95,997			355,082
Fair Value Inputs, Probability of Default																																																5.00%							10.00%
Probability of Default Monthly Increase																																																1.00%
Capital Raising Event													1,000,000
Percentage of Market Generating Dilutive Reset Events													75.00%
Percentage of Debt Instrument Redemption																																																					10.00%			20.00%
Percentage of Debt Instrument Redemption Monthly Increase																																																	1.00%
Derivative Liability, Current											$ 1,367,535		$ 1,367,535				$ 61,429																																$ 1,367,535

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Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations (Supplier Concentration Risk [Member])	3 Months Ended
	Mar. 31, 2014 Vendor A [Member] Cost of Goods, Total [Member]	Mar. 31, 2013 Vendor A [Member] Cost of Goods, Total [Member]	Mar. 31, 2014 Vendor A [Member] Account Payable [Member]	Dec. 31, 2013 Vendor A [Member] Account Payable [Member]	Mar. 31, 2014 Vendor B [Member] Cost of Goods, Total [Member]	Mar. 31, 2014 Vendor B [Member] Account Payable [Member]	Mar. 31, 2014 Cost of Goods, Total [Member]	Mar. 31, 2013 Cost of Goods, Total [Member]	Mar. 31, 2014 Account Payable [Member]	Dec. 31, 2013 Account Payable [Member]
Note 15 - Concentrations and Credit Risk (Details) - Vendor Purchase and Accounts Payable Concentrations [Line Items]
Vendor	38.40%	82.60%	40.20%	86.00%	37.00%	25.80%	75.40%	82.60%	66.00%	86.00%

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Note 3 - Pledged Deposits (Tables)

3 Months Ended

Mar. 31, 2014

Transfers and Servicing [Abstract]

Schedule of Financial Instruments Owned and Pledged as Collateral [Table Text Block]

	March 31, 2014		December 31, 2013
Armco HK
Letters of credit (i)	$	7,962	$	5,993
Sub-total – Armco HK		7,962		5,993
Renewable Metals
Bank acceptance notes payable		-		1,636,072
Letters of credit (ii)		551,839		2,517,621
Deposit for capital lease obligation (iii)		486,760		490,823
Sub-total – Renewable Metals		1,038,599		4,644,516
Henan Armco
Letters of credit (iv)		311		2,113
Sub-total – Henan Armco		311		2,113
	$	1,046,872	$	4,652,222

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Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (USD $)	Mar. 31, 2014	Dec. 31, 2013
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	$ 22,511,856	$ 27,415,638
Convertible Debt [Member] | Armco Metals Holdings [Member] | Temporary Short Term Loan [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable		5,999,957
Armco HK [Member] | RZB Hong Kong [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	359,303	504,248
Armco HK [Member] | DBS Hong Kong [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	13,342	2,602,115
Armco HK [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	372,645	3,106,363
Renewable Metals [Member] | Bank of Communications Lianyungang [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	324,507	1,963,286
Renewable Metals [Member] | Non-interest Bearing [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	64,901	229,050
Renewable Metals [Member] | Loan Payable [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	3,474,388	3,503,379
Renewable Metals [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	13,598,999	13,876,076
Henan Armco [Member] | ICBC Bank [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable		2,755,926
Henan Armco [Member] | Guanhutun Credit Union [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	162,253	163,607
Henan Armco [Member] | Temporary Short Term Loan [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	8,112,669	8,180,361
Henan Armco [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	3,018,724	8,919,490
Pudong Development Bank [Member] | Temporary Short Term Loan [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	1,622,534
Armco Metals Holdings [Member] | Temporary Short Term Loan [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	790,000	1,050,000
Armco Metals Holdings [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	5,521,488	1,513,709
Convertible notes payable, net of discount, with interest at 4-8% per annum, maturing from June 25, 2014 through March 3, 2015 and $5,777,967 was converted into shares in April and May 2014.	4,731,488	463,709
Short Term Borrowings [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable [Line Items]
Loans payable	$ 2,856,471

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Note 3 - Pledged Deposits (Details) (USD $)	Apr. 15, 2014 Renewable Metals [Member]	Apr. 08, 2014 Renewable Metals [Member]	Mar. 31, 2014 Renewable Metals [Member]		Dec. 31, 2013 Renewable Metals [Member]		Apr. 30, 2014 Henan Armco [Member]
Note 3 - Pledged Deposits (Details) [Line Items]
Letters of Credit Outstanding, Amount	$ 7,962	$ 551,839					$ 311
Pledged Assets, Not Separately Reported, Other		$ 486,760	$ 486,760	[1]	$ 490,823	[1]

[1] $486,760 is to be released to the Company as part of the payment towards capital lease installment payment when the capital lease agreement matures on December 15, 2014.

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Note 1 - Organization and Operations (Details) (USD $)	0 Months Ended						0 Months Ended	1 Months Ended	3 Months Ended	6 Months Ended	9 Months Ended	30 Months Ended	6 Months Ended
	Aug. 12, 2008	Mar. 31, 2014	Dec. 31, 2013	Jul. 27, 2008	Apr. 06, 2007	Dec. 01, 2008 Renewable Metals [Member]	Aug. 12, 2008 Armco HK [Member]	Jul. 27, 2008 Armco HK [Member]	Sep. 30, 2008 Armco HK [Member]	Jun. 27, 2008 Armco HK [Member]	Sep. 30, 2008 Armco HK [Member]	Jun. 27, 2010 Armco HK [Member]	Jun. 27, 2008 Armco HK 2 [Member]
Note 1 - Organization and Operations (Details) [Line Items]
Common Stock, Shares, Issued		33,770,176	29,876,327	10,000,000	9,100,000
Common Stock, Par or Stated Value Per Share (in Dollars per share)		$ 0.001	$ 0.001		$ 0.001
Additional Paid in Capital (in Dollars)		$ 37,305,937	$ 35,790,906		$ (9,100)
Equity Method Investment, Ownership Percentage						100.00%	69.70%	100.00%		100.00%
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares								7,694,000		7,694,000
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned (in Dollars)								6,890,000		6,890,000
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Options Issued										5,300,000	5,300,000	2,000,000	2,000,000
Investment Options, Exercise Price (in Dollars per share)	$ 1.30									$ 1.30	$ 1.30	$ 5.00	$ 5.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period							5,300,000		5,300,000
Stock Issued During Period, Value, Stock Options Exercised (in Dollars)							$ 6,890,000		$ 6,890,000

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Note 8 - Banker's Acceptance Notes Payable and Letters of Credit (Details) - Banker’s Acceptance Notes Payable (USD $)	Mar. 31, 2014	Dec. 31, 2013
Short-term Debt [Line Items]
Short-term debt	$ 3,116,049	$ 8,473,217
Bankers Acceptance [Member] | Renewable Metals [Member]
Short-term Debt [Line Items]
Short-term debt		3,272,144
Letter of Credit [Member]
Short-term Debt [Line Items]
Short-term debt	$ 3,116,049	$ 5,201,073

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Note 13 - Stockholders' Equity (Details) - Options Granted Fair Value Assumptions	0 Months Ended
	Oct. 05, 2010
Options Granted Fair Value Assumptions [Abstract]
Expected life (year)	5 years
Expected volatility	187.00%
Risk-free interest rate	1.21%
Expected annual rate of quarterly dividends	0.00%

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Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities (USD $)			3 Months Ended			12 Months Ended	3 Months Ended	12 Months Ended
	Jun. 30, 2010	May 31, 2010	Mar. 31, 2014 Warrants 2010 [Member] Earned and Exercisable [Member]	Mar. 31, 2014 Warrants 2010 [Member] Earned and Exercisable [Member] Weighted Average [Member]	Mar. 31, 2014 Warrants 2010 [Member]	Dec. 31, 2013 Warrants 2010 [Member]	Mar. 31, 2014 Warrants 2010 [Member] Weighted Average [Member]	Dec. 31, 2013 Warrants 2010 [Member] Weighted Average [Member]
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Non-Derivative Warrant Activities [Line Items]
Number of Warrant Shares (in Shares)	167,740	1,031,715				1,615,387
Exercise Price Per Share			$ 7.50	$ 7.50	$ 7.50	$ 7.50	$ 7.50	$ 7.5
Number of Warrant Shares (in Shares)	167,740	1,031,715	1,615,387		1,615,387
Exercise Price Per Share			$ 7.50	$ 7.50	$ 7.50	$ 7.50	$ 7.50	$ 7.5

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Note 6 - Inventories (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 Inventory Valuation and Obsolescence [Member]	Mar. 31, 2013 Inventory Valuation and Obsolescence [Member]	Mar. 31, 2014 Lower of Cost or Market [Member]
Note 6 - Inventories (Details) [Line Items]
Inventory Adjustments	$ 2,682,088	$ 2,291,915	$ 0	$ 0	$ 390,173
Inventory, Work in Process, Gross	$ 0	$ 0

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Note 3 - Pledged Deposits

3 Months Ended

Mar. 31, 2014

Transfers and Servicing [Abstract]

Transfers and Servicing of Financial Assets [Text Block]

Note 3 – Pledged Deposits

Pledged deposits consist of cash held in financial institutions for (a) outstanding letters of credit and (b) open banker’s acceptance notes payable maturing between three (3) to nine (9) months from the date of issuance, and (c) capital lease obligation.

Pledged deposits consisted of the following:

	March 31, 2014		December 31, 2013
Armco HK
Letters of credit (i)	$	7,962	$	5,993
Sub-total – Armco HK		7,962		5,993
Renewable Metals
Bank acceptance notes payable		-		1,636,072
Letters of credit (ii)		551,839		2,517,621
Deposit for capital lease obligation (iii)		486,760		490,823
Sub-total – Renewable Metals		1,038,599		4,644,516
Henan Armco
Letters of credit (iv)		311		2,113
Sub-total – Henan Armco		311		2,113
	$	1,046,872	$	4,652,222

(i) $7,962 is to be released to the Company for payment towards fulfilled letters of credit when those letters of credit mature on April 15, 2014

(ii) $551,839 is to be released to the Company for payment towards fulfilled letters of credit when those letters of credit mature on April 8, 2014

(iii) $486,760 is to be released to the Company as part of the payment towards capital lease installment payment when the capital lease agreement matures on December 15, 2014.

(iv) $311 is to be released to the Company on April 30, 2014

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Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Outstanding and Exercisable Warrants (USD $)						3 Months Ended
	Jan. 31, 2013	Jan. 28, 2013	Dec. 31, 2012	May 31, 2010	Jan. 30, 2009	Mar. 31, 2014 Exercise Price $0.50 - $7.50 [Member] Warrant [Member]	Mar. 31, 2014 Exercise Price $0.50 - $7.50 [Member] Minimum [Member]	Mar. 31, 2014 Exercise Price $0.50 - $7.50 [Member] Maximum [Member]	Mar. 31, 2014 Warrant [Member]	Mar. 31, 2014 Minimum [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price - Lower							$ 0.50			$ 7.50
Warrants Outstanding, Number								$ 7.50
Warrants Outstanding, Number Outstanding (in Shares)			1,218,021			1,615,387			1,615,387
Warrants Outstanding, Average Remaining Contractual Life						1 year 18 days			1 year 18 days
Warrants Exercisable, Weighted Average Exercise Price (in Dollars per Share)	5.00	0.50		5.00	5.00	7.5			7.50
Warrants Exercisable, Number (in Shares)						1,615,387			1,615,387
Warrants Exercisable, Average Remaining Contractual Life						1 year 18 days			1 year 18 days
Warrants Exercisable, Weighted Average Exercise Price						$ 7.5			$ 7.50

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Note 3 - Pledged Deposits (Details) - Pledged Deposits (USD $)	Apr. 08, 2014	Mar. 31, 2014		Dec. 31, 2013
Financial Instruments Owned and Pledged as Collateral [Line Items]
Total		$ 1,046,872		$ 4,652,222
Armco HK [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Letters of credit		7,962	[1]	5,993	[1]
Total		7,962		5,993
Renewable Metals [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Letters of credit		551,839	[2]	2,517,621	[2]
Deposit for capital lease obligation (iii)	486,760	486,760	[3]	490,823	[3]
Total		1,038,599		4,644,516
Bank acceptance notes payable				1,636,072
Henan Armco [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Letters of credit		311	[4]	2,113	[4]
Total		$ 311		$ 2,113

[1] $7,962 is to be released to the Company for payment towards fulfilled letters of credit when those letters of credit mature on April 15, 2014

[2] $551,839 is to be released to the Company for payment towards fulfilled letters of credit when those letters of credit mature on April 8, 2014

[3] $486,760 is to be released to the Company as part of the payment towards capital lease installment payment when the capital lease agreement matures on December 15, 2014.

[4] $311 is to be released to the Company on April 30, 2014

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Note 7 - Loans and Convertible Note Payable (Tables)

3 Months Ended

Mar. 31, 2014

Loans Payable [Abstract]

Loans Payable [Table Text Block]

	March 31, 2014		December 31, 2013
Armco HK
Loan payable to RZB Austria Finance (Hong Kong) Limited, collateralized by certain of the Company’s inventory, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at the bank’s cost of funds plus 200 basis points per annum, with principal and interest due April 1, 2014 and repaid in full as of filing date	$	359,303	$	504,248
Loan payables to DBS, collateralized by certain of the Company’s inventory, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at an average of 3.47% per annum, balance is due April 1, 2014 and repaid in full as of filing date		13,342		2,602,115
Sub-total - Armco HK		372,645		3,106,363
Renewable Metals
Loan payable to Bank of Communications, Lianyungang Branch, under trade credit facilities, collateralized by Renewable Metals inventories and guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at 120% of the bank’s benchmark rate per annum (average 7.2%), balance due June 2, 2014		324,507		1,963,286
Loan payable to Bank of China, Lianyungang Branch, under trade credit facilities, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at 6.6% per annum payable monthly, balance due from April 12, 2014 through September 25, 2014		8,112,669		8,180,361
Loan payable to Pudong Development Bank, Lianyungang Branch, under trade credit facilities, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at 7.92% per annum payable monthly, balance due March 27, 2015		1,622,534		-
Short-term borrowing, with interest rate at 8% per annum		64,901		229,050
Loan payable, with interest at 6% per annum and due July 21, 2014		3,474,388		3,503,379
Sub-total – Renewable Metals		13,598,999		13,876,076
Henan Armco
Loan Payable to ICBC, with interest at 2.47% per annum, and repaid in full on March 28, 2014		-		2,755,926
Loan Payable to Guanhutun Credit Union, collateralized by Henan’s building and leasehold improvement, with interest at 9.6% per annum, balance due March 16, 2015		162,253		163,607
Loans payable, with interest at 8% per annum, and due in 2014. The creditors agreed to exchange $5,319,351 into convertible notes in January and February, 2014		-		5,999,957
Short-term borrowing, no interest bearing and due upon demand		2,856,471		-
Sub-total – Henan Armco		3,018,724		8,919,490
Armco Metals Holdings
Loans payable, with interest at 8% per annum, due from April 21, 2014 through May 8, 2014		790,000		1,050,000
Convertible notes payable, net of discount, with interest at 4-8% per annum, maturing from June 25, 2014 through March 3, 2015 and $5,777,967 was converted into shares in April and May 2014.		4,731,488		463,709
Sub-total – Armco Metals Holdings		5,521,488		1,513,709
	$	22,511,856	$	27,415,638

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Note 6 - Inventories (Tables)

3 Months Ended

Mar. 31, 2014

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

	March 31, 2014			December 31, 2013
Raw materials – scrap metal	$	3,758,273		$	4,390,811
Finished goods – processed scrap metal		15,465,390			12,421,088
Purchased merchandise for resale		245,583			5,936,936
Write - down of inventories		(2,682,088	)		(2,291,915	)
	$	16,787,158		$	20,456,920

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Note 10 - Capital Lease Obligation (Details) - Capital Lease Obligation (Parentheticals) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Capital Leased Assets [Line Items]
Interest Rate		8.00%
Machinery and Equipment [Member]
Capital Leased Assets [Line Items]
Interest Rate	11.00%	11.00%
Principal and Interest	$ 497,897	$ 497,897
Other Machinery and Equipment [Member]
Capital Leased Assets [Line Items]
Interest Rate	11.00%	11.00%
Principal and Interest	$ 3,609,102	$ 3,609,102

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Note 4 - Marketable Equity Securities, Available for Sale (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Note 4 - Marketable Equity Securities, Available for Sale (Details) [Line Items]
Available-for-sale Securities	$ 3,396,658	$ 3,396,658
Available-for-sale Securities, Change in Net Unrealized Holding Gain (Loss), Net of Tax	(21,938)
Estimate of Fair Value Measurement [Member]
Note 4 - Marketable Equity Securities, Available for Sale (Details) [Line Items]
Available-for-sale Securities	$ 541,067

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Note 8 - Banker's Acceptance Notes Payable and Letters of Credit (Tables)

3 Months Ended

Mar. 31, 2014

Disclosure Text Block [Abstract]

Schedule of Short-term Debt [Table Text Block]

	March 31, 2014		December 31, 2013
Renewable Metals
Banker’s acceptance notes payable matured on March 27, 2014	$	-	$	3,272,144
Letters of credit matured on April 6, 2014		3,116,049		5,201,073
	$	3,116,049	$	8,473,217

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Note 9 - Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

Schedule of Related Party Transactions [Table Text Block]

	March 31, 2014		December 31, 2013
Keli Yao		147,501		116,828
Yi Chu		249,870		286,313
Total		397,371		403,141

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Note 2 - Significant and Critical Accounting Policies and Practices

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Note 2 - Significant and Critical Accounting Policies and Practices

Basis of Presentation - Unaudited Interim Financial Information

The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented.  Interim results are not necessarily indicative of the results for the full year.  These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2013 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2014.

Principles of Consolidation

The Company applies the guidance of Topic 810 “Consolidation” of the FASB Accounting Standards Codification to determine whether and how to consolidate another entity. Pursuant to ASC Paragraph 810-10-15-10 all majority-owned subsidiaries—all entities in which a parent has a controlling financial interest—shall be consolidated except (1) when control does not rest with the parent, the majority owner; (2) if the parent is a broker-dealer within the scope of Topic 940 and control is likely to be temporary; (3) consolidation by an investment company within the scope of Topic 946 of a non-investment-company investee. Pursuant to ASC Paragraph 810-10-15-8 the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree. The Company consolidates all less-than-majority-owned subsidiaries, if any, in which the parent’s power to control exists.

The Company's consolidated subsidiaries and/or entities as of March 31, 2014 are as follows:

Name of consolidated subsidiary or entity	State or other jurisdiction of incorporation or organization	Date of incorporation or formation (date of acquisition, if applicable)	Attributable interest
Armco Metal International Limited (“Armco HK”)	Hong Kong SAR	July 13, 2001	100%
Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”)	PRC	June 6, 2002	100%
Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”)	PRC	January 9, 2007	100%
Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”)	PRC	June 4, 2009	100%
Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”)	PRC	July 16, 2010	100%

The consolidated financial statements include all accounts of the Company and the consolidated subsidiaries and/or entities as of reporting period ending date(s) and for the reporting period(s) then ended.

All inter-company balances and transactions have been eliminated.

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) 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 revenues and expenses during the reporting period. Management makes its best estimate of the outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, pledged deposits, accounts receivable, advance on purchases, prepayments and other current assets, accounts payable, customer deposits, corporate income/VAT tax payable, accrued expenses and other current liabilities approximate their fair values because of the short maturity of these instruments.

The Company’s loans payable, banker’s acceptance notes payable, and capital lease obligation approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at March 31, 2014 and December 31, 2013.

The Company’s Level 3 financial liabilities consist of convertible notes with embedded conversion feature issued in September 2013, November 2013, and January through March 2014, for which there are no current market for these securities such that the determination of fair value requires significant judgment or estimation.  The Company valued the automatic conditional conversion, re-pricing/down-round, change of control; default and follow-on offering provisions using a lattice model, with the assistance of a valuation specialist, for which management understands the methodologies. These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

It is not, however, practical to determine the fair value of advances from significant stockholder and lease arrangement with the significant stockholder, if any, due to their related party nature.

Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis

Level 1 Financial Assets – Marketable Securities

The Company uses Level 1 of the fair value hierarchy to measure the fair value of the marketable securities and marks the available for sale marketable securities at fair value in the statement of financial position at each balance sheet date and reports the unrealized holding gains and losses for available-for-sale securities in other comprehensive income (loss) until realized provided the unrealized holding gains and losses is temporary. If the fair value of an investment is less than its cost basis at the balance sheet date of the reporting period for which impairment is assessed, and it is determined that the impairment is other than temporary, then an impairment loss is recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period.

Level 3 Financial Liabilities – Derivative Liabilities

The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liabilities at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable to the change in the fair value of the derivative liabilities.

The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as of March 31, 2014, and December 31, 2013:

Recurring Fair Value Measures	Level 1		Level 2		Level 3		Total
March 31, 2014
Derivative liability		-		-	$	1,367,535	$	1,367,535
Available-for-sale securities	$	541,067		-		-	$	541,067
December 31, 2013
Derivative liability		-		-	$	61,429	$	61,429
Available-for-sale securities	$	519,129		-		-	$	519,129

Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis

The Company’s non-financial assets include inventories. The Company identifies potentially excess and slow-moving inventories by evaluating turn rates, inventory levels and other factors. Excess quantities are identified through evaluation of inventory aging, review of inventory turns and historical sales experiences. The Company provides lower of cost or market reserves for such identified excess and slow-moving inventories. The Company establishes a reserve for inventory shrinkage, if any, based on the historical results of physical inventory cycle counts.

Foreign Currency Translation

The financial records of the Company's Chinese operating subsidiaries are maintained in their local currency, the Renminbi (“RMB”), which is the functional currency. Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial statements. Foreign currency translation gain (loss) resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the consolidated statement of stockholders’ equity.

RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. Commencing July 21, 2005, China adopted a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies. The exchange rate of the US dollar against the RMB was adjusted from approximately RMB 8.28 per U.S. dollar to approximately RMB 8.11 per U.S. dollar on July 21, 2005. Since then, the PBOC administers and regulates the exchange rate of the U.S. dollar against the RMB taking into account demand and supply of RMB, as well as domestic and foreign economic and financial conditions.

