Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | China Finance Online Co. LTD |
Entity Central Index Key | 1,297,830 |
Trading Symbol | JRJC |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2017 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2,017 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 118,098,018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 38,692,871 | $ 66,151,439 |
Restricted cash | 2,035,634 | 2,483,557 |
Prepaid expenses and other current assets | 4,198,301 | 8,241,042 |
Trust bank balances held on behalf of customers | 39,168,960 | 33,173,792 |
Accounts receivable - margin clients, net of allowance for doubtful accounts of nil and nil in 2016 and 2017, respectively | 8,010,846 | 7,556,557 |
Accounts receivable - others, net of allowance for doubtful accounts of $3,371 and $3,579 in 2016 and 2017, respectively | 8,977,608 | 14,410,947 |
Short - term investments | 532,912 | 16,443,831 |
Total current assets | 101,617,132 | 148,461,165 |
Property and equipment, net | 6,885,261 | 7,398,133 |
Acquired intangible assets, net | 96,457 | 396,753 |
Cost method investment | 1,714,058 | 1,542,454 |
Equity method investment, net | 817,223 | 1,019,009 |
Rental deposits | 1,140,929 | 1,292,078 |
Goodwill | 108,010 | 108,871 |
Guarantee fund deposits | 604,497 | 6,002,920 |
Deferred tax assets | 1,620,286 | 1,402,443 |
Total assets | 114,603,853 | 167,623,826 |
Current liabilities: | ||
Deferred revenue, current (including deferred revenue, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $5,285,623 and $ 8,477,256 as of December 31, 2016 and December 31, 2017, respectively) | 9,370,845 | 6,526,040 |
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $26,351,842 and $6,109,214 as of December 31, 2016 and December 31, 2017, respectively) | 9,953,695 | 29,619,949 |
Contingent liability (including contingent liability held on their behalf of the consolidated variable interest entities without recourse to China Finance Online Co. Limited nil and nil as of December 31, 2016 and December 31, 2017, respectively) | 2,760 | 3,000,000 |
Amounts due to customers for the trust bank balances held on their behalf (including amounts due to customers for the trust bank balances held on their behalf of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $3,070,884 and $5,374,977 as of December 31, 2016 and December 31, 2017, respectively) | 39,168,960 | 33,173,792 |
Accounts payable (including accounts payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $2,151,133 and $1,066,918 as of December 31, 2016 and December 31, 2017, respectively) | 9,461,921 | 8,745,868 |
Income taxes payable (including income taxes payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $3,819,194 and $483,656 as of December 31, 2016 and December 31, 2017, respectively) | 553,316 | 3,828,239 |
Total current liabilities | 68,511,497 | 84,893,888 |
Deferred revenue, non-current (including deferred revenue, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $ 77,603 and $25,229 as of December 31, 2016 and December 31, 2017, respectively) | 144,149 | 609,441 |
Deferred tax liabilities (including deferred tax liabilities, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $305,861 and $218,170 as of December 31, 2016 and December 31, 2017, respectively) | 236,596 | 325,687 |
Total liabilities | 68,892,242 | 85,829,016 |
Commitments and contingencies (Note 23) | ||
China Finance Online Co. Limited shareholder's equity: | ||
Ordinary shares (118,098,018 and 118,098,018 shares issued and outstanding as of December 31, 2016 and 2017, respectively) | 57,000,417 | 56,973,632 |
Additional paid-in capital | 34,368,210 | 32,176,992 |
Accumulated other comprehensive income | 6,654,191 | 4,253,643 |
Retained deficits | (43,976,136) | (7,239,583) |
Total China Finance Online Co. Limited shareholders' equity | 54,046,682 | 86,164,684 |
Noncontrolling interest | (8,335,071) | (4,369,874) |
Total equity | 45,711,611 | 81,794,810 |
Total liabilities and equity | $ 114,603,853 | $ 167,623,826 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable - margin clients, net of allowance for doubtful accounts | ||
Accounts receivable - others, net of allowance for doubtful accounts | 3,579 | 3,371 |
Deferred revenue, current | 8,477,256 | 5,285,623 |
Accrued expenses and other current liabilities | 6,109,214 | 26,351,842 |
Contingent liability, current | ||
Amounts due to customers for the trust bank balances held on their behalf | 5,374,977 | 3,070,884 |
Accounts payable | 1,066,918 | 2,151,133 |
Income taxes payable | 483,656 | 3,819,194 |
Deferred revenue, non-current | 25,229 | 77,603 |
Deferred tax liabilities, non-current | $ 218,170 | $ 305,861 |
Ordinary shares, shares issued | 118,098,018 | 118,098,018 |
Ordinary shares, shares outstanding | 118,098,018 | 118,098,018 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income(Loss) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net revenues | $ 42,622,650 | $ 83,057,896 | $ 107,404,766 |
Cost of revenues | 21,933,678 | 20,380,258 | 19,738,737 |
Gross profit | 20,688,972 | 62,677,638 | 87,666,029 |
Operating expenses: | |||
General and administrative (including share-based compensation of $6,395,451, $5,240,518 and $2,739,892 for 2015, 2016 and 2017, respectively) | 15,250,086 | 19,836,498 | 17,993,787 |
Product development (including share-based compensation of $(217,695), $205,448 and $216,374 for 2015, 2016 and 2017, respectively) | 16,208,000 | 14,485,444 | 10,738,730 |
Sales and marketing (including share-based compensation of $(121,723), $129,911 and $111,947 for 2015, 2016 and 2017, respectively) | 29,467,593 | 50,083,441 | 46,474,107 |
Loss from impairment of intangible assets | 291,817 | 1,111,149 | 250,360 |
Loss from impairment of goodwill | 6,659,691 | ||
Total operating expenses | 61,217,496 | 92,176,223 | 75,456,984 |
Government subsidies | 230,174 | 1,194,775 | 251,828 |
Income (loss) from operations | (40,298,350) | (28,303,810) | 12,460,873 |
Interest income | 487,007 | 1,050,781 | 2,648,026 |
Interest expense | (3,204) | (2,275) | (514) |
Exchange loss, net | (131,461) | (55,117) | (766,162) |
Gain (loss) on the interest sold and retained noncontrolling investment | (1,996,361) | 20,567,699 | 9,999,801 |
Gain from sales of cost method investment | 4,648,302 | ||
Gain from sale of equity method investment | 111,224 | ||
Loss from equity method investment | (13,404) | (138,124) | (66,970) |
Short-term investment income | 63,303 | 378,603 | 216,025 |
Other expense, net | (282,775) | (303,332) | (937,431) |
Income (loss) before income tax expense | (42,064,021) | (6,805,575) | 28,201,950 |
Income tax expense | (324,416) | (4,160,603) | (1,384,262) |
Net income (loss) | (42,388,437) | (10,966,178) | 26,817,688 |
Less: net income (loss) attributable to the noncontrolling interest | (5,651,884) | (9,287,365) | 4,335,272 |
Net income (loss) attributable to China Finance Online Co. Limited | $ (36,736,553) | $ (1,678,813) | $ 22,482,416 |
Net income (loss) per share attributable to China Finance Online Co. Limited | |||
Basic | $ (0.32) | $ (0.01) | $ 0.20 |
Diluted | $ (0.32) | $ (0.01) | $ 0.18 |
Weighted average shares used in calculating net income (loss) per share | |||
Basic | 113,601,949 | 113,213,912 | 110,997,871 |
Diluted | 113,601,949 | 113,213,912 | 125,129,763 |
Other comprehensive income (loss), net of tax: | |||
Changes in foreign currency translation adjustment | $ 2,400,548 | $ (4,343,652) | $ (3,467,043) |
Other comprehensive income (loss), net of tax | 2,400,548 | (4,343,652) | (3,467,043) |
Comprehensive income (loss) | (39,987,889) | (15,309,830) | 23,350,645 |
Less: net income (loss) attributable to the noncontrolling interest | (5,651,884) | (9,287,365) | 4,335,272 |
Comprehensive income (loss) attributable to China Finance Online Co. Limited | $ (34,336,005) | $ (6,022,465) | $ 19,015,373 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Income(Loss) (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based compensation | $ 3,068,213 | $ 5,575,877 | $ 6,056,033 |
General and administrative | |||
Share-based compensation | 2,739,892 | 5,240,518 | 6,395,451 |
Product development | |||
Share-based compensation | 216,374 | 205,448 | (217,695) |
Sales and marketing | |||
Share-based compensation | $ 111,947 | $ 129,911 | $ (121,723) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Total | Ordinary shares | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings/(deficits) | Total China Finance Online Co. limited shareholders' equity | Non controlling interest |
Balance at Dec. 31, 2014 | $ 75,541,436 | $ 56,386,606 | $ 24,207,606 | $ 12,064,338 | $ (28,043,186) | $ 64,615,364 | $ 10,926,072 |
Balance, shares at Dec. 31, 2014 | 112,417,933 | ||||||
Issuance of ordinary shares for the plan of stock options and restricted shares | 520 | $ 520 | 520 | ||||
Issuance of ordinary shares for the plan of stock options and restricted shares, shares | 4,000,000 | ||||||
Exercise of share options by employees | 293,654 | $ 293,654 | 293,654 | ||||
Exercise of share options by employees, shares | 435,000 | ||||||
Exercise of share options by non-employees | 175,200 | $ 175,200 | 175,200 | ||||
Exercise of share options by non-employees, shares | 1,095,000 | ||||||
Restricted shares issued | 20 | $ 20 | 20 | ||||
Restricted shares issued, shares | 150,085 | ||||||
Share-based compensation | 6,056,033 | 5,331,748 | 5,331,748 | 724,285 | |||
Changes in controlling ownership interest | 320,956 | (1,393,508) | (1,393,508) | 1,714,464 | |||
Dividends paid to noncontrolling shareholders | (6,509,680) | (6,509,680) | |||||
Paid-in capital from noncontrolling shareholders | 641 | 641 | |||||
Foreign currency translation adjustment | (3,467,043) | (3,467,043) | (3,467,043) | ||||
Net income (loss) | 26,817,688 | 22,482,416 | 22,482,416 | 4,335,272 | |||
Balance at Dec. 31, 2015 | 99,229,425 | $ 56,856,000 | 28,145,846 | 8,597,295 | (5,560,770) | 88,038,371 | 11,191,054 |
Balance, shares at Dec. 31, 2015 | 118,098,018 | ||||||
Exercise of share options by employees | 117,632 | $ 117,632 | 117,632 | ||||
Share-based compensation | 5,575,877 | 4,413,811 | 4,413,811 | 1,162,066 | |||
Changes in controlling ownership interest | (211,123) | (382,665) | (382,665) | 171,542 | |||
Dividends paid to noncontrolling shareholders | (10,117,946) | (10,117,946) | |||||
Deconsolidation | 2,510,775 | 2,510,775 | |||||
Foreign currency translation adjustment | (4,343,652) | (4,343,652) | (4,343,652) | ||||
Net income (loss) | (10,966,178) | (1,678,813) | (1,678,813) | (9,287,365) | |||
Balance at Dec. 31, 2016 | 81,794,810 | $ 56,973,632 | 32,176,992 | 4,253,643 | (7,239,583) | 86,164,684 | (4,369,874) |
Balance, shares at Dec. 31, 2016 | 118,098,018 | ||||||
Exercise of share options by employees | 26,785 | $ 26,785 | 26,785 | ||||
Share-based compensation | 3,068,213 | 2,191,218 | 2,191,218 | 876,995 | |||
Deconsolidation | 809,692 | 809,692 | |||||
Foreign currency translation adjustment | 2,400,548 | 2,400,548 | 2,400,548 | ||||
Net income (loss) | (42,388,437) | (36,736,553) | (36,736,553) | (5,651,884) | |||
Balance at Dec. 31, 2017 | $ 45,711,611 | $ 57,000,417 | $ 34,368,210 | $ 6,654,191 | $ (43,976,136) | $ 54,046,682 | $ (8,335,071) |
Balance, shares at Dec. 31, 2017 | 118,098,018 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | |||
Net income (loss) | $ (42,388,437) | $ (10,966,178) | $ 26,817,688 |
Adjustments to reconcile net income (loss) to net cash provided by Operating activities: | |||
Share-based compensation | 3,068,213 | 5,575,877 | 6,056,033 |
Depreciation and amortization | 2,105,158 | 2,039,791 | 1,649,136 |
Provision of allowance for doubtful accounts | (1,026,449) | 74 | |
(Gain) Loss from equity method investment | (97,820) | 138,124 | 66,970 |
Gain from short-term investments | (63,303) | (378,603) | (216,025) |
Deferred taxes | (231,667) | (487,057) | (502,052) |
Loss on disposal of property and equipment | 124,696 | 144,135 | 390,296 |
Gain from sales of cost method investment | (4,648,302) | ||
Loss from impairment of intangible assets | 291,817 | 1,111,149 | 250,360 |
Loss from impairment of goodwill | 6,659,691 | ||
(Gain) Loss on the interest sold and retained noncontrolling investment | 1,996,361 | (20,567,699) | (9,999,801) |
Changes in assets and liabilities: | |||
Accounts receivable, others | 4,896,250 | (2,067,338) | 586,009 |
Accounts receivable, margin clients | (515,614) | (3,188,904) | (2,666,812) |
Prepaid expenses and other current assets | (1,105,245) | (1,856,549) | 369,290 |
Trust bank balances held on behalf of customers | (5,987,800) | (19,148,934) | (2,267,808) |
Restricted cash | 581,650 | (2,593,901) | 5,403 |
Rental deposits | 15,652 | (169,148) | (204,811) |
Guarantee deposit funds | 5,616,733 | (1,049,046) | (1,576,128) |
Amounts due from noncontrolling shareholders | (461,810) | 2,690,941 | |
Deferred revenue | 3,517,988 | 349,113 | 1,794,179 |
Account payable | 298,975 | 3,609,213 | (5,182,939) |
Accrued expenses and other current liabilities | (3,483,073) | 1,573,833 | 2,596,050 |
Amounts due to customers for the trust bank balance held on their behalf | 5,987,800 | 19,148,934 | 2,267,808 |
Income taxes payable | (951,595) | 2,269,464 | 1,541,421 |
Net cash provided by (used in) operating activities | (26,323,261) | (21,342,292) | 19,816,980 |
Investing activities: | |||
Purchase of property and equipment | (2,472,409) | (4,602,154) | (3,350,260) |
Acquisition of businesses (net of cash acquired of $14,463, nil and nil for the years ended December 31, 2015, 2016 and 2017, respectively) | (424,437) | 14,463 | |
Business restructure | (354,284) | ||
Proceeds from disposal of affiliates (Note 10) | 1,576,467 | 23,836,195 | 8,463,170 |
Acquisition of equity method investment | (327,263) | ||
Proceeds from transfer of equity method investment | 350,181 | 12,765,427 | |
Repayment of loans given to equity method investee | 9,807,585 | ||
Proceeds from transfer equity interest to noncontrolling shareholders | 72,271 | ||
Advances related to disposal of subsidiaries | (5,299,758) | 5,299,758 | |
Purchase of short-term investments | (71,492,241) | (326,196,271) | (105,354,947) |
Proceeds from sales of short-term investments | 87,946,966 | 309,564,065 | 105,562,667 |
Acquisition of cost method investment | (76,520) | (216,232) | |
Proceeds from sales of cost method investment | 7,959,237 | ||
Proceeds from disposal of fixed assets | 19,671 | ||
Net cash provided by (used in) investing activities | 15,832,444 | (3,318,921) | 40,557,824 |
Financing activities: | |||
Proceeds from stock options exercised by employees | 26,786 | 142,618 | 294,193 |
Proceeds from stock options exercised by nonemployees | 175,200 | ||
Proceeds from paid-in capital of noncontrolling shareholders | 488,155 | ||
Dividends paid to noncontrolling shareholders | (9,839,173) | (6,549,628) | |
Proceeds from Yinglibao Clients | 31,764,134 | ||
Repayment of Yinglibao Clients | (19,083,181) | (12,365,167) | |
Net cash provided by (used in) financing activities | (19,056,395) | 9,702,412 | (5,592,080) |
Effect of exchange rate changes | 2,088,644 | (4,623,808) | (1,587,189) |
Net (decrease) increase in cash and cash equivalents | (27,458,568) | (19,582,609) | 53,195,535 |
Cash and cash equivalents, beginning of year | 66,151,439 | 85,734,048 | 32,538,513 |
Cash and cash equivalents, end of year | 38,692,871 | 66,151,439 | 85,734,048 |
Supplemental disclosure of cash flow information | |||
Income taxes paid | 1,510,281 | 2,536,254 | 682,232 |
Interest paid | $ 514 |
Consolidated Statements of Cas8
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Cash Flows [Abstract] | |||
Acquisition of businesses, cash acquired | $ 14,463 |
Organization and Principal Acti
Organization and Principal Activities | 12 Months Ended |
Dec. 31, 2017 | |
Organization and Principal Activities [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES China Finance Online Co. Limited (“China Finance Online” or the “Company”) was incorporated in Hong Kong on November 2, 1998. China Finance Online, its subsidiaries, its variable interest entities (“VIEs”) and its VIEs’ subsidiaries (collectively, the “Group”) is a leading web-based financial services company in China. The company provides Chinese retail investors with online access to securities and commodities trading services, wealth management products, securities investment advisory services, as well as financial database and analytics services to institutional customers. The Company’s prominent flagship portal site, www.jrj.com, is ranked among the top financial websites in China. In 2015, the Company integrated its web-based trading platform Yinglibao iTougu Yinglibao In 2016, the Company continue to develop our wealth management business, securities investment advisory business, financial database subscription business, individual research tool subscription business, advertisement business, and securities, commodities as well as futures trading business. In addition, we launched a new business line of online peer-to-peer lending. In addition, the Company offers basic financial software, information services and securities investment advisory services to retail investors in China. Through its subsidiary, Shenzhen Genius Information Technology Co., Ltd., the Company provides financial database and analytics to institutional customers including domestic financial, research, academic and regulatory institutions. China Finance Online also provides brokerage services in Hong Kong. Details of China Finance Online’s significant subsidiaries, VIEs and VIEs’ subsidiaries as of December 31, 2017 were as follows: Company name Place of Date of legal Subsidiaries: China Finance Online (Beijing) Co., Ltd. (“CFO Beijing”) Beijing, PRC Jul. 9, 1998 100% N/A Fortune Software (Beijing) Co., Ltd. (“CFO Software”) Beijing, PRC Dec. 7, 2004 100% N/A Shenzhen Genius Information Technology Co., Ltd. (“CFO Genius”) Shenzhen, PRC Sep. 21, 2006 100% Subscription service Zhengyong Information & Technology (Shanghai) Co., Ltd. (“CFO Zhengyong”) Shanghai, PRC Aug. 17, 2008 100% N/A Zhengtong Information Technology (Shanghai) Co., Ltd (“CFO Zhengtong”) Shanghai, PRC Jun. 24, 2008 100% N/A Rifa Financial Holdings Limited (“Rifa Financial Holdings”) (Formerly known as “iSTAR Financial Holdings Limited”) BVI Jul. 16, 2007 85% Investment holdings Rifa Securities Limited (“Rifa Securities”) (Formerly known as “iSTAR International Securities Co. Limited”) Hong Kong, PRC Nov. 23, 2007 85% Brokerage service Rifa Futures Limited (“Rifa Futures”) (Formerly known as “iSTAR International Futures Co. Limited”) Hong Kong, PRC Apr. 16, 2008 85% Brokerage service Rifa Credit Limited (“Rifa Credit”) (Formerly known as “iSTAR International Credit Co. Limited”) Hong Kong, PRC Feb. 10, 2012 85% N/A Rifa Wealth Management Co. Limited (“Rifa Wealth Management”) Hong Kong, PRC Sep. 13, 2016 85% Insurance brokerage service Variable interest entities: Beijing Fuhua Innovation Technology Development Co., Ltd. (“CFO Fuhua”) Beijing, PRC Dec. 31, 2000 Nil Web portal and advertising service Shenzhen Newrand Securities Advisory and Investment Co., Ltd. (“CFO Newrand”) Shenzhen, PRC Oct. 17, 2008 Nil Securities investment advising Shanghai Stockstar Wealth Management Co., Ltd. (“Stockstar Wealth Management”) Shanghai, PRC Apr. 12, 2011 Nil N/A Beijing Huizhi Fortune Technology Co., Ltd. (“CFO Huizhi”) Beijing, PRC Jun. 14, 2012 Nil N/A Shenzhen Ganlanren Investment Management Co., Ltd. (“CFO Shenzhen Ganlanren”) Shenzhen, PRC Feb. 18, 2016 Nil N/A Beijing CFO Premium Technology Co., Ltd. (“CFO Premium”). Beijing, PRC June 2, 2009 Nil N/A Subsidiaries of variable interest entities: Shenzhen Newrand Securities Training Center (“CFO Newrand Training”) Shenzhen, PRC Oct. 17, 2008 Nil Securities investment training Fortune (Beijing) Huiying Investment Consulting Co., Ltd. (“CFO Huiying”) Beijing, PRC Dec. 18, 2009 Nil N/A Shenzhen Tahoe Investment and Development Co., Ltd (“CFO Tahoe”) Shenzhen, PRC Sep. 30, 2013 Nil N/A Shenzhen Shangtong Software Co., Ltd. (“CFO Shenzhen Shangtong”) Shenzhen, PRC Sep. 23, 2009 Nil N/A Zhengjin (Tianjin) Precious Metals Investment Co., Ltd. (“CFO Zhengjin Tianjin”) Tianjin, PRC Jul. 23, 2013 Nil Commodities brokerage Beijing Jiayi Management Co., Ltd. (“CFO Zhengjin Beijing”) Beijing, PRC Jan. 13, 2014 Nil Commodities brokerage Yinglibao (Beijing) Technology Co., Ltd. (“CFO Yinglibao”) Beijing, PRC Jan. 15, 2014 Nil Internet-based financial platform Zhengjin (Jiangsu) Precious Metals Co., Ltd. (“CFO Zhengjin Jiangsu”) Nanjing, PRC Nov. 19, 2014 Nil Commodities brokerage Zhengjin (Fujian) Precious Metals Co., Ltd. (“CFO Zhengjin Fujian”) Fujian, PRC Jan. 6, 2013 Nil Commodities brokerage Qingdao Zhengjin Zhida Trading Co., Ltd. (“CFO Qingdao Zhida”) Qingdao, PRC Dec. 21, 2015 Nil Commodities brokerage Tibet Zhisheng Gold Industry Co., Ltd. (“CFO Tibet Zhisheng”) Tibet, PRC Mar. 18, 2016 Nil Commodities brokerage Qingdao Zhengjin Taiji Trading Co., Ltd. (“CFO Qingdao Taiji”) Qingdao, PRC Mar. 23, 2016 Nil Commodities brokerage iTougu (Beijing) Network Technology Co., Ltd. (“CFO iTougu”) Beijing, PRC Dec. 8, 2014 Nil Investment advisory service platform Tibet Fortune Jinyuan Network Technology Co., Ltd. (“CFO Tibet”) Tibet, PRC Aug. 22, 2015 Nil N/A Beijing Zhongjun Sunshine Investment and Management Co., Ltd (“CFO Zhongjun Sunshine”) Beijing, PRC Sep. 30, 2013 Nil Financial service Fortune (Beijing) Qicheng Technology Co., Ltd. (“CFO Qicheng”) Beijing, PRC Dec. 18, 2009 Nil N/A Beijing Chuangying Advisory and Investment Co., Ltd. (“CFO Chuangying”) Beijing, PRC Jan. 9, 2009 Nil P2P lending service Zhongheng Xintai (Beijing) Asset Management Co., Ltd. (“CFO Zhongheng Xintai”) Beijing, PRC Jun. 8, 2016 Nil N/A The consolidated financial statements of the Group include the financial statements of the Company and its controlled operating entities including the subsidiaries and the variable interest entities for which the Company is the primary beneficiary. A variable interest entity is the entity in which the Company, through contractual arrangements as the primary beneficiary, bears the risks of, and enjoys the rewards normally associated with ownership of the entity. People’s Republic of China (“PRC”) regulations prohibit or restrict direct foreign ownership of business entities providing certain services in PRC, such as internet content service and securities investment advisory service. In order to comply with these regulations, China Finance Online, through its subsidiaries, entered into contractual arrangements with the Company’s VIEs and their equity owners who are PRC citizens. The Group made loans to the shareholders of the VIEs solely for the purposes of capitalizing the VIEs. Pursuant to the loan agreements, these loans can only be repaid by transferring all of their interests in the VIEs to the Group or a third party designated by the Group. The Group has entered into proxy agreements or power of attorney and exclusive equity purchase option agreements with the VIEs and nominee shareholders of the VIEs through the Company’s wholly owned significant subsidiaries including CFO Beijing, CFO Software, CFO Zhengyong and CFO Zhengtong (collectively, the “ WFOEs WFOE Despite the lack of technical majority ownership, the agreements with the VIEs provide the WFOEs with effective control over and the ability to receive substantially all of the economic benefits of its VIEs, resembling a parent-subsidiary relationship between the WFOEs and the VIEs. The shareholders of the VIEs effectively assigned all of their voting rights underlying their equity interest in the VIEs to the WFOEs. In addition, through the other exclusive agreements, which consist of strategic consulting services agreement, technical support services agreement and operating support services agreement, the WFOEs demonstrate their ability and intention to continue to exercise the ability to absorb substantially all of the profits and all of the expected losses of the VIEs. The VIEs are subject to operating risks, which determine the variability of the Company’s interest in those entities. Based on these contractual arrangements, the Company consolidates the VIEs as required by SEC Regulation SX-3A-02 and Accounting Standards Codification (“ASC”) Topic 810 (“ASC 810”) because the Company holds all the variable interests of the VIEs through the WFOEs. The principal terms of the agreements entered into amongst the VIEs, their respective shareholders and the WFOEs are further described below. Exclusive technology consulting and management service agreement Pursuant to a series of technology support and service agreements, the WOFEs retain exclusive right to provide the VIEs and their subsidiaries technology support and consulting services and exclusive management consulting service. As a result of these services, the WOFEs are entitled to charge the VIEs and their subsidiaries annual service fees. The terms of the strategic consulting services agreement, the technical support services agreement and the operating support services agreement are twenty, ten and ten years, respectively, and these agreements will be automatically renewed on applicable expiration dates, unless the contracting WOFE informs the corresponding VIE its intention to terminate such contract one month prior to the applicable expiration date. Notwithstanding the foregoing, none of the parties has a right to terminate the service contracts. The principal services agreements that the WOFEs have entered into with VIEs include: ● strategic consulting services agreement, pursuant to which the amount of the fee to be charged is 30% of each VIE’s income before tax; ● technical support services agreement, pursuant to which the amount of the fee to be charged is 30% of each VIE’s income before tax; and ● operating support services agreement, pursuant to which the amount of the fee to be charged is 40% of each VIE’s income before tax. Exclusive purchase right agreement on the equity interest of the VIEs Pursuant to the purchase option agreement, the WOFEs have the unconditional right to purchase the entire equity interest in, or all the assets of the VIEs at a price equal to the total principal amount of the loan lent by the WOFEs to the shareholders of the VIEs when and if such purchase is permitted by the PRC law or the current shareholders of the VIEs cease to be directors or employees of the VIEs. The term of the exclusive purchase right agreement is perpetual and can be terminated at the discretion of the WOFEs. Power of attorney Pursuant to the power of attorney, each of the shareholders of the VIEs have executed an irrevocable power of attorney assigning the WOFEs or individuals designated by the WOFEs as their attorney-in-fact to vote on their behalf on all matters of the VIEs requiring shareholder approval under PRC laws and regulations and the articles of association of VIEs. The Articles of Incorporation of the VIE state that the major rights of the shareholders include the right to appoint directors, the general manager and other senior management. Therefore, through the irrevocable power of attorney arrangement, the WOFEs have the ability to exercise effective control over the VIEs through shareholder votes and, through such votes, to also control the composition of the board of directors. In addition, the senior management team of the VIEs is the same as that of the WOFEs. The term of the power of attorney is twenty years and will be automatically renewed on the expiration date. The contract can be terminated at the discretion of the WOFEs. Pledge agreement Pursuant to the equity pledge agreement between the WOFEs and the shareholders of the VIEs, the shareholders of the VIEs pledged all of their equity interests in the VIEs to the WOFEs to guarantee the VIEs’ performance of its obligations under the exclusive technology consulting and service agreement. If the VIEs breach their contractual obligations under that agreement, the WOFEs, as the pledge, will be entitled to certain rights, including the rights to sell the pledged equity interests. The shareholders of the VIEs agree that, without prior written consent of the WOFEs, they will not transfer, sell, and dispose of or create any encumbrance on their equity interest in the VIEs. The term of the pledge agreement is twenty years and will be automatically renewed on the expiration date, unless the WOFEs inform the VIEs of their intention to terminate the agreement one month prior to the expiration date. Through these contractual agreements, the WOFEs have the ability to effectively control the VIEs and are also able to receive substantially all the economic benefits of the VIEs. Details of significant VIEs and their counterparts which substantially control the VIEs as of December 31, 2017 were as follows: VIE name Contractual arrangement Date counterpart CFO Fuhua May 27, 2004 CFO Beijing CFO Newrand October 17, 2008 CFO Zhengyong CFO Qicheng November 20, 2009 CFO Chuangying CFO Chuangying January 9, 2009 CFO Software Stockstar Wealth Management April 12, 2011 CFO Zhengtong CFO Zhongheng Xintai June 8, 2016 CFO Glory CFO Shenzhen Ganlanren April 20, 2017 CFO Software Beijing CFO Premium Technology June 2, 2009 CFO Software Risks in relation to the VIE structure The Company’s ability to control the VIEs also depends on the power of attorney the WOFEs have to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes this power of attorney is legally enforceable but may not be as effective as direct equity ownership. In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the regulatory authorities may exercise their discretion and ● revoke the business and operating licenses of our PRC subsidiaries or VIEs; ● restrict the rights to collect revenues from any of our PRC subsidiaries; ● discontinue or restrict the operations of any related-party transactions among our PRC subsidiaries or VIEs; ● require our PRC subsidiaries or VIEs to restructure the relevant ownership structure or operations; ● take other regulatory or enforcement actions, including levying fines that could be harmful to our business; or ● impose additional conditions or requirements with which we may not be able to comply. The imposition of any of these penalties may result in a material adverse effect on the Company’s ability to conduct its business. In addition, if the imposition of any of these penalties causes the Company to lose the rights to direct the activities of the VIEs and their subsidiaries or the right to receive their economic benefits, the Company would no longer be able to consolidate the VIEs. The Company does not believe that any penalties imposed or actions taken by the PRC Government would result in the liquidation of the Company, its subsidiaries, or the VIEs. The Company has consolidated its VIEs because it was the primary beneficiary of those entities. Through the contractual agreements discussed above, the Company, through its wholly owned subsidiaries, has (1) the power to direct the activities of the VIEs that most significantly affect the entities’ economic performance and (2) the right to receive benefits from the VIEs, therefore it consolidates the VIEs. The consolidated VIEs operate securities investment advisory business and commodities brokerage business. The following table presents the most important revenue-producing assets to operate commodities brokerage business, which was recognized in the Company’s consolidated financial statements. December 31, 2016 2017 Commodities brokerage business: Commodities trading right $ 288,309 $ - $ 288,309 $ - The VIEs also hold important unrecognized revenue-producing assets, such as our domain names and Internet Content Provider Licenses with respect to www.jrj.com The following financial statement amounts and balances of the VIEs for which the Company is the primary beneficiary and their subsidiaries were before intercompany elimination as of and for the years ended: December 31, 2016 2017 Assets Current assets: Cash and cash equivalents $ 41,551,367 $ 8,176,346 Restricted cash 2,483,557 2,035,634 Accounts receivable – others, net 7,031,380 3,759,927 Short-term investment 16,443,831 155,727 Others 7,863,322 36,714,120 Total current assets 75,373,457 50,841,754 Property and equipment, net 5,103,126 4,348,884 Acquired intangible assets, net 288,309 - Cost method investment 1,542,454 1,714,058 Equity method investment, net 1,019,009 817,223 Rental deposits 972,252 776,196 Guarantee fund deposits 5,760,309 311,615 Investment in subsidiaries 39,026,188 41,279,679 Deferred tax assets 1,152,527 1,288,064 Total assets $ 130,237,631 $ 101,377,473 Third-party liabilities: Current liabilities: Accrued expenses and other current liabilities $ 38,527,545 $ 20,445,103 Accounts payable 2,151,134 806,749 Total current liabilities 40,678,679 21,251,852 Non-current liabilities 383,463 243,398 Total third-party liabilities $ 41,062,142 $ 21,495,250 Inter-company liabilities $ 3,397,736 $ 18,558,400 Year ended December 31, 2015 2016 2017 Net revenues $ 136,412,062 $ 71,559,226 $ 19,556,988 Net income (loss) $ 49,300,399 $ (1,815,389 ) $ (35,738,587 ) Year ended December 31, 2015 2016 2017 Net cash provided by (used in) operating activities $ (835,965 ) $ (8,473,669 ) $ (27,357,141 ) Net cash (used in) provided by investing activities 38,523,306 (4,211,878 ) 16,669,443 Net cash provided by (used in) financing activities (6,061,473 ) 9,559,794 (19,083,181 ) Effect of exchange rate changes $ (1,452,505 ) $ (3,111,278 ) $ (3,604,142 ) There are no consolidated VIE’s assets that are collateral for the VIE’s obligations and can only be used to settle the VIE’s obligations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Basis of consolidation The consolidated financial statements include the financial statements of China Finance Online, its subsidiaries, VIEs for which the Company is the primary beneficiary and those VIEs’ subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation. Cash and cash equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. Restricted cash Restricted cash is the deposit in bank accounts for providing guarantee to perform the contract obligation related to “Yinglibao”, a mobile-based financial platform that integrates cash management solutions and mutual fund distribution. Fair value measurement Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1-inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2-inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3-inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Financial instruments include cash and cash equivalents, restricted cash, accounts receivable, short-term investment, cost method investment, equity method investment and accounts payable. The carrying values of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their fair value due to their short-term maturities. The Group’s short-term investment includes trading securities, held-to-maturity securities, and available-for-sale securities. See Note 7 and Note 8 for further discussion. The carrying value of the cost method investment was $1,542,454 and $1,714,058 as of December 31, 2016 and 2017, which approximate the fair value of the investment based on the valuation performed by the Company. See Note 8 and Note 9 for further discussion. The carrying value of the equity method investment was $1,019,009 and $817,223 as of December 31, 2016 and 2017, which approximate the fair value of the investments at the acquired date and subsequently adjusted as the net assets of the investee change through the earning of income. See Note 8 and Note 10 for further discussion. The Group measures certain assets, including intangible assets and goodwill at fair value on a nonrecurring basis when they are deemed to be impaired. The fair values of goodwill and intangible assets are determined based on valuation techniques using the best information available, and may include management judgments, future performance projections, See Note 8 for further discussion. The Group measured the fair value for the assets acquired, with the assistance of an independent valuation firm, using discounted cash flow techniques, and these assets were valued using Level 3 inputs, because the Group used unobservable inputs to value them, reflecting the Group’s assessment of the assumptions market participants would use in valuing these purchased intangible assets. The Group does not use derivative instruments to manage risks. Trust bank balances held on behalf of customers Trust bank balances held on behalf of customers consist two parts: i) Rifa Securities and Rifa Futures receive fund from customers for purpose of buying or selling securities and futures on behalf of its customers and deposits the fund in its interest-bearing bank account; ii) The funds received by CFO Newrand from customers who purchase mutual funds and other wealth management products which are deposited in a trust bank account. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses in the financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s financial statements include account receivable, cost method investment, equity method investment, impairment of goodwill and long-lived assets, income taxes, share-based compensation and purchase price allocation. Actual results could differ from those estimates. Short-term investments Short-term investments comprise marketable debt and equity securities, which are classified as trading, held-to-maturity or available-for-sale. Trading securities are securities that are bought and held principally for the purpose of selling them in the near term and are reported at fair value, with unrealized gains and losses recognized in earnings. Short-term investments are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. All of the Company’s held-to-maturity securities are classified as short-term investments on the consolidated balance sheets based on their contractual maturity dates which are less than one year and are stated at their amortized costs. Short-term investments classified as available for sale are carried at their fair values and the unrealized gains or losses from the changes in fair values are included in accumulated other comprehensive income. Available for sale securities are classified as current assets on the accompanying consolidated balance sheets because they are available for immediate sale. The Group reviews its short-term investments for other-than-temporary impairment based on the specific identification method. The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its short-term investments. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than the cost, and the Group’s intent and ability to hold the investment, in determining if impairment is needed. Property and equipment, net Property and equipment, net are carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Technology infrastructure 5 years Computer equipment 5 years Furniture, fixtures and equipment 5 years Motor vehicle 5 years Leasehold improvements Shorter of the lease term or 5 years Acquired intangible assets, net Acquired intangible assets are estimated by management based on the fair value of assets acquired. Identifiable intangible assets are carried at cost less accumulated amortization. Amortization of definite-lived intangible assets is computed using the straight-line method over the estimated average useful lives, which are as follows: License and related trademarks 10-15 years Completed technology 5 years Customer relationship 4-5 years Certain trademarks resulting from the acquisitions of business and certain trading rights bought by the Group are determined to have indefinite lives. If an intangible asset is determined to have an indefinite life, it is not amortized until its useful life is determined to be no longer indefinite. Guarantee fund deposits Guarantee fund deposits consist of i) the funds deposited with Hong Kong Exchange and Clearing Limited by Rifa Futures, to guarantee its customers’ settlement obligations; ii) the funds deposited with the commodities exchanges as a result of its customers’ trading. The Group needs to deposit certain percentage of its customers’ trading margins with the commodities exchanges. Impairment of long-lived assets with definite lives The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group compares the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the fair value of the assets. There were nil, $491,284 and nil impairment losses in relation to the long-lived assets with definite lives for the years ended December 31, 2015, 2016 and 2017. Business combinations Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed, and any noncontrolling interest of the acquiree at the acquisition date, if any, are measured at their fair values as of that date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interest of the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Common forms of the consideration made in acquisitions include cash and common equity instruments. Consideration transferred in a business acquisition is measured at the fair value as at the date of acquisition. Where the consideration in an acquisition includes contingent consideration the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and if recorded as a liability it is subsequently carried at fair value with changes in fair value reflected in earnings. Impairment of goodwill and indefinite-lived intangible assets The Group performs a qualitative analysis that includes reviewing the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist, whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable at least annually. The excess of the purchase price over the fair value of net assets acquired is recorded on the consolidated balance sheet as goodwill. After a qualitative analysis indicates an impairment test is needed, the Company completes a two-step goodwill impairment test. The first step is to compare the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step is to compare the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being a discounted cash flow. The impairment test for other intangible assets not subject to amortization consists of a comparison of the fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The estimates of fair values of intangible assets not subject to amortization are determined using various discounted cash flow valuation methodologies. Significant assumptions are inherent in this process, including estimates of discount rates. Discount rate assumptions are based on an assessment of the risk inherent in the respective intangible assets. The Group performed the annual impairment tests on December 31 of each year. Based on the Group’s assessment, the Group recorded nil, $6,659,691 and nil goodwill impairment losses during the years ended December 31, 2015, 2016 and 2017, respectively. In addition, the Group recorded $250,360, $619,865 and $291,817 impairment loss in relation to intangible assets with indefinite life during the years ended December 31, 2015, 2016 and 2017. Revenue recognition Commodities brokerage business The Group derives commission income, carrying charges and trading revenues from its commodities brokerage services. Commission income is recognized on a trade basis based on their customers’ trading volumes. The commission earned is fixed no matter how the client’s open positions are ultimately settled. Additionally, the Group charges carrying charges to its customers. The commissions and carrying charges are presented in net revenues in the statement of comprehensive income. Amounts are settled with the Exchange by both the Group and the customers and the exchange then settles with any counterparty. The exchange offsets the Group’s gains and losses and amounts receivable and amounts payable from the exchange are presented net on the statement of financial position as the Group and the exchange settle net. Trading gains, net include brokerage fees and margins generated from derivative trades executed with customers and other counterparties and are recognized when trades are executed. Trading gains, net also include activities where the Group acts as market maker in the purchase and sale of commodities derivative instruments with customers. These transactions may be offset simultaneously with another customer or counterparty, offset with similar but not identical positions on an exchange, made from inventory, or may be aggregated with other purchases to provide liquidity intraday, for a number of days, or in some cases, particularly the commodities brokerage business, even longer periods (during which fair value may fluctuate). Therefore, trading gains, net includes activities from the Group’s operations of a proprietary commodity trades. Net trading gains are recognized on a trade-date basis and include realized gains or losses and changes in unrealized gains or losses on investments at fair value. Unrealized gains/losses on open positions will be marked to market at each period end and may present trading gains and losses which comprise both realized and unrealized gains and losses, on a net basis in the statement of comprehensive income. The open transactions may lead to receivables and/or payables for open transaction which are recorded on the Statement of Financial Position. Revenue generally is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. The following table presents the totally recognized net revenue from commodities trading business, consisted of: Years ended 2016 2017 Commodities trading gain (loss) $ 44,841,125 $ (1,466,888 ) Commission income 13,283,933 3,823,586 Carrying charges 1,851,659 231,728 $ 59,976,717 $ 2,588,426 Hong Kong Brokerage services The Group also derives commission from its brokerage services provided by the subsidiaries, Rifa Securities and Rifa Futures which buy or sell securities and future contracts on their customers’ behalf. The Group acts as an agent with their customers for these transactions. The commission income is recognized on a trade date basis as transactions occur. Financial information and advisory services The Group derives revenue from subscription fees from subscribers to their financial data, information services and investment advisory. The Group recognizes revenues when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred, (3) the fee is fixed or determinable and (4) collectability is probable. Upon receipt of the upfront cash payments from the subscriber, the Group will activate the subscriber’s account and provide the subscriber the access code. This will commence a certain subscription period according to the customer demand and the full payment will be deferred and recognized ratably over the subscription period. The Group recognizes revenue ratably over the life of the arrangement. Estimated refund of subscription fees is recorded as deduction of revenue and deferred revenue. The Group also derives revenue from providing services as information intermediary in online P2P lending business. We procure borrowing and lending information from independent third parties, and our professional team evaluates and selects the information provided by third parties, from the perspective of risks. Eventually we display the selected information on the platform of Yinglibao, which is our online consumer finance marketplace. We charge borrowers interests for facilitating loan transactions, and the revenues are recognized upon completion of the services. Advertising revenue The Group derives its advertising fees from advertising sales on their website for a fixed period of time, generally less than one year. Revenues from advertising arrangements are recognized ratably over the period the advertising is displayed. Business taxes and value added taxes Starting from January 1, 2012, the PRC Ministry of Finance and the State Administration of Taxation launched a Business Tax to value added tax (“VAT”) Transformation Pilot Program (the “Pilot Program”), for certain industries in Shanghai. On September 1, 2012, the PRC Ministry of Finance and the State Administration of Taxation extended the Pilot Program to certain industries in other eight regions, including Beijing and Shenzhen. With the adoption of Pilot Program, our advertising-related revenues and certain subscription revenues were subject to VAT tax at a rate of 6%. Our advertising- related revenues, certain subscription revenues and certain commodities brokerage revenues were recognized after deducting VAT and other related surcharges. Revenue is recorded net of business taxes when incurred. The Group is subject to business taxes of 3%-5% on taxable services provided to its customers. During the years ended December 31, 2015, 2016, and 2017 business taxes and related surcharges totaled $1,663,869, $678,594 and $262,117, respectively. The Group’s certain PRC subsidiaries, VIEs and VIEs’ subsidiaries are subject to VAT at a rate of 17% on subscription-based revenue. VAT payable on subscription-based revenue is computed net of VAT paid on purchases. In respect of subscription-based revenue, however, if the net amount of VAT payable exceeds 3% of subscription-based revenue, the excess portion of value added tax can be refunded immediately. The Group therefore is subject to an effective net VAT burden of 3% from subscription-based revenue and records VAT on a net basis. Net amount of value added tax is recorded either in the line item of other current liabilities or prepaid expenses and other current assets on the face of consolidated balance sheet. Subscription-based revenue includes the benefit of the refund of value added taxes on sale of the downloadable software received from the Chinese tax authorities as part of the PRC government policy of encouraging software development in the PRC. In 2015, 2016 and 2017, the Group recognized $328,817, $271,885 and $348,165, respectively, in VAT refunds. Government subsidies The Group records government subsidies when granted by local government authority and are not subject to future return. The government subsidies include research & development subsidy, business tax refund, innovation fund and high-tech company subsidy. Deferred revenue Payments received in advance of for our financial information and advisory service, advertising service are recorded as deferred revenue until earned and when the relevant revenue recognition requirements have been met. Cost method investment For investments in an investee over which the Group does not have significant influence, the Group carries the investment at cost and recognizes income as any dividends declared from distribution of investee’s earnings. The Group reviews the cost method investments for impairment whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable. An impairment loss is recognized in earnings equal to the difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value of the investment would then become the new cost basis of the investment. Equity method investment Under the equity method, the Group initially records its investment at cost. The Group subsequently adjusts the carrying amount of the investment to recognize the Company’s proportionate share of each equity investee’s net income or loss. The Group will discontinue applying equity method if an investment (and additional financial supports to the investee, if any) has been reduced to zero. When the equity-method investment in ordinary shares is reduced to zero and further investments are made that have a higher liquidation preference than ordinary shares, the Group would recognize the loss based on its percentage of the investment with the same liquidation preference, and the loss would be applied to those investments of a lower liquidation preference first before being further applied to the investments of a higher liquidation preference. An impairment loss on the equity method investments is recognized in the consolidated statements of comprehensive income when the decline in value is determined to be other than-temporary. Also, noncontrolling interests in the Company’s s are reported as a component of equity, separate from the parent company’s equity. Results of operations attributable to the non-controlling interest are included in the Company’s consolidated statements of comprehensive income (loss). Foreign currency translation The functional and reporting currency of the Company is the United States dollar (“U.S. dollar”). The financial records of the Group’s subsidiaries, VIEs and VIEs’ subsidiaries located in the PRC, Hong Kong and British Virgin Islands are maintained in their local currencies, the Renminbi (“RMB”), Hong Kong Dollars (“HK$”), and U.S. Dollars (“US$”), respectively, which are also the functional currencies of these entities. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations. The Group’s entities with functional currency of RMB and HK$ translate their operating results and financial position into the US$, the Group’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are report as cumulative translation adjustments and are shown as a separate component of other comprehensive income. Foreign currency risk The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of Renminbi into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Cash and cash equivalents of the Group included aggregate amounts of $79,461,280, $46,295,841 and $15,237,326 at December 31, 2015, 2016 and 2017 which were denominated in RMB. Product development expenses Costs of product development, including investment in data capability, are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized. The Group essentially completed its development concurrently with the establishment of technological feasibility, and, accordingly, no costs have been capitalized. Advertising costs The Group expenses advertising costs as incurred. Total advertising expenses were $4,908,593, $5,192,126 and $1,014,481 for the years ended December 31, 2015, 2016 and 2017, respectively, and have been included as part of sales and marketing expenses in the accompanying consolidated statements of operations. Commissions paid Commissions paid are the commission of our Hong Kong brokerage business and the commissions paid to the sales agents of our commodities brokerage business. Total commissions paid were $5,049,661, $8,903,424 and $13,976,505 for the years ended December 31, 2015, 2016 and 2017. Income taxes Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net operating loss carry forwards and credits by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. Comprehensive income (loss) Comprehensive income (loss) includes net income (loss), unrealized gain (loss) on short-term investments and foreign currency translation adjustments. Beginning in January 1, 2012, the Group presents the components of net income, the components of other comprehensive income and total comprehensive income a single continuous consolidated statement of comprehensive income. Share-based compensation Share-based compensation with employees is measured based on the grant date fair value of the equity instrument. The Group recognizes the compensation costs net of an estimated forfeiture rate using the straight-line method for performance based awards or graded vesting attribution method for service based awards, over the requisite service period of the award, which is generally the vesting period of the award. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of share-based compensation expense to be recognized in future periods. Share awards issued to nonemployees are measured at fair value at the earlier of the commitment date or the date the services is completed and recognized over the period the service is provided or as goods is received. Net income (loss) per share Basic net income (loss) per share attributable to China Finance Online Co. Limited is computed by dividing net income (loss) attributable to China Finance Online Co. Limited by the weighted average number of ordinary shares outstanding during the period. Diluted net income per ordinary share attributable to China Finance Online Co. Limited reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares. The dilutive effect of the stock options and nonvested shares is computed using treasury stock method. Concentrations of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, short-term investments, loan receivable and accounts receivable. The Group places its cash and cash equivalents, restricted cash, short-term investments in major financial institutions located in PRC and Hong Kong, which management considers to be of high credit quality. The Group conducts ongoing credit evaluations of its customers and generally does not require collateral or other security from its customers except for the accounts receivable-margin clients which represents the margin loan to customers for securities purchase. The accounts receivable-margin client was collateralized by the securities the margin client purchased. The Group manages its credit risk by collecting up-front fee from its customers and billing at regular intervals during the contract period. The Group assesses the adequacy of allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers. Details of clients accounting for 10% or more of accounts receivable are as follows: Year ended December 31, 2016 2017 Amount % Amount % A $ 4,010,897 18.3 $ 3,844,569 22.6 * Represented less than 10% of consolidated account receivable balance. There were no customers with 10% or more of the Group’s revenues during 2015, 2016, or 2017. Recently accounting pronouncements In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception” (“ASU 2017-11”), which addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. The amendments in Part I of this ASU are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact of the adoption of ASU 2017-11 on its consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which provides guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. The amendments in this ASU are |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions [Abstract] | |
ACQUISITIONS | 3. ACQUISITIONS Acquisition of Rifa Wealth Management On September 13, 2016, Rifa Finance Limited (“Rifa Finance”, formerly known as iSTAR Finance limited), a BVI company of the Company, acquired 100% of equity interest of Rifa Wealth Management Limited (“Rifa Wealth Management”, formerly named as Financial Solutions Wealth Management Limited), which is an insurance broker registered with the Professional Insurance Brokers Association (“PIBA”) in Hong Kong and is engaged in provision of insurance brokerage. The Company expects to develop the insurance brokerage business in the future. With the assistance of a third party appraiser, the Company allocated the purchase price to assets acquired and liabilities assumed as of the acquisition date as follows and goodwill was allocated to the insurance brokerage business. The net revenue and net loss of Rifa Wealth Management in the amount of $5,305 and $(34,388), respectively, have been included in the consolidated statement of comprehensive income for the year ended December 31, 2016. Useful life Purchase price allocation: Cash and cash equivalents $ 11,170 Prepaid expenses and current assets 5,499 Accounts receivable 1,062 Property and equipment, net 219 Rental deposit 5,130 Acquired intangible assets: PIBA license 112,144 10 years Total assets acquired 135,224 Accrued expenses and other current liabilities (135 ) Accounts payable (2,627 ) Deferred tax liabilities, non-current (18,504 ) Total net assets 113,958 Goodwill 108,831 Total purchase price $ 222,789 There were no pro forma results of operations presented since Rifa Wealth Management was incorporated in Hong Kong on March 12, 2015 and has a limited substantial operating history. Acquisition 30% of Beijing Zhongjun Sunshine Investment Management Co., Ltd. (“CFO Zhongjun Yangguang ) In the Second quarter of 2016, Beijing Huizhi Wealth Management Co., Ltd. (“CFO Huizhi”), an affiliate of the Company, acquired 30% of equity interest of CFO Zhongjun Sunshine), which was previously held 70% of equity interest by CFO Huizhi. Total cash consideration was $201,816. Acquisition of CFO Guiwo On April 1, 2015, Fortune Zhengjin Co., Ltd. (“Fortune Zhengjin”, formerly known as Huifu Jinyuan Co., Ltd.), an affiliate of the Company, acquired 100% of equity interest of Shanghai Guiwo Information Technology Co., Ltd. (“CFO Guiwo”), which was not a significant acquisition. Total cash consideration was $16,278. The Company recognized $19,906 goodwill at the acquisition date. The results of CFO Guiwo’s operations have been included in the consolidated statement of comprehensive income for the year ended December 31, 2015. Neither the results of operations since the acquisition date nor the pro forma results of operations of CFO Guiwo were presented because of the effects of this acquisition was not significant to the Company’s consolidated statement of comprehensive income. If comparative financial statements are presented, the pro forma results as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period The pro forma results are prepared for comparative purposes only and do not purport to be indicative of the results of operations which actually would have resulted, nor is it indicative of future operating results. There were no pro forma results presented during the years ended December 31, 2016 and 2017. Fair value of acquired assets The Group measured the fair value for the assets acquired, with the assistance of an independent valuation firm, using discounted cash flow techniques, and these assets were valued using Level 3 inputs, because the Group used unobservable inputs to value them, reflecting the Group’s assessment of the assumptions market participants would use in valuing these purchased intangible assets. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable [Abstract] | |