Unless otherwise noted, the rate presented below per U.S. $1.00 was the midpoint of the interbank rate as quoted by OANDA Corporation (www.oanda.com) contained in its consolidated financial statements. Management believes that the difference between RMB vs. U.S. dollar exchange rate quoted by the PBOC and RMB vs. U.S. dollar exchange rate reported by OANDA Corporation were immaterial. Translations do not imply that the RMB amounts actually represent, or have been or could be converted into, equivalent amounts in U.S. dollars. Translation of amounts from RMB into U.S. dollars has been made at the following exchange rates for the respective periods:

	March 31, 2014		December 31, 2013		March 31, 2013		December 31, 2012
Balance sheets		6.1632		6.1122		6.2741		6.3086
Statements of operations and comprehensive income (loss)		6.1178		6.1943		6.2814		6.3116

Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options, warrants and non-vested shares.

For the periods presented, the computation of diluted loss per share equaled basic loss per share as the inclusion of any dilutive instruments would have had an antidilutive effect on the earnings per share calculation in the periods presented.

Recently Issued Accounting Pronouncements

In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.” The ASU states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although “major” is not defined, the standard provides examples of when a disposal qualifies as a discontinued operation. The ASU also requires additional disclosures about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The ASU is effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years. The adoption of ASU 2014-08 is not expected to have a material impact on the Company’s consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the consolidated financial statements.

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Note 10 - Capital Lease Obligation (Tables)

3 Months Ended

Mar. 31, 2014

Leases, Capital [Abstract]

Schedule of Capital Leased Assets [Table Text Block]

	March 31, 2014			December 31, 2013
Renewable Metals
(i)Capital lease obligation to a financing company for a term of three (3) years, collateralized by certain of Renewable Metals’ machinery and equipment, with interest at 11.0% per annum, with principal and interest due and payable in monthly installments of RMB 497,897 on the 23rd of each month.	$	333,284		$	336,065
Less current maturities		(333,284	)		(336,065	)
Capital lease obligation, net of current maturities		-			-
(ii)Capital lease obligation to a financing company for a term of three (3) years, collateralized by certain of Renewable Metals’ machinery and equipment, with interest at 11.0% per annum, with principal and interest due and payable in quarterly installments of RMB3,609,102 on the 15th of each quarter.		564,217			568,925
Less current maturities		(564,217	)		(568,925	)
Capital lease obligation, net of current maturities		-			-
Total capital lease obligation		897,501			904,990
Less current maturities		(897,501	)		(904,990	)
TOTAL CAPITAL LEASE OBLIGATION, net of current maturities	$	-		$	-

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Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Fair Value of Financial Assets and Liabilities Recurring (USD $)	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 3,396,658	$ 3,396,658
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	541,067	519,129
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	1,367,535	61,429
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	1,367,535	61,429
Available-for-sale securities	541,067	519,129
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 541,067	$ 519,129

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Note 9 - Related Party Transactions (Details)				0 Months Ended	1 Months Ended					3 Months Ended
	Mar. 31, 2014 USD ($)	Dec. 31, 2013	Dec. 31, 2012 USD ($)	Jan. 01, 2006 Monthly Payment [Member] Operating Lease From Related Party [Member] CNY	Mar. 29, 2013 Notes Payable, Other Payables [Member] Chief Executive Officer [Member]	Mar. 31, 2014 Chairman, CEO and Significant Stockholders [Member] USD ($)	Mar. 31, 2013 Chairman, CEO and Significant Stockholders [Member] USD ($)	Mar. 29, 2013 Chief Executive Officer [Member] USD ($)	Mar. 29, 2013 Chief Executive Officer [Member] CNY	Mar. 31, 2014 Operating Lease From Related Party [Member] USD ($)	Mar. 31, 2014 Operating Lease From Related Party [Member] CNY	Mar. 31, 2013 Operating Lease From Related Party [Member] USD ($)	Mar. 31, 2013 Operating Lease From Related Party [Member] CNY	Jan. 01, 2006 Operating Lease From Related Party [Member] sqm
Note 9 - Related Party Transactions (Details) [Line Items]
Due to Related Parties	$ 397,371		$ 403,141			$ 755,805	$ 668,332
Notes Payable, Related Parties								1,000,000	6,300,000
Debt Instrument, Term					1 year
Debt Instrument, Interest Rate, Stated Percentage		8.00%			8.00%
Area of Land (in Square Meters)														176.37
Operating Leases, Rent Expense				10,000						$ 4,868	30,000	$ 4,843	30,000

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Note 16 - Subsequent Events (Details) (USD $)			0 Months Ended			1 Months Ended	0 Months Ended	1 Months Ended		0 Months Ended				0 Months Ended	1 Months Ended	0 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	May 14, 2014 Subsequent Event [Member] Hanover Holdings I, LLC [Member]	May 07, 2014 Subsequent Event [Member] Hanover Holdings I, LLC [Member]	Apr. 16, 2014 Subsequent Event [Member] Hanover Holdings I, LLC [Member]	Sep. 23, 2013 Subsequent Event [Member] Hanover Holdings I, LLC [Member]	Apr. 08, 2014 Subsequent Event [Member] Asher Enterprises, Inc [Member]	Mar. 28, 2014 Subsequent Event [Member] Asher Enterprises, Inc [Member]	Sep. 23, 2013 Subsequent Event [Member] Asher Enterprises, Inc [Member]	Apr. 07, 2014 Subsequent Event [Member] All Bright [Member]	Apr. 15, 2014 Subsequent Event [Member] Draco Resources [Member] Initial Acquisition Percentage [Member]	Apr. 15, 2014 Subsequent Event [Member] Draco Resources [Member]	Apr. 15, 2014 Subsequent Event [Member] Draco Resources [Member]	Apr. 08, 2014 Subsequent Event [Member]	Sep. 23, 2013 Subsequent Event [Member]	Nov. 08, 2013 Hanover Holdings I, LLC [Member]
Note 16 - Subsequent Events (Details) [Line Items]
Debt Conversion, Original Debt, Amount			$ 25,000	$ 25,000	$ 100,000		$ 73,500	$ 80,000						$ 5,554,467	$ 153,500
Debt Conversion, Converted Instrument, Shares Issued (in Shares)			109,923	105,756	374,425	3	363,635	355,082						17,521,978
Debt Instrument, Interest Rate, Stated Percentage		8.00%													8.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger						58.00%
Debt Instrument, Convertible, Threshold Consecutive Trading Days						10 years
Debt Instrument Convertible Period									180 days
Debt Instrument, Convertible, Conversion Price (in Dollars per share)		$ 0.317	$ 0.22814	$ 0.23902	$ 0.271150		$ 0
Interest Accrued on Convertible Note			77.78	277.78	1,525
Proceeds from Convertible Debt										500,000						300,000
Business Acquisition, Percentage of Voting Interests Acquired											100.00%	74.64%
Common Stock, Value, Issued	$ 33,770	$ 29,876											$ 51,615,000

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Consolidated Balance Sheets (Unaudited) (USD $)	Mar. 31, 2014	Dec. 31, 2013
CURRENT ASSETS:
Cash	$ 1,000,304	$ 596,557
Pledged deposits	1,046,872	4,652,222
Marketable securities	541,067	519,129
Accounts receivable, net	18,459,055	25,595,516
Inventories	16,787,158	20,456,920
Advance on purchases	749,387	733,285
Prepayments and other current assets	2,136,796	1,181,371
Total Current Assets	40,720,639	53,735,000
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment	44,491,820	44,856,611
Accumulated depreciation	(9,988,674)	(9,360,933)
PROPERTY, PLANT AND EQUIPMENT, net	34,503,146	35,495,678
LAND USE RIGHTS
Land use rights	6,626,488	6,681,779
Accumulated amortization	(443,587)	(416,478)
LAND USE RIGHTS, net	6,182,901	6,265,301
Total Assets	81,406,686	95,495,979
CURRENT LIABILITIES:
Loans payable	22,511,856	27,415,638
Banker's acceptance notes payable and letters of credit	3,116,049	8,473,217
Current maturities of capital lease obligation	897,501	904,990
Accounts payable	5,118,495	10,062,463
Due to related party	397,371	403,141
Customer deposits	2,821,930	649,488
Corporate income tax payable	820,036	822,207
Derivative liability	1,367,535	61,429
Value added tax and other taxes payable	1,831,056	2,202,331
Accrued expenses and other current liabilities	1,653,038	1,228,753
Total Current Liabilities	41,290,672	52,891,989
Total Liabilities	41,290,672	52,891,989
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $0.001 par value, 74,000,000 shares authorized, 33,770,176 and 29,876,327 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively	33,770	29,876
Additional paid-in capital	37,305,937	35,790,906
Retained earnings	(994,994)	2,625,287
Accumulated other comprehensive income (loss):
Change in unrealized gain on marketable securities	(672,574)	(694,512)
Foreign currency translation gain	4,443,875	4,852,433
Total Stockholders' Equity	40,116,014	42,603,990
Total Liabilities and Stockholders' Equity	81,406,686	95,495,979
Warrant [Member]
CURRENT LIABILITIES:
Derivative liability	1,367,535	61,429
Chairman and CEO [Member]
CURRENT LIABILITIES:
Advances received from Chairman and CEO	$ 755,805	$ 668,332

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Note 4 - Marketable Equity Securities, Available for Sale (Details) - Fair Value of Marketable Securities, Available for Sale (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Note 4 - Marketable Equity Securities, Available for Sale (Details) - Fair Value of Marketable Securities, Available for Sale [Line Items]
Balance, December 31, 2013	$ 3,396,658
Balance, December 31, 2013	4,852,433
Balance, December 31, 2013	(694,512)
Other comprehensive income (loss): Changes in unrealized loss	21,938	5,499
Balance, March 31, 2014	3,396,658
Balance, March 31, 2014	4,443,875
Balance, March 31, 2014	(672,574)
Fair Value, Inputs, Level 1 [Member]
Note 4 - Marketable Equity Securities, Available for Sale (Details) - Fair Value of Marketable Securities, Available for Sale [Line Items]
Balance, December 31, 2013	519,129
Balance, December 31, 2013	(2,366,941)
Balance, December 31, 2013	183,924
Balance, December 31, 2013	(694,512)
Other comprehensive income (loss): Changes in unrealized loss	21,938
Other comprehensive income (loss): Changes in unrealized loss	21,938
Balance, March 31, 2014	541,067
Balance, March 31, 2014	(2,366,941)
Balance, March 31, 2014	183,924
Balance, March 31, 2014	$ (672,574)

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Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (3,620,281)	$ (1,089,768)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation expense	706,766	706,402
Amortization expense	30,782	59,190
Change in fair value of derivative liability	(477,909)	(615,946)
Amortization of debt discount	494,593
Stock-based compensation	1,017,031	411,625
Write-down of inventories	390,173
Changes in operating assets and liabilities
Bank acceptance notes receivable		(1,115,698)
Accounts receivable	8,777,149	7,635,827
Inventories	3,136,203	(5,354,655)
Advance on purchases	269,806	(1,130,362)
Prepayments and other current assets	(1,080,644)	(1,113,145)
Accounts payable	(4,898,046)	3,468,335
Customer deposits	501,493	1,733,345
Taxes payable	(354,926)	(1,285,492)
Accrued expenses and other current liabilities	152,365	980,317
NET CASH PROVIDED BY OPERATING ACTIVITIES	5,044,555	3,289,975
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from release of pledged deposits	5,409,660	3,756,871
Payment made towards pledged deposits	(1,816,273)	(7,907,848)
Purchase of property, plant and equipment		(97,858)
NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES	3,593,387	(4,248,835)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans payable	6,082,898	9,503,386
Repayment of loans payable	(9,135,063)	(16,504,984)
Banker's acceptance notes payable	(5,326,288)	5,674,121
Repayment of capital lease obligation		(71,329)
Advances from (repayment to) Chairman and CEO	77,918	187,929
Advances from (repayment to) related party	78
Proceeds from related party loan		1,004,128
Proceeds from sales of common stock		1,621,356
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(8,300,997)	1,414,607
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(66,802)	(495,412)
NET CHANGE IN CASH	403,747	(39,665)
Cash at beginning of the period	596,557	1,367,171	1,367,171
Cash at end of the period	1,000,304	1,327,506	596,557
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Interest paid	175,553	729,372
Income tax paid		1,777
NON CASH FINANCING AND INVESTING ACTIVITIES:
Debt discount due to convertible features	1,901,282
Reclassification of derivative liability to additional paid-in capital	117,267
Change in fair value of marketable securities	21,938
Common shares issued for conversion of convertible notes and accrued interest	5,777,967		5,777,967
Short-term Debt [Member]
NON CASH FINANCING AND INVESTING ACTIVITIES:
Common shares issued for conversion of convertible notes and accrued interest	$ 384,627

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Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Summary of the Fair Value of the Remaining Derivative Warrant Liability (Fair Value, Inputs, Level 3 [Member], USD $)	9 Months Ended
	Sep. 30, 2013
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Summary of the Fair Value of the Remaining Derivative Warrant Liability [Line Items]
Balance	$ (306,708)
Purchases, issuances and settlements	(623,809)
Net income (loss)	930,517
Warrant [Member]
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Summary of the Fair Value of the Remaining Derivative Warrant Liability [Line Items]
Balance	(306,708)
Purchases, issuances and settlements	(623,809)
Net income (loss)	$ 930,517

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Note 13 - Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	October 5, 2010
Expected life (year)		5.00
Expected volatility		187.00	%
Risk-free interest rate		1.21	%
Expected annual rate of quarterly dividends		0.00	%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of Shares or Options			Fair Value at Date of Grant
Balance, December 31, 2012		4,198,881		$	2,614,951
Options – granted		-			-
Options – canceled		-			-
Shares – granted		1,419,532			662,256
Shares – canceled		(-	)		(-	)
Balance, December 31, 2013		5,618,413		$	3,277,207
Vested, December 31, 2013		5,101,746			3,023,732
Unvested, December 31, 2013		516,667		$	253,475
Options – granted		-			-
Options – canceled		-			-
Shares – granted		2,336,208			840,804
Shares – canceled		(-	)		(-	)
Balance, March 31, 2014		7,954,621		$	4,118,011
Vested, March 31, 2014		7,556,704			3,924,892
Unvested, March 31, 2014		397,917		$	193,119

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Note 12 - Commitments and Contingencies (Details) - Uncommitted Trade Credit Facilities (USD $)	3 Months Ended
	Mar. 31, 2014
Line of Credit Facility [Line Items]
Total Facilities	$ 84,487,279
Facilities Used	14,162,257
Facilities Available	70,325,023
Armco HK [Member] | DBS Hong Kong [Member]
Line of Credit Facility [Line Items]
Date of Expiration	Oct. 21, 2014	[1]
Total Facilities	20,000,000	[1]
Facilities Used	695,226	[1]
Facilities Available	19,304,774	[1]
Armco HK [Member]
Line of Credit Facility [Line Items]
Total Facilities	20,000,000
Facilities Used	695,226
Facilities Available	19,304,774
Henan Armco [Member] | Bank of China Lianyungang [Member]
Line of Credit Facility [Line Items]
Date of Expiration	May 23, 2014	[2]
Total Facilities	4,867,601	[2]
Facilities Used		[2]
Facilities Available	4,867,601	[2]
Henan Armco [Member] | China CITIC Bank [Member]
Line of Credit Facility [Line Items]
Date of Expiration	May 31, 2014	[3]
Total Facilities	6,490,135	[3]
Facilities Used		[3]
Facilities Available	6,490,135	[3]
Henan Armco [Member] | ICBC Bank [Member]
Line of Credit Facility [Line Items]
Date of Expiration	Sep. 09, 2014	[4]
Total Facilities	3,245,607	[4]
Facilities Used		[4]
Facilities Available	3,245,607	[4]
Henan Armco [Member] | Guangdong Development Bank [Member]
Line of Credit Facility [Line Items]
Date of Expiration	May 06, 2015	[5]
Total Facilities	12,655,763	[5]
Facilities Used		[5]
Facilities Available	12,665,763	[5]
Henan Armco [Member]
Line of Credit Facility [Line Items]
Total Facilities	27,258,566
Facilities Available	27,258,566
Renewable Metals [Member] | Bank of China Lianyungang [Member]
Line of Credit Facility [Line Items]
Date of Expiration	Dec. 27, 2015	[6]
Total Facilities	8,112,669	[6]
Facilities Used	8,112,669	[6]
Facilities Available		[6]
Renewable Metals [Member] | Shanghai Pudong Development Banks [Member]
Line of Credit Facility [Line Items]
Date of Expiration	Aug. 25, 2014	[7]
Total Facilities	2,433,801	[7]
Facilities Used	2,433,801	[7]
Facilities Available		[7]
Renewable Metals [Member] | Bank of Communications Lianyungang [Member]
Line of Credit Facility [Line Items]
Date of Expiration	Aug. 08, 2014	[8]
Total Facilities	11,682,243	[8]
Facilities Used	2,920,561	[8]
Facilities Available	8,761,683	[8]
Renewable Metals [Member]
Line of Credit Facility [Line Items]
Total Facilities	22,228,713
Facilities Used	13,467,031
Facilities Available	$ 8,761,683

[1] On December 21, 2011, Armco HK entered into a Banking Facilities Agreement with DBS Bank (Hong Kong) Limited of $20,000,000 for issuance of commercial letters of credit in connection with the Company's purchase of metal ore. The Company pays interest at LIBOR or DBS Bank's cost of funds plus 2.50% per annum on issued letters of credit in addition to an export bill collection commission equal to 12.5% of the first $50,000 and 6.25% of the balance and an opening commission of 25% on the first $50,000 and 6.25% of the balance for each issuance. Amounts advanced under this facility are repaid from the proceeds of the sale of metal ore. The lender may terminate the facility at anytime at its sole discretion. The facility is secured by the charge on cash deposit of the borrower, the borrower's restricted pledged deposit in the minimum amount of 3% of the letter of credit amount, the Company's letter of comfort and the guarantee of Mr. Yao.

[2] On June 8, 2013, Henan Armco obtained a RMB 30,000,000 (approximately $4.8 million) line of credit from Bank of China for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring May 23, 2014. The facility is secured by the guarantee provided by Renewable Metals and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore.

[3] On June 18, 2012, Henan Armco obtained a RMB 40,000,000 (approximately $6.5 million) line of credit from China Citic Bank, Zhengzhou Branch, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring one (1) year from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Yao, the Company's Chairman and Chief Executive Officer.

[4] On September 10, 2013, Henan Armco obtained a RMB 20,000,000 (approximately $3.2 million) line of credit from ICBC, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring one (1) year from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Yao.

[5] On September 19, 2012, Henan Armco obtained a RMB 78,000,000 (approximately $12.6 million) line of credit from Guangdong Development Bank Zhengzhou Branch for issuance of letters of credit to finance the purchase of metal ore. The Company pays interest at 120% of the applicable base rate for lending published by the People's Bank of China ("PBC") at the time the loan is made on issued letters of credit. The facility is secured by the guarantee provided by Mr. Yao and Renewable Metals jointly and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore.

[6] On March 15, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB50,000,000 (approximately $8.1 million) from Bank of China, Lianyungang Branch for the purchase of raw materials. The facility is expiring December 27, 2015 with interest at 7.872% per annum. The facility is secured by Renewable metals properties, machinery and equipment and land use rights, and guaranteed by Mr. Yao, Ms. Yi Chu, and Henan Armco, respectively.

[7] On July 24, 2012, Renewable Metals entered into a line of credit facility in the amount of RMB 15,000,000 (approximately $2.4 million) from Shanghai Pudong Development Bank for the purchase of raw materials. The term of the facility is 12 months with interest at 120% of the applicable base rate for lending published by the People's Bank of China ("PBOC") at the time the loan is drawn down per annum. The facility is secured by Armco machinery's land use right and guarantees provided by Mr. Yao and Ms. Yi Chu.

[8] On July 1, 2011, Renewable Metals obtained a RMB 72,000,000 (approximately $11.7 million) line of credit from Bank of Communications, Lianyungang Branch expiring two (2) years from the date of issuance, for issuance of letters of credit in connection with the purchase of scrap metal. The letters of credit require Renewable Metals to pledge cash deposit equal to 20% of the letter of credit for letters of credit at sight, or 30% for other domestic letters of credit and for extended domestic letters of credit, the collateral of inventory equal to 166% of the letter of credit. The facility is secured by Renewable Metals inventories and guarantee provided by Mr. Yao.

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Note 16 - Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 16 – Subsequent Events

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued.  The Management of the Company determined that there were certain reportable subsequent events to be disclosed as follows:

On April 8, 2014, the convertible note holders of an aggregate of $5,554,467 principal converted the principal and accrued unpaid interest due under those notes into an aggregate of 17,521,978 shares of the Company’s common stock.

On September 23, 2013, the Company issued a convertible promissory note to Asher Enterprises, Inc. in the amounts of $153,500 with annual interest rate of 8%.  The note is convertible at 58% of the average 3 lowest closing bid prices for the last 10 trading days after 180 days following the Date of Issuance. On March 28, 2014, $80,000 of principal under the note was converted to 355,082 shares of the Company’s common stock. On April 8, 2014, $73,500 of principal under the note was converted to 363,635 shares of the Company’s common stock and the remaining principal balance under the note is zero.

On April 16, 2014, the Company received a conversion notice from its convertible note holder, Hanover, to convert $100,000 principal of the note due March 3, 2015, along with $1,525 accrued interest, into a total of 374,425 shares of the Company's common stock, at a conversion price of $0.271150 per share. On May 7, 2014, the Company received a conversion notice from Hanover to convert $25,000 principal of the note due March 3, 2015, along with $277.78 accrued interest, into a total of $105,756 shares of the Company’s common stock, at a conversion price of $0.23902 per share. On May 14, 2014, the Company received a conversion notice from Hanover to convert $25,000 principal of the note due March 3, 2015, along with $77.78 accrued interest, into a total of $109,923 shares of the Company’s common stock, at a conversion price of $0.22814 per share.

On April 7, 2014, the Company entered into a Legal Services Agreement (“Legal Agreement”) with All Bright Law Office (“All Bright”), a PRC law firm located in Shanghai, China. Pursuant to the Legal Agreement, All Bright agreed to provide Chinese-law related legal counsel services from April 1, 2014 to March 31, 2015 in exchange for 500,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the All Bright.

On April 15, 2014, the Company entered into a Share Exchange Agreement (the “Agreement”) with Draco Resources, Inc., a California corporation ("Draco Resources") and its shareholders (the “Draco Resources Shareholders”).   Pursuant to the terms of the Agreement between the parties, the Company plans to acquire 100% of the issued and outstanding capital stock of Draco Resources in exchange for the Company's common stock valued at $51,615,000 based on the closing market price of its common stock on the exchange prior to the date of the Agreement (the "Purchase Price") and a Series C stock purchase warrant. The parties made customary representations and warranties and agreed to customary covenants in the Agreement. Upon the completion of the acquisition, the number of shares which Draco Resources Shareholders will receive from the Company represents approximately 74.64% of the issued and outstanding common stock of the Company. The closing of the acquisition is subject to approvals by the shareholders, the New York Stock Exchange and any applicable governmental regulatory agencies.

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Note 15 - Concentrations and Credit Risk (Tables)

3 Months Ended

Mar. 31, 2014

Risks and Uncertainties [Abstract]

Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]

	Net Sales for the Three Months Ended						Accounts Receivable at
	March 31, 2014			March 31, 2013			March 31, 2014			December 31, 2013
Customer A		-	%		54.6	%		32.4	%		33.8	%
Customer B		22.6	%		-	%		27.2	%		25.1	%
Customer C		-	%		-	%		-	%		18.3	%
Customer D		-	%		-	%		10.4	%		-	%
Customer E		-	%		-	%		19.6	%		-	%
Customer F		37.2	%		-	%		-	%		-	%
Customer G		12.3	%		-	%		-	%		-	%
Customer H		11.8	%		-	%		-	%		-	%
		83.9	%		54.6	%		89.6	%		77.2	%

Schedule of Vendor Purchase Concentrations [Table Text Block]

	Net Purchases for the Three Months Ended						Accounts Payable at
	March 31, 2014			March 31, 2013			March 31, 2014			December 31, 2013
Vendor A		38.4	%		82.6	%		40.2	%		86.0	%
Vendor B		37.0	%		-	%		25.8	%		-	%
		75.4	%		82.6	%		66.0	%		86.0	%

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Note 2 - Significant and Critical Accounting Policies and Practices (Tables)

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Schedule of Variable Interest Entities [Table Text Block]

Name of consolidated subsidiary or entity	State or other jurisdiction of incorporation or organization	Date of incorporation or formation (date of acquisition, if applicable)	Attributable interest
Armco Metal International Limited (“Armco HK”)	Hong Kong SAR	July 13, 2001	100%
Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”)	PRC	June 6, 2002	100%
Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”)	PRC	January 9, 2007	100%
Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”)	PRC	June 4, 2009	100%
Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”)	PRC	July 16, 2010	100%

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

Recurring Fair Value Measures	Level 1		Level 2		Level 3		Total
March 31, 2014
Derivative liability		-		-	$	1,367,535	$	1,367,535
Available-for-sale securities	$	541,067		-		-	$	541,067
December 31, 2013
Derivative liability		-		-	$	61,429	$	61,429
Available-for-sale securities	$	519,129		-		-	$	519,129

Schedule of Foreign Exchange Contracts, Statement of Financial Position [Table Text Block]

	March 31, 2014		December 31, 2013		March 31, 2013		December 31, 2012
Balance sheets		6.1632		6.1122		6.2741		6.3086
Statements of operations and comprehensive income (loss)		6.1178		6.1943		6.2814		6.3116

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Note 13 - Stockholders' Equity (Details) - Amended and Restated 2009 Stock Incentive Plan Activities (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Amended and Restated 2009 Stock Incentive Plan Activities [Abstract]
Number of Shares or Options	5,618,413	4,198,881
Fair Value at Date of Grant	$ 3,277,207	$ 2,614,951
Number of Shares or Options	7,556,704	5,101,746
Fair Value at Date of Grant	3,924,892	3,023,732
Number of Shares or Options	397,917	516,667
Fair Value at Date of Grant	193,119	253,475
Number of Shares or Options	2,336,208	1,419,532
Fair Value at Date of Grant	840,804	662,256
Number of Shares or Options	7,954,621	5,618,413
Fair Value at Date of Grant	$ 4,118,011	$ 3,277,207

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Note 1 - Organization and Operations

3 Months Ended

Mar. 31, 2014

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1 – Organization and Operations

Armco Metals Holdings, Inc. (formerly China Armco Metals, Inc. and Cox Distributing, Inc.)

Cox Distributing was founded as an unincorporated business in January 1984 and was incorporated as Cox Distributing, Inc. (“Cox Distributing”), a C corporation under the laws of the State of Nevada on April 6, 2007 at which time 9,100,000 shares of common stock were issued to the founder in exchange for the existing unincorporated business. No value was given to the stock issued by the newly formed corporation.  Therefore, the shares were recorded to reflect the $.001 par value and paid in capital was recorded as a negative amount ($9,100).

On June 27, 2008, Cox Distributing amended its Articles of Incorporation, and changed its name to China Armco Metals, Inc. (“Armco Metals” ) upon the acquisition of Armco Metals International Limited (formerly “Armco & Metawise (H.K) Limited” or “Armco HK”) and Subsidiaries to better identify the Company with the business conducted, through its wholly owned subsidiaries in China, import, export and distribution of ferrous and non-ferrous ores and metals, and processing and distribution of scrap steel.

On July 3, 2013, the Company changed its name from “China Armco Metals, Inc.” to “Armco Metals Holdings, Inc.”(“Armco Metals Holdings” or the “Company”).

Armco Metals International Limited (formerly Armco & Metawise (H.K) Limited) and Subsidiaries

Armco Metals International Limited (formerly Armco & Metawise (H.K) Limited)

Armco & Metawise (H.K) Limited was incorporated on July 13, 2001 under the laws of the Hong Kong Special Administrative Region (“HK SAR”) of the People’s Republic of China (“PRC”). Armco HK engages in the import, export and distribution of ferrous and non-ferrous ore and metals.

On March 22, 2011, Armco & Metawise (H.K) Limited amended its Memorandum and Articles of Association, and changed its name to Armco Metals International Limited (“Armco HK”).

Formation of Henan Armco and Metawise Trading Co., Ltd.

Henan Armco and Metawise Trading Co., Ltd. (“Henan”) was incorporated on June 6, 2002 in the City of Zhengzhou, Henan Province, PRC. Henan engages in the import, export and distribution of ferrous and non-ferrous ores and metals.

Formation of Armco (Lianyungang) Renewable Metals, Inc.

On January 9, 2007, Armco HK formed Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”), a wholly-owned foreign enterprise (“WOFE”) subsidiary in the City of Lianyungang, Jiangsu Province, PRC. Renewable Metals engages in the processing and distribution of scrap metal.

On December 1, 2008, Armco HK transferred its 100% equity interest in Renewable Metals to Armco Metals.

Merger of Henan with Renewable Metals, Companies under Common Control

On December 28, 2007, Armco HK entered into a Share Transfer Agreement with Renewable Metals, whereby Armco HK transferred to Renewable Metals all of its equity interest in Henan, a company under common control of Armco HK.

The acquisition of Henan has been recorded on the purchase method of accounting at historical amounts as Renewable Metals and Henan were under common control since June 2002. The consolidated financial statements have been presented as if the acquisition of Henan had occurred as of the first date of the first period presented.

Acquisition of Armco Metal International Limited and Subsidiaries (“Armco HK”)Recognized as a Reverse Acquisition

On June 27, 2008, the Company entered into and consummated a share purchase agreement (the “Share Purchase Agreement”) with Armco HK and Feng Gao, who owned 100% of the issued and outstanding shares of Armco HK. In connection with the consummation of the Share Purchase Agreement, (i) Stephen Cox surrendered 7,694,000 common shares, representing his controlling interest in the Company for cancellation and resigned as an officer and director; (ii) the Company purchased from the Armco HK Shareholder 100% of the issued and outstanding shares of Armco HK’s capital stock for $6,890,000 by delivery of the Company’s purchase money promissory note; (iii) issued to Ms. Gao (a) a stock option entitling Ms. Gao to purchase 5,300,000 shares of the Company’s common stock, par value $.001 per share (the “Common Stock”) with an exercise price of $1.30 per share expiring on December 31, 2008 and (b) a stock option entitling Ms. Gao to purchase 2,000,000 shares of the Company’s common stock with an exercise price of $5.00 per share expiring two (2) years from the date of issuance on June 27, 2010 (the “Gao Options”). On August 12, 2008, Ms. Gao exercised her option to purchase and the Company issued 5,300,000 shares of its common stock in exchange for the $6,890,000 note owed to Ms. Gao. The shares issued represented approximately 69.7% of the issued and outstanding common stock immediately after the consummation of the Share Purchase and exercise of the option to purchase 5,300,000 shares of the Company’s common stock at $1.30 per share.

As a result of the controlling financial interest of the former stockholder of Armco HK, for financial statement reporting purposes, the merger between the Company and Armco HK has been treated as a reverse acquisition with Armco HK deemed the accounting acquirer and the Company deemed the accounting acquiree under the acquisition method of accounting in accordance with section 805-10-55 of the FASB Accounting Standards Codification. The reverse acquisition is deemed a capital transaction and the net assets of Armco HK (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the acquisition. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of Armco HK which are recorded at their historical cost. The equity of the Company is the historical equity of Armco HK retroactively restated to reflect the number of shares issued by the Company in the transaction.

Formation of Armco (Lianyungang) Holdings, Inc.

On June 4, 2009, the Company formed Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”), a WOFE subsidiary in the City of Lianyungang, Jiangsu Province, PRC. Lianyungang Armco intends to engage in marketing and distribution of the recycled scrap steel.

Formation of Armco Metals (Shanghai) Holdings, Ltd.

On July 16, 2010, the Company formed Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”) as a WOFE subsidiary in Shanghai, China. Armco Shanghai serves as the headquarters for the Company’s China operations and oversees the activities of the Company in financing and international trading.

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Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Preferred stock par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	74,000,000	74,000,000
Common stock, shares issued	33,770,176	29,876,327
Common stock, shares outstanding	33,770,176	29,876,327

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Note 11 - Derivative Instruments and the Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2014

Disclosure Text Block [Abstract]

Derivatives and Fair Value [Text Block]

Note 11 – Derivative Instruments and the Fair Value of Financial Instruments

(i)     Warrants Issued in 2008 (“2008 Warrants)

Description of Warrants and Fair Value on Date of Grant

In connection with the four (4) rounds of private placements from July 25, 2008 through August 8, 2008 (the “2008 Unit Offering”), the Company issued (i) warrants to purchase 2,486,649 common shares of the Company to the investors and (ii) warrants to purchase 242,264 common shares of the Company to the brokers, or 2,728,913 common shares in aggregate (“2008 Warrants”) with an exercise price of $5.00 per share expiring on August 31, 2013, all of which have been earned upon issuance.

The Company estimated the fair value of 2008 warrants on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	July 25, 2008 through August 8, 2008
Expected life (year)		5.00
Expected volatility (*)		89.00	%
Risk-free interest rate		3.23	%
Expected annual rate of quarterly dividends		0.00	%

* Expected volatility is based on historical volatility of the Company’s common stock. The Company currently has no reason to believe future volatility over the expected life of these warrants is likely to differ materially from its historical volatility. The risk-free interest rate is based on a yield curve of U.S. treasury interest rates on the date of grant based on the expected term of the warrant. Expected annual rate of quarterly dividends is based on the Company’s dividend history and anticipated dividend policy.

The relative fair value of 2008 warrants, estimated on the date of grant, was $5,097,404, which was originally recorded as additional paid-in capital and the remaining balance of the net proceeds of $1,523,277 has been assigned to common stock.

Amendment No. 1 to the Subscription Agreement and Common Stock Purchase Warrant

In May, 2010 (the “Closing Date”), effective as of January 1, 2010, Armco Metals Holdings, Inc. ( the “Company”) (the “Company”) entered into an amendment (the “First Amendment”) to that certain Subscription Agreement and Common Stock Purchase Warrant (the “Original Agreements”) dated July 2008. Pursuant to the Original Agreements, the Company offered (the “Offering”) and issued securities to 82 investors for an aggregate purchase price of $6,896,229.

Pursuant to the First Amendment 34 investors (the “First Amendment Investors”) with warrants to purchase 1,031,715 shares of the Company’s common stock waived certain rights under, Section 6.6 Adjustment for Certain Transactions, of the Common Stock Purchase Warrant, and Section 12(b) Most Favored Nation Provision, of the Subscription Agreement, in exchange for certain covenants that so long as any Warrants are outstanding other than Excepted Issuances that it will not enter into an agreement to issue nor issue any shares of Common Stock or Common Stock Equivalents to any Third Party Purchasers at an effective price per share of less than $5.00 without the prior written consent of the Investor, which consent may be withheld for any reason.

The waiver of the anti-dilution or commonly known as a most favored nation clause made those warrants no longer derivative instruments, accordingly the Company reclassified $1,292,227 of the derivative liability to additional paid-in capital.

Amendment No. 2 to the Subscription Agreement and Common Stock Purchase Warrant

On January 11, 2013 (the “Closing Date”), China Armco Metals, Inc. (the “Company”) entered into a second amendment (the “Second Amendment”) to that certain Subscription Agreement and Common Stock Purchase Warrant (the “Original Agreements”) dated July 2008, as amended by certain Amendment No. 1 to the Original Agreements dated May 2010 (“First Amendment”). Pursuant to the Original Agreements, the Company offered (the “Offering”) and issued securities to 82 investors for an aggregate purchase price of $6,896,229.

This Second Amendment amended (i) the First Amendment to eliminate the Future Financing Restrictions, (ii) the Warrant to reinstate Section 6.6, Adjustment for Certain Transaction, and (iii) the Subscription Agreement to reinstate Section 12(b), Most Favored Nation Provision.

The Second Amendment provides that it shall only be effective upon execution of this Second Amendment by each of the investors that executed the First Amendment. At January 8, 2013, three (3) days prior to the Closing Date, after an exhaustive search and numerous attempts to reach all holders that signed the first amendment, all the First Amendment Investors that executed the First Amendment signed the Second Amendment except two (2) investors from whom the Company has been unable to reach or receive responses. These two (2) investors invested a total amount of $400,000. On January 8, 2013, the Company transmitted emails to all of the First Amendment Investors to notify them of the foregoing circumstance and conveyed to them the Company’s intent to declare the Second Amendment effective despite the absence of executions by the two (2) remaining investors. A two-day objection period was afforded to all the First Amendment Investors (including the two (2) unsigned investors) in such emails. As of January 10, 2013, the Company has received no indication from any of the First Amendment Investors that object to effectiveness of the Second Amendment, and no indications from the two unsigned investors that they will not sign the Second Amendment. Accordingly, on the Closing Date the Company declared the Second Amendment effective with respect to all the signed investors.

Amendment to the Common Stock Purchase Warrant in Connection with January 28, 2013 Security Offering

On January 28, 2013, the Company completed a public registered direct offering of an aggregate of 3,242,712 shares of the Company’s Common Stock, at a purchase price of $0.50 per share (the “January 2013 Offering”).

Pursuant to Section 12 of the Subscription Agreement and Section 6 of the Warrant, as a result of the January 2013 Offering, the Investor is now entitled to adjustments to the terms of the Warrant consisting of the followings:

(a) a lowered exercise price of $0.50 per share instead of $5.00 per share with respect to the unexercised and outstanding portion of the Warrant; and

(b) increased number of Warrant Shares, which shall cause (i)(x) the total number of new Warrant Shares pursuant to the unexercised and outstanding portion of the Warrant following such adjustment, multiplied by (y) the adjusted Exercise Price per share, to equal the dollar amount of (ii)(x) the total number of old Warrant Shares pursuant to the unexercised and outstanding portion of the Warrant before adjustment, multiplied by (y) the total Exercise Price before adjustment, i.e. 10 times of the unexercised and outstanding portion of the Warrant prior to such adjustment.

The Company reclassified warrants to purchase 1,031,715 common shares from non-derivative to derivative and related fair value at January 11, 2013 from additional paid-in capital to derivative liability to reflect the re-instatement of the derivative feature of these warrants.

Derivative Analysis

The exercise price of 2008 warrants and the number of shares issuable upon exercise is subject to reset adjustment in the event of stock splits, stock dividends, recapitalization, most favored nation clause and similar corporate events. Pursuant to the most favored nation provision of the 2008 Unit Offering, if the Company issues any common stock or securities other than the excepted issuances, to any person or entity at a purchase or exercise price per share less than the share purchase price of the 2008 Unit Offering without the consent of the subscriber holding purchased shares, warrants or warrant shares of the 2008 Unit Offering, then the subscriber shall have the right to apply the lowest such purchase price or exercise price of the offering or sale of such new securities to the purchase price of the purchased shares then held by the subscriber (and, if necessary, the Company will issue additional shares), the reset adjustments are also referred to as full reset adjustments.

Because these warrants have full reset adjustments tied to future issuances of equity securities by the Company, they are subject to derivative liability treatment under Section 815-40-15 of the FASB Accounting Standard Codification (“Section 815-40-15”) (formerly FASB Emerging Issues Task Force (“EITF”) Issue No. 07-5: Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock (“EITF 07-5”))). Section 815-40-15 became effective for the Company on January 1, 2009 and as of that date the Warrants issued in the 2008 Unit Offering have been measured at fair value using a lattice model at each reporting period with gains and losses from the change in fair value of derivative liabilities recognized on the consolidated statement of income and comprehensive income.

Valuation of Derivative Liability

(a) Valuation Methodology

The Company’s 2008 warrants do not trade in an active securities market, as such, the Company developed a lattice model that values the derivative liability of the warrants based on a probability weighted discounted cash flow model. This model is based on future projections of the various potential outcomes. The features that were analyzed and incorporated into the model included the exercise feature and the full ratchet reset.

Based on these features, there are two primary events that can occur; the Holder exercises the Warrants or the Warrants are held to expiration. The model analyzed the underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e. stock price, exercise price, volatility, etc.). Projections were then made on these underlying factors which led to a set of potential scenarios. As the result of the large Warrant overhang we accounted for the dilution affects, volatility and market cap to adjust the projections.

Probabilities were assigned to each of these scenarios based on management projections. This led to a cash flow projection and a probability associated with that cash flow. A discounted weighted average cash flow over the various scenarios was completed to determine the value of the derivative warrant liability.

(b) Valuation Assumptions

The Company’s 2008 derivative warrants were valued at each period ending date with the following assumptions:

● The underlying stock price was used as the fair value of the common stock on period end date;

● The stock price would fluctuate with the CNAM projected volatility. The projected volatility curve for each valuation period was based on the historical volatility of 14 comparable companies in the metal/industrial metals industries;

● The Holder would exercise the warrant at maturity if the stock price was above the exercise price;

● Reset events projected to occur are based on no future projected capital needs;

● The Holder would exercise the warrant as they become exercisable at target prices of $7.50 for the 2008 Offering, and lowering such target as the warrants approached maturity;

● The probability weighted cash flows are discounted using the risk free interest rates.

● The risk-free interest rate is based on a yield curve of U.S treasury interest rates on the date of valuation based on the contractual life of the warrants

● Expected annual rate of quarterly dividends is based on the Company’s dividend history and anticipated dividend policy.

(c) Fair Value of Derivative Warrants

The fair value of the 2008 derivative warrants were computed using the lattice model with the following assumptions:

	September 30, 2014
Expected life (year)		0.08
Expected volatility		57.00	%
Risk-free interest rate		0.02	%
Expected annual rate of quarterly dividends		0.00	%

The fair value of the embedded derivative warrants is marked-to-market at each balance sheet date and the change in the fair value of the embedded derivative warrants is recorded in the consolidated statements of operations and comprehensive income (loss) as other income or expense.

As of September 30, 2013, 2008 warrants were expired and the Company wrote off the derivative warrants liability of $10,179 to the consolidated statements of operations and comprehensive income (loss) as other income.

The table below provides a summary of the fair value of the remaining derivative warrant liability and the changes in the fair value of the remaining derivative warrants to purchase 12,180,210 shares of the Company’s common stock, including net transfers in and/or out, of derivative warrants measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

	Fair Value Measurement Using Level 3 Inputs
	Derivative warrants Assets (Liabilities)			Total
Balance, December 31, 2012		(306,708	)		(306,708	)
Purchases, issuances and settlements		(623,809	)		(623,809	)
Transfers in and/or out of Level 3		-			-
Total gains or losses (realized/unrealized) included in:
Net income (loss)		930,517			930,517
Other comprehensive income (loss)		-			-
Balance, September 30, 2013	$	-		$	-

Exercise and Extinguishment of Warrants

On January 30, 2009, the Company issued 5,000 shares of its common stock for cash at $5.00 per share and received a cash payment of $25,000 in connection with the exercise of the 2008 warrants for 5,000 shares with an exercise price of $5.00 per share by one (1) investor and 2008 warrants holder.

During the three months ended March 31, 2010, the Company issued 1,324,346 shares of its common stock for cash at $5.00 per share and received cash of $6,621,730 in connection with the exercise of the warrants to purchase 1,324,346 shares with an exercise price of $5.00 per share to fifty (50) of the 2008 warrant holders. In addition, the Company issued 78,217 shares of its common stock in connection with the exercise of the 2008 warrants to purchase 167,740 shares with an exercise price of $5.00 per share on a cashless basis to thirteen (13) of the 2008 warrant holders. The Company reclassified $1,665,011 and $210,095 of the derivative liability to additional paid-in capital, respectively.

During April 2010, four (4) of the 2008 warrant holders exercised their warrants to purchase 13,806 shares of the Company’s common stock at an exercise price of $5.00 per share resulting in cash proceeds of $69,030 to the Company, for which the Company issued 13,806 shares of its common stock to the 2008 warrant holders and reclassified $21,229 of the derivative liability to additional paid-in capital.