ACCOUNTS RECEIVABLE | 4. ACCOUNTS RECEIVABLE December 31, 2016 2017 Accounts receivable-margin clients $ 7,556,557 $ 8,010,846 Less: Allowance for doubtful accounts - - Accounts receivable- margin clients, net $ 7,556,557 $ 8,010,846 Accounts receivable-others 14,414,318 8,981,187 Less: Allowance for doubtful accounts (3,371 ) (3,579 ) Accounts receivable-others, net $ 14,410,947 $ 8,977,608 Accounts receivable- margin clients represent the receivables derived in the Hong Kong brokerage service in Rifa Securities, which is pledged by the customer’s purchased securities. Accounts receivable-others represent the receivables derived in commodities brokerage business and other ordinary business without any collateral or other security from its customers. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: December 31, 2016 2017 Prepayment of advertising fees $ 492,672 $ 2,983 Advertising deposit 172,985 35,199 Advances to suppliers 701,033 1,292,023 VAT refund receivable 174,542 460,410 Interest receivable (i) 237,013 36 Prepayment of office rental 524,805 193,060 Advances to Yinglibao 582,440 170,613 Advances to employees 747,000 793,802 NCI receivable - 378,204 Advances to consulting service fees 171,052 86,876 Insurance receivable (Note 23) 3,000,000 2,760 Consideration receivable 166,907 77,457 Other current assets 1,270,593 704,878 $ 8,241,042 $ 4,198,301 (i) The Group launched Qiribao, which is a new product on the wealth management platform (Yinglibao), in July 2016. Once an investor commits funds through the platform of Yinglibao to invest Qiribao, his funds are reinvested by the Group to purchase the held-to-maturity securities. Interest receivable derived from the held-to-maturity securities purchased by the Group. Due to the compliance requirement and our strategy, the Group terminated the purchase of Qiribao starting on April 10, 2017, all the held-to-maturity securities was redeemed by the end of December 31, 2017. |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Dec. 31, 2017 | |
Short-Term Investments [Abstract] | |
SHORT-TERM INVESTMENTS | 6. SHORT-TERM INVESTMENTS As of December 31, 2017, the Group’s short-term investment consisted of available-for-sale securities with maturities of one year or less. The Group measured the trading securities at fair value based on quoted market prices in an active market. As a result, the Group has determined the valuation of its trading securities falls within Level 1 of the fair value hierarchy. As of December 31, 2016 and 2017, the Group did not hold any trading securities. For the year ended December 31, 2015, 2016 and 2017, the Group recognized a loss from the trading securities of $18,396, $549,538 and nil as short-term investment income in the consolidated statement of comprehensive income, respectively. The Group measured the held-to-maturity securities at amortized cost basis, which the Group believes a Level 2 valuation. The amount at which an investment is acquired, adjusted for accretion, amortization, collection of cash, etc. As of December 31, 2017, the Group has no held-to-maturity securities. The Group launched Qiribao Yinglibao Yinglibao Qiribao Qiribao The Group measured the available-for-sale securities at the fair value shown by the financial institution which the Group believes a Level 2 valuation. The following table presents changes in level 2 available-for-sale securities measured on a recurring basis for the twelve-month period ended December 31, 2016 and 2017, respectively: December 31, 2016 2017 Beginning balance $ - $ 1,605,882 Purchases 192,785,066 71,492,241 Redemption (192,022,189 ) (72,572,216 ) Realized gain(loss) 870,200 (64,596 ) Exchange difference (27,195 ) 71,601 Ending balance $ 1,605,882 $ 532,912 The following table provides additional information on the realized gains of the sale of available-for-sale securities as of December 31, 2016 and 2017, respectively. For purposes of determining gross realized gains, the cost of securities sold is based on specific identification. Year ended December 31, 2017 Exchange Proceeds Costs Gains difference Available-for-sale securities $ (72,572,216 ) $ 71,492,241 $ (64,596 ) $ 71,601 Total $ (72,572,216 ) $ 71,492,241 $ (64,596 ) $ 71,601 Year ended December 31, 2016 Exchange Proceeds Costs Gains difference Available-for-sale securities $ (192,022,189 ) $ 192,785,066 $ 870,200 $ (27,195 ) Total $ (192,022,189 ) $ 192,785,066 $ 870,200 $ (27,195 ) The fair values of trading securities and available-for-sale securities as measured, and held-to-maturity securities as disclosed are further discussed in Note 8. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurement [Abstract] | |
FAIR VALUE MEASUREMENT | 7. FAIR VALUE MEASUREMENT Fair value disclosed or measured on a recurring basis The fair values of the Group’s available-for-sale securities as measured as disclosed are determined based on the discounted cash flow method. The following table summarizes the Group’s financial assets measured or disclosed at fair value on a recurring basis. Fair value disclosure or measurement at December 31, 2017 using Fair value at Quoted prices in Significant Significant Fair value disclosure Cash and cash equivalents: Cash equivalents $ 38,692,871 $ 38,692,871 - - Fair value measurement Short-term investments: Available-for-sale securities 532,912 - 532,912 - Total assets measured at fair value $ 532,912 - $ 532,912 - Fair value disclosure or measurement at December 31, 2016 using Fair value at Quoted prices in Significant Significant Fair value disclosure Cash and cash equivalents: Cash equivalents $ 66,151,439 $ 66,151,439 - - Short-term investments: Held-to-maturity securities 14,837,949 - 14,837,949 - Fair value measurement Short-term investments: Available-for-sale securities 1,605,882 - 1,605,882 - Total assets measured at fair value 1,605,882 - 1,605,882 - The following table presents changes in level 2 available-for-sale securities measured on a recurring basis for the twelve-month period ended December 31, 2016 and 2017, respectively: December 31, 2016 2017 Beginning balance $ - $ 1,605,882 Purchases 192,785,066 71,492,241 Redemption (192,022,189 ) (72,572,216 ) Realized gain 870,200 (64,596 ) Exchange difference (27,195 ) 71,601 Ending balance $ 1,605,882 $ 532,912 Fair value disclosed or measured on a non-recurring basis The Group measured the fair value for the assets acquired, with the assistance of an independent valuation firm, using discounted cash flow techniques, and these assets were valued using Level 3 inputs, because the Group used unobservable inputs to value them, reflecting the Group’s assessment of the assumptions market participants would use in valuing these purchased intangible assets. The Group measures certain financial assets, including equity method investments and cost method investments, at fair value on a nonrecurring basis only if an impairment charge were to be recognized. The Group’s non-financial assets, such as intangible assets, goodwill and fixed assets, would be measured at fair value only if they were determined to be impaired on an other-than-temporary basis. Fair value at Total losses Fair value at Total losses Non-Recurring Goodwill 108,871 (6,659,691 ) 108,010 - Intangible Assets 396,753 (1,111,149 ) 96,457 (291,817 ) As of December 31, 2016 and 2017, certain goodwill (Note 14) and intangible assets (Note 13) were written off from their carrying value to fair value, which was measured using significant unobservable inputs (Level 3), with impairment loss incurred and recorded in the in the consolidated statement of comprehensive income for the year ended December 31, 2016 and 2017. |
Cost Method Investment
Cost Method Investment | 12 Months Ended |
Dec. 31, 2017 | |
Cost Method Investment [Abstract] | |
COST METHOD INVESTMENT | 8. COST METHOD INVESTMENT In April, 2015, the Group collected $2,168,868, the remaining consideration related to the sale of Ocean Butterflies Holdings Inc. In May 2015, the Group sold a cost method investment to third parties, which was acquired during 2012 and 2013, and recognized a gain from the sale of cost method investment of $4,648,302 in the consolidated statement of comprehensive income for the year ended December 31, 2015. In December 2015, the Group entered a series of arrangements to dispose its 90% equity interests in CFO Securities Consulting with third parties. With the assistance of a third party appraiser, the fair value of the 10% retained noncontrolling investment of $477,393 was recognized in the consolidated balance sheets. (Note 10) In April 2016, the Group completed the disposal of its 90% equity interests in Shanghai Meining Computer Software Co., Ltd (“CFO Meining”) to third parties, based on the arrangements signed in December 2015. With the assistance of a third party appraiser, the fair value of the 10% retained noncontrolling investment of $807,265 was recognized in the consolidated balance sheets. (Note 10) In December 2016, the Group made a cost method investment of $216,232. In December 2017, the Group made a cost method investment of $76,520. As a result, the carrying balance of cost method investment was $1,542,454 and $1,714,058 as of December 31, 2016 and 2017, respectively. The following table presents changes in cost method investment for the twelve-month period ended December 31, 2016 and 2017, respectively: December 31, 2016 2017 Beginning balance $ 554,392 $ 1,542,454 Acquisitions 216,232 76,520 Fair value adjustment of retained noncontrolling investment 807,265 - Exchange difference (35,435 ) 95,084 Ending balance $ 1,542,454 $ 1,714,058 These investments are recorded as cost method investments, as the Group did not have a significant influence to the investee. There was no impairment of the Group’s cost method investment for the year ended December 31, 2016 and 2017. |
Equity Method Investment
Equity Method Investment | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investment [Abstract] | |
EQUITY METHOD INVESTMENT | 9. EQUITY METHOD INVESTMENT In June 2015, the Group paid $307,996 to acquire 20% of an investee’s the equity interest. In December 2015, the Group entered a contractual arrangement with a third party to transfer its 15% equity interests in Aishang (Beijing) Fortune Technology Co., Ltd. (“CFO Aishang”), which was previously owned 55% equity interests by the Group. The remaining 40% equity interests in CFO Aishang was recorded as equity method investment at the disposal date, as the Group lost control over CFO Aishang. The fair value of the retained noncontrolling investment of $985,586 was recognized in the consolidated balance sheets, based on the valuation performed by a third party. (Note 10) The Group recognized a loss from equity method investment of $138,124 and a gain from equity method investment of $97,820 in the consolidated statement of comprehensive income for the year ended December 31, 2016 and 2017, respectively. The carrying balance of equity method investment was $1,019,009 and $ 817,223 as of December 31, 2016 and 2017, respectively. The following table presents changes in equity method investment for the twelve-month period ended December 31, 2016 and 2017, respectively: December 31, 2016 2017 Beginning balance $ 1,228,269 $ 1,019,009 Equity method investment gain (losses) (138,124 ) 97,820 Consideration Received on Disposal - (350,181 ) Exchange difference (71,136 ) 50,575 Ending balance $ 1,019,009 $ 817,223 |
Deconsolidation
Deconsolidation | 12 Months Ended |
Dec. 31, 2017 | |
Deconsolidation [Abstract] | |
DECONSOLIDATION | 10. DECONSOLIDATION In December, 2015, the Group entered a series of arrangements to dispose its 100% equity interests in Zhongcheng Futong Co., Ltd. (“CFO Zhongcheng”) who hold 90% equity interests in CFO Securities Consulting with third parties. Pursuant to the arrangements, the cash consideration was $9,322,850. With the assistance of a third party appraiser, the fair value of the 10% retained noncontrolling investment of $477,393 was recognized as a cost method investment in the consolidated balance sheets (Note 8), as the Group did not have any significant influence over CFO Securities Consulting. The Group recorded a gain on the interest sold and the retained noncontrolling investment of $9,161,948 in the consolidated statement of comprehensive income for the year ended December 31, 2015. In April 2016, the Group completed the disposal of its 100% equity interests in Shanghai Fenxin Information Technology Co., Ltd. (“CFO Fenxin”) who hold 90% equity interests in CFO Meining to third parties, based on the aforementioned a series of arrangements. Pursuant to the arrangements, the cash consideration was $21,675,518 and completely received in 2016. With the assistance of a third party appraiser, the fair value of the 10% retained noncontrolling investment of $807,265 was recognized as a cost method investment in the consolidated balance sheets (Note 8), as the Group did not have any significant influence over CFO Meining. The Group recorded a gain on the interest sold and the retained noncontrolling investment of $22,445,303 in the consolidated statement of comprehensive income for the year ended December 31, 2016. In December, 2015, the Company entered a contractual arrangement with third parties to transfer its 15% equity interests in CFO Aishang, which was previously owned 55% equity interests by the Group. Pursuant to the arrangements, the cash consideration was $3,861. With the assistance of a third party appraiser, the fair value of the 40% retained noncontrolling investment of $985,586 was recognized as an equity method investment in the consolidated balance sheets (Note 9). The Group recorded a gain on the interest sold and the retained noncontrolling investment of $837,853 in the consolidated statement of comprehensive income for the year ended December 31, 2015. In the second quarter of 2016, the Company fully disposed Henghui (Tianjin) Precious Metals Investment Co., Ltd. (“CFO Henghui”) and Shanghai Yongfu Enterprises Management Consulting Co., Ltd. (“CFO Yongfu”) to third parties, respectively. Both entities were previously owned 57.07% equity interests by the Company. Pursuant to the arrangement, the total cash consideration was $710,659 and $3,800, respectively, and all the consideration was received in 2016. The Group recorded a loss on the interest sold and the retained noncontrolling investment of $3,921,387 and $202,363 in the consolidated statement of comprehensive income for the year ended December 31, 2016, respectively. Furthermore, the Company deregistered two insignificant affiliates in the second quarter of 2016, which were both previously owned 70.25% equity interest by the Group. The Group recorded a gain on the interest sold and the retained noncontrolling investment of $319 in the consolidated statement of comprehensive income for the year ended December 31, 2016. In September, 2016, the Company fully disposed iSTAR International Wealth Management Co., Ltd. (“iSTAR Wealth Management”), which was previously owned 85% equity interests by the Company to a third party of Tianfeng Securities Co., Ltd.. Pursuant to the arrangement, the total cash consideration was $3,002,628, of which $2,835,782 was received in 2016. The Group recorded a gain on the interest sold and the retained noncontrolling investment of $2,245,827 in the consolidated statement of comprehensive income for the year ended December 31, 2016. In the first quarter of 2017, the Company fully disposed Shanghai Stockstar Asset Management Co., Ltd. ("Stockstar Asset Management") which was previously owned 100% equity interests by the Company. Pursuant to the arrangement, the total cash consideration was $1,451,723 and all the consideration was received in 2017. The Group recorded a gain on the interest sold and the retained noncontrolling investment of $1,080 in the consolidated statement of comprehensive income for the year ended December 31, 2017. Furthermore, the Company deregistered four affiliates, which were all previously owned 59.83% equity interest by the Group. The Group recorded a loss on the interest sold and the retained noncontrolling investment of $738,449 in the consolidated statement of comprehensive income for the year ended December 31, 2017. In the second quarter of 2017, the Company fully disposed Zhengjin (Qingdao) Wisdom Trading Co., Ltd. ("CFO Zhengjin Qingdao") which was previously owned 59.83% equity interests by the Company. Pursuant to the arrangement, the total cash consideration was $159,907 and all the consideration was received in 2017. The Group recorded a loss on the interest sold and the retained noncontrolling investment of $1,259,044 in the consolidated statement of comprehensive income for the year ended December 31, 2017. The gain on the interest sold and the retained noncontrolling investment was calculated as the difference between the aggregate of (i) the fair value of the consideration transferred, (ii) the fair value of any retained noncontrolling investment in the former affiliated company on the date the affiliated company was deconsolidated, if any, (iii) the carrying amount of any noncontrolling interest in the former subsidiary (including any accumulated other comprehensive income or loss attributable to the noncontrolling interests) on the date the subsidiary is deconsolidated, and (iv) the carrying amount of any noncontrolling interest in the former affiliated company on the date the affiliated company was deconsolidated, if applicable; and the carrying amount of the former affiliated company’s net assets. None of the disposals described above was presented as discontinued operation, because none of the disposals meets the criteria of discontinued operation. To meet the criteria of discontinued operation, the disposal group must be qualified as a component of an entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group. The entities disposed by the company don’t constitute any reportable segment or operating segments, so none of the disposals presented as discontinued operations. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment, Net [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 11. PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of: December 31, 2016 2017 Technology infrastructure $ 10,344,659 $ 11,322,883 Computer equipment 2,123,332 2,134,959 Furniture, fixtures and equipment 3,799,154 3,906,408 Motor vehicle 1,040,999 1,126,504 Leasehold improvements 4,751,864 4,480,845 22,060,008 22,971,599 Less: accumulated depreciation (14,661,875 ) (16,086,338 ) $ 7,398,133 $ 6,885,261 Depreciation expense for the years ended December 31, 2015, 2016 and 2017 were $1,364,048, $1,922,818 and $2,093,993, respectively. |
Acquired Intangible Assets, Net
Acquired Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Acquired Intangible Assets, Net [Abstract] | |
ACQUIRED INTANGIBLE ASSETS, NET | 12. ACQUIRED INTANGIBLE ASSETS, NET Intangible assets as of December 31, 2016 and 2017 were as follows: December, 31 2016 2017 Gross carrying amount Accumulated amortization Impairment Net carrying amount Gross carrying Accumulated amortization Impairment Net carrying amount Commodities trading right $ 908,174 - $ (619,865 ) $ 288,309 $ 291,817 - $ (291,817 ) - Customer relationship 1,108,548 (617,264 ) (491,284 ) - - - - - PIBA license 112,183 (3,739 ) - 108,444 111,296 (14,839 ) - 96,457 $ 2,128,905 $ (621,003 ) $ (1,111,149 ) $ 396,753 $ 403,113 $ (14,839 ) $ (291,817 ) $ 96,457 Amortization expenses for the years ended December 31, 2015, 2016 and 2017 were $285,088, $116,973 and $11,165, respectively. Future amortization expenses of acquired intangible assets with determinable lives are $11,130, $11,130, $11,130, $11,130 and $51,938 for 2018, 2019, 2020, 2021, 2022 and thereafter, respectively. For the year ended December 31, 2015, the Group recorded an impairment loss of $250,360 related to commodities trading right. During 2016, the Group recorded an impairment loss on its intangible assets in the amount of $1,111,149 associated with the acquired commodities trading right and customer relationships due to management’s estimation of the expected future cash flows associated with these assets were insufficient to recover their carrying values. During 2017, the Group recorded an impairment loss on its intangible assets in the amount of $291,817 associated with the acquired commodities trading right. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill [Abstract] | |
GOODWILL | 13. GOODWILL Changes in goodwill for the years ended December 31, 2015, 2016 and 2017 were as follows: Commodities brokerage Investment advisory services Institution subscription services Hong Kong brokerage services Total Balance as of January 1, 2015 $ 7,089,780 $ - $ - $ - $ 7,089,780 Acquisition of CFO Guiwo (Note 3) 19,906 - - - 19,906 Exchange difference (410,066 ) - - - (410,066 ) Balance as of December 31, 2015 $ 6,699,620 $ - $ - - $ 6,699,620 Acquisition of Financial Solution Wealth Management (Note 3) - - - 108,831 108,831 Impairment of CFO Guiwo (Note 3) (17,873 ) - - - (17,873 ) Impairment of CFO Henghui (6,641,818 ) - - - (6,641,818 ) Exchange difference (39,929 ) - - 40 (39,889 ) Balance as of December 31, 2016 $ - $ - $ - 108,871 $ 108,871 Exchange difference - - - (861 ) (861 ) Balance as of December 31, 2017 $ - $ - $ - $ 108,010 $ 108,010 The goodwill related to the acquisition of CFO Guiwo was allocated to commodities brokerage reporting unit, which was acquired in the second quarter of 2015. The Group performed a goodwill impairment test as of December 31, 2015 and no impairment loss was recorded. In 2016, the Group concluded that goodwill allocated to the commodities brokerage reporting unit was fully impaired because the estimated growth rates and profit margins for future periods were expected lower than that of prior years based on that assessment. The Group recognized an impairment loss of $6,659,691 related to the commodities brokerage reporting unit for the year ended December 31, 2016. The goodwill related to the acquisition of Rifa Wealth Management was allocated to Hong Kong brokerage services reporting unit, which was acquired on September 13, 2016. The Company expects to develop the insurance brokerage business in the future and believes there was no goodwill impairment related to the insurance brokerage services reporting unit. In the goodwill impairment test, the Group used the income approach, which it believed to be more reliable than the market approach in determining the fair value of the Group’s reporting units. Accordingly, it adopted a discounted cash flow (“DCF”) method under the income approach, which considers a number of factors that include expected future cash flows, growth rates, discount rates, and comparable multiples from publicly traded companies in the industry and requires the Group to make certain assumptions and estimates regarding industry economic factors and future profitability of its business unit. The assumptions are inherently uncertain and subjective. |
Accounts Payable
Accounts Payable | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Payable [Abstract] | |
ACCOUNTS PAYABLE | 14. ACCOUNTS PAYABLE Accounts payable consist of: December 31, 2016 2017 Amount due to customers of Hong Kong brokerage business $ 6,591,131 $ 8,392,037 Amount due to sales agents 1,659,702 114,480 Amount due to noncontrolling shareholders(i) 400,389 31,968 Others 94,646 923,436 $ 8,745,868 $ 9,461,921 (i) Amount due to noncontrolling shareholders represents business deals between the group and noncontrolling shareholders. The business deal we made with noncontrolling shareholders in 2016 and 2017 were $4,635,241 and $9,492, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 15. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of: December 31, 2016 2017 Accrued bonus $ 5,217,065 $ 3,310,964 Accrued professional service fees 592,797 498,066 Withholding individual income tax-option exercise 36,696 36,696 Value added taxes and other taxes payable 123,264 66,288 Accrued raw data cost 380,237 97,896 Accrued bandwidth cost 27,587 115,486 Accrued welfare benefits 56,887 419,230 Deposit payable (i) 2,374,144 3,032,812 Interest payable (iii) 265,692 - Amount due to Yinglibao 865,036 170,058 Amount due to Yinglibao clients (iv) 18,573,735 - Accrued sales service fees 114,055 121,086 Others 992,754 2,085,113 $ 29,619,949 $ 9,953,695 (i) Deposit payable is the deposit in bank accounts for providing guarantee to perform the contract obligation related to “Yinglibao”, an internet-based financial platform that integrates cash management solutions and mutual fund distribution. (ii) On March 30, 2015, the Group signed a sale & purchase agreement with a third party, to transfer the 100% ordinary shares of Rifa Futures and iSTAR Wealth Management (the “ Transaction ). In April 2015, the Group collected partial consideration of approximately $5.1 million. Due to the Transaction was not completed as of December 31, 2015, the agreement was expired automatically. The Group refunded the $5.1 million and entered into a new agreement in April 2016. (iii) The Group launched Qiribao, which is a new product on the wealth management platform (Yinglibao), in July 2016. Once an investor commits funds through the platform of Yinglibao to invest Qiribao, his funds are reinvested by the Group to purchase the held-to-maturity securities. Interest payable represented the interest expense that has been incurred but has not been paid to the Qiribao investors as of the date of the balance sheet. Due to the compliance requirement and our strategy, the Group terminated the purchase of Qiribao on April 10, 2017, and all the held-to-maturity securities were redeemed by the end of December 31, 2017. (iv) The Group launched Qiribao, which is a new product on the wealth management platform (Yinglibao), in July 2016. Once an investor commits funds through the platform of Yinglibao to invest Qiribao, his funds are reinvested by the Group to purchase the held-to-maturity securities. The Group recognized the funds committed by the investors through the Yinglibao platform of $18,573,735 in the consolidated balance sheet at December 31, 2016. Due to the compliance requirement and our strategy, the Group terminated the purchase of Qiribao starting on April 10, 2017, all the held-to-maturity securities was redeemed by the end of December 31, 2017. |
Stock Options and Nonvested Sha
Stock Options and Nonvested Shares | 12 Months Ended |
Dec. 31, 2017 | |
Stock Options and Nonvested Shares [Abstract] | |
STOCK OPTIONS AND NONVESTED SHARES | 16. STOCK OPTIONS AND NONVESTED SHARES As of December 31, 2017, the Company and its subsidiaries have five share-based compensation plans, which are described below. The compensation expenses that had been charged against income for those plans were $6,056,033, $5,575,877 and $3,068,213 for 2015, 2016, and 2017, respectively. 2004 Stock incentive plan In January 2004, the Company adopted the 2004 stock incentive plan (the “2004 Plan”) which allows the Company to offer a variety of incentive awards to employees, directors, officers and other eligible persons in the Group, and consultants and advisors outside the Group. We amended the 2004 Plan in September 2004, August 2006, June 2009 and June 2010. The total number of ordinary shares authorized under the 2004 Plan was 30,688,488, and all of these authorized ordinary shares were granted to directors, officers, employees and non-employees as of December 31, 2014. Summary of stock options to employees and non-employees A summary of the stock option activity is as follows: 2015 2016 2017 Weighted Weighted Weighted Number average Number average Number average of options exercise price of options exercise price of options exercise price Outstanding at beginning of year 21,326,160 $ 0.57 17,332,760 $ 0.55 16,180,260 $ 0.53 Exercised (2,205,600 ) 0.22 (417,900 ) 0.25 (107,200 ) 0.25 Forfeited (1,787,800 ) 1.18 (734,600 ) 1.08 (2,395,100 ) 0.98 Outstanding at end of year 17,332,760 $ 0.55 16,180,260 $ 0.53 13,677,960 $ 0.46 Shares exercisable at end of year 14,513,528 $ 0.61 16,180,260 $ 0.53 13,677,960 $ 0.46 The following table summarizes information with respect to stock options outstanding at December 31, 2017: Options outstanding Option exercisable Stock option with exercise price of: Number outstanding Weighted Weighted average exercise price Aggregate Number exercisable Weighted average exercise price Aggregate $ 1.26 413,360 413,360 $ 1.43 2,044,500 2,044,500 $ 0.25 11,220,100 11,220,100 13,677,960 4.90 years $ 0.46 $ 3,208,949 13,677,960 $ 0.46 $ 3,208,949 The total intrinsic value of options exercised during the years ended December 31, 2015, 2016 and 2017 was $1,881,129, $198,084, and $30,659, respectively. The total fair value of shares vested during the year ended December 31, 2015, 2016 and 2017 were $2,067,037, $1,500,901 and nil, respectively. The Company recognized share-based compensation expenses of $546,465, $51,593 and nil for stock option in the years ended December 31, 2015, 2016 and 2017, respectively. As of December 31, 2016, all share-based compensation expenses relating to the stock options under the 2004 Plan were recognized. Restricted shares to employees On January 2, 2014, the Company granted remaining 1,100,240 ordinary shares, which were in the form of restricted shares, to employees under 2004 Plan. The vesting of the restricted shares is subject to rendering service to the Company for three years. Based on the Company’s requisite service period stated in the 2004 Plan, all the granted restricted shares were vested as of January 2, 2017, of which 330,085 shares were issued to employees as of December 31, 2017. The fair value of restricted shares is $1.106, which equal to the fair market value of the Company’s shares at the date of grant. The Company recognized share-based compensation expenses of $324,496 and $129,801 for the years ended December 31, 2015 and 2016. As of December 31, 2016, all the share-based compensation expenses relating to the restricted shares under the 2004 Plan were recognized. 2007 Equity incentive plan In July 2007, the Company adopted the 2007 Equity incentive plan (the “2007 Plan”) and granted nonvested shares covering 10,558,493 ordinary shares of the Company to the employees who were eligible for the 2007 Plan. The vesting of the nonvested shares are subject to achieving certain operating performance targets and rendering service to the Company for the requisite service period stated in the 2007 Plan. Based on the Company’s operating performance, 8,658,048 shares were vested as of December 31, 2010. In June 2014, the Annual General Meeting approved the amendment to the 2007 Plan and the Restricted Stock Issuance and Allocation Agreement of 2007 Plan. Pursuant to such agreement, together with the remaining 1,900,445 ordinary shares which were not vested due to the operating performance targets under 2007 Plan not being achieved, 3,000,000 ordinary shares were collectively granted to the employees who were eligible. The fair value of a nonvested share on the grant date was measured at the quoted market price of the Company’s equity shares. The nonvested shares shall become activated and vest during the period commencing from the grant date and ending on December 31, 2016 based on the Company’s achievement of the performance targets. As of December 31, 2014, there was no nonvested shares become activated and vested due to the performance targets were not achieved, and nil share-based compensation expenses relating to the nonvested shares was recognized. As of December 31, 2015, the granted shares were activated and vested based on the Group’s achievement of performance target. The fair value of granted share is $0.82, which equal to the fair market value of the Company’s shares at the date of grant. The Company recognized share-based compensation expenses of $1,476,000, $984,000 and nil for the years ended December 31, 2015, 2016 and 2017, respectively. As of December 31, 2016, all the share-based compensation expenses relating to the restricted shares under the 2007 Plan were recognized. 