2008 Warrants Outstanding

As of September 30, 2013, all of 2008 warrants to purchase 12,180,210 shares of Company’s common stock were expired.

The table below summarizes the Company’s 2008 derivative warrant activity.

	2008 Warrant Activities											APIC		(Gain) Loss
	Derivative Shares		Non-derivative Shares			Total Warrant Shares			Fair Value of Derivative Warrants			Reclassification of Derivative Liability		Change in Fair Value of Derivative Liability
Derivative warrant at December 31, 2012		186,306		1,031,715			1,218,021			(306,708	)				306,505
Reclassification of warrants to purchase 1,031,715 common shares from additional paid-in capital to derivative liability at January 11, 2013 to reflect the re-instatement of the derivative feature		1,031,715		(1,031,715	)		(-	)		(623,809	)		623,809		(-	)
Increased number of warrant shares per Amendment No. 2 to the Subscription Agreement and Common Stock Purchase Warrant ("2008 Unit Offering Agreement") dated July 2008 and Amendment No. 1 to 2008 Unit Offering Agreement upon completion of January 2013 Offering.		10,962,189		-			10,962,189			(-	)				-
Mark to market										930,517					930,517
Warrants expired		12,180,210					12,180,210			-					-
Derivative warrant at September 30, 2013		-		-			-			-					-

(ii)     Warrants Issued in April 2010 (“2010 Warrants)

Description of Warrants

In connection with the sale of 1,538,464 shares of its common stock at $6.50 per share or $10,000,016 in gross proceeds to nine (9) accredited and institutional investors on April 20, 2010, the Company issued warrants to purchase an additional 1,538,464 shares of its common stock with an exercise price of $7.50 per share (“2010 Warrants”) expiring five (5) years from date of grant exercisable commencing 181 days following the date of issuance.  At the closing of the private offering, the Company paid Rodman & Renshaw, LLC, a FINRA member firm that served as placement agent for the Company in the offering, (i) a fee of $500,000 as compensation for their services and (ii) a warrant to purchase 76,923 shares of the Company’s common stock with an exercise price of $7.50 per share expiring five (5) years from date of grant exercisable commencing 181 days following the date of issuance, as well as a $15,000 non-accountable expense allowance to one of the nine (9) investors in the offering.

Warrants Valuation and Related Assumptions

The 2010 warrants were valued on the date of grant with the following assumptions:

● The underlying MYSE MKT stock price $6.95 was used as the fair value of the common stock on April 20, 2010;

● The stock price would fluctuate with the CNAM projected volatility. The projected volatility curve for each valuation period was based on the historical volatility of 14 comparable companies in the metal/industrial metals industries; At April 20, 2010 one (1) through five (5) years were 76%, 134%, 155%, 167% and 182%, respectively.

● The Holder would exercise the warrant at maturity if the stock price was above the exercise price;

● Reset events projected to occur are based on no future projected capital needs;

● The Holder would exercise the warrants as they become exercisable at target prices of $11.25 for the 2010 Offering, and lowering such target as the warrants approaches maturity;

● The probability weighted cash flows are discounted using the risk free interest rates.

● The risk-free interest rate is based on a yield curve of U.S treasury interest rates on the date of valuation based on the expected term of the warrants

● Expected annual rate of quarterly dividends is based on the Company’s dividend history and anticipated dividend policy.

The Company estimated the fair value of 2010 warrants on the date of grant using the lattice model with the Black-Scholes option-pricing model with the following weighted-average assumptions:

	April 20, 2010
Expected life (year)		5.00
Expected volatility		182.00	%
Risk-free interest rate		2.56	%
Expected annual rate of quarterly dividends		0.00	%

The fair value of the 2010 warrants, estimated on the date of issuance, was $2,483,938, which was recorded as additional paid-in capital and the remaining balance of the net proceeds of $6,629,036, net of issuance cost, has been assigned to common stock.

Derivative Analysis

The warrants issued as part of the April 20, 2010 private placement were analyzed to determine the appropriate treatment under ASC 815-40. The warrants meet the provisions of Section 815-40-15 of the FASB Accounting Standard Codification (“Section 815-40-15”) (formerly FASB Emerging Issues Task Force (“EITF”) Issue No. 07-5:Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock (“EITF 07-5”)) to be considered indexed to the Company’s own stock. In addition, the warrants meet all the criteria in Section 815-40-55 of the FASB Accounting Standard Codification (“Section 815-40-55”) (formerly FASB EITF Issue No. 00-19: Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock (“EITF 00-19”)) to be accounted for as equity.

2010 Warrants Outstanding

As of March 31, 2014, 2010 warrants to purchase 1,615,387 shares of its common stock remain outstanding.

The table below summarizes the Company’s 2010 non-derivative warrant activities through March 31, 2014:

	Number of Warrant Shares			Exercise Price Range Per Share		Weighted Average Exercise Price		Fair Value at Date of Issuance		Aggregate Intrinsic Value
Balance, December 31, 2013		1,615,387		$	7.50	$	7.5	$	-	$	-
Granted		-			-		-		-		-
Canceled for cashless exercise		(-	)		-		-		-		-
Exercised (Cashless)		(-	)		-		-		-		-
Exercised		(-	)		-		-		-		-
Expired		-			-		-		-		-
Balance, March 31, 2014		1,615,387		$	7.50	$	7.50	$	-	$	-
Earned and exercisable, March 31, 2014		1,615,387		$	7.50	$	7.50	$	-	$	-
Unvested, March 31, 2014		-		$	-	$	-	$	-	$	-

The following table summarizes information concerning outstanding and exercisable 2010 warrants as of March 31, 2014:

			Warrants Outstanding						Warrants Exercisable
Range of Exercise Prices			Number Outstanding		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price
$7.50				1,615,387		1.05	$	7.50		1,615,387		1.05	$	7.50
$0.50	-	$7.50		1,615,387		1.05	$	7.5		1,615,387		1.05	$	7.5

         (iii)       Convertible Notes  

On November 8, 2013, the Company signed a purchase agreement with Hanover Holdings I, LLC, a New York limited liability company, or Hanover, with an initial principal amount of $450,000, or the Initial Convertible Note (“Hanover Notes”), for a purchase price of $300,000. The outstanding principal of initial note is subject to filing date reduction and effective date reduction. Filing date reduction will reduce the outstanding principal of initial note by $50,000 if the Company files the S-1registration statement per the purchase agreement within 45 days of the note date. The Company failed to meet this filing date reduction term, and accordingly, the initial principal amount was not reduced by the $50,000. Effective date reduction will reduce the outstanding principal of the initial note by another $100,000 if the S-1 registration statement takes effective within 120 days of the note date. On December 26, 2013, the Company filed a S-1 registration statement pursuant to the purchase agreement which was effective on February 14, 2014. Thus, we successfully met the effective date reduction term. As a result, the principal amount of the note was reduced to $350,000 of which $50,000 was recorded as accrued liabilities as of December 31, 2013. Additionally, the Company has the right to require Hanover to purchase, on the 10th trading day after the effective date of the Registration Statement, or the Additional Closing Date, an additional senior convertible note with an initial principal amount of $500,000, or the Additional Convertible Note, for a purchase price of $500,000.  The Initial Convertible Note matures on November 8, 2014 (subject to extension as provided in the Initial Convertible Note) and accrues interest at the rate of 4.0% per annum. If issued, the Additional Convertible Note will mature on the date that is the one-year anniversary of the date of issuance of the Additional Convertible Note (subject to extension as provided in the Initial Convertible Note) and will accrue interest at the rate of 4.0% per annum. The Initial Convertible Note is convertible at any time, in whole or in part, at Hanover’s option, into shares of common stock, at a conversion price equal to the Variable Conversion Price. “Variable Conversion Price” means, as of any date of determination, the product of (A) the lowest volume weighted average price of the common stock of any of the five consecutive trading days ending and including the trading day immediately preceding such date of determination (subject to adjustment) , or the Variable Conversion Base Price; and (B) the applicable Variable Percentage. “Variable Percentage” means (i) if the applicable Variable Conversion Base Price is less than or equal to $0.45 (subject to adjustment), 85% or (ii) if the applicable Variable Conversion Base Price is greater than $0.45 (subject to adjustment), 80%. If issued, the Additional Convertible Note will be convertible at any time, in whole or in part, at Hanover’s option into shares of common stock at a conversion price that will be equal to the Variable Conversion Price.

On September 23, 2013 and December 10, 2013, the Company issued Notes (“Asher Notes”) to Asher Enterprises, Inc. (the “Holder”), which are convertible in 180 days (at which time they will require derivative treatment), in the amounts of $153,500 (1st tranche included no deferred financing cost or legal fees) and $63,000 (2nd tranche included no deferred financing cost or legal fees) (the “Convertible Note” or the “Note”). The 9/23/13 and 12/10/13 Asher Convertible Notes are convertible at 58% of the average 3 lowest closing bid prices for the last 10 trading days and contains a full ratchet reset. The holders have the right after 180 days following the Date of Issuance (on 3/22/14 the 9/23/13 note became convertible), and until any time until the Convertible Note is fully paid, to convert any outstanding and unpaid principal portion of the Convertible Note, and accrued interest, into fully paid and non-assessable shares of Common Stock. The Holder was not issued warrants with the Convertible Note. The Convertible Note: (a) bears interest at 8% per annum; (b) the principal and accrued interest is due and payable on 6/25/13 and 9/12/14; (c) is convertible optionally by the Holder at any time after 180 days; (d) bears 22% interest on default with a 150% payment penalty under specific default provisions; (e) redeemable at 115% through 140% for days 0-180; (f) and is subject to dilutive adjustments for share issuances (full ratchet reset feature). The embedded conversion feature in the Note should be accounted for as a derivative liability after 180 days (if not redeemed) due to the variable conversion provision based on guidance in FAS 133 and EITF 07-05.

On January 13, 2014, the Company issued convertible notes for a total of $2,472,127 to four foreign investors. The notes will mature on October 13, 2014. On February 4, 2014, the Company issued convertible notes for a total of $3,082,340 to another eleven foreign investors. The notes will mature on February 4, 2014. All these notes bear interest at 8% per annum, and convertible optionally by the holders at any time at a conversion price of $0.317. The derivative features of the Asher and Hanover Notes taint (due to the indeterminate number of shares) the convertible notes issued on January 13, and February 4, 2014. See more details in Note 7.

Conversions to Common Stock 

On February 27, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $25,000 plus interest of $4,628 of the note into 95,997 shares of the Company's common stock, at a conversion price of $0.308635 per share.

In March 2014, the Company issued a convertible note to Hanover in the amount of $500,000. The note bears interest at 4% per annum and matures on November 1, 2014.

On March 5, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $75,000 of the note due November 1, 2014 into 234,295 shares of the Company's common stock, at a conversion price of $0.32011 per share.

On March 14, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $50,000 of the note due November 1, 2014 into 155,085 shares of the Company's common stock, at a conversion price of $0.322405 per share.

On March 24, 2014, the Company received a conversion notice from its convertible notes holder, Hanover, to convert $50,000 of the note due November 1, 2014 into 145,351 shares of the Company's common stock, at a conversion price of $0.343995 per share.

On March 26, 2014, the Company received a conversion notice from its convertible note holder, Hanover, to convert $100,000 of the note due November 1, 2014 into 288,493 shares of the Company's common stock, at a conversion price of $0.34663 per share.

On March 28, 2014, $80,000 of principal under the Asher Note was converted to 355,082 shares of the Company’s common stock and the remaining principal balance under the note is $73,500.

Valuation Methodology 

The Company analyzed the conversion feature with the reset provisions within the Convertible Note and has utilized a third party valuation consultant to assist the Company to fair value the compound embedded derivatives using a multinomial lattice models that values the derivative liabilities within the convertible notes based on a probability weighted discount cash flow model.

Valuation Assumptions – Initial valuation, Conversion and Change in Fair Value of Derivative Liability Related to Convertible Notes 

The following assumptions were used for the valuation of the derivative liability related to March 3, 2014 (issuance date), conversions, and the quarterly period ended March 31, 2014:

● The underlying stock price was used as the fair value of the common stock;

● An event of default would occur 5% of the time, increasing 1.00% per month to a maximum of 10% – to-date the 1 note is not in default and has not been converted by the holder nor redeemed by the Company;

● Capital raising events of $1,000,000 would occur in each quarter at 75% of market generating dilutive reset events at prices below the current exercise price or stock price;

● The projected annual volatility for each valuation period was based on the historical volatility of the Company which has been actively trading for the last 3 years:

1 Year

2/27/14 101%

3/3/14 101%

3/5/14 101%

3/14/14 102%

3/24/14 102%

3/26/14 102%

3/31/14 102%

● The Holder would redeem through maturity based on availability of alternative financing, 10% of the time increasing 1.0% monthly to a maximum of 20%; and;

● The Holder would automatically convert the note at maturity if the registration was effective and the company was not in default.

As of March 31, 2014, the estimated fair value of derivative liabilities on convertible notes was $1,367,535.

The following table summarizes the change of fair value of the derivative debt liabilities:

Balance at December 31, 2012	$	-
To record derivative liability as debt discount		60,795
Change in fair value of derivative liability		634
Balance at December 31, 2013	$	61,429
To record derivative liability as debt discount		1,901,282
Change in fair value of derivative liability		(477,909	)
Settlement of derivative liability due to conversion of related notes	$	(117,267	)
Balance at March 31, 2014		1,367,535

XML

Document And Entity Information	3 Months Ended
	Mar. 31, 2014	May 16, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	Armco Metals Holdings, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		52,739,661
Amendment Flag	false
Entity Central Index Key	0001410711
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

XML

Note 12 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 12 – Commitments and Contingencies  

Litigation  

The Company and the directors are a party to a lawsuit filed on March 29, 2013 by Albert Perron in the District Court for Clark County, Nevada (Case No.: A-13-679151-C), which seeks a declaratory judgment, rescission, unspecified damages, equitable and injunctive relief, and attorney’s fees. The complaint alleges that the directors of the Company breached their fiduciary duties to the Company by exceeding their authority under the Company’s Amended and Restated 2009 Stock Incentive Plan, as further amended (the “Plan”), by issuing shares to Mr. Yao that exceeded that allowed under the Plan.

On August 12, 2013, the Company and certain directors filed an answer to the complaint denying all the allegations of wrongdoing. The case is currently in the discovery stage. The Company’s position is that the shares at issue in this matter granted to Mr. Yao were authorized under the Plan. The Company and the directors intend to vigorously defend this matter.

Uncommitted Trade Credit Facilities  

The Company entered into uncommitted trade credit facilities with certain financial institutions. Substantially all of the uncommitted trade credit facilities were guaranteed by Mr. Yao.

The uncommitted trade credit facilities at March 31, 2014 were as follows:

	Date of Expiration		Total Facilities			Facilities Used		Facilities Available
Armco HK
DBS (Hong Kong) Limited (i)	October 21, 2014		20,000,000			695,226		19,304,774
Sub-total - Armco HK			20,000,000			695,226		19,304,774
Henan Armco
Bank of China (ii)	May 23, 2014		4,867,601			-		4,867,601
China CITIC Bank (iii)	May 31, 2014		6,490,135			-		6,490,135
ICBC (iv)	September 09, 2014		3,245,607			-		3,245,607
Guangdong Development Bank Zhengzhou Branch (v)	May 6, 2015		12,655,763			-		12,665,763
Sub-total – Henan Armco			27,258,566			-		27,258,566
Renewable Metals
Bank of China Lianyungang Branch (vi)	December 27, 2015		8,112,669			8,112,669		-
Shanghai Pudong Development Bank (vii)	August 25, 2014		2,433,801			2,433,801		-
Bank of Communications Lianyungang Branch (viii)	August 8, 2014		11,682,243			2,920,561		8,761,683
Sub-total – Renewable Metals			22,228,713			13,467,031		8,761,683
		$	84,487,279		$	14,162,257	$	70,325,023
				%

(i) On December 21, 2011, Armco HK entered into a Banking Facilities Agreement with DBS Bank (Hong Kong) Limited of $20,000,000 for issuance of commercial letters of credit in connection with the Company’s purchase of metal ore.  The Company pays interest at LIBOR or DBS Bank’s cost of funds plus 2.50% per annum on issued letters of credit in addition to an export bill collection commission equal to 12.5% of the first $50,000 and 6.25% of the balance and an opening commission of 25% on the first $50,000 and 6.25% of the balance for each issuance.  Amounts advanced under this facility are repaid from the proceeds of the sale of metal ore.  The lender may terminate the facility at anytime at its sole discretion. The facility is secured by the charge on cash deposit of the borrower, the borrower’s restricted pledged deposit in the minimum amount of 3% of the letter of credit amount, the Company’s letter of comfort and the guarantee of Mr. Yao.

(ii) On June 8, 2013, Henan Armco obtained a RMB 30,000,000 (approximately $4.8 million) line of credit from Bank of China for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring May 23, 2014. The facility is secured by the guarantee provided by Renewable Metals and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore.

(iii) On June 18, 2012, Henan Armco obtained a RMB 40,000,000 (approximately $6.5 million) line of credit from China Citic Bank, Zhengzhou Branch, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring one (1) year from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Yao, the Company’s Chairman and Chief Executive Officer.

(iv) On September 10, 2013, Henan Armco obtained a RMB 20,000,000 (approximately $3.2 million) line of credit from ICBC, for issuance of letters of credit to finance the purchase of metal ore and scrap metal expiring one (1) year from the date of issuance. The facility is guaranteed by Renewable Metals and Mr. Yao.

(v) On September 19, 2012, Henan Armco obtained a RMB 78,000,000 (approximately $12.6 million) line of credit from Guangdong Development Bank Zhengzhou Branch for issuance of letters of credit to finance the purchase of metal ore.  The Company pays interest at 120% of the applicable base rate for lending published by the People’s Bank of China (“PBC”) at the time the loan is made on issued letters of credit.  The facility is secured by the guarantee provided by Mr. Yao and Renewable Metals jointly and the pledge of movable assets provided by the borrower. Amounts advanced under this line of credit are repaid from the proceeds of the sale of metal ore.

(vi) On March 15, 2013, Renewable Metals entered into a line of credit facility in the amount of RMB50,000,000 (approximately $8.1 million) from Bank of China, Lianyungang Branch for the purchase of raw materials. The facility is expiring December 27, 2015 with interest at 7.872% per annum. The facility is secured by Renewable metals properties, machinery and equipment and land use rights, and guaranteed by Mr. Yao, Ms. Yi Chu, and Henan Armco, respectively.

(vii) On July 24, 2012, Renewable Metals entered into a line of credit facility in the amount of RMB 15,000,000 (approximately $2.4 million) from Shanghai Pudong Development Bank for the purchase of raw materials. The term of the facility is 12 months with interest at 120% of the applicable base rate for lending published by the People’s Bank of China (“PBOC”) at the time the loan is drawn down per annum. The facility is secured by Armco machinery’s land use right and guarantees provided by Mr. Yao and Ms. Yi Chu.

(viii) On July 1, 2011, Renewable Metals obtained a RMB 72,000,000 (approximately $11.7 million) line of credit from Bank of Communications, Lianyungang Branch expiring two (2) years from the date of issuance, for issuance of letters of credit in connection with the purchase of scrap metal. The letters of credit require Renewable Metals to pledge cash deposit equal to 20% of the letter of credit for letters of credit at sight, or 30% for other domestic letters of credit and for extended domestic letters of credit, the collateral of inventory equal to 166% of the letter of credit. The facility is secured by Renewable Metals inventories and guarantee provided by Mr. Yao.

Employment with the Chairman and CEO

On February 8, 2012, the Company and Mr. Yao, entered into an Employment Agreement (the “Employment Agreement”), to employ Mr. Yao as the Company’s Chairman of the Board of Directors, President, and Chief Executive Officer. The initial term of employment under the agreement is from January 1, 2012 (the “Effective Date”) until December 31, 2014, unless sooner terminated in accordance with the terms of the Employment Agreement. Pursuant to the Employment Agreement, Mr. Yao is entitled to, among others, the following compensation and benefits:

a. Base Salary.  The Company shall pay the Executive a salary at a minimum rate of (i) $250,000 per annum for the period beginning on the Effective Date through December 31, 2012; (ii) $275,000 per annum for the period beginning on January 1, 2013 through December 31, 2013; and (iii) $300,000 per annum for the period beginning on January 1, 2014 through December 31, 2014 (the “Base Salary”).  Base Salary shall be payable in accordance with the customary payroll practices of the Company applicable to senior executives.

b. Bonus.  Each year during the Term, in addition to Base Salary, the Executive shall be entitled to an annual cash bonus in an amount equal to 50% of the Executive’s Base Salary for such year. Any such bonus shall be payable no later than 2.5 months following the year with respect to which the Base Salary is payable.

c. Restricted Shares.  On the Effective Date, Executive shall receive 1,500,000 shares of the Company’s common stock (“Restricted Shares”) subject to the terms and conditions of the Amended and Restated China Armco Metals, Inc. 2009 Stock Incentive Plan (the "Incentive Plan"). The Restricted Shares shall vest according to Vesting Schedule attached the Employment Agreement as Exhibit A; provided, however, if the Executive is terminated pursuant to Section 5 of this Agreement, the Executive shall forfeit all the unvested Restricted Shares as of such termination.

d. Equity Incentive Compensation.  The Executive shall be entitled to participate in any equity compensation plan of the Company in which he is eligible to participate, and may, without limitation, be granted in accordance with any such plan options to purchase shares of Company’s common stock, shares of restricted stock and other equity awards in the discretion of the Board or the Committee. Any equity incentive compensation shall be payable no later than 2.5 months of the following tax year in which such compensation is granted

e. Eligibility to participate in the Company’s benefit plans that are generally provided for executive employees.

Operating Leases 

(i)     Operating Lease - Office Space

On July 16, 2012, Armco Shanghai entered into a non-cancelable operating lease for office space that will expire on July 31, 2014. The annual lease payment is RMB 656,357 (approximately $106,496).

On December 17, 2010, Armco Metals Holdings entered into a non-cancelable operating lease for office space that expired on December 31, 2013. The monthly rental payment is $ 4,004 in 2013. After the contract expired, the Company continued the lease with the same landlord on a month by month basis.