2010 Equity incentive plan of Rifa Financial Holdings In November 2010, Rifa Financial Holdings, a subsidiary of the Company, implemented the “2010 equity incentive plan” (the “2010 Plan”) under which the Company transferred 1,500 nonvested shares which representing 15% of total Rifa Financial Holdings’ equity interest to its management group as a share incentive. If the grantees left the Company before the third anniversary of the grant date when the nonvested shares become vested, they should transfer the shares to the Company at no consideration. Therefore, the total share based compensation expenses are recognized ratably over the three years of vesting period. In addition, as the grantees are entitled to all the shareholder’s rights, including the dividend rights since the date of grant, the 15% share of the earnings of Rifa Financial Holdings is recognized as noncontrolling interest on the Company’s consolidated financial statements since November 1, 2010, the date of grant. The fair value of the share incentive was determined to be $1,188 per share. The Group recognized $495,848 share based compensation cost in 2013. As of December 31, 2013, all compensation cost relating to nonvested shares was recognized. 2014 Stock incentive plan In July 2014, the Company adopted the 2014 stock incentive plan (the “2014 Plan”) which allows the Company to offer a variety of incentive awards to employees, directors, officers and other eligible persons in the Group, and consultants and advisors outside the Group. The maximum number of ordinary Shares that may be delivered pursuant to awards granted to eligible persons under 2014 Plan during calendar year 2014 is equal to 5,000,000 ordinary shares; provided, that, as of January 1 of each calendar year thereafter during the term of 2014 plan, the maximum number of ordinary shares that may be delivered pursuant to awards granted to eligible persons under 2014 Plan shall be increased by 3,000,000 Ordinary Shares. As of result, the total number of ordinary shares authorized under the 2014 Plan was 14,000,000 as of December 31, 2017. As of December 31, 2017, 4,591,700 shares were available for future grant of awards. Options to employees During 2014, 2015 and 2017, the Company granted totaling 1,930,000, 120,000 and 2,490,000 stock options to employees at an exercise price that equaled the trading price of the stock upon the stock option grant, respectively. These options vest over 3 years. The fair value of employee options was estimated on the basis of the Black-Scholes Option Price model with the following assumptions: Years ended December 31, 2014 2015 2017 Weighted average risk free rate of return 1.39% - 1.62% 1.32% 1.88% - 2.13% Weighted average expected option life 6.82 - 6.87 years 6.86 years 7.36 – 7.38 years Expected volatility rate 77.74% - 79.37% 77.81% 73.31% - 74.76% Dividend yield - - (1) Expected volatility The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of the Company over the past years. (2) Risk-free interest rate Risk-free interest rate was estimated based on the yield to maturity of treasury bonds of the United States with a maturity period close to the expected term of the options. (3) Expected option life The expected life was estimated based on historical information. (4) Dividend yield The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options. (5) Exercise price Options are generally granted at an exercise price equal to the fair market value of the Company’s shares at the date of grant. Options to non-employees During 2014 and 2017, the Company granted 30,000 and 200,000 options under the 2014 Plan to a consultant. The fair value of non-employee options is estimated using the Black-Scholes Option Pricing model as such method provided a more accurate estimate of the fair value of services provided by the consultants and strategic advisers. The fair value of the stock options is remeasured as of the end of each reporting period until the services of these non-employees are complete under the service contracts. These options vest over 3 years. Summary of stock options to employees and non-employees A summary of the stock option activity is as follows: 2015 2016 2017 Weighted Weighted Weighted Number average Number average Number average of options exercise price of options exercise price of options exercise price Outstanding at beginning of year 1,860,000 $ 0.89 1,235,000 $ 0.88 1,105,000 $ 0.87 Granted 120,000 0.87 - - 2,690,000 0.34 Exercised (3,600 ) 0.92 (14,800 ) 0.89 - - Forfeited (741,400 ) 0.89 (115,200 ) 0.90 (40,000 ) 0.89 Outstanding at end of year 1,235,000 $ 0.88 1,105,000 $ 0.87 3,755,000 $ 0.49 Shares exercisable at end of year 480,200 0.89 805,400 $ 0.88 1,045,800 $ 0.88 The following table summarizes information with respect to stock options outstanding at December 31, 2017: Options outstanding Option exercisable Stock option with exercise price of: Number outstanding Weighted Weighted average exercise price Aggregate intrinsic value as of December 31, 2017 Number exercisable Weighted average exercise price Aggregate intrinsic value as of December 31, 2017 $ 0.878 885,000 885,000 $ 0.920 60,000 60,000 $ 1.032 - - $ 1.038 - - $ 0.870 120,000 100,800 $ 0.302 940,000 - $ 0.348 1,750,000 - 3,755,000 7.15 years $ 0.49 548,960 1,045,800 $ 0.88 - The weighted-average grant-date fair value of options granted during the years 2014, 2015 and 2017 was $0.63, $0.61 and $0.24, respectively. The total intrinsic value of options exercised during the years ended December 31, 2015, 2016 and 2017 was $1,159, nil and nil, respectively. The total fair value of shares vested during the year ended December 31, 2015, 2016 and 2017 was $496,560, $260,944 and $174,360, respectively. The Company recognized share-based compensation expenses of $(187,485), $174,672 and $115,428 for stock option under 2014 Plan in the years ended December 31, 2015, 2016 and 2017, respectively. As of December 31, 2017, there were $530,052 unrecognized share-based compensation expenses relating to the stock options under 2014 Plan, which are expected to be recognized over a weighted average period of 2.8 year. Restricted shares to employees During 2014, the Company granted 1,780,000 restricted shares under the 2014 Plan to directors and employees. The vesting of the restricted shares is subject to rendering service to the Company for two years. Based on the Company’s requisite service period stated in the 2014 Plan, all the 1,780,000 shares were vested, of which 235,885 shares were issued as of December 31, 2017. The fair value of restricted shares was $0.878, which was the fair market value of the Company’s shares at the date of grant. On November 16, 2015, the Company granted 3,800,000 restricted shares under the 2014 Plan to selected directors and employees. Subject to the agreement, the awards shall become activated and vest during the period commencing on the grant date and ending on November 16, 2018 (the “Vesting Term”), provided that the participant has achieved all the performance targets. The fair value of restricted shares was $0.742, which was the fair market value of the Company’s shares at the date of grant. As of December 31, 2017, 2,414,500 granted shares were activated, of which 1,641,860 shares were vested based on the participant’s achievement of performance target and the Company’s requisite service period stated. Furthermore, 159,320 shares were issued as of December 31, 2017. On November 8, 2016, the Company granted 200,000 restricted shares under the 2014 Plan to a selected employee. The vesting of the restricted shares is subject to rendering service to the Company for two years. As of December 31, 2017, 100,000 shares were vested, and no share was issued as of December 31, 2017 On July 1, 2017, the Company granted 150,000 restricted shares under the 2014 Plan to a selected employee. The vesting of the restricted shares is subject to rendering service to the Company for 2.5 years. As of December 31, 2017, no share was vested, and no share was issued as of December 31, 2017. The Company recognized share-based compensation expenses of $898,903, $1,091,923 and $682,424 relating to the restricted shares granted to employees in 2015, 2016 and 2017, respectively. As of December 31, 2017, there were $524,747 unrecognized share-based compensation expenses relating to the restricted shares granted to employees, which are expected to be recognized over a weighted average period of 0.57 year. Restricted shares to non-employees During 2014, the Company granted 1,150,000 restricted shares under the 2014 Plan to consultants. The fair value of the stock options is remeasured as of the end of each reporting period until the services of these non-employees are completed under the service contracts. These options vest over two years except 50,000 restricted shares granted to one consultant which vest over three years. The Company recognized share-based compensation expenses of $754,354, $(49,055) and $(15,657) relating to the restricted shares granted to non-employees in 2015, 2016 and 2017, respectively. As of December 31, 2017, there were no unrecognized share-based compensation expenses relating to the restricted shares granted to non-employees. Restricted shares of Shanghai Shangtong Co., Ltd. (“CFO Shangtong”), Fortune Zhengjin and CFO Tahoe On July 1, 2014, CFO Shangtong and Fortune Zhengjin, two affiliates of the Company, entered into a series of contractual arrangement with selected employees of the Group. Pursuant to the agreement, these employees were granted 10% restricted shares of CFO Shangtong and Fortune Zhengjin. The vesting of the restricted shares is subject to rendering service to the Company for five years. The fair value of restricted shares is $28,965 and $2,464,455, which equal to the fair value of the CFO Shangtong and Fortune Zhengjin’s 10% net assets at the effective date of the agreement, respectively. On July 1, 2015, Fortune Zhengjin entered into an additional arrangement with selected employees of the Group. Pursuant to the agreement, these employees were granted 8% restricted shares of Fortune Zhengjin. The vesting of the restricted shares is subject to rendering service to the Company for five years. The fair value of restricted shares is $4,681,533, which equal to the fair value of Fortune Zhengjin’s 8% net assets at the effective date of the agreement. CFO Tahoe also entered an arrangement with selected employees of the Group. Pursuant to the agreement, these employees were granted 1.95% restricted shares of CFO Tahoe. The fair value of restricted shares is subject to rendering service to the Company for five years. The fair value of restricted shares is $1,141,124, which equal to the fair value of CFO Tahoe’s 1.95% net assets at the effective date of the agreement. On May 31, 2016, Fortune Zhengjin entered into another arrangement with selected employees of the Group. Pursuant to the agreement, these employees were granted 5.35% restricted shares of Fortune Zhengjin. The vesting of the restricted shares is subject to rendering service to the Company for five years. The fair value of restricted shares is $2,460,213, which equal to the fair value of Fortune Zhengjin’s 5.35% net assets at the effective date of the agreement. The Company recognized share-based compensation expenses of $6,584 and $560,187 in 2014 relating to CFO Shangtong, Fortune Zhengjin, respectively. There were $10,200, $1,965,535 and $267,565 share-based compensation expenses recorded in 2015 relating to CFO Shangtong, Fortune Zhengjin and CFO Tahoe, respectively. There were $5,541, $2,787,475 and $399,927 share-based compensation expenses recorded in 2016 relating to CFO Shangtong, Fortune Zhengjin and CFO Tahoe, respectively. There were $3,223, $2,056,930 and $225,864 share-based compensation expenses recorded in 2017 relating to CFO Shangtong, Fortune Zhengjin and CFO Tahoe, respectively. As of December 31, 2017, there were $1,579 and $2,202,047 and $240,677 unrecognized share-based compensation expenses relating to CFO Shangtong, Fortune Zhengjin and CFO Tahoe, respectively, which are expected to be recognized over a weighted average period of 2.9 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
INCOME TAXES | 17. INCOME TAXES Hong Kong China Finance Online, Rifa Securities, Rifa Futures, Rifa Credit, Rifa Wealth Management and other nine subsidiaries were established in Hong Kong. These companies were subject to Hong Kong profit tax at 16.5%. In addition, companies who incorporated outside of Hong Kong and carried on a trade, profession or business in Hong Kong were also subject to Hong Kong profit tax in respect of their profits arising in or derived from Hong Kong. British Virgin Islands Companies that were incorporated in the BVI are not subject to taxation in their country of incorporation. Subsidiaries incorporated in the BVI include Rifa Financial Holdings and other eleven subsidiaries. PRC The Group’s PRC entities are subject to 25% PRC Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant PRC income tax laws, except for certain entities that enjoy preferential tax rates, which are lower than the statutory rates, as described below. Under the EIT Law and its implementing rules, an enterprise which qualifies as a “high and new technology enterprise” (“the HNTE”) is entitled to a tax rate of 15%. Under the EIT law and its implementing rules, enterprises that obtain status of “Software Enterprises” are entitled to be exempted from EIT tax for the first two profit-making years and enjoy a preferential 12.5% tax rate, which is half of the standard EIT rate of 25% for the three years thereafter. A summary of the main PRC entities that subject to tax preferential policies for the year ended December 31, 2017 is as follows: PRC entities Chinese EIT rate Qualification for preferential tax rate CFO Qicheng Preferential tax rate of 12.5% in 2013 and 2014. Software Enterprises CFO Shenzhen Shangtong Preferential tax rate of 12.5% in 2013 and 2014. Software Enterprises CFO Meining (deconsolidated in 2016) Preferential tax rate of 15% from 2013 to 2015. HNTE CFO Genius Preferential tax rate of 15% from 2014 to 2015. HNTE CFO Tibet Preferential tax rate of 9% from 2015 to 2017 and 15% thereafter Preferential tax rate for enterprises in Tibet, China CFO Tibet Zhisheng Preferential tax rate of 9% from 2017 and thereafter Preferential tax rate for enterprises in Tibet, China Under the EIT Law, the HNTE status is valid for three years and qualifying entities can then apply to renew for an additional three years provided their business operations continue to qualify for the HNTE status. CFO Meining obtained its HNTE status in 2008 and obtained the renewal successfully in 2011 and 2014. In 2012, CFO Genius also obtained the HNTE status and successfully renewed it in 2015. In 2013 and 2014, CFO Chongzhi and CFO Shangtong filed their EIT by adopting the “deemed-profit method”. In 2014, Shanghai Yongfu Enterprises Management Consulting Co., Ltd. adopted this method. In 2015, Zhengjin (Jiangsu) Precious Metals Co., Ltd. also adopted this method. In 2016, CFO Qingdao Zhida and our other four affiliates adopted this method. Under this method, the qualifying entities filed their income tax by calculating as 2.5% of the gross revenues. This method is subject to be reevaluated by the local tax authority in the future. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for PRC Income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the EIT Law provide that non-resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc., occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that currently the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed a resident enterprise, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income tax at a rate of 25%. If the Company were to be non-resident for PRC tax purpose, dividends paid to it out of profits earned after January 1, 2008 would be subject to a withholding tax. In the case of dividends paid by PRC subsidiaries the withholding tax would be 10% not considering the arrangements for the Avoidance of Double Taxation on income and Prevention of Fiscal Evasion with respect to Taxes on Income between mainland and Hong Kong. Aggregate deficits of the Company’s subsidiaries located in the PRC were approximately $ at December 31, 2017. And accordingly, no provision has been made for the Chinese dividend withholding taxes. Aggregate undistributed earnings of the Company’s VIEs and its VIEs’ subsidiaries located in the PRC that is available for distribution to the Company of approximately $11.5 million at December 31, 2017. A deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting amounts over tax basis amounts, including those differences attributable to a more than 50% interest in a domestic subsidiary. However, recognition is not required in situations where the tax law provides a means by which the reported amount of that investment can be recovered tax-free and the enterprise expects that it will ultimately use that means. The Company has not recorded any such deferred tax liability attributable to the undistributed earnings of its financial interest in VIEs because it believes such excess earnings can be distributed in a manner that would not be subject to income tax. Income tax expense was as follows: December 31, 2015 2016 2017 Current $ (2,071,154 ) $ (4,723,267 ) $ (578,367 ) Deferred 686,892 562,664 253,951 Total $ (1,384,262 ) $ (4,160,603 ) $ (324,416 ) The principal components of deferred income taxes were as follows: December 31, 2016 2017 Deferred tax assets: Deferred revenue $ 1,049,187 $ 1,608,723 Accrued expenses and other liabilities 465,538 63,972 Net operating loss carrying forwards 14,386,215 24,662,909 15,900,940 26,335,603 Less: valuation allowance (14,498,497 ) (24,715,317 ) Total deferred tax assets $ 1,402,443 $ 1,620,286 Deferred tax liabilities: Account receivable and other assets (235,717 ) (220,222 ) Intangible assets (89,970 ) (16,374 ) Total deferred tax liabilities $ (325,687 ) $ (236,596 ) A valuation allowance of $14,498,497 and $24,715,317 was established as of December 31, 2016 and 2017, respectively, for the entities that have incurred losses because the Group believes that it is more likely than not that the related deferred tax assets will not be realized in the future. At December 31, 2017, operating loss carry forwards includes approximately $86.6 million which will expire by 2022, and $22.1 million which will carry forward indefinitely. Reconciliation between total income tax expense and the amount computed by applying the PRC EIT statutory rate to income before income taxes is as follows: Years ended December 31, 2015 2016 2017 Income (loss) before tax $ 28,201,950 $ (6,805,575 ) $ (42,064,021 ) Income tax (benefits) expenses calculated at 25% 7,050,488 (1,701,394 ) (10,516,005 ) Effect of tax holiday (8,139,429 ) (4,431,103 ) (14,009 ) Effect of income tax rate difference in other jurisdictions 645,873 236,759 (223,454 ) Non-deductible expenses 2,559,649 3,645,741 10,229,536 Non-taxable income (893,950 ) (113,170 ) (3,780,428 ) Change in valuation allowance 161,631 6,523,770 4,628,776 Income tax expense $ 1,384,262 $ 4,160,603 $ 324,416 During the years ended December 31, 2015, 2016 and 2017, if the Company’s subsidiaries, VIEs and VIEs’ subsidiaries in the PRC were neither in the tax holiday period nor had they been specifically allowed special tax concessions, they would have recorded additional income tax expense of $1,102,399, $209,418 and $8,123, respectively. The impact of the tax holidays on basic net loss per ordinary share was an increase of $0.00 and $0.00 for the year ended December 31, 2016 and 2017, respectively, and net income per ordinary share was decrease of $0.01, for the years ended December 31, 2015. The Group did not identify significant unrecognized tax benefits for the years ended December 31, 2015, 2016 and 2017. The Group did not incur any interest and penalties related to potential underpaid income tax expenses and also believed that the adoption of pronouncement issued by FASB regarding accounting for uncertainty in income taxes did not have a significant impact on the unrecognized tax benefits within 12 months from December 31, 2017. In accordance with relevant PRC tax administration laws, tax years from 2012 to 2017 of the Group’s PRC subsidiaries and VIEs remain subject to tax audits as of December 31, 2017, at the tax authority’s discretion. |
American Depositary Shares ("AD
American Depositary Shares ("ADS") Plan | 12 Months Ended |
Dec. 31, 2017 | |
American Depositary Shares (''ADS") Plan [Abstract] | |
AMERICAN DEPOSITARY SHARES ("ADS") PLAN | 18. AMERICAN DEPOSITARY SHARES (“ADS”) PLAN In September 2015, the Group issued 4,000,000 ordinary shares to its American Depositary Receipt bank and in exchange received 800,000 ADSs under the 2004 Plan and 2014 Plan. As of December 31, 2017, 2,298,695 shares were available for future exercise of options and vesting of granted shares. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Net Income (Loss) Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | 19. NET INCOME (LOSS) PER SHARE The following table sets forth the computation of basic and diluted income (loss) per share for the years indicated: Years ended December 31, 2015 2016 2017 Net income (loss) attributable to China Finance Online Co. Limited $ 22,482,416 $ (1,678,813 ) $ (36,736,553 ) Weighted average ordinary shares outstanding used in computing basic net income (loss) per share 110,997,871 113,213,912 113,601,949 Plus: Incremental shares from assumed conversions of stock options, restricted shares and nonvested shares 14,131,892 - - Weighted average ordinary shares outstanding used in computing diluted net income (loss) per share 125,129,763 113,213,912 113,601,949 Net income (loss) per share attributable to China Finance Online Co. Limited - basic $ 0.20 $ (0.01 ) $ (0.32 ) - diluted $ 0.18 $ (0.01 ) $ (0.32 ) For the year ended December 31, 2016, 8,498,868 options, 2,843,252 restricted shares and 3,000,000 nonvested shares, were anti-dilutive, respectively, because the Group was in the loss position. For the year ended December 31, 2017, 5,286,305 options, 4,906,268 restricted shares and 3,000,000 nonvested shares, were anti-dilutive, respectively, because the Group was in the loss position. |
Mainland China Contribution Pla
Mainland China Contribution Plan and Profit Appropriation | 12 Months Ended |
Dec. 31, 2017 | |
Mainland China Contribution Plan and Profit Appropriation [Abstract] | |
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION | 20. MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION Full time employees of the Group in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require the Group to accrue for these benefits based on certain percentages of the employees’ salaries. The total provisions for such employee benefits were $4,353,944, $5,255,982 and $ 4,768,614 for the years ended December 31, 2015, 2016 and 2017, respectively. |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interests [Abstract] | |
NONCONTROLLING INTERESTS | 21. NONCONTROLLING INTERESTS Commodities brokerage Investment Institution Rifa Financial Other Total Balance as of January 1, 2015 $ 10,994,060 $ - $ - $ (31,679 ) (36,309 ) $ 10,926,072 Dividends paid to noncontrolling interest (6,509,680 ) - - - - (6,509,680 ) Changes in controlling ownership interest 1,393,508 - - - 320,956 1,714,464 Paid-in capital from noncontrolling shareholders 641 - - - - 641 Share-based compensation (Note 16) 724,285 - - - - 724,285 Net income (loss) 4,815,506 (195,587 ) (284,647 ) 4,335,272 Balance as of December 31, 2015 $ 11,418,320 $ - $ - $ (227,266 ) $ $ 11,191,054 Dividends paid to noncontrolling shareholders (10,117,946 ) - - - - (10,117,946 ) Changes in controlling ownership interest 171,542 - - - - 171,542 Deconsolidation 2,404,822 - - 105,953 - 2,510,775 Share-based compensation (Note 16) 1,162,066 - - - - 1,162,066 Net income (loss) (9,563,735 ) - - 276,370 - (9,287,365 ) Balance as of December 31, 2016 $ (4,524,931 ) $ - $ - $ 155,057 - $ (4,369,874 ) Dividends paid to noncontrolling shareholders - - - - - - Changes in controlling ownership interest - - - - - - Deconsolidation 809,692 - - - - 809,692 Share-based compensation (Note 16) 876,995 - - - - 876,995 Net income (loss) (6,388,746 ) - - 736,862 - (5,651,884 ) Balance as of December 31, 2017 $ (9,226,990 ) $ - $ - $ 891,919 - $ (8,335,071 ) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 22. COMMITMENTS AND CONTINGENCIES Commitments The Group leases certain office premises and purchases data under non-cancelable leases. Rent expenses under operating leases for 2015, 2016 and 2017 were $6,044,119, $5,555,144 and $5,597,774, respectively. Future minimum payments under non-cancelable operating leases and data purchase agreements were as follows: Year ending 2017 5,562,828 2018 4,950,715 2019 4,181,357 Total $ 14,694,900 Securities Litigation The Company was named as a defendant in a putative securities class action, Wang, et al., v. China Finance Online Co. Limited, 1:15-cv-07894-RMB. The original complaint was filed on June 5, 2015 in the Central District of California. The case was subsequently consolidated with several other similar actions and transferred to the Southern District of New York, where an amended consolidated complaint was filed in December 2015. The amended consolidated complaint alleged that the Company violated Exchange Act Section 10(b) and Rule 10b-5 by failing to disclose certain of its transactions involving Langfang Shengshi Real Estate Development Co. Limited as related party transactions. The amended consolidated complaint also made claims under Exchange Act Section 10(b) and Rule 10b-5 against certain of the Company’s current officers and its current and former auditors and under Exchange Act Section 20(a) against certain of its current officers and former directors. Lead plaintiffs subsequently voluntarily dismissed (without prejudice) all defendants other than the Company from the action. The Company filed a motion to dismiss the complaint on April 8, 2016, to which Plaintiffs filed an opposition on May 6, 2016 and the Company filed a reply on May 13, 2016. During a mediation session in May 2016, the parties agreed to settle the action for $3.0 million. The same amount as specified in the settlement term sheet, which was fully covered under its existing insurance policies. The settlement was preliminarily approved on November 18, 2016 and notice of the settlement was provided to putative class members. No class members objected to the settlement and none requested exclusion. The settlement includes a release of all claims asserted in the Complaint (or any of the previous versions of the complaint) or all claims that could have been asserted based on the same operative facts at issue in the Complaint. This release applies not only as to the Company, but also as to individuals and entities included within the definition of “Releasees,” which definition includes, among others, current and former officers and directors of the Company. In the light of ASC450, the contingent losses were probable and reasonably estimable in the Company’s judgment. There is no P&L impact because the full amount of the loss is covered under insurance. Therefore, the accrual amount of $3.0 million and the expected insurance recovery of $3.0 million should be reflected in the Company’s balance sheet as of December 31, 2016. Following a March 21, 2017 fairness hearing, an order was entered on March 24, 2017 approving the settlement. The order reflects that a judgment in the action will be entered after Lead Plaintiffs file their motion for final distribution of the settlement amount. On June 23, 2017, the court granted the lead plaintiffs’ motion for a first distribution of the settlement amount, less attorneys’ fees and expenses. On June 28, 2017, lead plaintiffs informed the court checks representing the net settlement amount were mailed to class members. On January 16, 2018, lead plaintiffs informed the court that checks representing all but $2,759.76 of the net settlement amount had been cashed, requested that the court authorize a second and final distribution for the remaining amount, and requested that the court enter the judgment. The court has not yet responded to this request. Assuming the Court enters the judgment as anticipated by the settlement approval order and there are no appeals, the approval of the settlement will become final (and no longer subject to appeal) 30 days after the judgment is entered. Litigation The Group was involved in certain cases pending in some PRC courts as of December 31, 2015. These cases include a copyright infringement case, among others. In the copyright infringement dispute, we are claimed for a public apology for the violation, and compensated a damage of $7.7 million (RMB50 million, equivalently). Through a series of litigation proceedings, among other things, cross-examination, China International Capital Corporation Limited (“CICC”) reached a settlement agreement in 2017. For these proceedings, the Company is currently unable to estimate the reasonably possible loss or a range of reasonably possible losses as the proceedings are in the early stages, and/or there is a lack of clear or consistent interpretation of laws specific to the industry-specific complaints among different jurisdictions. As a result, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, which includes eventual loss, fine, penalty or business impact, if any, and therefore, an estimate for the reasonably possible loss or a range of reasonably possible losses cannot be made. However, the Company believes that such matters, individually and in the aggregate, when finally resolved, are not reasonably likely to have a material adverse effect on the Company’s consolidated results of operations, financial position and cash flows. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment and Geographic Information [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | 23. SEGMENT AND GEOGRAPHIC INFORMATION The Group has three operating segments (1) commodities brokerage services, (2) online financial information and advisory service, and other related services in PRC, (3) Hong Kong brokerage services. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-makers in deciding how to allocate resources and in assessing performance. The Group’s chief executive officer has been identified as the chief operating decision makers. The Group’s chief operating decision maker directs the allocation of resources to operating segments based on the profitability and cash flows of each respective segment. The Group evaluates performance based on several factors, including net revenue, cost of revenue, operating expenses, income from operation. The following tables show the operations of the Group’s operating segments: For the year ended December 31, 2017 Subscription Commodities services and other Hong Kong brokerage services related services brokerage Consolidated Net revenues $ 3,698,857 $ 23,984,993 $ 25,497,974 $ 53,181,824 Less: intersegment sales (1,110,431 ) (9,232,502 ) (216,241) (10,559,174 ) Net revenues from external customer 2,588,426 14,752,491 25,281,733 42,622,650 Cost of revenues (60,504 ) 7,453,185 14,540,997 21,933,678 Less: intersegment cost of revenues - - - - Cost of revenues after elimination (60,504 ) 7,453,185 14,540,997 21,933,678 Operating expenses: General and administrative 4,511,167 7,565,268 3,930,479 16,006,914 Product development 1,776,007 23,502,362 - 25,278,369 Sales and marketing 11,115,488 16,830,525 2,933,763 30,879,776 Loss from impairment of intangible assets - 291,817 - 291,817 Loss from impairment of goodwill - - - - Total segments operating expenses 17,402,662 48,189,972 6,864,242 72,456,876 Less: intersegment operating expenses (1,110,431 ) (9,439,947 ) (689,002 ) (11,239,380 ) Total operating expenses 16,292,231 38,750,025 6,175,240 61,217,496 Government subsidies 230,174 - - 230,174 Income (loss) from operations $ (1 3,413,127 ) $ (31,450,719 ) $ 4,565,496 $ (40,298,350 ) Total segments assets 21,569,350 187,122,375 89,004,771 297,696,496 Less: intersegment asset. (13,995,983 ) (149,214,015 ) (19,882,645 ) (183,092,643 ) Total assets $ 7,573,367 $ 37,908,360 $ 69,122,126 $ 114,603,853 For the year ended December 31, 2016 Subscription Commodities services and other Hong Kong brokerage services related services brokerage Consolidated Net revenues $ 69,980,296 $ 16,654,534 $ 8,956,501 $ 95,591,331 Less: intersegment sales (10,003,579 ) (2,529,856 ) - (12,533,435 ) Net revenues from external customer 59,976,717 14,124,678 8,956,501 83,057,896 Cost of revenues 5,729,464 10,392,343 4,258,451 20,380,258 Less: intersegment cost of revenues - - - - Cost of revenues after elimination 5,729,464 10,392,343 4,258,451 20,380,258 Operating expenses: General and administrative 6,026,102 10,090,294 3,992,953 20,109,349 Product development 3,374,144 12,995,022 - 16,369,166 Sales and marketing 46,648,934 13,029,524 1,054,695 60,733,153 Loss from impairment of intangible assets 1,111,149 - - 1,111,149 Loss from impairment of goodwill 6,659,691 - - 6,659,691 Total segments operating expenses 63,820,020 36,114,840 5,047,648 104,982,508 Less: intersegment operating expenses (10,003,579 ) (2,524,975 ) (277,731 ) (12,806,285 ) Total operating expenses 53,816,441 33,589,865 4,769,917 92,176,223 Government subsidies 1,194,775 - - 1,194,775 Income (loss) from operations $ 1,625,587 $ (29,857,530 ) $ (71,867 ) $ (28,303,810 ) Total segments assets 42,343,571 197,412,591 77,656,701 317,412,863 Less: intersegment balances (13,508,587 ) (116,348,234 ) (19,932,216 ) (149,789,037 ) Total assets $ 28,834,984 $ 81,064,357 $ 57,724,485 $ 167,623,826 For the year ended December 31, 2015 Subscription Commodities and other Hong Kong brokerage services related services brokerage Consolidated Net revenues $ 113,720,922 $ 27,236,753 $ 3,149,063 $ 144,106,738 Less: intersegment sales (34,018,268 ) (2,683,704 ) - (36,701,972 ) Net revenues from external customer 79,702,654 24,553,049 3,149,063 107,404,766 Cost of revenues 4,975,361 14,321,339 1,181,538 20,478,238 Less: intersegment cost of revenues - (739,501 ) - (739,501 ) Cost of revenues after elimination 4,975,361 13,581,838 1,181,538 19,738,737 Operating expenses: General and administrative 4,026,984 11,148,924 2,978,161 18,154,069 Product development 2,549,731 8,188,718 - 10,738,449 Sales and marketing 69,674,657 12,139,100 566,396 82,380,153 Loss from impairment of intangible assets 250,360 - - 250,360 - - - - Total segments operating expenses 76,501,732 31,476,742 3,544,557 111,523,031 Less: intersegment operating expenses (35,907,706 ) (47,620 ) (110,721 ) (36,066,047 ) Total operating expenses 40,594,026 31,429,122 3,433,836 75,456,984 Government subsidies 251,828 - - 251,828 Income (loss) from operations $ 34,385,095 $ (20,457,911 ) $ (1,466,311 ) $ 12,460,873 Total segments assets 109,286,634 179,706,230 47,011,111 336,003,975 Less: intersegment balances (51,101,320 ) (122,077,495 ) (18,760,003 ) (191,938,818 ) Total assets $ 58,185,314 $ 57,628,735 $ 28,251,108 $ 144,065,157 Enterprise wide disclose The Group derives revenue from external customers for each of the following services during the years presented: Years ended December 31, 2015 2016 2017 Commodities brokerage services revenues $ 79,702,654 $ 59,976,717 $ 2,588,426 Financial information and advisory services revenues 17,205,459 10,696,523 10,271,822 Advertising revenues 7,023,399 2,893,707 3,588,499 Hong Kong brokerage services revenues 3,149,063 8,956,501 25,281,733 Others 324,191 534,448 892,170 Total revenue from external customers $ 107,404,766 $ 83,057,896 $ 42,622,650 Substantially all of the Company’s revenues for the years ended December 31, 2015, 2016 and 2017 were generated from the PRC and Hong Kong. As of December 31, 2015, 2016 and 2017, respectively, substantially all of long-lived assets of the Group are located in the PRC and Hong Kong. |
Statutory Reserves and Restrict
Statutory Reserves and Restricted Net Assets | 12 Months Ended |
Dec. 31, 2017 | |
Statutory Reserves and Restricted Net Assets [Abstract] | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 24. STATUTORY RESERVES AND RESTRICTED NET ASSETS PRC legal restrictions permit payments of dividends by the Group’s PRC entities only out of their retained earnings, if any, determined in accordance with PRC regulations. Prior to payment of dividends, pursuant to the laws applicable to the PRC Domestic Enterprises and PRC Foreign Investment Enterprises, the PRC entities must make appropriations from after-tax profit to non-distributable statutory reserve funds as determined by the Board of Directors of the Group. These reserve funds include the (1) general reserve, (2) enterprise expansion fund and (3) staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires annual appropriations of not less than 10% of after-tax profit (as determined under accounting principles and financial regulations applicable to PRC enterprises at each year-end); the other two funds are to be made at the discretion of the board of directors of each of the Group’s subsidiaries. These reserve funds can only be used for specific purposes and are not distributable as cash dividends. The appropriation to these reserves by the Group’s PRC subsidiaries was $1,820,080, $353,069 and $ 59,293 in 2015, 2016 and 2017. The balance of the statutory reserves was $8,993,590 and $ 9,052,883 as of December 31 2016 and 2017. Such reserves have been included in the retained earnings of the Company’s consolidated balance sheet. As a result of these PRC laws and regulations and the requirement that distributions by PRC entities can only be paid out of distributable profits computed in accordance with PRC GAAP, the PRC entities are restricted from transferring a portion of their net assets to the Group. Amounts restricted include paid-in capital and the statutory reserves of the Company’s PRC subsidiaries and VIEs. As of December 31, 2017, the aggregate amounts restricted which represented the amount of net assets of the relevant subsidiaries and VIEs in the Group not available for distribution was $34,555,406. As a result of the above restrictions, parent-only financials are presented on financial statement Schedule I. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Event [Abstract] | |
SUBSEQUENT EVENT | 25. SUBSEQUENT EVENT In March 2018, we signed strategic partnership agreement with Orient Securities to provide a cloud-based investor education platform. |
Financial Information of Parent
Financial Information of Parent Company | 12 Months Ended |
Dec. 31, 2017 | |
Financial Information of Parent Company [Abstract] | |
Financial Information of Parent Company | December 31, 2016 2017 Assets Current assets: Cash and cash equivalents $ 9,427,287 $ 7,614,175 Amounts due from subsidiaries, VIEs and VIE’s subsidiaries 9,874,248 9,845,705 Prepaid expenses and other current assets 3,224,614 144,353 Dividends receivable - - Total current assets 22,526,149 17,604,233 Investments in subsidiaries, VIEs and VIE’s subsidiaries 77,036,485 46,306,964 Total assets $ 99,562,634 $ 63,911,197 Liabilities and shareholders’ equity Current liabilities: Accrued expenses and other current liabilities 301,076 91,143 Contingent liability 3,000,000 2,760 Amounts due to subsidiaries, VIEs and VIE’s subsidiaries 10,096,874 9,770,611 Total current liabilities $ 13,397,950 $ 9,864,514 Shareholders’ equity Ordinary shares (118,098,018 and 118,098,018 shares issued and outstanding as of December 31, 2016 and 2017, respectively) 56,973,632 57,000,417 Additional paid-in capital 32,176,992 34,368,210 Accumulated other comprehensive income 4,253,643 6,654,191 Retained deficits (7,239,583 ) (43,976,136 ) Total shareholders’ equity 86,164,684 54,046,682 Total liabilities and shareholders’ equity $ 99,562,634 $ 63,911,197 December 31, 2015 2016 2017 Cost of revenues $ - $ 34,740 $ 84,717 Gross loss - (34,740 ) (84,717 ) Operating expenses: General and administrative 1,226,800 2,150,680 1,122,440 Product development - - - Sales and marketing - - 181,073 Share-based compensation 3,812,733 2,382,934 782,196 Total operating expenses 5,039,533 4,533,614 2,085,709 Interest income 47 - 2,246 Equity in earnings (deficits) of subsidiaries, VIEs and VIE’s subsidiaries 28,643,095 3,049,831 (34,540,850 ) Exchange loss, net (1,011,509 ) (159,868 ) (2,785 ) Other income (loss), net (109,684 ) (422 ) (24,738 ) Gain from sales of cost method investment - - - Net income (loss) $ 22,482,416 $ (1,678,813 ) $ (36,736,553 ) Other comprehensive income (loss), net of tax: Changes in foreign currency translation adjustment (3,467,043 ) (4,343,652 ) 2,400,548 Other comprehensive income (loss), net of tax (3,467,043 ) (4,343,652 ) 2,400,548 Comprehensive income (loss) $ 19,015,373 $ (6,022,465 ) $ (34,336,005 ) Additional Accumulated other Retained Total Ordinary shares paid-in comprehensive earnings shareholders’ Shares Amount capital income (loss) (deficits) equity Balance as of January 1, 2015 112,417,933 $ 56,386,606 $ 24,207,606 $ 12,064,338 $ (28,043,186 ) $ 64,615,364 Issuance of ordinary shares for the plan of stock options and restricted shares 4,000,000 520 - - - 520 Exercise of share options by employees 435,000 293,654 - - - 293,654 Exercise of share options by non-employees 1,095,000 175,200 - - - 175,200 Restricted shares issued 150,085 20 - - - 20 Share-based compensation - - 3,812,733 - - 3,812,733 Equity pick up from compensation of VIE's subsidiaries - - 1,519,015 - - 1,519,015 Changes in controlling ownership interest - - (1,393,508 ) - - (1,393,508 ) Foreign currency translation adjustment - - - (3,467,043 ) - (3,467,043 ) Net income - - - - 22,482,416 22,482,416 Balance as of December 31,2015 118,098,018 $ 56,856,000 $ 28,145,846 $ 8,597,295 $ (5,560,770 ) $ 88,038,371 Exercise of share options by employees - 117,632 - - - 117,632 Share-based compensation - - 2,382,934 - - 2,382,934 Equity pick up from compensation of VIE's subsidiaries - - 2,030,877 - - 2,030,877 Changes in controlling ownership interest - - (382,665 ) - - (382,665 ) Foreign currency translation adjustment - - - (4,343,652 ) - (4,343,652 ) Net loss - - - - (1,678,813 ) (1,678,813 ) Balance as of December 31, 2016 118,098,018 $ 56,973,632 $ 32,176,992 $ 4,253,643 $ (7,239,583 ) $ 86,164,684 Exercise of share options by employees - 26,785 - - - 26,785 Share-based compensation - - 782,196 - - 782,196 Equity pick up from compensation of VIE's subsidiaries - - 1,409,022 - - 1,409,022 Foreign currency translation adjustment - - - 2,400,548 - 2,400,548 Net loss - - - - (36,736,553 ) (36,736,553 ) Balance as of December 31, 2017 118,098,018 $ 57,000,417 $ 34,368,210 $ 6,654,191 $ (43,976,136 ) $ 54,046,682 December 31, 2015 2016 2017 Operating activities: Net income (loss) $ 22,482,416 $ (1,678,813 ) $ (36,736,553 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Share-based compensation 3,812,733 2,382,934 782,196 Equity in deficits (earnings) of subsidiaries, VIEs and VIE’s subsidiaries (28,643,095 ) (3,049,831 ) 34,540,850 Changes in assets and liabilities: Prepaid expenses and other current assets 20,339 65,990 83,021 Amounts due from subsidiaries, VIEs and VIE’s subsidiaries 142,303 (2,523,274 ) 28,544 Rental deposits 66,893 - - Accrued expenses and other current liabilities (8,035 ) (3,712 ) (211,691 ) Amounts due to subsidiaries, VIEs and VIE’s subsidiaries 1,065,088 (3,409,764 ) (326,263 ) Net cash (used in) provided by operating activities (1,061,358 ) (8,216,470 ) (1,839,898 ) Investing activities: Dividend received from subsidiaries 1,011,931 16,529,639 - Capital paid to subsidiaries (3,000,000 ) - - Proceeds from sales of cost method investment 2,168,868 - - Net cash provided by (used in) investing activities 180,799 16,529,639 - Financing activities: Proceeds from stock options exercised by employees 293,654 142,618 26,786 Proceeds from stock options exercised by nonemployees 175,200 - - Net cash provided by financing activities 468,854 142,618 26,786 Net (decrease) increase in cash and cash equivalents (411,705 ) 8,455,787 (1,813,112 ) Cash and cash equivalents, beginning of the year 1,383,205 971,500 9,427,287 Cash and cash equivalents, end of the year $ 971,500 $ 9,427,287 $ 7,614,175 Note: Basis for preparation The parent-company Financial Information of China Finance Online has been prepared using the same accounting policies as set out in the Group’s consolidated financial statements except that China Finance Online has used equity method to account for its investments in its subsidiaries and variable interest entities. |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the financial statements of China Finance Online, its subsidiaries, VIEs for which the Company is the primary beneficiary and those VIEs’ subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. |
Restricted cash | Restricted cash Restricted cash is the deposit in bank accounts for providing guarantee to perform the contract obligation related to “Yinglibao”, a mobile-based financial platform that integrates cash management solutions and mutual fund distribution. |
Fair value measurement | Fair value measurement Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1-inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2-inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3-inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Financial instruments include cash and cash equivalents, restricted cash, accounts receivable, short-term investment, cost method investment, equity method investment and accounts payable. The carrying values of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their fair value due to their short-term maturities. The Group’s short-term investment includes trading securities, held-to-maturity securities, and available-for-sale securities. See Note 7 and Note 8 for further discussion. The carrying value of the cost method investment was $1,542,454 and $1,714,058 as of December 31, 2016 and 2017, which approximate the fair value of the investment based on the valuation performed by the Company. See Note 8 and Note 9 for further discussion. The carrying value of the equity method investment was $1,019,009 and $817,223 as of December 31, 2016 and 2017, which approximate the fair value of the investments at the acquired date and subsequently adjusted as the net assets of the investee change through the earning of income. See Note 8 and Note 10 for further discussion. The Group measures certain assets, including intangible assets and goodwill at fair value on a nonrecurring basis when they are deemed to be impaired. The fair values of goodwill and intangible assets are determined based on valuation techniques using the best information available, and may include management judgments, future performance projections, See Note 8 for further discussion. The Group measured the fair value for the assets acquired, with the assistance of an independent valuation firm, using discounted cash flow techniques, and these assets were valued using Level 3 inputs, because the Group used unobservable inputs to value them, reflecting the Group’s assessment of the assumptions market participants would use in valuing these purchased intangible assets. The Group does not use derivative instruments to manage risks. |
Trust bank balances held on behalf of customers | Trust bank balances held on behalf of customers Trust bank balances held on behalf of customers consist two parts: i) Rifa Securities and Rifa Futures receive fund from customers for purpose of buying or selling securities and futures on behalf of its customers and deposits the fund in its interest-bearing bank account; ii) The funds received by CFO Newrand from customers who purchase mutual funds and other wealth management products which are deposited in a trust bank account. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses in the financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s financial statements include account receivable, cost method investment, equity method investment, impairment of goodwill and long-lived assets, income taxes, share-based compensation and purchase price allocation. Actual results could differ from those estimates. |
Short-term investments | Short-term investments Short-term investments comprise marketable debt and equity securities, which are classified as trading, held-to-maturity or available-for-sale. Trading securities are securities that are bought and held principally for the purpose of selling them in the near term and are reported at fair value, with unrealized gains and losses recognized in earnings. Short-term investments are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. All of the Company’s held-to-maturity securities are classified as short-term investments on the consolidated balance sheets based on their contractual maturity dates which are less than one year and are stated at their amortized costs. Short-term investments classified as available for sale are carried at their fair values and the unrealized gains or losses from the changes in fair values are included in accumulated other comprehensive income. Available for sale securities are classified as current assets on the accompanying consolidated balance sheets because they are available for immediate sale. The Group reviews its short-term investments for other-than-temporary impairment based on the specific identification method. The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its short-term investments. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than the cost, and the Group’s intent and ability to hold the investment, in determining if impairment is needed. |
Property and equipment, net | Property and equipment, net Property and equipment, net are carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Technology infrastructure 5 years Computer equipment 5 years Furniture, fixtures and equipment 5 years Motor vehicle 5 years Leasehold improvements Shorter of the lease term or 5 years |
Acquired intangible assets, net | Acquired intangible assets, net Acquired intangible assets are estimated by management based on the fair value of assets acquired. Identifiable intangible assets are carried at cost less accumulated amortization. Amortization of definite-lived intangible assets is computed using the straight-line method over the estimated average useful lives, which are as follows: License and related trademarks 10-15 years Completed technology 5 years Customer relationship 4-5 years Certain trademarks resulting from the acquisitions of business and certain trading rights bought by the Group are determined to have indefinite lives. If an intangible asset is determined to have an indefinite life, it is not amortized until its useful life is determined to be no longer indefinite. |
Guarantee fund deposits | Guarantee fund deposits Guarantee fund deposits consist of i) the funds deposited with Hong Kong Exchange and Clearing Limited by Rifa Futures, to guarantee its customers’ settlement obligations; ii) the funds deposited with the commodities exchanges as a result of its customers’ trading. The Group needs to deposit certain percentage of its customers’ trading margins with the commodities exchanges. |
Impairment of long-lived assets with definite lives | Impairment of long-lived assets with definite lives The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group compares the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the fair value of the assets. There were nil, $491,284 and nil impairment losses in relation to the long-lived assets with definite lives for the years ended December 31, 2015, 2016 and 2017. |
Business combinations | Business combinations Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed, and any noncontrolling interest of the acquiree at the acquisition date, if any, are measured at their fair values as of that date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interest of the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Common forms of the consideration made in acquisitions include cash and common equity instruments. Consideration transferred in a business acquisition is measured at the fair value as at the date of acquisition. Where the consideration in an acquisition includes contingent consideration the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and if recorded as a liability it is subsequently carried at fair value with changes in fair value reflected in earnings. |
Impairment of goodwill and indefinite-lived intangible assets | Impairment of goodwill and indefinite-lived intangible assets The Group performs a qualitative analysis that includes reviewing the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist, whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable at least annually. The excess of the purchase price over the fair value of net assets acquired is recorded on the consolidated balance sheet as goodwill. After a qualitative analysis indicates an impairment test is needed, the Company completes a two-step goodwill impairment test. The first step is to compare the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step is to compare the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being a discounted cash flow. The impairment test for other intangible assets not subject to amortization consists of a comparison of the fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The estimates of fair values of intangible assets not subject to amortization are determined using various discounted cash flow valuation methodologies. Significant assumptions are inherent in this process, including estimates of discount rates. Discount rate assumptions are based on an assessment of the risk inherent in the respective intangible assets. The Group performed the annual impairment tests on December 31 of each year. Based on the Group’s assessment, the Group recorded nil, $6,659,691 and nil goodwill impairment losses during the years ended December 31, 2015, 2016 and 2017, respectively. In addition, the Group recorded $250,360, $619,865 and $291,817 impairment loss in relation to intangible assets with indefinite life during the years ended December 31, 2015, 2016 and 2017. |
Revenue recognition | Revenue recognition Commodities brokerage business The Group derives commission income, carrying charges and trading revenues from its commodities brokerage services. Commission income is recognized on a trade basis based on their customers’ trading volumes. The commission earned is fixed no matter how the client’s open positions are ultimately settled. Additionally, the Group charges carrying charges to its customers. The commissions and carrying charges are presented in net revenues in the statement of comprehensive income. Amounts are settled with the Exchange by both the Group and the customers and the exchange then settles with any counterparty. The exchange offsets the Group’s gains and losses and amounts receivable and amounts payable from the exchange are presented net on the statement of financial position as the Group and the exchange settle net. Trading gains, net include brokerage fees and margins generated from derivative trades executed with customers and other counterparties and are recognized when trades are executed. Trading gains, net also include activities where the Group acts as market maker in the purchase and sale of commodities derivative instruments with customers. These transactions may be offset simultaneously with another customer or counterparty, offset with similar but not identical positions on an exchange, made from inventory, or may be aggregated with other purchases to provide liquidity intraday, for a number of days, or in some cases, particularly the commodities brokerage business, even longer periods (during which fair value may fluctuate). Therefore, trading gains, net includes activities from the Group’s operations of a proprietary commodity trades. Net trading gains are recognized on a trade-date basis and include realized gains or losses and changes in unrealized gains or losses on investments at fair value. Unrealized gains/losses on open positions will be marked to market at each period end and may present trading gains and losses which comprise both realized and unrealized gains and losses, on a net basis in the statement of comprehensive income. The open transactions may lead to receivables and/or payables for open transaction which are recorded on the Statement of Financial Position. Revenue generally is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. The following table presents the totally recognized net revenue from commodities trading business, consisted of: Years ended 2016 2017 Commodities trading gain (loss) $ 44,841,125 $ (1,466,888 ) Commission income 13,283,933 3,823,586 Carrying charges 1,851,659 231,728 $ 59,976,717 $ 2,588,426 Hong Kong Brokerage services The Group also derives commission from its brokerage services provided by the subsidiaries, Rifa Securities and Rifa Futures which buy or sell securities and future contracts on their customers’ behalf. The Group acts as an agent with their customers for these transactions. The commission income is recognized on a trade date basis as transactions occur. Financial information and advisory services The Group derives revenue from subscription fees from subscribers to their financial data, information services and investment advisory. The Group recognizes revenues when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred, (3) the fee is fixed or determinable and (4) collectability is probable. Upon receipt of the upfront cash payments from the subscriber, the Group will activate the subscriber’s account and provide the subscriber the access code. This will commence a certain subscription period according to the customer demand and the full payment will be deferred and recognized ratably over the subscription period. The Group recognizes revenue ratably over the life of the arrangement. Estimated refund of subscription fees is recorded as deduction of revenue and deferred revenue. The Group also derives revenue from providing services as information intermediary in online P2P lending business. We procure borrowing and lending information from independent third parties, and our professional team evaluates and selects the information provided by third parties, from the perspective of risks. Eventually we display the selected information on the platform of Yinglibao, which is our online consumer finance marketplace. We charge borrowers interests for facilitating loan transactions, and the revenues are recognized upon completion of the services. Advertising revenue The Group derives its advertising fees from advertising sales on their website for a fixed period of time, generally less than one year. Revenues from advertising arrangements are recognized ratably over the period the advertising is displayed. |
Business taxes and value added taxes | Business taxes and value added taxes Starting from January 1, 2012, the PRC Ministry of Finance and the State Administration of Taxation launched a Business Tax to value added tax (“VAT”) Transformation Pilot Program (the “Pilot Program”), for certain industries in Shanghai. On September 1, 2012, the PRC Ministry of Finance and the State Administration of Taxation extended the Pilot Program to certain industries in other eight regions, including Beijing and Shenzhen. With the adoption of Pilot Program, our advertising-related revenues and certain subscription revenues were subject to VAT tax at a rate of 6%. Our advertising- related revenues, certain subscription revenues and certain commodities brokerage revenues were recognized after deducting VAT and other related surcharges. Revenue is recorded net of business taxes when incurred. The Group is subject to business taxes of 3%-5% on taxable services provided to its customers. During the years ended December 31, 2015, 2016, and 2017 business taxes and related surcharges totaled $1,663,869, $678,594 and $262,117, respectively. The Group’s certain PRC subsidiaries, VIEs and VIEs’ subsidiaries are subject to VAT at a rate of 17% on subscription-based revenue. VAT payable on subscription-based revenue is computed net of VAT paid on purchases. In respect of subscription-based revenue, however, if the net amount of VAT payable exceeds 3% of subscription-based revenue, the excess portion of value added tax can be refunded immediately. The Group therefore is subject to an effective net VAT burden of 3% from subscription-based revenue and records VAT on a net basis. Net amount of value added tax is recorded either in the line item of other current liabilities or prepaid expenses and other current assets on the face of consolidated balance sheet. Subscription-based revenue includes the benefit of the refund of value added taxes on sale of the downloadable software received from the Chinese tax authorities as part of the PRC government policy of encouraging software development in the PRC. In 2015, 2016 and 2017, the Group recognized $328,817, $271,885 and $348,165, respectively, in VAT refunds. |
Government subsidies | Government subsidies The Group records government subsidies when granted by local government authority and are not subject to future return. The government subsidies include research & development subsidy, business tax refund, innovation fund and high-tech company subsidy. |
Deferred revenue | Deferred revenue Payments received in advance of for our financial information and advisory service, advertising service are recorded as deferred revenue until earned and when the relevant revenue recognition requirements have been met. |
Cost method investment | Cost method investment For investments in an investee over which the Group does not have significant influence, the Group carries the investment at cost and recognizes income as any dividends declared from distribution of investee’s earnings. The Group reviews the cost method investments for impairment whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable. An impairment loss is recognized in earnings equal to the difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value of the investment would then become the new cost basis of the investment. |