(ii) Operating Lease of Property, Plant and Equipment and Facilities

Initial Lease Signed on June 24, 2010

On June 24, 2011, Renewable Metals entered into a non-cancelable operating lease agreement with an independent third party for property, plant, equipment and facilities expiring one (1) year from date of signing. Renewable Metals is required to pay RMB 30 per metric ton of scrap metal processed at this facility over the term of the lease, which were accrued and included in the inventory of finished goods – processed scrap metal and transferred to cost of goods sold upon shipment of processed scrap metal.

First Renewal on April 13, 2012

On April 13, 2012, Renewable Metals renewed the aforementioned non-cancelable operating lease agreement for property, plant, equipment and facilities for an additional two-year term commencing on June 25, 2012, in consideration for (i) the issuance of one (1) million shares of the Company’s common stock and (ii) the payment of RMB1,000,000 (approximately $159,000) in cash. Pursuant to the lease agreement, the Company issued one million shares to the third party on April 13, 2012.  The cash amount is to be paid during the second year of the lease term

On March 31, 2013, Renewable Metals terminated this operating lease agreement. Under the terms and conditions of the Termination Agreement, Hebang agreed to forgive the cash amount to be paid under the amended Leasing Agreement and Renewable Metals agreed to let Hebang keep the 1 million shares. Also see Note 13.

XML

Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
NET REVENUES	$ 9,918,651	$ 14,343,077
COST OF GOODS SOLD	11,082,455	13,698,412
GROSS MARGIN	(1,163,804)	644,665
OPERATING EXPENSES:
Selling expenses	100,855	29,226
Professional fees	214,454	196,497
General and administrative expenses	1,438,126	1,046,694
Operating cost of idle manufacturing facility	534,972	423,221
Total operating expenses	2,288,407	1,695,638
LOSS FROM OPERATIONS	(3,452,211)	(1,050,973)
OTHER (INCOME) EXPENSE:
Interest income	(98,268)	(2,725)
Interest expense	672,942	729,372
Change in fair value of derivative liability	(477,909)	(615,946)
Loan guarantee expense	13,002	12,500
Other (income) expense	58,303	(75,896)
Total other (income) expense	168,070	47,305
LOSS BEFORE INCOME TAXES PROVISION	(3,620,281)	(1,098,278)
INCOME TAX PROVISION		(8,510)
NET LOSS	(3,620,281)	(1,089,768)
OTHER COMPREHENSIVE INCOME (LOSS):
Change in unrealized income (loss) of marketable securities	21,938	5,499
Foreign currency translation gain (loss)	(408,558)	(239,518)
COMPREHENSIVE LOSS	$ (4,006,901)	$ (1,323,787)
NET LOSS PER COMMON SHARE - BASIC AND DILUTED:
Net loss per common share - basic and diluted (in Dollars per share)	$ (0.12)	$ (0.05)
Weighted Average Common Shares Outstanding - basic and diluted (in Shares)	30,052,787	23,304,334

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Note 6 - Inventories

3 Months Ended

Mar. 31, 2014

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 6 – Inventories

Inventories consisted of the following:

	March 31, 2014			December 31, 2013
Raw materials – scrap metal	$	3,758,273		$	4,390,811
Finished goods – processed scrap metal		15,465,390			12,421,088
Purchased merchandise for resale		245,583			5,936,936
Write - down of inventories		(2,682,088	)		(2,291,915	)
	$	16,787,158		$	20,456,920

Renewable Metals raw materials and finished goods are collateralized for loans from the Bank of Communications Limited Lianyungang Branch. Raw materials consisted of scrap metals to be processed and finished goods were comprised of all of the processed scrap metal at Renewable Metals. Due to the short duration time for the processing of its scrap metal, there was no material work-in-process inventory at March 31, 2014 or December 31, 2013.

Slow-Moving or Obsolescence Markdowns

The Company recorded no inventory obsolescence adjustments for the three months ended March 31, 2014 and 2013.

Lower of Cost or Market Adjustments

There were $390,173 and $nil of lower of cost or market adjustments for the three months ended March 31, 2014 and 2013, respectively.

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Note 5 - Accounts Receivable

3 Months Ended

Mar. 31, 2014

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 5 – Accounts Receivable

Accounts receivable consisted of the following:

	March 31, 2014			December 31, 2013
Accounts receivable	$	18,502,205		$	25,638,666
Allowance for doubtful accounts		(43,150	)		(43,150	)
	$	18,459,055		$	25,595,516

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Accounting Policies, by Policy (Policies)

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation - Unaudited Interim Financial Information

The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented.  Interim results are not necessarily indicative of the results for the full year.  These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2013 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2014.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The Company applies the guidance of Topic 810 “Consolidation” of the FASB Accounting Standards Codification to determine whether and how to consolidate another entity. Pursuant to ASC Paragraph 810-10-15-10 all majority-owned subsidiaries—all entities in which a parent has a controlling financial interest—shall be consolidated except (1) when control does not rest with the parent, the majority owner; (2) if the parent is a broker-dealer within the scope of Topic 940 and control is likely to be temporary; (3) consolidation by an investment company within the scope of Topic 946 of a non-investment-company investee. Pursuant to ASC Paragraph 810-10-15-8 the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree. The Company consolidates all less-than-majority-owned subsidiaries, if any, in which the parent’s power to control exists.

The Company's consolidated subsidiaries and/or entities as of March 31, 2014 are as follows:

Name of consolidated subsidiary or entity	State or other jurisdiction of incorporation or organization	Date of incorporation or formation (date of acquisition, if applicable)	Attributable interest
Armco Metal International Limited (“Armco HK”)	Hong Kong SAR	July 13, 2001	100%
Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”)	PRC	June 6, 2002	100%
Armco (Lianyungang) Renewable Metals, Inc. (“Renewable Metals”)	PRC	January 9, 2007	100%
Armco (Lianyungang) Holdings, Inc. (“Lianyungang Armco”)	PRC	June 4, 2009	100%
Armco Metals (Shanghai) Holdings. Ltd. (“Armco Shanghai”)	PRC	July 16, 2010	100%

The consolidated financial statements include all accounts of the Company and the consolidated subsidiaries and/or entities as of reporting period ending date(s) and for the reporting period(s) then ended.

All inter-company balances and transactions have been eliminated.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) 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 revenues and expenses during the reporting period. Management makes its best estimate of the outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value of Financial Instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, pledged deposits, accounts receivable, advance on purchases, prepayments and other current assets, accounts payable, customer deposits, corporate income/VAT tax payable, accrued expenses and other current liabilities approximate their fair values because of the short maturity of these instruments.

The Company’s loans payable, banker’s acceptance notes payable, and capital lease obligation approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at March 31, 2014 and December 31, 2013.

The Company’s Level 3 financial liabilities consist of convertible notes with embedded conversion feature issued in September 2013, November 2013, and January through March 2014, for which there are no current market for these securities such that the determination of fair value requires significant judgment or estimation.  The Company valued the automatic conditional conversion, re-pricing/down-round, change of control; default and follow-on offering provisions using a lattice model, with the assistance of a valuation specialist, for which management understands the methodologies. These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

It is not, however, practical to determine the fair value of advances from significant stockholder and lease arrangement with the significant stockholder, if any, due to their related party nature.

Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis

Level 1 Financial Assets – Marketable Securities

The Company uses Level 1 of the fair value hierarchy to measure the fair value of the marketable securities and marks the available for sale marketable securities at fair value in the statement of financial position at each balance sheet date and reports the unrealized holding gains and losses for available-for-sale securities in other comprehensive income (loss) until realized provided the unrealized holding gains and losses is temporary. If the fair value of an investment is less than its cost basis at the balance sheet date of the reporting period for which impairment is assessed, and it is determined that the impairment is other than temporary, then an impairment loss is recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period.

Level 3 Financial Liabilities – Derivative Liabilities

The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liabilities at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable to the change in the fair value of the derivative liabilities.

The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as of March 31, 2014, and December 31, 2013:

Recurring Fair Value Measures	Level 1		Level 2		Level 3		Total
March 31, 2014
Derivative liability		-		-	$	1,367,535	$	1,367,535
Available-for-sale securities	$	541,067		-		-	$	541,067
December 31, 2013
Derivative liability		-		-	$	61,429	$	61,429
Available-for-sale securities	$	519,129		-		-	$	519,129

Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis

The Company’s non-financial assets include inventories. The Company identifies potentially excess and slow-moving inventories by evaluating turn rates, inventory levels and other factors. Excess quantities are identified through evaluation of inventory aging, review of inventory turns and historical sales experiences. The Company provides lower of cost or market reserves for such identified excess and slow-moving inventories. The Company establishes a reserve for inventory shrinkage, if any, based on the historical results of physical inventory cycle counts.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

The financial records of the Company's Chinese operating subsidiaries are maintained in their local currency, the Renminbi (“RMB”), which is the functional currency. Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial statements. Foreign currency translation gain (loss) resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the consolidated statement of stockholders’ equity.

RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. Commencing July 21, 2005, China adopted a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies. The exchange rate of the US dollar against the RMB was adjusted from approximately RMB 8.28 per U.S. dollar to approximately RMB 8.11 per U.S. dollar on July 21, 2005. Since then, the PBOC administers and regulates the exchange rate of the U.S. dollar against the RMB taking into account demand and supply of RMB, as well as domestic and foreign economic and financial conditions.

Unless otherwise noted, the rate presented below per U.S. $1.00 was the midpoint of the interbank rate as quoted by OANDA Corporation (www.oanda.com) contained in its consolidated financial statements. Management believes that the difference between RMB vs. U.S. dollar exchange rate quoted by the PBOC and RMB vs. U.S. dollar exchange rate reported by OANDA Corporation were immaterial. Translations do not imply that the RMB amounts actually represent, or have been or could be converted into, equivalent amounts in U.S. dollars. Translation of amounts from RMB into U.S. dollars has been made at the following exchange rates for the respective periods:

	March 31, 2014		December 31, 2013		March 31, 2013		December 31, 2012
Balance sheets		6.1632		6.1122		6.2741		6.3086
Statements of operations and comprehensive income (loss)		6.1178		6.1943		6.2814		6.3116

Earnings Per Share, Policy [Policy Text Block]

Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options, warrants and non-vested shares.

For the periods presented, the computation of diluted loss per share equaled basic loss per share as the inclusion of any dilutive instruments would have had an antidilutive effect on the earnings per share calculation in the periods presented.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.” The ASU states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although “major” is not defined, the standard provides examples of when a disposal qualifies as a discontinued operation. The ASU also requires additional disclosures about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The ASU is effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years. The adoption of ASU 2014-08 is not expected to have a material impact on the Company’s consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the consolidated financial statements.

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Note 13 - Stockholders' Equity

3 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 13 – Stockholders’ Equity

Shares Authorized

Upon formation the aggregate number of shares which the Corporation shall have authority to issue is seventy five million (75,000,000) shares, consisting of two classes to be designated, respectively, “Common Stock” and “Preferred Stock,” with all of such shares having a par value of $.001 per share. The total number of shares of Preferred Stock that the Corporation shall have authority to issue is one million (1,000,000) shares. The total number of shares of Common Stock that the Corporation shall have authority to issue is seventy four million (74,000,000) shares.

Common Stock

Immediately prior to the consummation of the Share Purchase Agreement on July 27, 2008, the Company had 10,000,000 common shares issued and outstanding.

On July 27, 2008, upon the consummation of the Share Purchase Agreement, (i) Stephen Cox surrendered 7,694,000 common shares, representing his controlling interest in the Company for cancellation and resigned as an officer and director; (ii) the Company issued a promissory note of $6,890,000 (the “Share Purchase Note”) to purchase from Ms. Gao, the sole stockholder of Armco HK, the 100% of the issued and outstanding capital stock of Armco HK; and (iii) (a) a stock option entitling Ms. Gao to purchase 5,300,000 shares of its common stock, par value $.001 per share (the “Common Stock”) with an exercise price of $1.30 per share expiring on September 30, 2008 and (b) a stock option entitling Ms. Gao to purchase 2,000,000 shares of its common stock with an exercise price of $5.00 per share expiring two (2) years from the date of issuance on June 27, 2010, vested immediately (the “Gao Options”). The Company did not record the fair value of the Gao Options as the options were included as part of the reverse acquisition and recapitalization.

On August 12, 2008, Ms. Gao exercised her option to purchase and the Company issued 5,300,000 shares of its common stock in exchange for the $6,890,000 note owed to Ms. Gao.

On April 12, 2010, Mr. Yao purchased the Gao option to purchase 2,000,000 shares of the Company’s common stock with an exercise price of $5.00 per share originally granted to and owned by Ms. Feng Gao pursuant to a share purchase agreement to consummate the reverse merger capital transaction with Armco HK on June 27, 2008. In addition, on April 12, 2010 and June 25, 2010, Mr. Yao exercised part of the option and purchased 1,000,000 and 400,000 shares of the Company’s common stock at $5.00 per share resulting in net proceeds of $4,500,000, forgiveness of debt of $500,000 and $2,000,000 to the Company, respectively. The balance of the stock option to purchase the remaining 600,000 common shares expired on June 27, 2010.

Sale of Common Stock or Equity Unit Inclusive of Common Stock and Warrants

July and August 2008 Issuances

On July 25, 2008 and July 31, 2008, the Company closed the first and second rounds of a private placement by raising $6,896,229 from eighty-two (82) investors through the sale of 22.9 units of its securities at an offering price of $300,000 per unit in a private placement. Each unit sold in the offering consisted of 100,000 shares of the Company’s common stock, $.001 par value per share at a per share purchase price of $3.00, and five (5) year warrants to purchase 100,000 shares of common stock with an exercise price of $5.00 per share (the “Warrants“).

On August 8, 2008 the Company closed the third round of the offering by raising $523,500 from ten (10) investors through the sale of 1.745 units of its securities at an offering price of $300,000 per unit.

On August 11, 2008 the Company closed the fourth round of the offering by raising $40,200 from five (5) investors through the sale of 0.134 units of its securities at an offering price of $300,000 per unit.

The Company paid (i) FINRA member broker-dealers cash commissions of $162,660 and issued those firms five (5) year warrants to purchase a total of 99,650 shares of its common stock at $5.00 per share as compensation for services to the Company, (ii) due diligence fees to certain investors or their advisors in connection with the Offering aggregating $579,316 in cash and issued those firms five (5) year warrants to purchase a total of 142,614 shares of its common stock at $5.00 per share as compensation for services to the Company, and (iii) professional fees in the amount of $97,689 paid in cash in connection with the Offering. The recipients of these fees included China Direct Investments, Inc., a subsidiary of China Direct, Inc. and a principal stockholder of the company..

In aggregate, the Company raised $7,459,929 in the offering from ninety-seven (97) investors through the sale of 24.87 units and after payment of cash commissions, broker dealer fee, due diligence fees and other costs associated with the Offering, the Company received net proceeds of $6,620,681, all of which were used for construction of a scrap steel recycling facility in the City of Lianyungang, Jiangsu Province, China as previously disclosed by the Company and general corporate working capital purposes.

April 2010 Issuance

On April 20, 2010, the Company entered into a Securities Purchase Agreement with nine (9) accredited and institutional investors for the sale of 1,538,464 shares of its common stock at an offering price of $6.50 per share resulting in gross proceeds to the Company of $10,000,016.  At closing the Company issued the investors warrants to purchase an additional 1,538,464 shares of its common stock at an exercise price of $7.50 per share expiring five (5) years from the date of grant.  The warrants are exercisable commencing 181 days after the date of issuance.  The private offering, which was made under an exemption from the registration requirements of the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that act and Rule 506 of Regulation D.  At closing, the Company paid Rodman & Renshaw, LLC, a FINRA member firm that served as placement agent for the Company in the offering, (i) a fee of $500,000 as compensation for its services and (ii) a warrant to purchase 76,923 shares of the Company’s common stock at an exercise price of $7.50 per share expiring five (5) years from the date of issuance which are exercisable commencing 181 days after the date of issuance, as well as a $15,000 non-accountable expense allowance to one (1) of the investors in the offering.  The Company used the net proceeds from this offering for its working capital.

January 2013 Offering

On January 28, 2013 (the “Closing Date”), the Company completed a public offering of an aggregate of 3,242,712 shares of the Company’s common stock in a registered direct public offering (the “January 2013 Offering”) for approximately $1.6 million proceeds in cash.  The shares offered in this January 2013 Offering were sold by the Company directly to the investors.  No underwriter or agents was involved in connection with this Offering to solicit offers to purchase the shares.

On the Closing Date, the Company entered into Subscription Agreements (the “Subscription Agreements”) with certain investors (the “Investors”) in connection with the January 2013 Offering, pursuant to which the Company agreed to sell an aggregate of 3,242,712 shares of its common stock at a purchase price of $0.50 per share to the Investors for aggregate gross proceeds, before deducting the estimated offering expenses payable by the Company, of approximately $1,621,356.

The purchase and issuance of the securities in the Registered Direct Offering are completed on January 28, 2013.

The January 2013 Offering was effectuated as a takedown off the Company’s shelf registration statement on Form S-3, as amended (File No. 333-184354), which became effective on December 14, 2012 (the “Registration Statement”), pursuant to a prospectus supplement filed with the Securities and Exchange Commission (the “SEC”) on January 28, 2013.

Conversion of Advances from Chairman and CEO to Common Shares

On December 31, 2012, Mr. Yao proposed to the Company to convert the amount of unpaid Principals of the Loans owed him, into shares of common stock of the Company, at a conversation price equal to the current market price at which the Company's common stock trades on NYSE MKT; and the Board of the Directors of the Company considered that it is in the best interest of the Company and its stockholders for the Company to authorize the conversion of the amount of unpaid Principals of the Loans, into shares of common stock of the Company, at a conversation price equal to the average of the three (3) closing bid prices during the three (3) trading days immediately prior the date hereof at which the Company's common stock trades on NYSE MKT. Upon authorization by the Board of Directors of the Company, Mr. Yao converted unpaid Principals of the Loans of $353,753 owed him, into common shares of the Company, at a conversation price of $0.4933 per share, the average of the three (3) closing bid prices during the three (3) trading days immediately prior the date hereof at which the Company's common stock trades on NYSE MKT, or 717,067 shares of the Company’s common stock.

Conversion of Loan from Chairman and CEO to Common Shares

On October 22, 2013, Mr. Yao proposed to the Company to convert the amount of unpaid Principals of the Loans owed him, into shares of common stock of the Company, at a conversation price equal to the current market price at which the Company's common stock trades on NYSE MKT; and the Board of the Directors of the Company considered that it is in the best interest of the Company and its stockholders for the Company to authorize the conversion of the amount of unpaid Principals of the Loans, into shares of common stock of the Company, at a conversation price equal to the average of the three (3) closing bid prices during the three (3) trading days immediately prior the date hereof at which the Company's common stock trades on NYSE MKT. Upon authorization by the Board of Directors of the Company, Mr. Yao converted unpaid Principals of the Loans and interest in the amount of $1,045,369 owed him, into common shares of the Company, at a conversation price of $0.52 per share, the average of the three (3) closing bid prices during the three (3) trading days immediately prior the date hereof at which the Company's common stock trades on NYSE MKT, or 2,010,327 shares of the Company’s common stock.

Conversion of Short Term Loan to Common Shares

On October 28, 2013, a non-affiliated investor (the “Investor”) proposed to the Company to convert the amount of unpaid Principals of the Loans owed her in the amount of $816,593 into common shares of the Company, at a conversion price of $0.52 per share, or 1,570,371 share of the Company’s common stock.

Issuance of Common Stock to Parties Other Than Employees for Acquiring Goods or Services

Loan Guarantee - Henan Chaoyang Steel Co., Ltd.

On June 11, 2010 the Company entered into a Guaranty Cooperation Agreement with Henan Chaoyang Steel Co., Ltd. (“Henan Chaoyang”) to provide additional liquidity to meet anticipated working capital requirements of Renewable Metals’ scrap metal recycling facility. Under the terms of the guaranty, Henan Chaoyang agreed to provide loan guarantees to Renewable Metals’ existing and pending bank lines of credit of up to 300 million RMB in the aggregate (approximately $45,400,000) for five (5) years expiring June 30, 2015. As consideration for the guaranty, the Company issued a designee of Henan Chaoyang 500,000 shares of its common stock. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the guarantor.

Mr. Heping Ma, a former member of the Company’s Board of Directors, is a founder, Chairman and owns an 85% equity interest of Henan Chaoyang Steel Co., Ltd. Co, a corporation incorporated under the laws of the PRC. This transaction was approved by the members of the Board of Directors of the Company who were independent in the matter in accordance with the Company’s Related Persons Transaction Policy. On September 16, 2010, Mr. Ma resigned from the Company’s Board of Directors.

Shares Earned during the Year Ending December 31, 2012

33,333 common shares earned for the quarter ended March 31, 2012 were valued at $0.50 per share, or $16,667, which was recorded as loan guarantee expense.

33,333 common shares earned for the quarter ended June 30, 2012 were valued at $0.4289 per share, or $14,297, which was recorded as loan guarantee expense.

33,333 common shares earned for the quarter ended September 30, 2012 were valued at $0.3795 per share, or $12,650, which was recorded as loan guarantee expense.

33,333 common shares earned for the quarter ended December 31, 2012 were valued at $0.4839 per share, or $16,130, which was recorded as loan guarantee expense.

Shares Earned during the Year Ending December 31, 2013

33,333 common shares earned for the quarter ended March 31, 2013 were valued at $0.375 per share, or $12,500, which was recorded as loan guarantee expense.

33,333 common shares earned for the quarter ended June 30, 2013 were valued at $0.31 per share, or $10,333, which was recorded as loan guarantee expense.

33,333 common shares earned for the quarter ended September 30, 2013 were valued at $0.38 per share, or $12,667, which was recorded as loan guarantee expense.

33,333 common shares earned for the quarter ended December 31, 2013 were valued at $0.307 per share, or $10,2337, which was recorded as loan guarantee expense.

Shares Earned during the Year Ending December 31, 2014

33,338 common shares earned for the quarter ended March 31, 2014 were valued at $0.39 per share, or $13,002, which was recorded as loan guarantee expense.

Legal Services Agreement – All Bright Law Offices

On March 3, 2012, the Company entered into a Legal Services Agreement (“Legal Agreement”) with All Bright Law Office (“All Bright”), a PRC law firm located in Shanghai, China. Pursuant to the Legal Agreement, All Bright agreed to provide Chinese-law related legal counsel services from April 1, 2012 to March 31, 2013 in exchange for 300,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the All Bright.

Shares Earned during the Year Ending December 31, 2012

75,000 common shares earned for the quarter ended June 30, 2012 were valued at $0.4289 per share, or $32,168, which was recorded as legal expenses.

75,000 common shares earned for the quarter ended September 30, 2012 were valued at $0.3795 per share, or $28,463, which was recorded as legal fees.

75,000 common shares earned for the quarter ended December 31, 2012 were valued at $0.4839 per share, or $36,293, which was recorded as legal fees.

Shares Earned during the Year Ending December 31, 2013

75,000 common shares earned for the quarter ended March 31, 2013 were valued at $0.375 per share, or $28,125, which was recorded as legal expenses.

Consulting Services Agreement – Broad Max Holding

On December 1, 2012, the Company entered into a Consulting Services Agreement (“Consulting Agreement”) with Broad Max Holding (“Broad Max”), a HK firm located in Hong Kong, China. Pursuant to the Consulting Agreement, Broad Max agreed to provide consulting services from December 1, 2012 to May 31, 2013 in exchange for 100,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the Broad Max.

Shares Earned during the Year Ending December 31, 2012

16,667 common shares earned for the quarter ended December 31, 2012 were valued at $0.4839 per share, or $8,065, which was recorded as consulting fees.

Shares Earned during the Year Ending December 31, 2013

50,000 common shares earned for the quarter ended March 31, 2013 were valued at $0.375 per share, or $18,750, which was recorded as consulting fees.

33,333 common shares earned for the quarter ended June 30, 2013 were valued at $0.31 per share, or $10,333, which was recorded as consulting fees.

Facility and Equipment Lease Agreement – Hebang Renewable Resources Co., Ltd.

On April 13, 2012, the Company entered into a Facility and Equipment Leasing Agreement (“Leasing Agreement”) with Lianyungang Hebang Renewable Resources Co., Ltd. (“Hebang”), a PRC company located in the City of Lianyungang, Jiangsu Province, China. Pursuant to the Leasing Agreement, Hebang agreed to lease its entire facility and all of its equipment for the Company’s exclusive use and operation for a two-year term commencing on June 25, 2012, in consideration for the issuance of one (1) million shares of common stock of the Company to Hebang and the payment of RMB one (1) million (approximately $159,000) in cash. Pursuant to the Leasing Agreement, the Company issued the Shares to a designee of Hebang on April 13, 2012 (the “Hebang Stock Issuance”).  The cash amount is to be paid out to Hebang during the second year of the lease term. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by Hebang.

On March 31, 2013, Renewable Metals and Hebang terminated the Leasing Agreement ("Termination Agreement"). Under the terms and conditions of the Termination Agreement, Hebang agreed to forgive the cash amount to be paid under the amended Leasing Agreement and Renewable Metals agreed to let Hebang to keep the remaining unearned 625,000 common shares, which was valued at $0.375 per share or $234,375, which was recorded as facility leasing expenses.

Shares Earned during the Year Ending December 31, 2012

125,000 common shares earned for the quarter ended September 30, 2012 were valued at $0.3795 per share, or $47,438, which was recorded as facility leasing expenses.

125,000 common shares earned for the quarter ended December 31, 2012 were valued at $0.4839 per share, or $60,488, which was recorded as facility leasing expenses.

Shares Earned during the Year Ending December 31, 2013

125,000 common shares earned for the quarter ended March 31, 2013 were valued at $0.375 per share, or $46,875, which was recorded as facility leasing expenses.

Under the terms and conditions of the Termination Agreement, Hebang agreed to forgive the cash amount to be paid under the amended Leasing Agreement and Renewable Metals agreed to let Hebang to keep the remaining unearned 625,000 common shares, which was valued at $0.375 per share or $234,375 and recorded as facility leasing expenses.

Consulting Services Agreement – CD International Enterprise Inc

On November 8, 2013, the Company entered into a Consulting Services Agreement (“Consulting Agreement”) with CD International Enterprise Inc (“CDI”), a US company. Pursuant to the Consulting Agreement, CDI agreed to provide consulting services from November 1, 2013 to October 31, 2014 in exchange for 1,000,000 shares of common stock of the Company. These shares are earned ratably over the term of the agreement and the unearned shares are forfeitable in the event of nonperformance by the CDI.

Shares Earned during the Year Ending December 31, 2013

250,000 common shares earned for the quarter ended December 31, 2013 were valued at $0.307 per share, or $76,750, which was recorded as consulting expenses.

Shares Earned during the Year Ending December 31, 2014

250,000 common shares earned for the quarter ended March 31, 2014 were valued at $0.39 per share, or $97,500, which was recorded as consulting expenses.

Financing Cost – Hangover

On November 8, 2013, the Company issued 47,022 shares of common stock to Hanover Holdings I, LLC, (“Hanover”), as commitment shares for entering into that certain securities purchase agreement dated November 4, 2013 by and between the Company and Hanover. The shares were valued at $0.4499 per share, or $21,155, which was recorded as financing cost.

2009 Stock Incentive Plan as Amended

Adoption of 2009 Stock Incentive Plan

On October 26, 2009, the Board of Directors of the Company adopted the 2009 Stock Incentive Plan, whereby the Board of Directors authorized 1,200,000 shares of the Company’s common stock to be reserved for issuance (the “2009 Stock Incentive Plan”). The purpose of the 2009 Stock Incentive Plan is to advance the interests of the Company by providing an incentive to attract, retain and motivate highly qualified and competent persons who are important to us and upon whose efforts and judgment the success of the Company is largely dependent. Grants to be made under the 2009 Stock Incentive Plan are limited to the Company’s employees, including employees of the Company’s subsidiaries, the Company’s directors and consultants to the Company. The recipient of any grant under the 2009 Stock Incentive Plan, and the amount and terms of a specific grant, are determined by the Board of Directors of the Company. Should any option granted or stock awarded under the 2009 Stock Incentive Plan expire or become un-exercisable for any reason without having been exercised in full or fail to vest, the shares subject to the portion of the option not so exercised or lapsed will become available for subsequent stock or option grants.

2011 Amendment to the 2009 Stock Incentive Plan

On May 19, 2011, the Company’s Board of Directors adopted and approved the Amended and Restated 2009 Stock Incentive Plan to increase the number of shares of the Company’s common stock available for issuance thereunder by 1,000,000 shares to 2,200,000 shares of the Company’s common stock among other material terms, subject to stockholder approval at the Annual Meeting. At the 2011 Annual Meeting of Stockholders (the “2011 Annual Meeting”) of the Company held on July 9, 2011, the Company’s stockholders approved the amendment and restatement of the Company’s 2009 Stock Incentive Plan (the “Amended and Restated 2009 Stock Incentive Plan”).

Common shares

The Amended and Restated Incentive Plan contains limitations on the number of shares available for issuance with respect to specified types of awards as specified in Section 6.2 Limitation on Shares of Stock Subject to Awards and Cash Awards. During any time when the Company has a class of equity securities registered under Section 12 of the Securities Exchange Act:

● the maximum number of shares of the Company’s common stock subject to stock options or SARs that may be granted under the Amended and Restated Incentive Plan in a calendar year to any person eligible for an award will be 1,300,000 shares;

● the maximum number of shares of the Company’s common stock that may be granted under the Amended and Restated Incentive Plan, other than pursuant to stock options or SARs, in a calendar year to any person eligible for an award will be 1,300,000 shares; and

● the maximum amount that may be paid as a cash-settled performance-based award will be $1,000,000 for a performance period of 12 months or less and $5,000,000 for a performance period of greater than 12 months.

The maximum number of shares available for issuance pursuant to incentive stock options granted under the Amended and Restated Incentive Plan will be the same as the number of shares available for issuance under the Amended and Restated Incentive Plan.

Options

Under the Amended and Restated Incentive Plan, the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, may grant both incentive stock options ("ISOs") intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), and options that are not qualified as incentive stock options ("NSOs"). ISOs may only be granted to persons who are employees of the Company or a subsidiary of the Company and the fair market value at the date of grant of the shares of stock with respect to which all ISO’s held by a particular grantee become exercisable for the first time during any calendar year does not exceed $100,000. ISOs and NSOs must be granted a an exercise price that is at least the fair market value of the common stock on the date of grant and the term of these options cannot exceed ten years from the date of grant. The exercise price of an ISO granted to a holder of more than 10% of the common stock of the Company must be at least 110% of the fair market value of the Common Stock on the date of grant, and the term of these options cannot exceed five years. All of the authorized shares of common stock under the Amended and Restated Incentive Plan are available for grant as ISOs.

Stock Appreciation Rights

Under the Amended and Restated Incentive Plan, the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, may grant stock appreciation rights (“SARs”), that confer on the grantee a right to receive, upon exercise thereof, the excess of (a) the fair market value of one share of common stock of the Company on the date of exercise over (b) the grant price of the SAR (which shall be at least the grant date fair market value of a share of common stock of the Company) as determined by the board of directors or the committee to which it grants authority under the Amended and Restated Incentive Plan.  The term of each SAR is ten years from the date of grant of the SAR.

Stock Awards

Under the stock component of the Amended and Restated Incentive Plan, the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, may, in selected cases, grant to a plan participant a given number of shares of restricted stock, stock units or unrestricted stock. Restricted stock under the Amended and Restated Incentive Plan is common stock restricted as to sale pending fulfillment of such vesting schedule and requirements as the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, shall determine. Prior to the lifting of the restrictions, the participant will nevertheless be entitled to receive dividends on, and to vote the shares of, the restricted stock. Stock units are a right to be delivered shares of common stock upon fulfillment of such vesting schedule and requirements as the board of directors, or the committee to which it grants authority under the Amended and Restated Incentive Plan, shall determine.  Grantees of stock units will have no voting or dividend rights or other rights associated with stock ownership, although the board of directors, or the committee may award dividend equivalent rights on such units.

Shares Awarded during 2009

On October 26, 2009, the Company awarded 200,000 shares of its restricted common stock, par value $.001 per share, pursuant to the 2009 Stock Incentive Plan, to Mr. Kexuan Yao, the Company’s Chief Executive Officer, vesting 66,667 shares on December 15, 2010, 66,667 shares on December 15, 2011 and 66,666 shares on December 15, 2012. These shares were valued at $3.28 per share or $656,000 on the date of grant and were amortized over the vesting period, or $54,667 per quarter.

On October 26, 2009, the Company agreed to pay Mr. William Thomson the sum of $20,000 and awarded 6,250 shares of the Company’s restricted common stock to Mr. William Thomson in conjunction with his appointment to the Company's board of directors vesting 25% on , 2010, 25% on June 30, 2010, 25% on September 30, 2010 and 25% on December 31, 2010.  These shares were valued at $3.28 per share or $20,500 on the date of grant and were amortized over the vesting period, all of which was earned and recorded as stock based compensation for the year ended December 31, 2010.

Shares and Options Awarded during 2010

On September 16, 2010, the Company agreed to pay Mr. K.P. Chan the sum of $20,000 and awarded 6,250 shares of the Company’s restricted common stock to Mr. Chan in conjunction with his appointment to the Company's board of directors vesting 50% on March 10, 2011 and 50% on September 10, 2011.  These shares were valued at $3.12 per share or $19,500 on the date of grant and were amortized over the vesting period, or $4,875 per quarter.

On October 5, 2010, the Company awarded a stock option to purchase 40,000 shares of the Company’s common stock exercisable at $5.00 per share expiring five (5) years from the date of grant to an employee in conjunction with his employment agreement as the Company's Director of Administration, vested upon grant. The Company estimated the fair value of option granted, estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	October 5, 2010
Expected life (year)		5.00
Expected volatility		187.00	%
Risk-free interest rate		1.21	%
Expected annual rate of quarterly dividends		0.00	%

Expected volatility is based on historical volatility for the Company’s common stock. The Company currently has no reason to believe future volatility over the expected life of the option is likely to differ materially from its historical volatility. The risk-free interest rate is based on a yield curve of U.S treasury interest rates on the date of valuation based on the expected term of the share options or equity instruments. Expected dividend yield is based on our dividend history and anticipated dividend policy.

The fair value of share options or equity instruments granted, estimated on the date of grant, using the Black-Scholes option-pricing model, was $138,000. The Company recorded the entire amount as stock based compensation expense on the date of grant.

Shares Awarded during 2011

On January 25, 2011, the Company issued 55,378 shares of its common stock to certain of its employees for their 2010 services of approximately $187,180 in lieu of cash, which was recorded as compensation expenses in 2010 and credited the same to the accrued expenses at December 31, 2010.

On March 29, 2011, the Company awarded 10,000 shares of the Company’s common stock to an employee for his 2011 employment service vesting on July 1, 2011. These shares were valued at $2.74 per share or $27,400 on the date of grant and are being amortized over the service period of one year in 2011.

On December 15, 2011, the Company issued 10,000 and 50,000 shares of its common stock to two (2) of its outside directors for their 2011 services, respectively. These shares were valued at $0.27 per share, $2,700 and $13,500 or $16,200 in aggregate on the date of grant, which was recorded as stock based compensation.

On December 15, 2011, the Company issued 264,379 shares of its common stock to certain of its employees for their 2011 services of approximately $71,383, in lieu of cash, which was recorded as compensation expense in 2011.

On December 16, 2011, the Company agreed to pay Director Mr. Kam Ping Chan 6,250 shares of the Company’s restricted common stock in conjunction with his appointment to the Company's board of directors vesting 50% on June 30, 2012 and 50% on December 31, 2012, effectively January 1, 2012.  The restricted stock vests only if Mr. Chan is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $0.2851 per share or $1,782 on the date of grant and are being amortized over the vesting period, or $446 per quarter in 2012.

On December 20, 2011, the Company issued 50,000 shares of its common stock to Mr. Tao Pang, one of its outside directors for his 2012 services, effectively January 1, 2012. These shares were valued at $0.28 per share, or $14,000 on the date of grant, which was deferred to 2012 to be recognized as stock based compensation. On May 4, 2012 those shares were cancelled upon Mr. Pang's resignation as a member of the board of directors. Mr. Pang was compensated in cash in lieu of common shares for such period served as a director.

2012 Amendment to the 2009 Stock Incentive Plan

At the 2012 Annual Meeting of Stockholders (the “2012 Annual Meeting”) of the Company held on July 13, 2012, the Company’s stockholders approved an amendment and restatement of the Company’s 2009 Stock Incentive Plan to increase the number of shares of the Company’s common stock available for issuance hereunder by 3,000,000 shares to 5,200,000 shares of the Company’s common stock.

Shares Awarded during 2012

On February 6, 2012, the Company issued 57,743 shares of its common stock to certain of its employees for their 2011 services of approximately $33,318, in lieu of cash, which was recorded as compensation expense and credited to common shares to be issued at December 31, 2011.

On February 8, 2012, the Company awarded 1,500,000 shares of its restricted common stock, par value $.001 per share, pursuant to the Amended and Restated 2009 Stock Incentive Plan, to Mr. Kexuan Yao, the Company’s Chief Executive Officer. The term of employment under the agreement is from January 1, 2012 (the “Effective Date”) until December 31, 2014, unless sooner terminated in accordance with the terms of the Employment Agreement. These shares were valued at $0.499 per share or $748,500 on the date of grant and are amortized over the vesting period, or $62,375 per quarter.

On May 4, 2012, the Company agreed to pay Director Mr. Weiping Shen 50,000 shares of the Company’s restricted common stock in conjunction with his appointment to the Company's board of directors vesting 50% on December 31, 2012 and 50% on May 3, 2013.  The restricted stock vests only if Mr. Shen is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $0.69 per share or $34,500 on the date of grant and are being amortized over the vesting period, or $8,625 per quarter.

On July 30, 2012, the Company issued 561,640 shares of its common stock to certain of its employees for the first half year of their 2012 service of approximately $185,341, in lieu of cash, all of which was recorded as compensation expense for the quarter ended June 30, 2012.

On July 30, 2012, the Company granted 400,000 shares of its common stock to certain of its employees for the second half year of their 2012 service of approximately $132,000, in lieu of cash, which were recorded as compensation expense for the year ended December 31, 2012.

On November 12, 2012, the Company granted 980,991 shares of its common stock to certain of its employees for the second half year of their 2012 service of approximately $343,347, in lieu of cash, which were recorded as compensation expense for the quarter ended December 31, 2012.

2013 Amendment to the 2009 Stock Incentive Plan

At the 2013 Annual Meeting of Stockholders (the “2013 Annual Meeting”) of the Company held on July 2, 2013, the Company’s stockholders approved an amendment and restatement of the Company’s 2009 Stock Incentive Plan to increase the number of shares of the Company’s common stock available for issuance hereunder by 3,000,000 shares to 8,200,000 shares of the Company’s common stock.

Shares Awarded during 2013

On May 2, 2013, the Company agreed to pay Director Mr. Kam Ping Chan 6,250 shares of the Company’s restricted common stock in conjunction with his re-appointment to the Company's board of directors vesting 50% on June 30, 2013 and 50% on December 31, 2013, effectively January 1, 2013.  The restricted stock vests only if Mr. Chan is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $0.3301 per share or $2,063 on the date of grant and are being amortized over the vesting period, or $516 per quarter in 2013.

On May 3, 2013, the Company agreed to pay Director Mr. Weiping Shen 50,000 shares of the Company’s restricted common stock in conjunction with his re-appointment to the Company's board of directors vesting 50% on September 30, 2013 and 50% on May 3, 2014.  The restricted stock vests only if Mr. Shen is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $0.389 per share or $19,450 on the date of grant and are being amortized over the vesting period, or $4,863 per quarter.

On November 5, 2013, the Company granted 1,363,282 shares of its common stock to certain of its employees for the year of their 2013 service of approximately $640,743, in lieu of cash, which were recorded as compensation expense for the quarter ended December 31, 2013.

Shares Awarded during 2014

On January 2, 2014, the Company agreed to pay Director Mr. Kam Ping Chan 6,250 shares of the Company’s restricted common stock in conjunction with his re-appointment to the Company's board of directors vesting 50% on June 30, 2014 and 50% on December 31, 2014, effectively January 1, 2014.  The restricted stock vests only if Mr. Chan is still a director of the Company on the vesting date (with limited exceptions), and the shares are eligible for the payment of dividends, if the Board of Directors was to declare dividends on the Company’s common stock. These shares were valued at $0.323 per share or $2,019 on the date of grant and are being amortized over the vesting period, or $505 per quarter in 2014.

On April 9, 2014, the Company granted 2,329,958 shares of its common stock to certain of its employees for the first quarter of their 2014 service of approximately $838,785, in lieu of cash, which were recorded as compensation expense for the quarter ended March 31, 2014.

Summary of the Company’s Amended and Restated 2009 Stock Incentive Plan Activities

The table below summarizes the Company’s Amended and Restated 2009 Stock Incentive Plan activities:

	Number of Shares or Options			Fair Value at Date of Grant
Balance, December 31, 2012		4,198,881		$	2,614,951
Options – granted		-			-
Options – canceled		-			-
Shares – granted		1,419,532			662,256
Shares – canceled		(-	)		(-	)
Balance, December 31, 2013		5,618,413		$	3,277,207
Vested, December 31, 2013		5,101,746			3,023,732
Unvested, December 31, 2013		516,667		$	253,475
Options – granted		-			-
Options – canceled		-			-
Shares – granted		2,336,208			840,804
Shares – canceled		(-	)		(-	)
Balance, March 31, 2014		7,954,621		$	4,118,011
Vested, March 31, 2014		7,556,704			3,924,892
Unvested, March 31, 2014		397,917		$	193,119

As of March 31, 2014, there were 245,379 shares of common stock remaining available for issuance under the Amended and Restated 2009 Stock Incentive Plan.

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Note 9 - Related Party Transactions

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 9 – Related Party Transactions

The related parties consist of the following:

Kexuan Yao (“Mr. Yao”)                      The Company’s Chairman, Chief Executive Officer and principal stockholder

Keli Yao                                                   Kexuan Yao’s brother

Yi Chu                                                      Kexuan Yao’s wife

Advances from Chairman and CEO

From time to time, the Mr. Yao advances funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and due on demand. As of March 31, 2014 and December 31, 2013, the advance balance was $755,805 and $668,332, respectively.

Promissory Note from Chairman and CEO

On March 29, 2013, the Company executed a promissory note in the amount of RMB 6,300,000 (approximately $1,000,000) payable to Mr. Yao.  The note, which is due one year from the date of issuance, accrues interest at 8% per annum.  The proceeds are used for working capital purposes. The note was subsequently converted into shares of common stock of the Company in October 28, 2013. See more details in Note 13.

Operating Lease from Chairman and CEO

On January 1, 2006, Henan entered into a non-cancellable operating lease for its 176.37 square meters commercial office space in the City of Zhengzhou, Henan Province, PRC from Mr. Yao for RMB 10, 000 per month. The lease expired on December 31, 2008 and has been extended through December 31, 2014.  Rental expense incurred for the three months ended March 31, 2014 and 2013 was RMB 30,000 (approximately $4,868) and RMB 30,000 (approximately $4,843), respectively.

Due to Other Related Parties

Due to other related parties consists of the following:

	March 31, 2014		December 31, 2013
Keli Yao		147,501		116,828
Yi Chu		249,870		286,313
Total		397,371		403,141

The balance of $397,371 due to related parties represents the loan owed to the related parties, which is interest free, unsecured and repayable on demand.