Equity method investment | Equity method investment Under the equity method, the Group initially records its investment at cost. The Group subsequently adjusts the carrying amount of the investment to recognize the Company’s proportionate share of each equity investee’s net income or loss. The Group will discontinue applying equity method if an investment (and additional financial supports to the investee, if any) has been reduced to zero. When the equity-method investment in ordinary shares is reduced to zero and further investments are made that have a higher liquidation preference than ordinary shares, the Group would recognize the loss based on its percentage of the investment with the same liquidation preference, and the loss would be applied to those investments of a lower liquidation preference first before being further applied to the investments of a higher liquidation preference. An impairment loss on the equity method investments is recognized in the consolidated statements of comprehensive income when the decline in value is determined to be other than-temporary. Also, noncontrolling interests in the Company’s s are reported as a component of equity, separate from the parent company’s equity. Results of operations attributable to the non-controlling interest are included in the Company’s consolidated statements of comprehensive income (loss). |
Foreign currency translation | Foreign currency translation The functional and reporting currency of the Company is the United States dollar (“U.S. dollar”). The financial records of the Group’s subsidiaries, VIEs and VIEs’ subsidiaries located in the PRC, Hong Kong and British Virgin Islands are maintained in their local currencies, the Renminbi (“RMB”), Hong Kong Dollars (“HK$”), and U.S. Dollars (“US$”), respectively, which are also the functional currencies of these entities. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations. The Group’s entities with functional currency of RMB and HK$ translate their operating results and financial position into the US$, the Group’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are report as cumulative translation adjustments and are shown as a separate component of other comprehensive income. |
Foreign currency risk | Foreign currency risk The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of Renminbi into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Cash and cash equivalents of the Group included aggregate amounts of $79,461,280, $46,295,841 and $15,237,326 at December 31, 2015, 2016 and 2017 which were denominated in RMB. |
Product development expenses | Product development expenses Costs of product development, including investment in data capability, are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized. The Group essentially completed its development concurrently with the establishment of technological feasibility, and, accordingly, no costs have been capitalized. |
Advertising costs | Advertising costs The Group expenses advertising costs as incurred. Total advertising expenses were $4,908,593, $5,192,126 and $1,014,481 for the years ended December 31, 2015, 2016 and 2017, respectively, and have been included as part of sales and marketing expenses in the accompanying consolidated statements of operations. |
Commissions paid | Commissions paid Commissions paid are the commission of our Hong Kong brokerage business and the commissions paid to the sales agents of our commodities brokerage business. Total commissions paid were $5,049,661, $8,903,424 and $13,976,505 for the years ended December 31, 2015, 2016 and 2017. |
Income taxes | Income taxes Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net operating loss carry forwards and credits by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. |
Comprehensive income (loss) | Comprehensive income (loss) Comprehensive income (loss) includes net income (loss), unrealized gain (loss) on short-term investments and foreign currency translation adjustments. Beginning in January 1, 2012, the Group presents the components of net income, the components of other comprehensive income and total comprehensive income a single continuous consolidated statement of comprehensive income. |
Share-based compensation | Share-based compensation Share-based compensation with employees is measured based on the grant date fair value of the equity instrument. The Group recognizes the compensation costs net of an estimated forfeiture rate using the straight-line method for performance based awards or graded vesting attribution method for service based awards, over the requisite service period of the award, which is generally the vesting period of the award. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of share-based compensation expense to be recognized in future periods. Share awards issued to nonemployees are measured at fair value at the earlier of the commitment date or the date the services is completed and recognized over the period the service is provided or as goods is received. |
Net income (loss) per share | Net income (loss) per share Basic net income (loss) per share attributable to China Finance Online Co. Limited is computed by dividing net income (loss) attributable to China Finance Online Co. Limited by the weighted average number of ordinary shares outstanding during the period. Diluted net income per ordinary share attributable to China Finance Online Co. Limited reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares. The dilutive effect of the stock options and nonvested shares is computed using treasury stock method. |
Concentrations of credit risk | Concentrations of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, short-term investments, loan receivable and accounts receivable. The Group places its cash and cash equivalents, restricted cash, short-term investments in major financial institutions located in PRC and Hong Kong, which management considers to be of high credit quality. The Group conducts ongoing credit evaluations of its customers and generally does not require collateral or other security from its customers except for the accounts receivable-margin clients which represents the margin loan to customers for securities purchase. The accounts receivable-margin client was collateralized by the securities the margin client purchased. The Group manages its credit risk by collecting up-front fee from its customers and billing at regular intervals during the contract period. The Group assesses the adequacy of allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers. Details of clients accounting for 10% or more of accounts receivable are as follows: Year ended December 31, 2016 2017 Amount % Amount % A $ 4,010,897 18.3 $ 3,844,569 22.6 * Represented less than 10% of consolidated account receivable balance. There were no customers with 10% or more of the Group’s revenues during 2015, 2016, or 2017. |
Recently accounting pronouncements | Recently accounting pronouncements In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception” (“ASU 2017-11”), which addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. The amendments in Part I of this ASU are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact of the adoption of ASU 2017-11 on its consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which provides guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. We do not expect the adoption of ASU 2017-09 to have a material impact on our consolidated financial statements. In February 2017, the FASB issued ASU No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” (“ASU 2017-05”), which clarifies the scope of the nonfinancial asset guidance in Subtopic 610-20. This ASU also clarifies that the derecognition of all businesses and nonprofit activities (except those related to conveyances of oil and gas mineral rights or contracts with customers) should be accounted for in accordance with the derecognition and deconsolidation guidance in Subtopic 810-10. The amendments in this ASU also provide guidance on the accounting for what often are referred to as partial sales of nonfinancial assets within the scope of Subtopic 610-20 and contributions of nonfinancial assets to a joint venture or other non-controlled investee. The amendments in this ASU are effective for annual reporting reports beginning after December 15, 2017, including interim reporting periods within that reporting period. Public entities may apply the guidance earlier but only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We do not expect the adoption of ASU 2017-05 to have a material impact on our consolidated financial statements. In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”), which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this ASU do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact of the adoption of ASU 2016-18 on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact of the adoption of ASU 2016-15 on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplifies several aspects of the accounting for employee share-based payment transactions. The areas for simplification in ASU 2016-09 include the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this ASU will be effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2016-09 on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Subtopic 842).” The new guidance requires lessees to recognize assets and liabilities arising from leases as well as extensive quantitative and qualitative disclosures. A lessee will need to recognize on its balance sheet a right-of-use asset and a lease liability for the majority of its leases (other than leases that meet the definition of a short-term lease). The lease liabilities will be equal to the present value of lease payments. The right-of-use asset will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. ASU 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. The Company is currently evaluating the impact of adopting ASU 2016-02 on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers (Topic 606), which is effective January 1, 2018. The guidance clarifies that revenue from contracts with customers should be recognized in a manner that depicts both the likelihood of payment and the timing of the related transfer of goods or performance of services. In March 2016, the FASB issued an amendment (ASU 2016-08) to the new revenue recognition guidance clarifying how to determine if an entity is a principal or agent in a transaction. In April (ASU 2016-10), May (ASU 2016-12), and December (ASU 2016-20) of 2016, the FASB further amended the guidance to include performance obligation identification, licensing implementation, collectability assessment and other presentation and transition clarifications. The effective date and transition requirements for the amendments is the same as for ASU 2014-09. The Company will adopt the revenue recognition guidance beginning January 1, 2018 using the modified retrospective method of adoption. The Company has performed an assessment of our revenue contracts and concluded that there will be no change to (1) the timing and pattern of revenue recognition for its current revenue streams in scope of Topic 606, which includes subscription fees, commission income, carrying charges and advertising fees, or (2) the presentation of revenue as gross versus net upon adoption of Topic 606. Because there will be no change to the timing and pattern of revenue recognition, we believe there will be no material changes to the Company’s processes and internal controls. |
Organization and Principal Ac36
Organization and Principal Activities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization and Principal Activities [Abstract] | |
Schedule of showing china finance online's significant subsidiaries, VIEs and VIEs' subsidiaries | Company name Place of Date of legal Subsidiaries: China Finance Online (Beijing) Co., Ltd. (“CFO Beijing”) Beijing, PRC Jul. 9, 1998 100% N/A Fortune Software (Beijing) Co., Ltd. (“CFO Software”) Beijing, PRC Dec. 7, 2004 100% N/A Shenzhen Genius Information Technology Co., Ltd. (“CFO Genius”) Shenzhen, PRC Sep. 21, 2006 100% Subscription service Zhengyong Information & Technology (Shanghai) Co., Ltd. (“CFO Zhengyong”) Shanghai, PRC Aug. 17, 2008 100% N/A Zhengtong Information Technology (Shanghai) Co., Ltd (“CFO Zhengtong”) Shanghai, PRC Jun. 24, 2008 100% N/A Rifa Financial Holdings Limited (“Rifa Financial Holdings”) (Formerly known as “iSTAR Financial Holdings Limited”) BVI Jul. 16, 2007 85% Investment holdings Rifa Securities Limited (“Rifa Securities”) (Formerly known as “iSTAR International Securities Co. Limited”) Hong Kong, PRC Nov. 23, 2007 85% Brokerage service Rifa Futures Limited (“Rifa Futures”) (Formerly known as “iSTAR International Futures Co. Limited”) Hong Kong, PRC Apr. 16, 2008 85% Brokerage service Rifa Credit Limited (“Rifa Credit”) (Formerly known as “iSTAR International Credit Co. Limited”) Hong Kong, PRC Feb. 10, 2012 85% N/A Rifa Wealth Management Co. Limited (“Rifa Wealth Management”) Hong Kong, PRC Sep. 13, 2016 85% Insurance brokerage service Variable interest entities: Beijing Fuhua Innovation Technology Development Co., Ltd. (“CFO Fuhua”) Beijing, PRC Dec. 31, 2000 Nil Web portal and advertising service Shenzhen Newrand Securities Advisory and Investment Co., Ltd. (“CFO Newrand”) Shenzhen, PRC Oct. 17, 2008 Nil Securities investment advising Shanghai Stockstar Wealth Management Co., Ltd. (“Stockstar Wealth Management”) Shanghai, PRC Apr. 12, 2011 Nil N/A Beijing Huizhi Fortune Technology Co., Ltd. (“CFO Huizhi”) Beijing, PRC Jun. 14, 2012 Nil N/A Shenzhen Ganlanren Investment Management Co., Ltd. (“CFO Shenzhen Ganlanren”) Shenzhen, PRC Feb. 18, 2016 Nil N/A Beijing CFO Premium Technology Co., Ltd. (“CFO Premium”). Beijing, PRC June 2, 2009 Nil N/A Subsidiaries of variable interest entities: Shenzhen Newrand Securities Training Center (“CFO Newrand Training”) Shenzhen, PRC Oct. 17, 2008 Nil Securities investment training Fortune (Beijing) Huiying Investment Consulting Co., Ltd. (“CFO Huiying”) Beijing, PRC Dec. 18, 2009 Nil N/A Shenzhen Tahoe Investment and Development Co., Ltd (“CFO Tahoe”) Shenzhen, PRC Sep. 30, 2013 Nil N/A Shenzhen Shangtong Software Co., Ltd. (“CFO Shenzhen Shangtong”) Shenzhen, PRC Sep. 23, 2009 Nil N/A Zhengjin (Tianjin) Precious Metals Investment Co., Ltd. (“CFO Zhengjin Tianjin”) Tianjin, PRC Jul. 23, 2013 Nil Commodities brokerage Beijing Jiayi Management Co., Ltd. (“CFO Zhengjin Beijing”) Beijing, PRC Jan. 13, 2014 Nil Commodities brokerage Yinglibao (Beijing) Technology Co., Ltd. (“CFO Yinglibao”) Beijing, PRC Jan. 15, 2014 Nil Internet-based financial platform Zhengjin (Jiangsu) Precious Metals Co., Ltd. (“CFO Zhengjin Jiangsu”) Nanjing, PRC Nov. 19, 2014 Nil Commodities brokerage Zhengjin (Fujian) Precious Metals Co., Ltd. (“CFO Zhengjin Fujian”) Fujian, PRC Jan. 6, 2013 Nil Commodities brokerage Qingdao Zhengjin Zhida Trading Co., Ltd. (“CFO Qingdao Zhida”) Qingdao, PRC Dec. 21, 2015 Nil Commodities brokerage Tibet Zhisheng Gold Industry Co., Ltd. (“CFO Tibet Zhisheng”) Tibet, PRC Mar. 18, 2016 Nil Commodities brokerage Qingdao Zhengjin Taiji Trading Co., Ltd. (“CFO Qingdao Taiji”) Qingdao, PRC Mar. 23, 2016 Nil Commodities brokerage iTougu (Beijing) Network Technology Co., Ltd. (“CFO iTougu”) Beijing, PRC Dec. 8, 2014 Nil Investment advisory service platform Tibet Fortune Jinyuan Network Technology Co., Ltd. (“CFO Tibet”) Tibet, PRC Aug. 22, 2015 Nil N/A Beijing Zhongjun Sunshine Investment and Management Co., Ltd (“CFO Zhongjun Sunshine”) Beijing, PRC Sep. 30, 2013 Nil Financial service Fortune (Beijing) Qicheng Technology Co., Ltd. (“CFO Qicheng”) Beijing, PRC Dec. 18, 2009 Nil N/A Beijing Chuangying Advisory and Investment Co., Ltd. (“CFO Chuangying”) Beijing, PRC Jan. 9, 2009 Nil P2P lending service Zhongheng Xintai (Beijing) Asset Management Co., Ltd. (“CFO Zhongheng Xintai”) Beijing, PRC Jun. 8, 2016 Nil N/A |
Schedule of significant VIEs and counterparts | VIE name Contractual arrangement Date counterpart CFO Fuhua May 27, 2004 CFO Beijing CFO Newrand October 17, 2008 CFO Zhengyong CFO Qicheng November 20, 2009 CFO Chuangying CFO Chuangying January 9, 2009 CFO Software Stockstar Wealth Management April 12, 2011 CFO Zhengtong CFO Zhongheng Xintai June 8, 2016 CFO Glory CFO Shenzhen Ganlanren April 20, 2017 CFO Software Beijing CFO Premium Technology June 2, 2009 CFO Software |
Schedule of most important revenue-producing assets to operate commodities brokerage business | December 31, 2016 2017 Commodities brokerage business: Commodities trading right $ 288,309 $ - $ 288,309 $ - |
Schedule of financial statement amounts and balances of VIEs | December 31, 2016 2017 Assets Current assets: Cash and cash equivalents $ 41,551,367 $ 8,176,346 Restricted cash 2,483,557 2,035,634 Accounts receivable – others, net 7,031,380 3,759,927 Short-term investment 16,443,831 155,727 Others 7,863,322 36,714,120 Total current assets 75,373,457 50,841,754 Property and equipment, net 5,103,126 4,348,884 Acquired intangible assets, net 288,309 - Cost method investment 1,542,454 1,714,058 Equity method investment, net 1,019,009 817,223 Rental deposits 972,252 776,196 Guarantee fund deposits 5,760,309 311,615 Investment in subsidiaries 39,026,188 41,279,679 Deferred tax assets 1,152,527 1,288,064 Total assets $ 130,237,631 $ 101,377,473 Third-party liabilities: Current liabilities: Accrued expenses and other current liabilities $ 38,527,545 $ 20,445,103 Accounts payable 2,151,134 806,749 Total current liabilities 40,678,679 21,251,852 Non-current liabilities 383,463 243,398 Total third-party liabilities $ 41,062,142 $ 21,495,250 Inter-company liabilities $ 3,397,736 $ 18,558,400 Year ended December 31, 2015 2016 2017 Net revenues $ 136,412,062 $ 71,559,226 $ 19,556,988 Net income (loss) $ 49,300,399 $ (1,815,389 ) $ (35,738,587 ) Year ended December 31, 2015 2016 2017 Net cash provided by (used in) operating activities $ (835,965 ) $ (8,473,669 ) $ (27,357,141 ) Net cash (used in) provided by investing activities 38,523,306 (4,211,878 ) 16,669,443 Net cash provided by (used in) financing activities (6,061,473 ) 9,559,794 (19,083,181 ) Effect of exchange rate changes $ (1,452,505 ) $ (3,111,278 ) $ (3,604,142 ) |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of property and equipment, net estimated useful lives | Technology infrastructure 5 years Computer equipment 5 years Furniture, fixtures and equipment 5 years Motor vehicle 5 years Leasehold improvements Shorter of the lease term or 5 years |
Schedule of acquired intangible assets, net estimated average useful lives | License and related trademarks 10-15 years Completed technology 5 years Customer relationship 4-5 years |
Schedule of revenue recognition, net | Years ended 2016 2017 Commodities trading gain (loss) $ 44,841,125 $ (1,466,888 ) Commission income 13,283,933 3,823,586 Carrying charges 1,851,659 231,728 $ 59,976,717 $ 2,588,426 |
Schedule of accounts receivable by customers | Year ended December 31, 2016 2017 Amount % Amount % A $ 4,010,897 18.3 $ 3,844,569 22.6 * Represented less than 10% of consolidated account receivable balance. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions [Abstract] | |
Schedule of comprehensive income | Useful life Purchase price allocation: Cash and cash equivalents $ 11,170 Prepaid expenses and current assets 5,499 Accounts receivable 1,062 Property and equipment, net 219 Rental deposit 5,130 Acquired intangible assets: PIBA license 112,144 10 years Total assets acquired 135,224 Accrued expenses and other current liabilities (135 ) Accounts payable (2,627 ) Deferred tax liabilities, non-current (18,504 ) Total net assets 113,958 Goodwill 108,831 Total purchase price $ 222,789 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable [Abstract] | |
Schedule of accounts receivable | December 31, 2016 2017 Accounts receivable-margin clients $ 7,556,557 $ 8,010,846 Less: Allowance for doubtful accounts - - Accounts receivable- margin clients, net $ 7,556,557 $ 8,010,846 Accounts receivable-others 14,414,318 8,981,187 Less: Allowance for doubtful accounts (3,371 ) (3,579 ) Accounts receivable-others, net $ 14,410,947 $ 8,977,608 |
Prepaid Expenses and Other Cu40
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Schedule of prepaid expenses and other current assets | December 31, 2016 2017 Prepayment of advertising fees $ 492,672 $ 2,983 Advertising deposit 172,985 35,199 Advances to suppliers 701,033 1,292,023 VAT refund receivable 174,542 460,410 Interest receivable (i) 237,013 36 Prepayment of office rental 524,805 193,060 Advances to Yinglibao 582,440 170,613 Advances to employees 747,000 793,802 NCI receivable - 378,204 Advances to consulting service fees 171,052 86,876 Insurance receivable (Note 23) 3,000,000 2,760 Consideration receivable 166,907 77,457 Other current assets 1,270,593 704,878 $ 8,241,042 $ 4,198,301 (i) The Group launched Qiribao, which is a new product on the wealth management platform (Yinglibao), in July 2016. Once an investor commits funds through the platform of Yinglibao to invest Qiribao, his funds are reinvested by the Group to purchase the held-to-maturity securities. Interest receivable derived from the held-to-maturity securities purchased by the Group. Due to the compliance requirement and our strategy, the Group terminated the purchase of Qiribao starting on April 10, 2017, all the held-to-maturity securities was redeemed by the end of December 31, 2017. |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Short-Term Investments [Abstract] | |
Schedule of changes in level 2 available-for-sale securities measured on recurring basis | December 31, 2016 2017 Beginning balance $ - $ 1,605,882 Purchases 192,785,066 71,492,241 Redemption (192,022,189 ) (72,572,216 ) Realized gain(loss) 870,200 (64,596 ) Exchange difference (27,195 ) 71,601 Ending balance $ 1,605,882 $ 532,912 |
Schudule of available-for-sale securities | Year ended December 31, 2017 Exchange Proceeds Costs Gains difference Available-for-sale securities $ (72,572,216 ) $ 71,492,241 $ (64,596 ) $ 71,601 Total $ (72,572,216 ) $ 71,492,241 $ (64,596 ) $ 71,601 Year ended December 31, 2016 Exchange Proceeds Costs Gains difference Available-for-sale securities $ (192,022,189 ) $ 192,785,066 $ 870,200 $ (27,195 ) Total $ (192,022,189 ) $ 192,785,066 $ 870,200 $ (27,195 ) |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurement [Abstract] | |
Schedule of financial assets measured or disclosed at fair value on recurring basis | Fair value disclosure or measurement at December 31, 2017 using Fair value at Quoted prices in Significant Significant Fair value disclosure Cash and cash equivalents: Cash equivalents $ 38,692,871 $ 38,692,871 - - Fair value measurement Short-term investments: Available-for-sale securities 532,912 - 532,912 - Total assets measured at fair value $ 532,912 - $ 532,912 - Fair value disclosure or measurement at December 31, 2016 using Fair value at Quoted prices in Significant Significant Fair value disclosure Cash and cash equivalents: Cash equivalents $ 66,151,439 $ 66,151,439 - - Short-term investments: Held-to-maturity securities 14,837,949 - 14,837,949 - Fair value measurement Short-term investments: Available-for-sale securities 1,605,882 - 1,605,882 - Total assets measured at fair value 1,605,882 - 1,605,882 - |
Schedule of level 2 available-for-sale securities measured on recurring basis | December 31, 2016 2017 Beginning balance $ - $ 1,605,882 Purchases 192,785,066 71,492,241 Redemption (192,022,189 ) (72,572,216 ) Realized gain 870,200 (64,596 ) Exchange difference (27,195 ) 71,601 Ending balance $ 1,605,882 $ 532,912 |
Schedule of fair value disclosed or measured on non-recurring basis | Fair value at Total losses Fair value at Total losses Non-Recurring Goodwill 108,871 (6,659,691 ) 108,010 - Intangible Assets 396,753 (1,111,149 ) 96,457 (291,817 ) |
Cost Method Investment (Tables)
Cost Method Investment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cost Method Investment [Abstract] | |
Schedule of cost method investment | December 31, 2016 2017 Beginning balance $ 554,392 $ 1,542,454 Acquisitions 216,232 76,520 Fair value adjustment of retained noncontrolling investment 807,265 - Exchange difference (35,435 ) 95,084 Ending balance $ 1,542,454 $ 1,714,058 |
Equity Method Investment (Table
Equity Method Investment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investment [Abstract] | |
Summary of changes in equity method investment | December 31, 2016 2017 Beginning balance $ 1,228,269 $ 1,019,009 Equity method investment gain (losses) (138,124 ) 97,820 Consideration Received on Disposal - (350,181 ) Exchange difference (71,136 ) 50,575 Ending balance $ 1,019,009 $ 817,223 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment, Net [Abstract] | |
Schedule of property and equipment, net | December 31, 2016 2017 Technology infrastructure $ 10,344,659 $ 11,322,883 Computer equipment 2,123,332 2,134,959 Furniture, fixtures and equipment 3,799,154 3,906,408 Motor vehicle 1,040,999 1,126,504 Leasehold improvements 4,751,864 4,480,845 22,060,008 22,971,599 Less: accumulated depreciation (14,661,875 ) (16,086,338 ) $ 7,398,133 $ 6,885,261 |
Acquired Intangible Assets, N46
Acquired Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Acquired Intangible Assets, Net [Abstract] | |
Schedule of intangible assets | December, 31 2016 2017 Gross carrying amount Accumulated amortization Impairment Net carrying amount Gross carrying Accumulated amortization Impairment Net carrying amount Commodities trading right $ 908,174 - $ (619,865 ) $ 288,309 $ 291,817 - $ (291,817 ) - Customer relationship 1,108,548 (617,264 ) (491,284 ) - - - - - PIBA license 112,183 (3,739 ) - 108,444 111,296 (14,839 ) - 96,457 $ 2,128,905 $ (621,003 ) $ (1,111,149 ) $ 396,753 $ 403,113 $ (14,839 ) $ (291,817 ) $ 96,457 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill [Abstract] | |
Schedule of goodwill | Commodities brokerage Investment advisory services Institution subscription services Hong Kong brokerage services Total Balance as of January 1, 2015 $ 7,089,780 $ - $ - $ - $ 7,089,780 Acquisition of CFO Guiwo (Note 3) 19,906 - - - 19,906 Exchange difference (410,066 ) - - - (410,066 ) Balance as of December 31, 2015 $ 6,699,620 $ - $ - - $ 6,699,620 Acquisition of Financial Solution Wealth Management (Note 3) - - - 108,831 108,831 Impairment of CFO Guiwo (Note 3) (17,873 ) - - - (17,873 ) Impairment of CFO Henghui (6,641,818 ) - - - (6,641,818 ) Exchange difference (39,929 ) - - 40 (39,889 ) Balance as of December 31, 2016 $ - $ - $ - 108,871 $ 108,871 Exchange difference - - - (861 ) (861 ) Balance as of December 31, 2017 $ - $ - $ - $ 108,010 $ 108,010 |
Accounts Payable (Tables)
Accounts Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Payable [Abstract] | |
Schedule of accounts payable | December 31, 2016 2017 Amount due to customers of Hong Kong brokerage business $ 6,591,131 $ 8,392,037 Amount due to sales agents 1,659,702 114,480 Amount due to noncontrolling shareholders(i) 400,389 31,968 Others 94,646 923,436 $ 8,745,868 $ 9,461,921 (i) Amount due to noncontrolling shareholders represents business deals between the group and noncontrolling shareholders. The business deal we made with noncontrolling shareholders in 2016 and 2017 were $4,635,241 and $9,492, respectively. |
Accrued Expenses and Other Cu49
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | December 31, 2016 2017 Accrued bonus $ 5,217,065 $ 3,310,964 Accrued professional service fees 592,797 498,066 Withholding individual income tax-option exercise 36,696 36,696 Value added taxes and other taxes payable 123,264 66,288 Accrued raw data cost 380,237 97,896 Accrued bandwidth cost 27,587 115,486 Accrued welfare benefits 56,887 419,230 Deposit payable (i) 2,374,144 3,032,812 Interest payable (iii) 265,692 - Amount due to Yinglibao 865,036 170,058 Amount due to Yinglibao clients (iv) 18,573,735 - Accrued sales service fees 114,055 121,086 Others 992,754 2,085,113 $ 29,619,949 $ 9,953,695 (i) Deposit payable is the deposit in bank accounts for providing guarantee to perform the contract obligation related to “Yinglibao”, an internet-based financial platform that integrates cash management solutions and mutual fund distribution. (ii) On March 30, 2015, the Group signed a sale & purchase agreement with a third party, to transfer the 100% ordinary shares of Rifa Futures and iSTAR Wealth Management (the “ Transaction ). In April 2015, the Group collected partial consideration of approximately $5.1 million. Due to the Transaction was not completed as of December 31, 2015, the agreement was expired automatically. The Group refunded the $5.1 million and entered into a new agreement in April 2016. (iii) The Group launched Qiribao, which is a new product on the wealth management platform (Yinglibao), in July 2016. Once an investor commits funds through the platform of Yinglibao to invest Qiribao, his funds are reinvested by the Group to purchase the held-to-maturity securities. Interest payable represented the interest expense that has been incurred but has not been paid to the Qiribao investors as of the date of the balance sheet. Due to the compliance requirement and our strategy, the Group terminated the purchase of Qiribao on April 10, 2017, and all the held-to-maturity securities were redeemed by the end of December 31, 2017. (iv) The Group launched Qiribao, which is a new product on the wealth management platform (Yinglibao), in July 2016. Once an investor commits funds through the platform of Yinglibao to invest Qiribao, his funds are reinvested by the Group to purchase the held-to-maturity securities. The Group recognized the funds committed by the investors through the Yinglibao platform of $18,573,735 in the consolidated balance sheet at December 31, 2016. Due to the compliance requirement and our strategy, the Group terminated the purchase of Qiribao starting on April 10, 2017, all the held-to-maturity securities was redeemed by the end of December 31, 2017. |
Stock Options and Nonvested S50
Stock Options and Nonvested Shares (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
2004 Stock incentive plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock option activity | 2015 2016 2017 Weighted Weighted Weighted Number average Number average Number average of options exercise price of options exercise price of options exercise price Outstanding at beginning of year 21,326,160 $ 0.57 17,332,760 $ 0.55 16,180,260 $ 0.53 Exercised (2,205,600 ) 0.22 (417,900 ) 0.25 (107,200 ) 0.25 Forfeited (1,787,800 ) 1.18 (734,600 ) 1.08 (2,395,100 ) 0.98 Outstanding at end of year 17,332,760 $ 0.55 16,180,260 $ 0.53 13,677,960 $ 0.46 Shares exercisable at end of year 14,513,528 $ 0.61 16,180,260 $ 0.53 13,677,960 $ 0.46 |
Schedule of information with respect to stock options outstanding | Options outstanding Option exercisable Stock option with exercise price of: Number outstanding Weighted Weighted average exercise price Aggregate Number exercisable Weighted average exercise price Aggregate $ 1.26 413,360 413,360 $ 1.43 2,044,500 2,044,500 $ 0.25 11,220,100 11,220,100 13,677,960 4.90 years $ 0.46 $ 3,208,949 13,677,960 $ 0.46 $ 3,208,949 |