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Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Derivative Warrant Activity (USD $)	1 Months Ended		3 Months Ended		9 Months Ended	12 Months Ended
	May 31, 2010	Apr. 30, 2010	Mar. 31, 2014	Mar. 31, 2013	Sep. 30, 2013	Dec. 31, 2012
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Derivative Warrant Activity [Line Items]
Derivative warrant at December 31						1,218,021
Fair Value of Derivative warrant at December 31 (in Dollars)						$ (306,708)
(Gain) Loss Change in Fair Value of Derivative Liability at December 31 (in Dollars)			(477,909)	(615,946)		306,505
Reclassification of warrants to purchase 1,031,715 common shares from additional paid-in capital to derivative liability at January 11, 2013 to reflect the re-instatement of the derivative feature (in Dollars)					(623,809)
Reclassification of warrants to purchase 1,031,715 common shares from additional paid-in capital to derivative liability at January 11, 2013 to reflect the re-instatement of the derivative feature (in Dollars)	1,292,227	21,229			623,809
Increased number of warrant shares per Amendment No. 2 to the Subscription Agreement and Common Stock Purchase Warrant ("2008 Unit Offering Agreement") dated July 2008 and Amendment No. 1 to 2008 Unit Offering Agreement upon completion of January 2013 Offering.					10,962,189
Mark to market (in Dollars)					$ 930,517
Warrants expired					12,180,210
Derivative Financial Instruments, Liabilities [Member]
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Derivative Warrant Activity [Line Items]
Derivative warrant at December 31						186,306
Reclassification of warrants to purchase 1,031,715 common shares from additional paid-in capital to derivative liability at January 11, 2013 to reflect the re-instatement of the derivative feature					1,031,715
Increased number of warrant shares per Amendment No. 2 to the Subscription Agreement and Common Stock Purchase Warrant ("2008 Unit Offering Agreement") dated July 2008 and Amendment No. 1 to 2008 Unit Offering Agreement upon completion of January 2013 Offering.					10,962,189
Warrants expired					12,180,210
Non-Derivative Financial Instruments, Liabilities [Member]
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Derivative Warrant Activity [Line Items]
Derivative warrant at December 31						1,031,715
Reclassification of warrants to purchase 1,031,715 common shares from additional paid-in capital to derivative liability at January 11, 2013 to reflect the re-instatement of the derivative feature					(1,031,715)

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Note 7 - Loans and Convertible Note Payable

3 Months Ended

Mar. 31, 2014

Loans Payable [Abstract]

Loans Payable [Text Block]

Note 7 – Loans and Convertible Notes Payable

Loans payable consisted of the following:

	March 31, 2014		December 31, 2013
Armco HK
Loan payable to RZB Austria Finance (Hong Kong) Limited, collateralized by certain of the Company’s inventory, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at the bank’s cost of funds plus 200 basis points per annum, with principal and interest due April 1, 2014 and repaid in full as of filing date	$	359,303	$	504,248
Loan payables to DBS, collateralized by certain of the Company’s inventory, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at an average of 3.47% per annum, balance is due April 1, 2014 and repaid in full as of filing date		13,342		2,602,115
Sub-total - Armco HK		372,645		3,106,363
Renewable Metals
Loan payable to Bank of Communications, Lianyungang Branch, under trade credit facilities, collateralized by Renewable Metals inventories and guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at 120% of the bank’s benchmark rate per annum (average 7.2%), balance due June 2, 2014		324,507		1,963,286
Loan payable to Bank of China, Lianyungang Branch, under trade credit facilities, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at 6.6% per annum payable monthly, balance due from April 12, 2014 through September 25, 2014		8,112,669		8,180,361
Loan payable to Pudong Development Bank, Lianyungang Branch, under trade credit facilities, guaranteed by the Company’s Chairman and Chief Executive Officer, with interest at 7.92% per annum payable monthly, balance due March 27, 2015		1,622,534		-
Short-term borrowing, with interest rate at 8% per annum		64,901		229,050
Loan payable, with interest at 6% per annum and due July 21, 2014		3,474,388		3,503,379
Sub-total – Renewable Metals		13,598,999		13,876,076
Henan Armco
Loan Payable to ICBC, with interest at 2.47% per annum, and repaid in full on March 28, 2014		-		2,755,926
Loan Payable to Guanhutun Credit Union, collateralized by Henan’s building and leasehold improvement, with interest at 9.6% per annum, balance due March 16, 2015		162,253		163,607
Loans payable, with interest at 8% per annum, and due in 2014. The creditors agreed to exchange $5,319,351 into convertible notes in January and February, 2014		-		5,999,957
Short-term borrowing, no interest bearing and due upon demand		2,856,471		-
Sub-total – Henan Armco		3,018,724		8,919,490
Armco Metals Holdings
Loans payable, with interest at 8% per annum, due from April 21, 2014 through May 8, 2014		790,000		1,050,000
Convertible notes payable, net of discount, with interest at 4-8% per annum, maturing from June 25, 2014 through March 3, 2015 and $5,777,967 was converted into shares in April and May 2014.		4,731,488		463,709
Sub-total – Armco Metals Holdings		5,521,488		1,513,709
	$	22,511,856	$	27,415,638

Collateralization of Property, Plant and Equipment

Both Renewable Metals and Lianyungang Armco’s property, plant and equipment representing substantially all of the Company’s property, plant and equipment are collateralized for loans from the Bank of China Lianyungang Branch.

Collateralization of Land Use Rights

Both Renewable Metals and Lianyungang Armco’s land use rights representing all of the Company’s land use rights are collateralized for loans from the Bank of China Lianyungang Branch.

Convertible notes payable

During 2013, the Company’s subsidiary borrowed an aggregate of approximately $6.2 million from 15 non-U.S. lenders who are not its affiliates under the terms of loan contracts. In January and  February 2014, the Company and its subsidiary entered into note exchange agreements with each of these lenders pursuant to which the Company exchanged the loan contracts for 8% convertible notes in the aggregate amount of RMB 33,512,936 (approximately $5.5 million net of discount of $1.3 million), which represented the remaining principal balance due under the loan contracts. The convertible notes bear interest at the rate of 8% per annum, mature nine months from the date of issuance, and are convertible at any time at the option of the holder into shares of the Company’s common stock at a conversion price of $0.317 per share.

The Company analyzed the modification of the term under ASC 470-60 “Trouble Debt Restructurings” and ASC 470-50 “Extinguishment of Debt”. The Company determined the modification is substantial and the transaction should be accounted for as an extinguishment with the old debt written off and the new debt initially recorded at fair value with a new effective interest rate. The Company also determined that the fair value of the new debt is the same as the fair value of the old debt. Thus no gain or loss was recognized upon the extinguishment.

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Note 8 - Banker's Acceptance Notes Payable and Letters of Credit

15 Months Ended

Mar. 31, 2014

Disclosure Text Block [Abstract]

Short-term Debt [Text Block]

Note 8 – Banker’s Acceptance Notes Payable and Letters of Credit

Banker’s acceptance notes payable consisted of the following:

	March 31, 2014		December 31, 2013
Renewable Metals
Banker’s acceptance notes payable matured on March 27, 2014	$	-	$	3,272,144
Letters of credit matured on April 6, 2014		3,116,049		5,201,073
	$	3,116,049	$	8,473,217

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Note 10 - Capital Lease Obligation

3 Months Ended

Mar. 31, 2014

Leases, Capital [Abstract]

Capital Leases in Financial Statements of Lessee Disclosure [Text Block]

Note 10 – Capital Lease Obligation

Capital lease obligation consisted of the following:

	March 31, 2014			December 31, 2013
Renewable Metals
(i)Capital lease obligation to a financing company for a term of three (3) years, collateralized by certain of Renewable Metals’ machinery and equipment, with interest at 11.0% per annum, with principal and interest due and payable in monthly installments of RMB 497,897 on the 23rd of each month.	$	333,284		$	336,065
Less current maturities		(333,284	)		(336,065	)
Capital lease obligation, net of current maturities		-			-
(ii)Capital lease obligation to a financing company for a term of three (3) years, collateralized by certain of Renewable Metals’ machinery and equipment, with interest at 11.0% per annum, with principal and interest due and payable in quarterly installments of RMB3,609,102 on the 15th of each quarter.		564,217			568,925
Less current maturities		(564,217	)		(568,925	)
Capital lease obligation, net of current maturities		-			-
Total capital lease obligation		897,501			904,990
Less current maturities		(897,501	)		(904,990	)
TOTAL CAPITAL LEASE OBLIGATION, net of current maturities	$	-		$	-

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Note 12 - Commitments and Contingencies (Details)	1 Months Ended		1 Months Ended		1 Months Ended		0 Months Ended									1 Months Ended					1 Months Ended		7 Months Ended			0 Months Ended		12 Months Ended	1 Months Ended	0 Months Ended	1 Months Ended	12 Months Ended
	Dec. 21, 2011	Mar. 31, 2014 USD ($)	Dec. 21, 2011 Commission [Member] DBS Hong Kong [Member]	Dec. 21, 2011 Opening Commission [Member] Each Issuance [Member] DBS Hong Kong [Member] USD ($)	Dec. 21, 2011 Opening Commission [Member] DBS Hong Kong [Member] USD ($)	Dec. 21, 2011 Balance Outstanding [Member] DBS Hong Kong [Member]	Apr. 13, 2012 Renewable Metals [Member] USD ($)	Apr. 13, 2012 Renewable Metals [Member] CNY	Jun. 24, 2011 Renewable Metals [Member] Per Metric Ton Scrap Metal [Member] CNY	Sep. 10, 2013 Henan Armco [Member] ICBC Bank [Member] USD ($)	Sep. 10, 2013 Henan Armco [Member] ICBC Bank [Member] CNY	Jun. 08, 2013 Henan Armco [Member] ICBC Bank [Member] USD ($)	Jun. 08, 2013 Henan Armco [Member] ICBC Bank [Member] CNY	Jun. 18, 2012 Henan Armco [Member] China CITIC Bank [Member] USD ($)	Jun. 18, 2012 Henan Armco [Member] China CITIC Bank [Member] CNY	Sep. 19, 2012 Henan Armco [Member] Guangdong Development Bank [Member] USD ($)	Sep. 19, 2012 Henan Armco [Member] Guangdong Development Bank [Member] CNY	Mar. 31, 2014 Henan Armco [Member] USD ($)	Mar. 15, 2013 Renewable Metals [Member] Bank of China Lianyungang [Member] USD ($)	Mar. 15, 2013 Renewable Metals [Member] Bank of China Lianyungang [Member] CNY	Jul. 24, 2012 Renewable Metals [Member] Shanghai Pudong Development Banks [Member] USD ($)	Jul. 24, 2012 Renewable Metals [Member] Shanghai Pudong Development Banks [Member] CNY	Jul. 31, 2011 Renewable Metals [Member] Bank of Communications Lianyungang [Member] USD ($)	Jul. 31, 2011 Renewable Metals [Member] Bank of Communications Lianyungang [Member] CNY	Mar. 31, 2014 Renewable Metals [Member] USD ($)	Jul. 16, 2012 Armco Shanghai [Member] USD ($)	Jul. 16, 2012 Armco Shanghai [Member] CNY	Dec. 31, 2013 Armco Metals Holdings [Member] USD ($)	Dec. 21, 2011 DBS Hong Kong [Member] USD ($)	Jan. 02, 2012 Yao [Member]	Feb. 08, 2012 Yao [Member]	Dec. 31, 2014 Yao [Member] USD ($)	Dec. 31, 2013 Yao [Member] USD ($)	Dec. 31, 2012 Yao [Member] USD ($)	Dec. 20, 2011 Commission [Member] RZB Hong Kong [Member]
Note 12 - Commitments and Contingencies (Details) [Line Items]
Line of Credit Facility, Current Borrowing Capacity		$ 84,487,279								$ 3,200,000	20,000,000	$ 4,800,000	30,000,000	$ 6,500,000	40,000,000	$ 12,600,000	78,000,000	$ 27,258,566	$ 8,100,000	50,000,000	$ 2,400,000	15,000,000	$ 11,700,000	72,000,000	$ 22,228,713				$ 20,000,000
Debt Instrument, Basis Spread on Variable Rate																													2.50%
Export Bill Collection Commission			12.50%		25.00%	6.25%																													6.25%
Line of Credit Facility, Amount Outstanding		14,162,257		50,000	50,000																				13,467,031
Pledged Deposits	3.00%
undefined																120.00%	120.00%				120.00%	120.00%
Line of Credit Facility, Interest Rate at Period End																			7.872%	7.872%
Cash Collateral Letters of Credit at Sight																							20.00%	20.00%
Cash Collateral Other Domestic Letters of Credit																							30.00%	30.00%
Inventory Collateral																							166.00%	166.00%
Salaries, Wages and Officers' Compensation																																300,000	275,000	250,000
Bonus Percentage of Base Salary																																	50.00%
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures (in Shares)																														1,500,000	1,500,000
Operating Leases, Rent Expense, Net																										106,496	656,357	4,004
Operating Leases, Future Minimum Payments Due (in Yuan Renminbi)									30
Payments for Leasing Costs							$ 159,000	1,000,000
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Shares Issued (in Shares)							1,000,000	1,000,000

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Note 13 - Stockholders' Equity (Details)	0 Months Ended							1 Months Ended				0 Months Ended	1 Months Ended	3 Months Ended					6 Months Ended	12 Months Ended												12 Months Ended		1 Months Ended	12 Months Ended					6 Months Ended	12 Months Ended						9 Months Ended	16 Months Ended		1 Months Ended			0 Months Ended	1 Months Ended	0 Months Ended	1 Months Ended		12 Months Ended	0 Months Ended				0 Months Ended	3 Months Ended								12 Months Ended	3 Months Ended	6 Months Ended	0 Months Ended		1 Months Ended	0 Months Ended			1 Months Ended	10 Months Ended	3 Months Ended	4 Months Ended		0 Months Ended	3 Months Ended				6 Months Ended	3 Months Ended				6 Months Ended	1 Months Ended	3 Months Ended			0 Months Ended	1 Months Ended			10 Months Ended	1 Months Ended		3 Months Ended	10 Months Ended				3 Months Ended	4 Months Ended			0 Months Ended	1 Months Ended			3 Months Ended		1 Months Ended	3 Months Ended	4 Months Ended	12 Months Ended			1 Months Ended	12 Months Ended	3 Months Ended	4 Months Ended	0 Months Ended		1 Months Ended	3 Months Ended	6 Months Ended	9 Months Ended	30 Months Ended	1 Months Ended	0 Months Ended	3 Months Ended
	Apr. 09, 2014 USD ($)	Nov. 05, 2013 USD ($)	Jul. 02, 2013	Nov. 12, 2012 USD ($)	Aug. 11, 2008 USD ($)	Aug. 08, 2008 USD ($)	Aug. 12, 2008 USD ($)	Jan. 28, 2013 USD ($)	Jul. 30, 2012 USD ($)	May 19, 2011	Apr. 30, 2010 USD ($)	Aug. 08, 2008 USD ($)	Jul. 31, 2008 USD ($)	Mar. 31, 2014 USD ($)	Mar. 31, 2013 USD ($)	Dec. 20, 2012 USD ($)	Dec. 15, 2011 USD ($)	Jul. 13, 2012	Jun. 27, 2010	Dec. 31, 2013 USD ($)	Dec. 31, 2008 USD ($)	Sep. 30, 2013	Jan. 31, 2013	Jun. 30, 2012	Jun. 30, 2010	May 31, 2010	Apr. 20, 2010 USD ($)	Oct. 26, 2009	Jan. 30, 2009	Jul. 27, 2008	Apr. 06, 2007 USD ($)	Dec. 31, 2008 Broker Commissions [Member] Private Placement [Member]	Dec. 31, 2008 Management Fees [Member] Private Placement [Member]	Jan. 28, 2013 Subscription Agreements [Member] USD ($)	Dec. 31, 2012 Restricted Stock [Member] Yao [Member] USD ($)	Dec. 31, 2011 Restricted Stock [Member] Yao [Member]	Dec. 31, 2010 Restricted Stock [Member] Yao [Member]	Feb. 08, 2012 Restricted Stock [Member] Yao [Member] USD ($)	Oct. 26, 2009 Restricted Stock [Member] Thomson [Member] USD ($)	Jun. 30, 2013 Restricted Stock [Member] Chan [Member]	Dec. 31, 2013 Restricted Stock [Member] Chan [Member]	May 02, 2013 Restricted Stock [Member] Chan [Member] USD ($)	Sep. 10, 2011 Restricted Stock [Member] Chan [Member] USD ($)	May 03, 2013 Restricted Stock [Member] Director [Member]	Sep. 30, 2012 Restricted Stock [Member] Director [Member]	May 04, 2012 Restricted Stock [Member] Director [Member] USD ($)	Sep. 30, 2013 Restricted Stock [Member] Shen [Member]	May 14, 2014 Restricted Stock [Member] Shen [Member]	May 03, 2013 Restricted Stock [Member] Shen [Member] USD ($)	Dec. 31, 2014 Restricted Stock [Member] Mr. Kam Ping Chan [Member]	Jun. 30, 2014 Restricted Stock [Member] Mr. Kam Ping Chan [Member]	Jan. 02, 2014 Restricted Stock [Member] Mr. Kam Ping Chan [Member] USD ($)	Aug. 11, 2008 Private Placement [Member] USD ($)	Apr. 20, 2010 Private Placement [Member] USD ($)	Aug. 08, 2008 Private Placement [Member] USD ($)	Apr. 30, 2010 Private Placement [Member] USD ($)	Jul. 31, 2008 Private Placement [Member] USD ($)	Dec. 31, 2008 Private Placement [Member] USD ($)	Dec. 31, 2012 Yao [Member] USD ($)	Jun. 11, 2010 Board of Directors Chairman [Member] Chaoyang Steel [Member]	Jun. 11, 2010 Renewable Metals [Member] USD ($)	Jun. 11, 2010 Renewable Metals [Member] CNY	Jun. 11, 2010 Chaoyang Steel [Member]	Mar. 31, 2014 Chaoyang Steel [Member] USD ($)	Dec. 31, 2012 Chaoyang Steel [Member]	Sep. 30, 2012 Chaoyang Steel [Member] USD ($)	Jun. 30, 2012 Chaoyang Steel [Member] USD ($)	Mar. 31, 2012 Chaoyang Steel [Member] USD ($)	Dec. 31, 2012 All Bright Law Offices [Member] USD ($)	Sep. 30, 2012 All Bright Law Offices [Member] USD ($)	Jun. 30, 2012 All Bright Law Offices [Member] USD ($)	Mar. 31, 2013 All Bright Law Offices [Member]	Dec. 31, 2012 Broad Max Holding [Member] USD ($)	May 31, 2013 Broad Max Holding [Member]	Apr. 13, 2012 Hebang {Member] USD ($)	Apr. 13, 2012 Hebang {Member] CNY	Apr. 20, 2010 Rodman & Renshaw [Member] USD ($)	Nov. 08, 2013 CD International Enterprise Inc [Member]	Nov. 08, 2013 Hanover Holdings I, LLC [Member] Consulting Fees [Member] USD ($)	Nov. 08, 2013 Hanover Holdings I, LLC [Member] Financing Cost [Member]	Feb. 08, 2012 Quarterly [Member] Yao [Member] USD ($)	Oct. 26, 2009 Quarterly [Member] Yao [Member] USD ($)	Sep. 16, 2010 Quarterly [Member] Chan [Member] USD ($)	May 02, 2013 Quarterly [Member] Chan [Member] USD ($)	May 03, 2013 Quarterly [Member] Shen [Member] USD ($)	Jan. 02, 2014 Quarterly [Member] Mr. Kam Ping Chan [Member] USD ($)	Mar. 31, 2014 Loan Gurantee Expense [Member] USD ($)	Dec. 31, 2013 Loan Gurantee Expense [Member] USD ($)	Sep. 30, 2013 Loan Gurantee Expense [Member] USD ($)	Mar. 31, 2013 Loan Gurantee Expense [Member] USD ($)	Jun. 30, 2013 Loan Gurantee Expense [Member] USD ($)	Mar. 31, 2013 Legal Expenses [Member] USD ($)	Mar. 31, 2014 Consulting Fees [Member] USD ($)	Dec. 31, 2013 Consulting Fees [Member] USD ($)	Mar. 31, 2013 Consulting Fees [Member] USD ($)	Jun. 30, 2013 Consulting Fees [Member] USD ($)	Mar. 31, 2013 Termination of Leasing Agreement [Member] USD ($)	Dec. 31, 2012 Lease Expense [Member] USD ($)	Sep. 30, 2012 Lease Expense [Member] USD ($)	Mar. 31, 2013 Facility Leasing Expenses [Member] USD ($)	Jan. 02, 2012 Yao [Member]	Oct. 22, 2013 Yao [Member] USD ($)	Feb. 08, 2012 Yao [Member] USD ($)	Oct. 26, 2009 Yao [Member]	Oct. 26, 2009 Yao [Member] USD ($)	Oct. 28, 2013 Non-affiliated Investor [Member] USD ($)	Oct. 26, 2009 Thomson [Member] USD ($)	Dec. 31, 2012 Thomson [Member] USD ($)	Oct. 26, 2009 Thomson [Member] USD ($)	Dec. 31, 2010 Thomson [Member]	Sep. 30, 2010 Thomson [Member]	Mar. 31, 2010 Thomson [Member]	Sep. 16, 2010 Chan [Member] USD ($)	May 02, 2013 Chan [Member] USD ($)	Sep. 10, 2011 Chan [Member]	Mar. 10, 2011 Chan [Member]	Oct. 05, 2010 Employees [Member] USD ($)	Jul. 30, 2012 Employees [Member] USD ($)	Feb. 06, 2012 Employees [Member] USD ($)	Jan. 25, 2011 Employees [Member] USD ($)	Dec. 15, 2011 Employees [Member] USD ($)	Mar. 29, 2011 Employees [Member] USD ($)	May 04, 2012 Director [Member] USD ($)	Dec. 15, 2011 Director [Member] USD ($)	May 04, 2012 Director [Member]	Dec. 31, 2012 Director [Member] USD ($)	Jun. 30, 2012 Director [Member]	Dec. 16, 2011 Director [Member] USD ($)	May 04, 2012 Director [Member] Per Quarter [Member] USD ($)	Dec. 31, 2012 Director [Member] Per Quarter [Member] USD ($)	Dec. 15, 2011 Director 2 [Member] USD ($)	May 03, 2013 Shen [Member] USD ($)	Jan. 02, 2014 Mr. Kam Ping Chan [Member] USD ($)	Aug. 12, 2008 Armco HK [Member] USD ($)	Jul. 27, 2008 Armco HK [Member] USD ($)	Sep. 30, 2008 Armco HK [Member] USD ($)	Jun. 27, 2008 Armco HK [Member] USD ($)	Sep. 30, 2008 Armco HK [Member] USD ($)	Jun. 27, 2010 Armco HK [Member] USD ($)	Jun. 25, 2010 Yao Purchase of Gao Option [Member] USD ($)	Apr. 12, 2010 Yao Purchase of Gao Option [Member] USD ($)	Jun. 25, 2010 Yao Purchase of Gao Option [Member] USD ($)	Mar. 31, 2014 Restated 2009 Stock Incentive Plan [Member]	Dec. 31, 2013 Less Than One Year [Member] USD ($)	Dec. 31, 2013 Greater than One Year [Member] USD ($)
Note 13 - Stockholders' Equity (Details) [Line Items]
Aggregate Shares Authorized														75,000,000
Common and Preferred Stock, Par Value (in Dollars per share)														$ 0.001
Preferred Stock, Shares Authorized														1,000,000						1,000,000
Common Stock, Shares Authorized														74,000,000						74,000,000
Common Stock, Shares, Issued														33,770,176						29,876,327										10,000,000	9,100,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares																																																																																																																																							7,694,000		7,694,000
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned (in Dollars)																																																																																																																																							$ 6,890,000		$ 6,890,000
Equity Method Investment, Ownership Percentage																																																												85.00%																																																																										69.70%	100.00%		100.00%
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Options Issued																																																																																																																																									5,300,000	5,300,000	2,000,000		2,000,000
Investment Options, Exercise Price (in Dollars per share)							$ 1.30																																																																																																														$ 5.00																				$ 1.30	$ 1.30	$ 5.00	$ 5.00	$ 5.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period																																																																																																																																						5,300,000		5,300,000				400,000	1,000,000
Stock Issued During Period, Value, Stock Options Exercised (in Dollars)																																																																																																																																						6,890,000		6,890,000
Proceeds from Stock Options Exercised (in Dollars)																																																																																																																																														4,500,000
Debt Instrument, Decrease, Forgiveness (in Dollars)																																																																																																																																												2,000,000	500,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period																			600,000
Proceeds from Issuance of Private Placement (in Dollars)					40,200	523,500							6,896,229								7,459,929
Stock Issued During Period, Shares, New Issues								3,242,712			1,538,464																																										0.134	1,538,464	1.745		22.9	24.87																	1,000,000	1,000,000
Share Price (in Dollars per share)																$ 0.28											$ 6.95								$ 3.28			$ 0.499	$ 3.28			$ 0.3301	$ 3.12			$ 0.69			$ 0.389			$ 0.323					$ 300,000									$ 0.3795	$ 0.4289	$ 0.50	$ 0.4839	$ 0.3795	$ 0.4289		$ 0.4839						$ 0.4499								$ 0.39	$ 0.307	$ 0.38	$ 0.375	$ 0.31	$ 0.375	$ 0.39	$ 0.307	$ 0.375	$ 0.31	$ 0.375	$ 0.4839	$ 0.3795	$ 0.375								$ 0.4839														$ 2.74		$ 0.27				$ 0.2851
Shares Per Unit																																																									100,000
Sale of Stock, Price Per Share (in Dollars per share)								$ 0.50			$ 6.50																							$ 0.50																				$ 6.50			$ 3.00
Class of Warrant or Right, Number of Securities Called by Warrants or Rights																									167,740	1,031,715																												1,538,464	2,728,913		100,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item)								0.50															5.00			5.00			5.00			5.00	5.00																					7.50	5.00	7.50	5.00																				7.50
Common Stock, Par or Stated Value Per Share (in Dollars per share)														$ 0.001						$ 0.001											$ 0.001																						$ 300,000		$ 300,000
Investment Banking, Advisory, Brokerage, and Underwriting Fees and Commissions (in Dollars)																																																										162,660
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Warrants Issued											1,538,464																					99,650	142,614																																												76,923
Asset Management Fees (in Dollars)																																																								500,000		579,316																			500,000
Professional Fees (in Dollars)														214,454	196,497						97,689																																			15,000
Proceeds From Issuance of Private Placement Net (in Dollars)																					6,620,681
Proceeds from Issuance of Common Stock (in Dollars)												1,523,277			1,621,356																			1,621,356																				10,000,016
Payments of Stock Issuance Costs (in Dollars)																																																																													15,000
Partners' Capital Account, Units, Sold in Public Offering								3,242,712
Proceeds from Issuance Initial Public Offering (in Dollars)								1,600,000
Debt Conversion, Original Debt, Amount (in Dollars)																																																											353,753																																											1,045,369				816,593
Debt Instrument, Convertible, Conversion Price (in Dollars per share)																				$ 0.317																																							$ 0.4933																																											$ 0.52				$ 0.52
Debt Conversion, Converted Instrument, Shares Issued																																																											717,067																																											2,010,327				1,570,371
Long-term Line of Credit																																																													45,400,000	300,000,000
Share-based Goods and Nonemployee Services Transaction, Quantity of Securities Issued											76,923																																																				500,000																																																													10,000							50,000
Stock Issued During Period, Shares, Issued for Services																																																																	33,333	33,333	33,333	33,333	75,000	75,000	75,000	300,000	16,667	100,000				1,000,000									33,338	33,333	33,333	33,333	33,333	75,000	250,000	250,000	50,000	33,333	625,000	125,000	125,000	125,000
Stock Issued During Period, Value, Issued for Services (in Dollars)																																																																		12,650	14,297	16,667	36,293	28,463	32,168		8,065														13,002	102,337	12,667	12,500	10,333	28,125	97,500	76,750	18,750	10,333	234,375	60,488	47,438	46,875								16,130
Stock Issued During Period, Value, New Issues											10,000,016																																																																159,000	1,000,000
Stock Issued During Period, Shares, Other																																																																																47,022
Stock Issued During Period, Value, Other (in Dollars)																																																																															21,155
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized			8,200,000							2,200,000										1,300,000				5,200,000				1,200,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized			3,000,000							1,000,000								3,000,000
Maximum Amount of Cash-Settled Performance-Based Award (in Dollars)																																																																																																																																																1,000,000	5,000,000
Maximum ISOs Exercisable Per Employee (in Dollars)																				100,000
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum																				10.00%
Percentage of Fair Value																						110.00%
Stock Issued During Period, Shares, Restricted Stock Award, Gross																																																																																																								200,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period														7,556,704						5,101,746															66,666	66,667	66,667
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures (in Dollars)																																																																																	62,375	54,667	4,875	516	4,863	505																	748,500		656,000				20,500				19,500	2,063									34,500			1,782			8,625	446		19,450	2,019
Officers' Compensation (in Dollars)																																																																																																											20,000						20,000
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures																																																																																																					1,500,000		1,500,000				6,250						6,250	6,250							6,250				50,000							50,000	6,250
Restricted Stock, Vested Percentage																									25.00%																																																																																					25.00%	25.00%	25.00%			50.00%	50.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures									400,000																																																																																																												40,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share)																																																																																																																					$ 138,000
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures	2,329,958	1,363,282		980,991												50,000																																																																																																						561,640	57,743	55,378	264,379	10,000
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures (in Dollars)														906,529		14,000																																																																																																						185,341	33,318	187,180	71,383	27,400
Share-based Goods and Nonemployee Services Transaction, Stockholders' Equity (in Dollars)														97,500			16,200																																															13,002																																																												2,700							13,500
Vesting Percentage																																												50.00%	50.00%																																																																																	50.00%	50.00%
Stock Granted, Value, Share-based Compensation, Net of Forfeitures (in Dollars)	$ 838,785	$ 640,743		$ 343,347					$ 132,000
Portion Vesting																																								50.00%	50.00%						50.00%	50.00%		50.00%	50.00%
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant																																																																																																																																															245,379