2014 Stock incentive plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of fair value of employee options was estimated on the basis of the Black-Scholes Option Price model | Years ended December 31, 2014 2015 2017 Weighted average risk free rate of return 1.39% - 1.62% 1.32% 1.88% - 2.13% Weighted average expected option life 6.82 - 6.87 years 6.86 years 7.36 – 7.38 years Expected volatility rate 77.74% - 79.37% 77.81% 73.31% - 74.76% Dividend yield - - |
Schedule of stock option activity | 2015 2016 2017 Weighted Weighted Weighted Number average Number average Number average of options exercise price of options exercise price of options exercise price Outstanding at beginning of year 1,860,000 $ 0.89 1,235,000 $ 0.88 1,105,000 $ 0.87 Granted 120,000 0.87 - - 2,690,000 0.34 Exercised (3,600 ) 0.92 (14,800 ) 0.89 - - Forfeited (741,400 ) 0.89 (115,200 ) 0.90 (40,000 ) 0.89 Outstanding at end of year 1,235,000 $ 0.88 1,105,000 $ 0.87 3,755,000 $ 0.49 Shares exercisable at end of year 480,200 0.89 805,400 $ 0.88 1,045,800 $ 0.88 |
Schedule of information with respect to stock options outstanding | Options outstanding Option exercisable Stock option with exercise price of: Number outstanding Weighted Weighted average exercise price Aggregate intrinsic value as of December 31, 2017 Number exercisable Weighted average exercise price Aggregate intrinsic value as of December 31, 2017 $ 0.878 885,000 885,000 $ 0.920 60,000 60,000 $ 1.032 - - $ 1.038 - - $ 0.870 120,000 100,800 $ 0.302 940,000 - $ 0.348 1,750,000 - 3,755,000 7.15 years $ 0.49 548,960 1,045,800 $ 0.88 - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Schedule of tax preferential policies | PRC entities Chinese EIT rate Qualification for preferential tax rate CFO Qicheng Preferential tax rate of 12.5% in 2013 and 2014. Software Enterprises CFO Shenzhen Shangtong Preferential tax rate of 12.5% in 2013 and 2014. Software Enterprises CFO Meining (deconsolidated in 2016) Preferential tax rate of 15% from 2013 to 2015. HNTE CFO Genius Preferential tax rate of 15% from 2014 to 2015. HNTE CFO Tibet Preferential tax rate of 9% from 2015 to 2017 and 15% thereafter Preferential tax rate for enterprises in Tibet, China CFO Tibet Zhisheng Preferential tax rate of 9% from 2017 and thereafter Preferential tax rate for enterprises in Tibet, China |
Schedule of income tax expense | December 31, 2015 2016 2017 Current $ (2,071,154 ) $ (4,723,267 ) $ (578,367 ) Deferred 686,892 562,664 253,951 Total $ (1,384,262 ) $ (4,160,603 ) $ (324,416 ) |
Schedule of principal components of deferred income taxes | December 31, 2016 2017 Deferred tax assets: Deferred revenue $ 1,049,187 $ 1,608,723 Accrued expenses and other liabilities 465,538 63,972 Net operating loss carrying forwards 14,386,215 24,662,909 15,900,940 26,335,603 Less: valuation allowance (14,498,497 ) (24,715,317 ) Total deferred tax assets $ 1,402,443 $ 1,620,286 Deferred tax liabilities: Account receivable and other assets (235,717 ) (220,222 ) Intangible assets (89,970 ) (16,374 ) Total deferred tax liabilities $ (325,687 ) $ (236,596 ) |
Schedule of reconciliation between total income tax expense | Years ended December 31, 2015 2016 2017 Income (loss) before tax $ 28,201,950 $ (6,805,575 ) $ (42,064,021 ) Income tax (benefits) expenses calculated at 25% 7,050,488 (1,701,394 ) (10,516,005 ) Effect of tax holiday (8,139,429 ) (4,431,103 ) (14,009 ) Effect of income tax rate difference in other jurisdictions 645,873 236,759 (223,454 ) Non-deductible expenses 2,559,649 3,645,741 10,229,536 Non-taxable income (893,950 ) (113,170 ) (3,780,428 ) Change in valuation allowance 161,631 6,523,770 4,628,776 Income tax expense $ 1,384,262 $ 4,160,603 $ 324,416 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net Income (Loss) Per Share [Abstract] | |
Schedule of basic and diluted income (loss) per share | Years ended December 31, 2015 2016 2017 Net income (loss) attributable to China Finance Online Co. Limited $ 22,482,416 $ (1,678,813 ) $ (36,736,553 ) Weighted average ordinary shares outstanding used in computing basic net income (loss) per share 110,997,871 113,213,912 113,601,949 Plus: Incremental shares from assumed conversions of stock options, restricted shares and nonvested shares 14,131,892 - - Weighted average ordinary shares outstanding used in computing diluted net income (loss) per share 125,129,763 113,213,912 113,601,949 Net income (loss) per share attributable to China Finance Online Co. Limited - basic $ 0.20 $ (0.01 ) $ (0.32 ) - diluted $ 0.18 $ (0.01 ) $ (0.32 ) |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interests [Abstract] | |
Schedule of noncontrolling interests | Commodities brokerage Investment Institution Rifa Financial Other Total Balance as of January 1, 2015 $ 10,994,060 $ - $ - $ (31,679 ) (36,309 ) $ 10,926,072 Dividends paid to noncontrolling interest (6,509,680 ) - - - - (6,509,680 ) Changes in controlling ownership interest 1,393,508 - - - 320,956 1,714,464 Paid-in capital from noncontrolling shareholders 641 - - - - 641 Share-based compensation (Note 16) 724,285 - - - - 724,285 Net income (loss) 4,815,506 (195,587 ) (284,647 ) 4,335,272 Balance as of December 31, 2015 $ 11,418,320 $ - $ - $ (227,266 ) $ $ 11,191,054 Dividends paid to noncontrolling shareholders (10,117,946 ) - - - - (10,117,946 ) Changes in controlling ownership interest 171,542 - - - - 171,542 Deconsolidation 2,404,822 - - 105,953 - 2,510,775 Share-based compensation (Note 16) 1,162,066 - - - - 1,162,066 Net income (loss) (9,563,735 ) - - 276,370 - (9,287,365 ) Balance as of December 31, 2016 $ (4,524,931 ) $ - $ - $ 155,057 - $ (4,369,874 ) Dividends paid to noncontrolling shareholders - - - - - - Changes in controlling ownership interest - - - - - - Deconsolidation 809,692 - - - - 809,692 Share-based compensation (Note 16) 876,995 - - - - 876,995 Net income (loss) (6,388,746 ) - - 736,862 - (5,651,884 ) Balance as of December 31, 2017 $ (9,226,990 ) $ - $ - $ 891,919 - $ (8,335,071 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Schedule of future minimum payments under non-cancelable operating leases | Year ending 2017 5,562,828 2018 4,950,715 2019 4,181,357 Total $ 14,694,900 |
Segment and Geographic Inform55
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment and Geographic Information [Abstract] | |
Schedule of operations of the group's operating segments | For the year ended December 31, 2017 Subscription Commodities services and other Hong Kong brokerage services related services brokerage Consolidated Net revenues $ 3,698,857 $ 23,984,993 $ 25,497,974 $ 53,181,824 Less: intersegment sales (1,110,431 ) (9,232,502 ) (216,241) (10,559,174 ) Net revenues from external customer 2,588,426 14,752,491 25,281,733 42,622,650 Cost of revenues (60,504 ) 7,453,185 14,540,997 21,933,678 Less: intersegment cost of revenues - - - - Cost of revenues after elimination (60,504 ) 7,453,185 14,540,997 21,933,678 Operating expenses: General and administrative 4,511,167 7,565,268 3,930,479 16,006,914 Product development 1,776,007 23,502,362 - 25,278,369 Sales and marketing 11,115,488 16,830,525 2,933,763 30,879,776 Loss from impairment of intangible assets - 291,817 - 291,817 Loss from impairment of goodwill - - - - Total segments operating expenses 17,402,662 48,189,972 6,864,242 72,456,876 Less: intersegment operating expenses (1,110,431 ) (9,439,947 ) (689,002 ) (11,239,380 ) Total operating expenses 16,292,231 38,750,025 6,175,240 61,217,496 Government subsidies 230,174 - - 230,174 Income (loss) from operations $ (1 3,413,127 ) $ (31,450,719 ) $ 4,565,496 $ (40,298,350 ) Total segments assets 21,569,350 187,122,375 89,004,771 297,696,496 Less: intersegment asset. (13,995,983 ) (149,214,015 ) (19,882,645 ) (183,092,643 ) Total assets $ 7,573,367 $ 37,908,360 $ 69,122,126 $ 114,603,853 For the year ended December 31, 2016 Subscription Commodities services and other Hong Kong brokerage services related services brokerage Consolidated Net revenues $ 69,980,296 $ 16,654,534 $ 8,956,501 $ 95,591,331 Less: intersegment sales (10,003,579 ) (2,529,856 ) - (12,533,435 ) Net revenues from external customer 59,976,717 14,124,678 8,956,501 83,057,896 Cost of revenues 5,729,464 10,392,343 4,258,451 20,380,258 Less: intersegment cost of revenues - - - - Cost of revenues after elimination 5,729,464 10,392,343 4,258,451 20,380,258 Operating expenses: General and administrative 6,026,102 10,090,294 3,992,953 20,109,349 Product development 3,374,144 12,995,022 - 16,369,166 Sales and marketing 46,648,934 13,029,524 1,054,695 60,733,153 Loss from impairment of intangible assets 1,111,149 - - 1,111,149 Loss from impairment of goodwill 6,659,691 - - 6,659,691 Total segments operating expenses 63,820,020 36,114,840 5,047,648 104,982,508 Less: intersegment operating expenses (10,003,579 ) (2,524,975 ) (277,731 ) (12,806,285 ) Total operating expenses 53,816,441 33,589,865 4,769,917 92,176,223 Government subsidies 1,194,775 - - 1,194,775 Income (loss) from operations $ 1,625,587 $ (29,857,530 ) $ (71,867 ) $ (28,303,810 ) Total segments assets 42,343,571 197,412,591 77,656,701 317,412,863 Less: intersegment balances (13,508,587 ) (116,348,234 ) (19,932,216 ) (149,789,037 ) Total assets $ 28,834,984 $ 81,064,357 $ 57,724,485 $ 167,623,826 For the year ended December 31, 2015 Subscription Commodities and other Hong Kong brokerage services related services brokerage Consolidated Net revenues $ 113,720,922 $ 27,236,753 $ 3,149,063 $ 144,106,738 Less: intersegment sales (34,018,268 ) (2,683,704 ) - (36,701,972 ) Net revenues from external customer 79,702,654 24,553,049 3,149,063 107,404,766 Cost of revenues 4,975,361 14,321,339 1,181,538 20,478,238 Less: intersegment cost of revenues - (739,501 ) - (739,501 ) Cost of revenues after elimination 4,975,361 13,581,838 1,181,538 19,738,737 Operating expenses: General and administrative 4,026,984 11,148,924 2,978,161 18,154,069 Product development 2,549,731 8,188,718 - 10,738,449 Sales and marketing 69,674,657 12,139,100 566,396 82,380,153 Loss from impairment of intangible assets 250,360 - - 250,360 - - - - Total segments operating expenses 76,501,732 31,476,742 3,544,557 111,523,031 Less: intersegment operating expenses (35,907,706 ) (47,620 ) (110,721 ) (36,066,047 ) Total operating expenses 40,594,026 31,429,122 3,433,836 75,456,984 Government subsidies 251,828 - - 251,828 Income (loss) from operations $ 34,385,095 $ (20,457,911 ) $ (1,466,311 ) $ 12,460,873 Total segments assets 109,286,634 179,706,230 47,011,111 336,003,975 Less: intersegment balances (51,101,320 ) (122,077,495 ) (18,760,003 ) (191,938,818 ) Total assets $ 58,185,314 $ 57,628,735 $ 28,251,108 $ 144,065,157 |
Schedule of revenue from external customers | Years ended December 31, 2015 2016 2017 Commodities brokerage services revenues $ 79,702,654 $ 59,976,717 $ 2,588,426 Financial information and advisory services revenues 17,205,459 10,696,523 10,271,822 Advertising revenues 7,023,399 2,893,707 3,588,499 Hong Kong brokerage services revenues 3,149,063 8,956,501 25,281,733 Others 324,191 534,448 892,170 Total revenue from external customers $ 107,404,766 $ 83,057,896 $ 42,622,650 |
Organization and Principal Ac56
Organization and Principal Activities (Details) | 12 Months Ended |
Dec. 31, 2017 | |
China Finance Online (Beijing) Co., Ltd. ("CFO Beijing") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Jul. 9, 1998 |
legal ownership interest | 100.00% |
Principal activity | N/A |
Fortune Software (Beijing) Co., Ltd. ("CFO Software") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Dec. 7, 2004 |
legal ownership interest | 100.00% |
Principal activity | N/A |
Shenzhen Genius Information Technology Co., Ltd. ("CFO Genius") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Shenzhen, PRC |
Date of incorporation or acquisition | Sep. 21, 2006 |
legal ownership interest | 100.00% |
Principal activity | Subscription service |
Zhengyong Information & Technology (Shanghai) Co., Ltd. ("CFO Zhengyong") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Shanghai, PRC |
Date of incorporation or acquisition | Aug. 17, 2008 |
legal ownership interest | 100.00% |
Principal activity | N/A |
Zhengtong Information Technology (Shanghai) Co., Ltd ("CFO Zhengtong") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Shanghai, PRC |
Date of incorporation or acquisition | Jun. 24, 2008 |
legal ownership interest | 100.00% |
Principal activity | N/A |
Rifa Financial Holdings Limited ("Rifa Financial Holdings") (Formerly known as "iSTAR Financial Holdings Limited") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | BVI |
Date of incorporation or acquisition | Jul. 16, 2007 |
legal ownership interest | 85.00% |
Principal activity | Investment holdings |
Rifa Securities Limited ("Rifa Securities") (Formerly known as "iSTAR International Securities Co. Limited") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Hong Kong, PRC |
Date of incorporation or acquisition | Nov. 23, 2007 |
legal ownership interest | 85.00% |
Principal activity | Brokerage service |
Rifa Futures Limited ("Rifa Futures") (Formerly known as "iSTAR International Futures Co. Limited") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Hong Kong, PRC |
Date of incorporation or acquisition | Apr. 16, 2008 |
legal ownership interest | 85.00% |
Principal activity | Brokerage service |
Rifa Credit Limited ("Rifa Credit") (Formerly known as "iSTAR International Credit Co. Limited") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Hong Kong, PRC |
Date of incorporation or acquisition | Feb. 10, 2012 |
legal ownership interest | 85.00% |
Principal activity | N/A |
Rifa Wealth Management Co. Limited ("Rifa Wealth Management") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Hong Kong, PRC |
Date of incorporation or acquisition | Sep. 13, 2016 |
legal ownership interest | 85.00% |
Principal activity | Insurance brokerage service |
Beijing Fuhua Innovation Technology Development Co., Ltd. ("CFO Fuhua") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Dec. 31, 2000 |
legal ownership interest | 0.00% |
Principal activity | Web portal and advertising service |
Shenzhen Newrand Securities Advisory and Investment Co., Ltd. ("CFO Newrand") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Shenzhen, PRC |
Date of incorporation or acquisition | Oct. 17, 2008 |
legal ownership interest | 0.00% |
Principal activity | Securities investment advising |
Shanghai Stockstar Wealth Management Co., Ltd. ("Stockstar Wealth Management") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Shanghai, PRC |
Date of incorporation or acquisition | Apr. 12, 2011 |
legal ownership interest | 0.00% |
Principal activity | N/A |
Beijing Huizhi Fortune Technology Co., Ltd. ("CFO Huizhi") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Jun. 14, 2012 |
legal ownership interest | 0.00% |
Principal activity | N/A |
Shenzhen Ganlanren Investment Management Co., Ltd. ("CFO Shenzhen Ganlanren") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Shenzhen, PRC |
Date of incorporation or acquisition | Feb. 18, 2016 |
legal ownership interest | 0.00% |
Principal activity | N/A |
Beijing CFO Premium Technology Co., Ltd. ("CFO Premium") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Jun. 2, 2009 |
legal ownership interest | 0.00% |
Principal activity | N/A |
Shenzhen Newrand Securities Training Center ("CFO Newrand Training") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Shenzhen, PRC |
Date of incorporation or acquisition | Oct. 17, 2008 |
legal ownership interest | 0.00% |
Principal activity | Securities investment training |
Fortune (Beijing) Huiying Investment Consulting Co., Ltd. ("CFO Huiying") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Dec. 18, 2009 |
legal ownership interest | 0.00% |
Principal activity | N/A |
Shenzhen Tahoe Investment and Development Co., Ltd ("CFO Tahoe") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Shenzhen, PRC |
Date of incorporation or acquisition | Sep. 30, 2013 |
legal ownership interest | 0.00% |
Principal activity | N/A |
Shenzhen Shangtong Software Co., Ltd. ("CFO Shenzhen Shangtong") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Shenzhen, PRC |
Date of incorporation or acquisition | Sep. 23, 2009 |
legal ownership interest | 0.00% |
Principal activity | N/A |
Zhengjin (Tianjin) Precious Metals Investment Co., Ltd. ("CFO Zhengjin Tianjin") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Tianjin, PRC |
Date of incorporation or acquisition | Jul. 23, 2013 |
legal ownership interest | 0.00% |
Principal activity | Commodities brokerage |
Beijing Jiayi Management Co., Ltd. ("CFO Zhengjin Beijing") | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Jan. 13, 2014 |
legal ownership interest | 0.00% |
Principal activity | Commodities brokerage |
Yinglibao (Beijing) Technology Co., Ltd. ("CFO Yinglibao") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Jan. 15, 2014 |
legal ownership interest | 0.00% |
Principal activity | Internet-based financial platform |
Zhengjin (Jiangsu) Precious Metals Co., Ltd. ("CFO Zhengjin Jiangsu") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Nanjing, PRC |
Date of incorporation or acquisition | Nov. 19, 2014 |
legal ownership interest | 0.00% |
Principal activity | Commodities brokerage |
Zhengjin (Fujian) Precious Metals Co., Ltd. ("CFO Zhengjin Fujian") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Fujian, PRC |
Date of incorporation or acquisition | Jan. 6, 2013 |
legal ownership interest | 0.00% |
Principal activity | Commodities brokerage |
Qingdao Zhengjin Zhida Trading Co., Ltd. ("CFO Qingdao Zhida") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Qingdao, PRC |
Date of incorporation or acquisition | Dec. 21, 2015 |
legal ownership interest | 0.00% |
Principal activity | Commodities brokerage |
Tibet Zhisheng Gold Industry Co., Ltd. ("CFO Tibet Zhisheng") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Tibet, PRC |
Date of incorporation or acquisition | Mar. 18, 2016 |
legal ownership interest | 0.00% |
Principal activity | Commodities brokerage |
Qingdao Zhengjin Taiji Trading Co., Ltd. ("CFO Qingdao Taiji") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Qingdao, PRC |
Date of incorporation or acquisition | Mar. 23, 2016 |
legal ownership interest | 0.00% |
Principal activity | Commodities brokerage |
iTougu (Beijing) Network Technology Co., Ltd. ("CFO iTougu") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Dec. 8, 2014 |
legal ownership interest | 0.00% |
Principal activity | Investment advisory service platform |
Tibet Fortune Jinyuan Network Technology Co., Ltd. ("CFO Tibet") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Tibet, PRC |
Date of incorporation or acquisition | Aug. 22, 2015 |
legal ownership interest | 0.00% |
Principal activity | N/A |
Beijing Zhongjun Sunshine Investment and Management Co., Ltd ("CFO Zhongjun Sunshine") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Sep. 30, 2013 |
legal ownership interest | 0.00% |
Principal activity | Financial service |
Fortune (Beijing) Qicheng Technology Co., Ltd. ("CFO Qicheng") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Dec. 18, 2009 |
legal ownership interest | 0.00% |
Principal activity | N/A |
Beijing Chuangying Advisory and Investment Co., Ltd. ("CFO Chuangying") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Jan. 9, 2009 |
legal ownership interest | 0.00% |
Principal activity | P2P lending service |
Zhongheng Xintai (Beijing) Asset Management Co., Ltd. ("CFO Zhongheng Xintai") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Place of incorporation or establishment | Beijing, PRC |
Date of incorporation or acquisition | Jun. 8, 2016 |
legal ownership interest | 0.00% |
Principal activity | N/A |
Organization and Principal Ac57
Organization and Principal Activities (Details 1) | 12 Months Ended |
Dec. 31, 2017 | |
CFO Fuhua [Member] | |
Variable Interest Entity [Line Items] | |
Contractual arrangement | May 27, 2004 |
Date counterpart | CFO Beijing |
CFO Newrand [Member] | |
Variable Interest Entity [Line Items] | |
Contractual arrangement | October 17, 2008 |
Date counterpart | CFO Zhengyong |
CFO Qicheng [Member] | |
Variable Interest Entity [Line Items] | |
Contractual arrangement | November 20, 2009 |
Date counterpart | CFO Chuangying |
CFO Chuangying [Member] | |
Variable Interest Entity [Line Items] | |
Contractual arrangement | January 9, 2009 |
Date counterpart | CFO Software |
Stockstar Wealth Management [Member] | |
Variable Interest Entity [Line Items] | |
Contractual arrangement | April 12, 2011 |
Date counterpart | CFO Zhengtong |
CFO Zhongheng Xintai [Member] | |
Variable Interest Entity [Line Items] | |
Contractual arrangement | June 8, 2016 |
Date counterpart | CFO Glory |
CFO Shenzhen Ganlanren [Member] | |
Variable Interest Entity [Line Items] | |
Contractual arrangement | CFO Software |
Date counterpart | April 20, 2017 |
Beijing CFO Premium Technology [Member] | |
Variable Interest Entity [Line Items] | |
Contractual arrangement | June 2, 2009 |
Date counterpart | CFO Software |
Organization and Principal Ac58
Organization and Principal Activities (Details 2) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Commodities brokerage business: | ||
Revenue-producing assets | $ 96,457 | $ 396,753 |
Commodities trading right [Member] | ||
Commodities brokerage business: | ||
Revenue-producing assets | $ 288,309 |
Organization and Principal Ac59
Organization and Principal Activities (Details 3) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||||
Cash and cash equivalents | $ 38,692,871 | $ 66,151,439 | $ 85,734,048 | $ 32,538,513 |
Restricted cash | 2,035,634 | 2,483,557 | ||
Accounts receivable - others, net | 8,977,608 | 14,410,947 | ||
Short - term investments | 532,912 | 16,443,831 | ||
Total current assets | 101,617,132 | 148,461,165 | ||
Property and equipment, net | 6,885,261 | 7,398,133 | ||
Acquired intangible assets, net | 96,457 | 396,753 | ||
Cost method investment | 1,714,058 | 1,542,454 | 554,392 | |
Equity method investment | 817,223 | 1,019,009 | 1,228,269 | |
Rental deposits | 1,140,929 | 1,292,078 | ||
Guarantee fund deposits | 604,497 | 6,002,920 | ||
Total assets | 114,603,853 | 167,623,826 | $ 144,065,157 | |
Current liabilities: | ||||
Accrued expenses and other current liabilities | 2,085,113 | 992,754 | ||
Total current liabilities | 68,511,497 | 84,893,888 | ||
VIEs [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 8,176,346 | 41,551,367 | ||
Restricted cash | 2,035,634 | 2,483,557 | ||
Accounts receivable - others, net | 3,759,927 | 7,031,380 | ||
Short - term investments | 155,727 | 16,443,831 | ||
Others | 36,714,120 | 7,863,322 | ||
Total current assets | 50,841,754 | 75,373,457 | ||
Property and equipment, net | 4,348,884 | 5,103,126 | ||
Acquired intangible assets, net | 288,309 | |||
Cost method investment | 1,714,058 | 1,542,454 | ||
Equity method investment | 817,223 | 1,019,009 | ||
Rental deposits | 776,196 | 972,252 | ||
Guarantee fund deposits | 311,615 | 5,760,309 | ||
Investment in subsidiaries | 41,279,679 | 39,026,188 | ||
Deferred tax assets | 1,288,064 | 1,152,527 | ||
Total assets | 101,377,473 | 130,237,631 | ||
Current liabilities: | ||||
Accrued expenses and other current liabilities | 20,445,103 | 38,527,545 | ||
Accounts payable | 806,749 | 2,151,134 | ||
Total current liabilities | 21,251,852 | 40,678,679 | ||
Non-current liabilities | 243,398 | 383,463 | ||
Total third-party liabilities | 21,495,250 | 41,062,142 | ||
Inter-company liabilities | $ 18,558,400 | $ 3,397,736 |
Organization and Principal Ac60
Organization and Principal Activities (Details 4) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Variable Interest Entity [Line Items] | |||
Net revenues | $ 42,622,650 | $ 83,057,896 | $ 107,404,766 |
Net income (loss) | (36,736,553) | (1,678,813) | 22,482,416 |
VIEs [Member] | |||
Variable Interest Entity [Line Items] | |||
Net revenues | 19,556,988 | 71,559,226 | 136,412,062 |
Net income (loss) | $ (35,738,587) | $ (1,815,389) | $ 49,300,399 |
Organization and Principal Ac61
Organization and Principal Activities (Details 5) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Variable Interest Entity [Line Items] | |||
Net cash provided by (used in) operating activities | $ (26,323,261) | $ (21,342,292) | $ 19,816,980 |
Net cash (used in) provided by investing activities | 15,832,444 | (3,318,921) | 40,557,824 |
Net cash provided by (used in) financing activities | (19,056,395) | 9,702,412 | (5,592,080) |
Effect of exchange rate changes | 2,088,644 | (4,623,808) | (1,587,189) |
VIEs [Member] | |||
Variable Interest Entity [Line Items] | |||
Net cash provided by (used in) operating activities | (27,357,141) | (8,473,669) | (835,965) |
Net cash (used in) provided by investing activities | 16,669,443 | (4,211,878) | 38,523,306 |
Net cash provided by (used in) financing activities | (19,083,181) | 9,559,794 | (6,061,473) |
Effect of exchange rate changes | $ (3,604,142) | $ (3,111,278) | $ (1,452,505) |
Organization and Principal Ac62
Organization and Principal Activities (Details Textual) | 12 Months Ended |
Dec. 31, 2017 | |
Strategic consulting services agreement [Member] | |
Organization and Principal Activities (Textual) | |
Service agreement, term | 20 years |
VIE's income before tax | 30.00% |
Technical support services agreement [Member] | |
Organization and Principal Activities (Textual) | |
Service agreement, term | 10 years |
VIE's income before tax | 30.00% |
Operating support services agreement [Member] | |
Organization and Principal Activities (Textual) | |
Service agreement, term | 10 years |
VIE's income before tax | 40.00% |
Summary of Significant Accoun63
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Technology infrastructure [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net estimated useful lives | 5 years |
Computer equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net estimated useful lives | 5 years |
Furniture, fixtures and equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net estimated useful lives | 5 years |
Motor vehicle [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net estimated useful lives | 5 years |
Leasehold improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net estimated useful lives | Shorter of the lease term or 5 years |
Summary of Significant Accoun64
Summary of Significant Accounting Policies (Details 1) | Sep. 13, 2017 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, useful life | 10 years | |
License and related trademarks [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, useful life | 15 years | |
License and related trademarks [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, useful life | 10 years | |
Completed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, useful life | 5 years | |
Customer relationship [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, useful life | 5 years | |
Customer relationship [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, useful life | 4 years |
Summary of Significant Accoun65
Summary of Significant Accounting Policies (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | ||
Commodities trading gain (loss) | $ (1,466,888) | $ 44,841,125 |
Commission income | 3,823,586 | 13,283,933 |
Carrying charges | 231,728 | 1,851,659 |
Total net revenue from commodities trading business | $ 2,588,426 | $ 59,976,717 |
Summary of Significant Accoun66
Summary of Significant Accounting Policies (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% |
Accounts receivable [Member] | A [Member] | |||
Concentration Risk [Line Items] | |||
Concentrations of credit risk accounts receivable | $ 3,844,569 | $ 4,010,897 | |
Concentration risk, percentage | 22.60% | 18.30% |
Summary of Significant Accoun67
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Sep. 01, 2012 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of Significant Accounting Policies (Textual) | ||||
Impairment losses on long-lived assets | $ 491,284 | |||
Goodwill impairment losses | 6,659,691 | |||
Impairment loss on indefinite intangible assets | $ 291,817 | 1,111,149 | 250,360 | |
VAT tax rate | 6.00% | 17.00% | ||
Business taxes and related surcharges | $ 262,117 | 678,594 | 1,663,869 | |
VAT payable subscription-based revenue, percentage | 3.00% | |||
VAT refunds | $ 348,165 | 271,885 | 328,817 | |
Cash and cash equivalents | $ 15,237,326 | 46,295,841 | 79,461,280 | |
Uncertain income tax position | 50.00% | |||
Advertising expenses, total | $ 1,014,481 | 5,192,126 | 4,908,593 | |
Commissions paid, total | 13,976,505 | 8,903,424 | 5,049,661 | |
Cost method investment | $ 1,714,058 | $ 1,542,454 | $ 554,392 | |
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | |
Equity method investment | $ 817,223 | $ 1,019,009 | $ 1,228,269 | |
Minimum [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Business tax on services provided | 3.00% | |||
Maximum [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Business tax on services provided | 5.00% |
Acquisitions (Details)
Acquisitions (Details) | Sep. 13, 2017USD ($) |
Purchase price allocation: | |
Cash and cash equivalents | $ 11,170 |
Prepaid expenses and current assets | 5,499 |
Accounts receivable | 1,062 |
Property and equipment, net | 219 |
Rental deposit | 5,130 |
Acquired intangible assets: | |
PIBA license | $ 112,144 |
PIBA license, Useful life | 10 years |
Total assets acquired | $ 135,224 |
Accrued expenses and other current liabilities | (135) |
Accounts payable | (2,627) |
Deferred tax liabilities, non-current | (18,504) |
Total net assets | 113,958 |
Goodwill | 108,831 |
Total purchase price | $ 222,789 |
Acquisitions (Details Textual)
Acquisitions (Details Textual) - USD ($) | Apr. 01, 2015 | Jun. 30, 2016 | Dec. 31, 2016 | Sep. 13, 2017 | Sep. 13, 2016 |
Acquisitions (Textual) | |||||
Goodwill | $ 108,831 | ||||
Rifa Wealth Management [Member] | |||||
Acquisitions (Textual) | |||||
Percentage of equity interest | 100.00% | ||||
Business acquisition, revenue | $ 5,305 | ||||
Business acquisition, net loss | $ (34,388) | ||||
CFO Huizhi [Member] | |||||
Acquisitions (Textual) | |||||
Percentage of equity interest | 30.00% | ||||
Cash consideration | $ 201,816 | ||||
Percentage of equity interests held | 70.00% | ||||
Fortune Zhengjin [Member] | |||||
Acquisitions (Textual) | |||||
Percentage of equity interest | 100.00% | ||||
Cash consideration | $ 16,278 | ||||
Goodwill | $ 19,906 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts Receivable [Abstract] | ||
Accounts receivable-margin clients | $ 8,010,846 | $ 7,556,557 |
Less: Allowance for doubtful accounts | ||
Accounts receivable- margin clients, net | 8,010,846 | 7,556,557 |
Accounts receivable-others | 8,981,187 | 14,414,318 |
Less: Allowance for doubtful accounts | (3,579) | (3,371) |
Accounts receivable-others, net | $ 8,977,608 | $ 14,410,947 |
Prepaid Expenses and Other Cu71
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Prepaid Expenses and Other Current Assets [Abstract] | |||
Prepayment of advertising fees | $ 2,983 | $ 492,672 | |
Advertising deposit | 35,199 | 172,985 | |
Advances to suppliers | 1,292,023 | 701,033 | |
VAT refund receivable | 460,410 | 174,542 | |
Interest receivable | 36 | 237,013 | [1] |
Prepayment of office rental | 193,060 | 524,805 | |
Advances to Yinglibao | 170,613 | 582,440 | |
Advances to employees | 793,802 | 747,000 | |
NCI receivable | 378,204 | ||
Advances to consulting service fees | 86,876 | 171,052 | |