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Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Change of Fair Value of Derivative Debt Liabilities (USD $)	3 Months Ended	9 Months Ended	12 Months Ended		3 Months Ended	12 Months Ended
	Mar. 31, 2014	Sep. 30, 2013	Dec. 31, 2012	Dec. 31, 2013	Mar. 31, 2014 Derivative [Member]	Dec. 31, 2013 Derivative [Member]
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Change of Fair Value of Derivative Debt Liabilities [Line Items]
Balance	$ 1,367,535			$ 61,429
To record derivative liability as debt discount	1,901,282		60,795
Change in fair value of derivative liability		930,517			(477,909)	634
Settlement of derivative liability due to conversion of related notes	$ (117,267)

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Note 12 - Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Schedule of Line of Credit Facilities [Table Text Block]

	Date of Expiration		Total Facilities			Facilities Used		Facilities Available
Armco HK
DBS (Hong Kong) Limited (i)	October 21, 2014		20,000,000			695,226		19,304,774
Sub-total - Armco HK			20,000,000			695,226		19,304,774
Henan Armco
Bank of China (ii)	May 23, 2014		4,867,601			-		4,867,601
China CITIC Bank (iii)	May 31, 2014		6,490,135			-		6,490,135
ICBC (iv)	September 09, 2014		3,245,607			-		3,245,607
Guangdong Development Bank Zhengzhou Branch (v)	May 6, 2015		12,655,763			-		12,665,763
Sub-total – Henan Armco			27,258,566			-		27,258,566
Renewable Metals
Bank of China Lianyungang Branch (vi)	December 27, 2015		8,112,669			8,112,669		-
Shanghai Pudong Development Bank (vii)	August 25, 2014		2,433,801			2,433,801		-
Bank of Communications Lianyungang Branch (viii)	August 8, 2014		11,682,243			2,920,561		8,761,683
Sub-total – Renewable Metals			22,228,713			13,467,031		8,761,683
		$	84,487,279		$	14,162,257	$	70,325,023
				%

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Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе		8.00%
Convertible notes payable amount converted, $5,727,967 (in Dollars)	$ 5,777,967	$ 5,777,967
Armco HK [Member] | RZB Hong Kong [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе, basis points abovе cost of funds	2.00%	2.00%
Armco HK [Member] | DBS Hong Kong [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе	3.47%	3.47%
Renewable Metals [Member] | Bank of Communications Lianyungang [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе, basis points abovе cost of funds	1.20%	1.20%
Intеrеst ratе	7.20%	7.20%
Renewable Metals [Member] | Non-interest Bearing [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе	8.00%	8.00%
Renewable Metals [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе	6.00%
Henan Armco [Member] | ICBC Bank [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе	2.47%
Henan Armco [Member] | Guanhutun Credit Union [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе	9.60%
Henan Armco [Member] | Temporary Short Term Loan [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе	6.60%	6.60%
Pudong Development Bank [Member] | Temporary Short Term Loan [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе, basis points abovе cost of funds	0.0792%
Armco Metals Holdings [Member] | Temporary Short Term Loan [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе	8.00%
Armco Metals Holdings [Member] | Minimum [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе	4.00%	4.00%
Armco Metals Holdings [Member] | Maximum [Member]
Note 7 - Loans and Convertible Note Payable (Details) - Loans Payable (Parentheticals) [Line Items]
Intеrеst ratе	8.00%	8.00%

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Note 15 - Concentrations and Credit Risk

3 Months Ended

Mar. 31, 2014

Risks and Uncertainties [Abstract]

Concentration Risk Disclosure [Text Block]

Note 15 – Concentrations and Credit Risk

Credit Risk Arising from Financial Instruments

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents.

As of March 31, 2014 and December 31, 2013, substantially all of the Company’s cash and cash equivalents were held by major financial institutions located in the PRC, none of which are insured. However, the Company has not experienced losses on these accounts and management believes that the Company is not exposed to significant risks on such accounts.

Customers and Credit Concentrations

Customer concentrations and credit concentrations are as follows:

	Net Sales for the Three Months Ended						Accounts Receivable at
	March 31, 2014			March 31, 2013			March 31, 2014			December 31, 2013
Customer A		-	%		54.6	%		32.4	%		33.8	%
Customer B		22.6	%		-	%		27.2	%		25.1	%
Customer C		-	%		-	%		-	%		18.3	%
Customer D		-	%		-	%		10.4	%		-	%
Customer E		-	%		-	%		19.6	%		-	%
Customer F		37.2	%		-	%		-	%		-	%
Customer G		12.3	%		-	%		-	%		-	%
Customer H		11.8	%		-	%		-	%		-	%
		83.9	%		54.6	%		89.6	%		77.2	%

A reduction in sales from or loss of such customers would have a material adverse effect on the Company’s results of operations and financial condition.

Vendor Concentrations

Vendor purchase concentrations and accounts payable concentration as follows:

	Net Purchases for the Three Months Ended						Accounts Payable at
	March 31, 2014			March 31, 2013			March 31, 2014			December 31, 2013
Vendor A		38.4	%		82.6	%		40.2	%		86.0	%
Vendor B		37.0	%		-	%		25.8	%		-	%
		75.4	%		82.6	%		66.0	%		86.0	%

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Note 4 - Marketable Equity Securities, Available for Sale (Tables)

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

			Fair Value Measurement Using Level 1 Inputs
	Original cost		Impairment – Other Than Temporary			Accumulated Foreign Currency Transaction Gain (Loss)		Other Comprehensive Income (Loss) - Change in Unrealized Loss			Fair Value
Balance, December 31, 2013	$	3,396,658	$	(2,366,941	)	$	183,924	$	(694,512	)	$	519,129
Purchases, issuances and settlements
Total gains or losses (realized/unrealized) included in:
Other comprehensive income (loss): Changes in unrealized loss							-		21,938			21,938
Balance, March 31, 2014	$	3,396,658	$	(2,366,941	)	$	183,924	$	(672,574	)	$	541,067

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Note 7 - Loans and Convertible Note Payable (Details)	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CNY
Loans Payable [Abstract]
Debt Instrument, Face Amount	$ 6,200,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%	8.00%
Convertible Notes Payable	5,500,000	33,512,936
Debt Instrument, Unamortized Discount	$ 1,300,000
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.317

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Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Exchange Rates (RMB Into U.S. Dollars)	Jul. 21, 2005	Jul. 20, 2005	Mar. 31, 2014 Balance Sheet [Member]	Dec. 31, 2013 Balance Sheet [Member]	Mar. 31, 2013 Balance Sheet [Member]	Dec. 31, 2012 Balance Sheet [Member]	Mar. 31, 2014 Statement of Operations and Comprehensive Income (Loss) [Member]	Dec. 31, 2013 Statement of Operations and Comprehensive Income (Loss) [Member]	Mar. 31, 2013 Statement of Operations and Comprehensive Income (Loss) [Member]	Dec. 31, 2012 Statement of Operations and Comprehensive Income (Loss) [Member]
Note 2 - Significant and Critical Accounting Policies and Practices (Details) - Exchange Rates (RMB Into U.S. Dollars) [Line Items]
Financial Statement	8.11	8.28	6.1632	6.1122	6.2741	6.3086	6.1178	6.1943	6.2814	6.3116

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Consolidated Statement of Stockholders' Equity (USD $)	Common Stock [Member] Chaoyang Steel [Member]	Common Stock [Member]	Additional Paid-in Capital [Member] Chaoyang Steel [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Net Unrealized Investment Gain (Loss) [Member]	Accumulated Translation Adjustment [Member]	Chaoyang Steel [Member]	Total
Balance at Dec. 31, 2013		$ 29,876		$ 35,790,906	$ 2,625,287	$ (694,512)	$ 4,852,433		$ 42,603,990
Balance, shares (in Shares) at Dec. 31, 2013		29,876,327							29,876,327
Issuance of common stock for services	34	250	12,968	97,250				13,002	97,500
Issuance of common stock for services, shares (in Shares)	33,338	250,000
Issuance of common stock in conversion of convertible notes		1,274		383,353					384,627
Issuance of common stock in conversion of convertible notes (in Shares)		1,274,303
Reclassification of derivative liabilities due to conversion of convertible notes				117,267					117,267
Net Loss					(3,620,281)				(3,620,281)
Change in unrealized loss on marketable securities						21,938			21,938
Foreign currency translation loss							(408,558)		(408,558)
Stock-based compensation		2,336		904,193					906,529
Stock-based compensation (in Shares)		2,336,208
Balance at Mar. 31, 2014		$ 33,770		$ 37,305,937	$ (994,994)	$ (672,574)	$ 4,443,875		$ 40,116,014
Balance, shares (in Shares) at Mar. 31, 2014		33,770,176							33,770,176

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Note 4 - Marketable Equity Securities, Available for Sale

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 4 – Marketable Equity Securities, Available for Sale

As of March 31, 2014, the Company’s available for sale marketable securities were marked to market to its fair value of $541,067 and reported a $21,938 change in unrealized loss on marketable securities for the three months ended March 31, 2014 as other comprehensive income (loss) in its Stockholders’ Equity.

The table below provides a summary of the changes in the fair value of marketable securities, available for sale measured at fair value on a recurring basis using Level 1 of the fair value hierarchy to measure the fair value.

			Fair Value Measurement Using Level 1 Inputs
	Original cost		Impairment – Other Than Temporary			Accumulated Foreign Currency Transaction Gain (Loss)		Other Comprehensive Income (Loss) - Change in Unrealized Loss			Fair Value
Balance, December 31, 2013	$	3,396,658	$	(2,366,941	)	$	183,924	$	(694,512	)	$	519,129
Purchases, issuances and settlements
Total gains or losses (realized/unrealized) included in:
Other comprehensive income (loss): Changes in unrealized loss							-		21,938			21,938
Balance, March 31, 2014	$	3,396,658	$	(2,366,941	)	$	183,924	$	(672,574	)	$	541,067

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Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Fair Value of Derivative Warrants Assumptions	0 Months Ended			1 Months Ended				0 Months Ended		1 Months Ended	9 Months Ended
	Mar. 03, 2014	Mar. 05, 2014	Mar. 14, 2014	Mar. 24, 2014	Mar. 26, 2014	Mar. 31, 2014	Feb. 27, 2014	Aug. 08, 2008 Warrants 2008 [Member] Black-Scholes [Member]		Apr. 20, 2010 Warrants 2008 [Member] Lattice [Member]	Sep. 30, 2013 Warrants 2008 [Member] Lattice [Member]
Note 11 - Derivative Instruments and the Fair Value of Financial Instruments (Details) - Fair Value of Derivative Warrants Assumptions [Line Items]
Expected life (year)								5 years		5 years	29 days
Expected volatility (*)	101.00%	101.00%	102.00%	102.00%	102.00%	102.00%	101.00%	89.00%	[1]	182.00%	57.00%
Risk-free interest rate								3.23%		2.56%	0.02%
Expected annual rate of quarterly dividends								0.00%		0.00%	0.00%

[1] Expected volatility is based on historical volatility of the Company's common stock. The Company currently has no reason to believefuture volatility over the expected life of these warrants is likely to differ materially from its historical volatility. The risk-free interestrate is based on a yield curve of U.S. treasury interest rates on the date of grant based on the expected term of the warrant. Expectedannual rate of quarterly dividends is based on the Company's dividend history and anticipated dividend policy.

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Note 14 - Income Taxes (Details)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Note 14 - Income Taxes (Details) [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	33.00%
Effective Income Tax Rate Reconciliation, Percent	0.00%	0.77%
State [Member]
Note 14 - Income Taxes (Details) [Line Items]
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent	30.00%
Local [Member]
Note 14 - Income Taxes (Details) [Line Items]
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent	3.00%
Armco HK [Member]
Note 14 - Income Taxes (Details) [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	16.50%

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Note 5 - Accounts Receivable (Tables)

3 Months Ended

Mar. 31, 2014

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	March 31, 2014			December 31, 2013
Accounts receivable	$	18,502,205		$	25,638,666
Allowance for doubtful accounts		(43,150	)		(43,150	)
	$	18,459,055		$	25,595,516

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Note 2 - Significant and Critical Accounting Policies and Practices (Details)	Jul. 21, 2005	Jul. 20, 2005
Accounting Policies [Abstract]
Foreign Currency Exchange Rate, Translation	8.11	8.28

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Note 14 - Income Taxes

3 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 14 – Income Taxes

Armco Metals Holdings is a non-operating holding company. Armco HK, the Company’s Hong Kong Subsidiary is subject to Hong Kong SAR income taxes. Henan Armco, Renewable Metals, Lianyungang Armco and Armco Shanghai, the Company’s PRC subsidiaries are subject to PRC income taxes, file income tax returns under the Income Tax Law of the People’s Republic of China concerning Foreign Investment Enterprises and Foreign Enterprises and local income tax laws (the “PRC Income Tax Law”) accordingly. Henan Armco, Renewable Metals, Lianyungang Armco and Armco Shanghai derive substantially all of their income (loss) before income taxed and related tax expenses from PRC sources.

United States Income Tax

Armco Metals Holdings is incorporated in the State of Nevada and is subjected to United Sates of America tax law.

Hong Kong SAR Income Tax

Armco HK is registered and operates in the Hong Kong Special Administrative Region (“HK SAR”) of the People’s Republic of

China (“PRC”) and is subject to HK SAR tax law. Armco HK’s statutory income tax rate is 16.5%.

PRC Income Tax

Henan Armco, Renewable Metals, Lianyungang Armco and Armco Shanghai are governed by and file separate income tax returns under the PRC Income Tax Law, which, until January 2008, generally subject to tax at a statutory rate of 33% (30% state income tax plus 3% local income tax) on income reported in the statutory financial statements after appropriate tax adjustments. On March 16, 2007, the National People’s Congress of China approved the Corporate Income Tax Law of the People’s Republic of China (the “New CIT Law”), effective January 1, 2008. Under the New CIT Law, the corporate income tax rate applicable to all Companies, including both domestic and foreign-invested companies, will be 25%. However, tax concession granted to eligible companies prior to March 16, 2007 will be grand fathered in.

The effective tax rate is 0% and -0.77% for the three months ended March 31, 2014 and March 31, 2013, respectively.