Insurance receivable (Note 23) | 2,760 | 3,000,000 | |
Consideration receivable | 77,457 | 166,907 | |
Other current assets | 704,878 | 1,270,593 | |
Total | $ 4,198,301 | $ 8,241,042 | |
[1] | The Group launched Qiribao, which is a new product on the wealth management platform (Yinglibao), in July 2016. Once an investor commits funds through the platform of Yinglibao to invest Qiribao, his funds are reinvested by the Group to purchase the held-to-maturity securities. Interest receivable derived from the held-to-maturity securities purchased by the Group. Due to the compliance requirement and our strategy, the Group terminated the purchase of Qiribao starting on April 10, 2017, all the held-to-maturity securities was redeemed by the end of December 31, 2017. |
Short-Term Investments (Details
Short-Term Investments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Short-Term Investments [Abstract] | ||
Beginning balance | $ 1,605,882 | |
Purchases | 71,492,241 | 192,785,066 |
Redemption | (72,572,216) | (192,022,189) |
Realized gain | (64,596) | 870,200 |
Exchange difference | 71,601 | (27,195) |
Ending balance | $ 532,912 | $ 1,605,882 |
Short-Term Investments (Detai73
Short-Term Investments (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Investments [Line Items] | ||
Proceeds | $ (72,572,216) | $ (192,022,189) |
Costs | 71,492,241 | 192,785,066 |
Gains | (64,596) | 870,200 |
Exchange difference | 71,601 | (27,195) |
Available-for-sale securities [Member] | ||
Schedule of Investments [Line Items] | ||
Proceeds | (72,572,216) | (192,022,189) |
Costs | 71,492,241 | 192,785,066 |
Gains | (64,596) | 870,200 |
Exchange difference | $ 71,601 | $ (27,195) |
Short-Term Investments (Detai74
Short-Term Investments (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Short-Term Investments (Textual) | |||
Recognized loss from trading securities | $ 549,538 | $ 18,396 | |
Net gain from held-to-maturity securities | $ 127,899 | $ 57,941 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and cash equivalents: | ||||
Cash equivalents | $ 38,692,871 | $ 66,151,439 | $ 85,734,048 | $ 32,538,513 |
Short-term investments: | ||||
Held-to-maturity securities | 14,837,949 | |||
Short-term investments: | ||||
Available-for-sale securities | 532,912 | 1,605,882 | ||
Total assets measured at fair value | 532,912 | 1,605,882 | ||
Quoted prices in active markets for identical assets (Level 1) [Member] | ||||
Cash and cash equivalents: | ||||
Cash equivalents | 38,692,871 | 66,151,439 | ||
Short-term investments: | ||||
Held-to-maturity securities | ||||
Short-term investments: | ||||
Available-for-sale securities | ||||
Total assets measured at fair value | ||||
Significant other observable inputs (Level 2) [Member] | ||||
Cash and cash equivalents: | ||||
Cash equivalents | ||||
Short-term investments: | ||||
Held-to-maturity securities | 14,837,949 | |||
Short-term investments: | ||||
Available-for-sale securities | 532,912 | 1,605,882 | ||
Total assets measured at fair value | 532,912 | 1,605,882 | ||
Significant unobservable inputs (Level 3) [Member] | ||||
Cash and cash equivalents: | ||||
Cash equivalents | ||||
Short-term investments: | ||||
Held-to-maturity securities | ||||
Short-term investments: | ||||
Available-for-sale securities | ||||
Total assets measured at fair value |
Fair Value Measurement (Detai76
Fair Value Measurement (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Measurement [Abstract] | ||
Beginning balance | $ 1,605,882 | |
Purchases | 71,492,241 | 192,785,066 |
Redemption | (72,572,216) | (192,022,189) |
Realized gain | (64,596) | 870,200 |
Exchange difference | 71,601 | (27,195) |
Ending balance | $ 532,912 | $ 1,605,882 |
Fair Value Measurement (Detai77
Fair Value Measurement (Details 2) - Non-Recurring [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill, Fair value | $ 108,010 | $ 108,871 |
Goodwill, Total losses in the year ended | (6,659,691) | |
Intangible Assets, Fair value | 96,457 | 396,753 |
Intangible Assets, Total losses in the year ended | $ (291,817) | $ (1,111,149) |
Cost Method Investment (Details
Cost Method Investment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cost Method Investment [Abstract] | ||
Beginning balance | $ 1,542,454 | $ 554,392 |
Acquisitions | 76,520 | 216,232 |
Fair value adjustment of retained noncontrolling investment | 807,265 | |
Exchange difference | 95,084 | (35,435) |
Ending balance | $ 1,714,058 | $ 1,542,454 |
Cost Method Investment (Detai79
Cost Method Investment (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 30, 2016 | |
Cost Method Investment (Textual) | |||||
Cost method investments, realized gains from sale | $ 4,648,302 | ||||
Cost method investment | 1,714,058 | 1,542,454 | 554,392 | ||
Cost method investment original cost | $ 76,520 | $ 216,232 | |||
Ocean Butterflies Holdings [Member] | |||||
Cost Method Investment (Textual) | |||||
Proceeds from collection of consideration receivable | $ 2,168,868 | ||||
Cost method investments, realized gains from sale | 4,648,302 | ||||
CFO Securities Consulting [Member] | |||||
Cost Method Investment (Textual) | |||||
Cost method investments, fair value disclosure | $ 477,393 | ||||
Equity method investment, ownership percentage | 90.00% | ||||
Percentage of noncontrolling investment | 10.00% | ||||
Shanghai Meining Computer Software Co., Ltd [Member] | |||||
Cost Method Investment (Textual) | |||||
Cost method investments, fair value disclosure | $ 807,265 | ||||
Equity method investment, ownership percentage | 90.00% | ||||
Percentage of noncontrolling investment | 10.00% |
Equity Method Investment (Detai
Equity Method Investment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity Method Investment [Abstract] | |||
Beginning balance | $ 1,019,009 | $ 1,228,269 | |
Equity method investment gain (losses) | (13,404) | (138,124) | $ (66,970) |
Consideration Received on Disposal | (350,181) | ||
Exchange difference | 50,575 | (71,136) | |
Ending balance | $ 817,223 | $ 1,019,009 | $ 1,228,269 |
Equity Method Investment (Det81
Equity Method Investment (Details Textual) - USD ($) | Jun. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Equity Method Investment (Textual) | ||||
Equity method investments, fair value disclosure | $ 985,586 | |||
Recognized loss from equity method investment | $ (13,404) | $ (138,124) | (66,970) | |
Equity interests, description | The Group paid $307,996 to acquire 20% of an investee's the equity interest. | |||
Payments to acquire equity method investments | 327,263 | |||
Equity method investment | $ 817,223 | $ 1,019,009 | 1,228,269 | |
CFO Aishang [Member] | ||||
Equity Method Investment (Textual) | ||||
Equity method investments, fair value disclosure | $ 985,586 | |||
Equity interests, description | The remaining 40% equity interests in CFO Aishang was recorded as equity method investment at the disposal date. | |||
Payments to acquire equity method investments | $ 307,996 | |||
Equity method investment, ownership percentage | 55.00% | |||
Equity method investment, ownership transferred percentage | 15.00% |
Deconsolidation (Details)
Deconsolidation (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2016 | Apr. 30, 2016 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Deconsolidation [Line Items] | |||||||||
Cash consideration | $ 23,836,195 | $ 8,463,170 | |||||||
Noncontrolling investment, percentage | 59.83% | ||||||||
Gain on interest sold retained noncontrolling investment | $ 738,449 | ||||||||
Proceeds from transfer of equity method investment | $ 350,181 | 12,765,427 | |||||||
Equity method investments, fair value disclosure | $ 985,586 | ||||||||
CFO Zhongcheng [Member] | |||||||||
Schedule of Deconsolidation [Line Items] | |||||||||
Deconsolidation, ownership percentage disposed | 100.00% | ||||||||
Cash consideration | $ 9,322,850 | ||||||||
Gain on interest sold retained noncontrolling investment | $ 9,161,948 | ||||||||
CFO Fenxin [Member] | |||||||||
Schedule of Deconsolidation [Line Items] | |||||||||
Deconsolidation, ownership percentage disposed | 100.00% | ||||||||
Cash consideration | $ 21,675,518 | ||||||||
Noncontrolling investment, percentage | 10.00% | ||||||||
Cost method investments, fair value disclosure | $ 807,265 | ||||||||
Gain on interest sold retained noncontrolling investment | $ 22,445,303 | ||||||||
CFO Meining [Member] | |||||||||
Schedule of Deconsolidation [Line Items] | |||||||||
Equity method investment, ownership percentage | 90.00% | ||||||||
Two Insignificant Affiliates [Member] | |||||||||
Schedule of Deconsolidation [Line Items] | |||||||||
Gain on interest sold retained noncontrolling investment | 319 | ||||||||
Equity method investment, ownership percentage | 70.25% | ||||||||
CFO Securities Consulting [Member] | |||||||||
Schedule of Deconsolidation [Line Items] | |||||||||
Noncontrolling investment, percentage | 10.00% | ||||||||
Cost method investments, fair value disclosure | $ 477,393 | ||||||||
Equity method investment, ownership percentage | 90.00% | ||||||||
CFO Aishang [Member] | |||||||||
Schedule of Deconsolidation [Line Items] | |||||||||
Noncontrolling investment, percentage | 40.00% | ||||||||
Gain on interest sold retained noncontrolling investment | $ 837,853 | ||||||||
Equity method investment, ownership percentage | 55.00% | ||||||||
Equity method investment, ownership transferred percentage | 15.00% | ||||||||
Proceeds from transfer of equity method investment | $ 3,861 | ||||||||
Equity method investments, fair value disclosure | $ 985,586 | ||||||||
CFO Henghui [Member] | |||||||||
Schedule of Deconsolidation [Line Items] | |||||||||
Cash consideration | $ 710,659 | ||||||||
Cost method investments, fair value disclosure | 3,921,387 | ||||||||
Gain on interest sold retained noncontrolling investment | 202,363 | ||||||||
Equity method investment, ownership percentage | 57.07% | ||||||||
Proceeds from transfer of equity method investment | $ 3,800 | ||||||||
iSTAR Wealth Management [Member] | |||||||||
Schedule of Deconsolidation [Line Items] | |||||||||
Cash consideration | $ 3,002,628 | 2,835,782 | |||||||
Gain on interest sold retained noncontrolling investment | $ 2,245,827 | ||||||||
Equity method investment, ownership percentage | 85.00% | ||||||||
Description of gain on interest sold retained noncontrolling investment | (i) The fair value of the consideration transferred, (ii) the fair value of any retained noncontrolling investment in the former affiliated company on the date the affiliated company was deconsolidated, if any, (iii) the carrying amount of any noncontrolling interest in the former subsidiary (including any accumulated other comprehensive income or loss attributable to the noncontrolling interests) on the date the subsidiary is deconsolidated, and (iv) the carrying amount of any noncontrolling interest in the former affiliated company on the date the affiliated company was deconsolidated, if applicable; and the carrying amount of the former affiliated company's net assets. | ||||||||
Stockstar Asset Management [Member] | |||||||||
Schedule of Deconsolidation [Line Items] | |||||||||
Cash consideration | $ 1,451,723 | ||||||||
Noncontrolling investment, percentage | 100.00% | ||||||||
Gain on interest sold retained noncontrolling investment | $ 1,080 | ||||||||
CFO Zhengjin Qingdao [Member] | |||||||||
Schedule of Deconsolidation [Line Items] | |||||||||
Cash consideration | $ 159,907 | ||||||||
Noncontrolling investment, percentage | 59.83% | ||||||||
Gain on interest sold retained noncontrolling investment | $ 1,259,044 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 22,971,599 | $ 22,060,008 |
Less: accumulated depreciation | (16,086,338) | (14,661,875) |
Property and equipment, net | 6,885,261 | 7,398,133 |
Technology infrastructure [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 11,322,883 | 10,344,659 |
Computer equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,134,959 | 2,123,332 |
Furniture, fixtures and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,906,408 | 3,799,154 |
Motor vehicle [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,126,504 | 1,040,999 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,480,845 | $ 4,751,864 |
Property and Equipment, Net (84
Property and Equipment, Net (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment, Net (Textual) | |||
Depreciation expense | $ 2,093,993 | $ 1,922,818 | $ 1,364,048 |
Acquired Intangible Assets, N85
Acquired Intangible Assets, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Intangible Assets [Line Items] | |||
Gross carrying amount | $ 403,113 | $ 2,128,905 | |
Accumulated amortization | (14,839) | (621,003) | |
Impairment | (291,817) | (1,111,149) | $ (250,360) |
Net carrying amount | 96,457 | 396,753 | |
Customer relationship [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Gross carrying amount | 1,108,548 | ||
Accumulated amortization | (617,264) | ||
Impairment | (491,284) | ||
Net carrying amount | |||
PIBA license [Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Gross carrying amount | 111,296 | 112,183 | |
Accumulated amortization | (14,839) | (3,739) | |
Impairment | |||
Net carrying amount | 96,457 | 108,444 | |
Commodities trading right[Member] | |||
Schedule of Intangible Assets [Line Items] | |||
Gross carrying amount | 291,817 | 908,174 | |
Accumulated amortization | |||
Impairment | (291,817) | (619,865) | |
Net carrying amount | $ 288,309 |
Acquired Intangible Assets, N86
Acquired Intangible Assets, Net (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Acquired Intangible Assets, Net (Textual) | |||
Amortization expenses | $ 11,165 | $ 116,973 | $ 285,088 |
Future amortization expenses for 2018 | 11,130 | ||
Future amortization expenses for 2019 | 11,130 | ||
Future amortization expenses for 2020 | 11,130 | ||
Future amortization expenses for 2021 | 11,130 | ||
Future amortization expenses for 2022 | 51,938 | ||
Impairment loss on intangible assets | 291,817 | $ 1,111,149 | $ 250,360 |
Disposal of intangible assets | $ 291,817 |
Goodwill (Details)
Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | |||
Balance | $ 108,871 | $ 6,699,620 | $ 7,089,780 |
Acquisition of Financial Solution Wealth Management (Note 3) | 108,831 | ||
Impairment of CFO Guiwo (Note 3) | (17,873) | ||
Acquisition of CFO Guiwo (Note 3) | 19,906 | ||
Exchange difference | (861) | (39,889) | (410,066) |
Balance | 108,010 | 108,871 | 6,699,620 |
Commodities Brokerage [Member] | |||
Goodwill [Line Items] | |||
Balance | 6,699,620 | 7,089,780 | |
Impairment of CFO Guiwo (Note 3) | (17,873) | ||
Impairment of CFO Henghui | (6,641,818) | ||
Acquisition of CFO Guiwo (Note 3) | 19,906 | ||
Exchange difference | 39,929 | (410,066) | |
Balance | 6,699,620 | ||
Commodities Brokerage [Member] | CFO Henghui [Member] | |||
Goodwill [Line Items] | |||
Balance | 6,699,620 | ||
Balance | 6,699,620 | ||
Investment advisory services [Member] | |||
Goodwill [Line Items] | |||
Balance | |||
Acquisition of Financial Solution Wealth Management (Note 3) | |||
Impairment of CFO Guiwo (Note 3) | |||
Impairment of CFO Henghui | |||
Exchange difference | |||
Balance | |||
Investment advisory services [Member] | CFO Henghui [Member] | |||
Goodwill [Line Items] | |||
Balance | |||
Balance | |||
Institutional subscription services [Member] | |||
Goodwill [Line Items] | |||
Balance | |||
Acquisition of Financial Solution Wealth Management (Note 3) | |||
Impairment of CFO Guiwo (Note 3) | |||
Impairment of CFO Henghui | |||
Exchange difference | |||
Balance | |||
Institutional subscription services [Member] | CFO Henghui [Member] | |||
Goodwill [Line Items] | |||
Balance | |||
Balance | |||
Hong Kong brokerage services [Member] | |||
Goodwill [Line Items] | |||
Balance | 108,871 | ||
Acquisition of Financial Solution Wealth Management (Note 3) | 108,831 | ||
Impairment of CFO Guiwo (Note 3) | |||
Impairment of CFO Henghui | |||
Exchange difference | (861) | 40 | |
Balance | 108,010 | 108,871 | |
Hong Kong brokerage services [Member] | CFO Henghui [Member] | |||
Goodwill [Line Items] | |||
Balance | $ 108,871 | ||
Balance | $ 108,871 |
Goodwill (Details Textual)
Goodwill (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill (Textual) | |||
Impairment loss | $ 6,659,691 | ||
Commodities Brokerage [Member] | |||
Goodwill (Textual) | |||
Impairment loss | $ 6,659,691 |
Accounts Payable (Details)
Accounts Payable (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts Payable [Line Items] | |||
Accounts payable | $ 9,461,921 | $ 8,745,868 | |
Amount due to customers of Hong Kong brokerage business [Member] | |||
Accounts Payable [Line Items] | |||
Accounts payable | 8,392,037 | 6,591,131 | |
Amount due to sales agents [Member] | |||
Accounts Payable [Line Items] | |||
Accounts payable | 114,480 | 1,659,702 | |
Amount due to noncontrolling shareholders [Member] | |||
Accounts Payable [Line Items] | |||
Accounts payable | [1] | 31,968 | 400,389 |
Others [Member] | |||
Accounts Payable [Line Items] | |||
Accounts payable | $ 923,436 | $ 94,646 | |
[1] | Amount due to noncontrolling shareholders represents business deals between the group and noncontrolling shareholders. The business deal we made with noncontrolling shareholders in 2016 and 2017 were $4,635,241 and $9,492, respectively. |
Accrued Expenses and Other Cu90
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |||
Accrued bonus | $ 3,310,964 | $ 5,217,065 | |
Accrued professional service fees | 498,066 | 592,797 | |
Withholding individual income tax-option exercise | 36,696 | 36,696 | |
Value added taxes and other taxes payable | 66,288 | 123,264 | |
Accrued raw data cost | 97,896 | 380,237 | |
Accrued bandwidth cost | 115,486 | 27,587 | |
Accrued welfare benefits | 419,230 | 56,887 | |
Deposit payable | [1] | 3,032,812 | 2,374,144 |
Interest payable | [2] | 265,692 | |
Amount due to Yinglibao | 170,058 | 865,036 | |
Amount due to Yinglibao clients | [3] | 18,573,735 | |
Accrued sales service fees | 121,086 | 114,055 | |
Others | 2,085,113 | 992,754 | |
Accrued expenses and other current liabilities total | $ 9,953,695 | $ 29,619,949 | |
[1] | Deposit payable is the deposit in bank accounts for providing guarantee to perform the contract obligation related to "Yinglibao", an internet-based financial platform that integrates cash management solutions and mutual fund distribution. | ||
[2] | The Group launched Qiribao, which is a new product on the wealth management platform (Yinglibao), in July 2016. Once an investor commits funds through the platform of Yinglibao to invest Qiribao, his funds are reinvested by the Group to purchase the held-to-maturity securities. Interest payable represented the interest expense that has been incurred but has not been paid to the Qiribao investors as of the date of the balance sheet. Due to the compliance requirement and our strategy, the Group terminated the purchase of Qiribao on April 10, 2017, and all the held-to-maturity securities were redeemed by the end of December 31, 2017. | ||
[3] | The Group launched Qiribao, which is a new product on the wealth management platform (Yinglibao), in July 2016. Once an investor commits funds through the platform of Yinglibao to invest Qiribao, his funds are reinvested by the Group to purchase the held-to-maturity securities. The Group recognized the funds committed by the investors through the Yinglibao platform of $18,573,735 in the consolidated balance sheet at December 31, 2016. Due to the compliance requirement and our strategy, the Group terminated the purchase of Qiribao starting on April 10, 2017, all the held-to-maturity securities was redeemed by the end of December 31, 2017. |
Accrued Expenses and Other Cu91
Accrued Expenses and Other Current Liabilities (Details Textual) - USD ($) | 1 Months Ended | |||||
Apr. 30, 2016 | Apr. 30, 2015 | Mar. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Accrued Expenses and Other Current Liabilities (Textual) | ||||||
Sale of stock, percentage | 100.00% | |||||
Partial consideration received | $ 5,100,000 | |||||
Refund amount | $ 5,100,000 | |||||
Funds committed by the investors | [1] | $ 18,573,735 | ||||
[1] | The Group launched Qiribao, which is a new product on the wealth management platform (Yinglibao), in July 2016. Once an investor commits funds through the platform of Yinglibao to invest Qiribao, his funds are reinvested by the Group to purchase the held-to-maturity securities. The Group recognized the funds committed by the investors through the Yinglibao platform of $18,573,735 in the consolidated balance sheet at December 31, 2016. Due to the compliance requirement and our strategy, the Group terminated the purchase of Qiribao starting on April 10, 2017, all the held-to-maturity securities was redeemed by the end of December 31, 2017. |
Stock Options and Nonvested S92
Stock Options and Nonvested Shares (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
2004 Stock incentive plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Number of options, Outstanding at beginning of year | 16,180,260 | 17,332,760 | 21,326,160 |
Number of options, Exercised | (107,200) | (417,900) | (2,205,600) |
Number of options, Forfeited | (2,395,100) | (734,600) | (1,787,800) |
Number of options, Outstanding at end of year | 13,677,960 | 16,180,260 | 17,332,760 |
Number of options, Shares exercisable at end of year | 13,677,960 | 16,180,260 | 14,513,528 |
Weighted average exercise price, Outstanding at beginning of year | $ 0.53 | $ 0.55 | $ 0.57 |
Weighted average exercise price, Exercised | 0.25 | 0.25 | 0.22 |
Weighted average exercise price, Forfeited | 0.98 | 1.08 | 1.18 |
Weighted average exercise price, Outstanding at end of year | 0.46 | 0.53 | 0.55 |
Weighted average exercise price, Shares exercisable at end of year | $ 0.46 | $ 0.53 | $ 0.61 |
2014 Stock incentive plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Number of options, Outstanding at beginning of year | 1,105,000 | 1,235,000 | 1,860,000 |
Number of options, Granted | 2,690,000 | 120,000 | |
Number of options, Exercised | (14,800) | (3,600) | |
Number of options, Forfeited | (40,000) | (115,200) | (741,400) |
Number of options, Outstanding at end of year | 3,755,000 | 1,105,000 | 1,235,000 |
Number of options, Shares exercisable at end of year | 1,045,800 | 805,400 | 480,200 |
Weighted average exercise price, Outstanding at beginning of year | $ 0.87 | $ 0.88 | $ 0.89 |
Weighted average exercise price, Granted | 0.34 | 0.87 | |
Weighted average exercise price, Exercised | 0.89 | 0.92 | |
Weighted average exercise price, Forfeited | 0.89 | 0.90 | 0.89 |
Weighted average exercise price, Outstanding at end of year | 0.49 | 0.87 | 0.88 |
Weighted average exercise price, Shares exercisable at end of year | $ 0.88 | $ 0.88 | $ 0.89 |
Stock Options and Nonvested S93
Stock Options and Nonvested Shares (Details 1) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
2004 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Number outstanding | 13,677,960 | 16,180,260 | 17,332,760 | 21,326,160 |
Options outstanding, Weighted average remaining contractual life | 4 years 10 months 25 days | |||
Options outstanding, Weighted average exercise price | $ 0.46 | $ 0.53 | $ 0.55 | $ 0.57 |
Options outstanding, Aggregate intrinsic value as of December 31,2017 | $ 3,208,949 | |||
Option exercisable, Number exercisable | 13,677,960 | 16,180,260 | 14,513,528 | |
Option exercisable, Weighted average exercise price | $ 0.46 | $ 0.53 | $ 0.61 | |
Option exercisable, Aggregate intrinsic value as of December 31, 2017 | $ 3,208,949 | |||
2014 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Number outstanding | 3,755,000 | 1,105,000 | 1,235,000 | 1,860,000 |
Options outstanding, Weighted average remaining contractual life | 7 years 1 month 25 days | |||
Options outstanding, Weighted average exercise price | $ 0.49 | $ 0.87 | $ 0.88 | $ 0.89 |
Options outstanding, Aggregate intrinsic value as of December 31,2017 | $ 548,960 | |||
Option exercisable, Number exercisable | 1,045,800 | 805,400 | 480,200 | |
Option exercisable, Weighted average exercise price | $ 0.88 | $ 0.88 | $ 0.89 | |
Option exercisable, Aggregate intrinsic value as of December 31, 2017 | ||||
$1.26 [Member] | 2004 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Stock option with exercise price of: | $ 1.26 | |||
Options outstanding, Number outstanding | 413,360 | |||
Option exercisable, Number exercisable | 413,360 | |||
$1.43 [Member] | 2004 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Stock option with exercise price of: | $ 1.43 | |||
Options outstanding, Number outstanding | 2,044,500 | |||
Option exercisable, Number exercisable | 2,044,500 | |||
$0.25 [Member] | 2004 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Stock option with exercise price of: | $ 0.25 | |||
Options outstanding, Number outstanding | 11,220,100 | |||
Option exercisable, Number exercisable | 11,220,100 | |||
$0.878 [Member] | 2014 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Stock option with exercise price of: | $ 0.878 | |||
Options outstanding, Number outstanding | 885,000 | |||
Option exercisable, Number exercisable | 885,000 | |||
$0.920 [Member] | 2014 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Stock option with exercise price of: | $ 0.9200 | |||
Options outstanding, Number outstanding | 60,000 | |||
Option exercisable, Number exercisable | 60,000 | |||
$1.032 [Member] | 2014 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Stock option with exercise price of: | $ 1.032 | |||
Options outstanding, Number outstanding | ||||
Option exercisable, Number exercisable | ||||
$1.038 [Member] | 2014 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Stock option with exercise price of: | $ 1.038 | |||
Options outstanding, Number outstanding | ||||
Option exercisable, Number exercisable | ||||
$0.870 [Member] | 2014 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Stock option with exercise price of: | $ 0.870 | |||
Options outstanding, Number outstanding | 120,000 | |||
Option exercisable, Number exercisable | 100,800 | |||
$0.302 [Member] | 2014 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Stock option with exercise price of: | $ 0.302 | |||
Options outstanding, Number outstanding | 940,000 | |||
Option exercisable, Number exercisable | ||||
$0.348 [Member] | 2014 Stock incentive plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options outstanding, Stock option with exercise price of: | $ 0.348 | |||
Options outstanding, Number outstanding | 1,750,000 | |||
Option exercisable, Number exercisable |
Stock Options and Nonvested S94
Stock Options and Nonvested Shares (Details 2) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average risk free rate of return | 1.32% | ||
Weighted average expected option life | 6 years 10 months 10 days | ||
Expected volatility rate | 77.81% | ||
Dividend yield | |||
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average risk free rate of return | 1.88% | 1.39% | |
Weighted average expected option life | 7 years 4 months 9 days | 6 years 9 months 26 days | |
Expected volatility rate | 73.31% | 77.74% | |
Dividend yield | |||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average risk free rate of return | 2.13% | 1.62% | |
Weighted average expected option life | 7 years 4 months 17 days | 6 years 10 months 14 days | |
Expected volatility rate | 74.76% | 79.37% | |
Dividend yield |
Stock Options and Nonvested S95
Stock Options and Nonvested Shares (Details Textual) - USD ($) | Jul. 01, 2017 | Nov. 08, 2016 | Nov. 16, 2015 | Jul. 01, 2015 | Jul. 01, 2014 | Jan. 02, 2014 | May 31, 2016 | Jun. 30, 2014 | Nov. 30, 2010 | Jul. 31, 2007 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2010 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share-based compensation expenses | $ 5,541 | $ 3,068,213 | $ 5,575,877 | $ 6,056,033 | ||||||||||||
CFO Shenzhen Shangtong [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share-based compensation expenses | $ 3,223 | 5,541 | 10,200 | $ 6,584 | ||||||||||||
Share based compensation period for recognition | 2 years 10 months 25 days | |||||||||||||||
Unrecognized share based compensation expenses | $ 1,579 | |||||||||||||||
Fortune Zhengjin [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share-based compensation expenses | 2,787,475 | $ 2,056,930 | 2,787,475 | 1,965,535 | $ 560,187 | |||||||||||
Share based compensation period for recognition | 2 years 10 months 25 days | |||||||||||||||
Unrecognized share based compensation expenses | $ 2,202,047 | |||||||||||||||
CFO Tahoe [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share-based compensation expenses | $ 399,927 | $ 225,864 | 399,927 | 267,565 | ||||||||||||
Share based compensation period for recognition | 2 years 10 months 25 days | |||||||||||||||
Unrecognized share based compensation expenses | $ 240,677 | |||||||||||||||
Restricted shares [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Number of options, granted | 2,414,500 | |||||||||||||||
Share based compensation arrangement of vested in period | 1,641,860 | |||||||||||||||
Share based compensation available for grant | 159,320 | |||||||||||||||
Restricted shares [Member] | CFO Shenzhen Shangtong [Member] | Employees [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share based compensation for rendering service | 5 years | |||||||||||||||
Share based payment award percentage of net assets granted | 10.00% | |||||||||||||||
Share based compensation arrangement by percentage of shares granted | 10.00% | |||||||||||||||
Share based compensation arrangement by grants in period fair value | $ 28,965 | |||||||||||||||
Restricted shares [Member] | Fortune Zhengjin [Member] | Employees [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share based compensation for rendering service | 5 years | 5 years | 5 years | |||||||||||||
Share based payment award percentage of net assets granted | 8.00% | 10.00% | 5.35% | |||||||||||||
Share based compensation arrangement by percentage of shares granted | 8.00% | 10.00% | 5.35% | |||||||||||||
Share based compensation arrangement by grants in period fair value | $ 4,681,533 | $ 2,464,455 | $ 2,460,213 | |||||||||||||
Restricted shares [Member] | CFO Tahoe [Member] | Employees [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share based compensation period for recognition | 5 years | |||||||||||||||
Share based payment award percentage of net assets granted | 1.95% | |||||||||||||||
Share based compensation arrangement by percentage of shares granted | 1.95% | |||||||||||||||
Share based compensation arrangement by grants in period fair value | $ 1,141,124 | |||||||||||||||
2007 Equity incentive plan [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share-based compensation expenses | $ 984,000 | $ 1,476,000 | ||||||||||||||
Share based compensation arrangement of vested in period | 8,658,048 | |||||||||||||||
Fair value of granted share | $ 0.82 | |||||||||||||||
2007 Equity incentive plan [Member] | Nonvested ordinary shares [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share based compensation arrangement grants in period | 10,558,493 | |||||||||||||||
2014 Stock incentive plan [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Number of ordinary shares authorized | 14,000,000 | 5,000,000 | ||||||||||||||
Number of options, granted | 2,690,000 | 120,000 | ||||||||||||||
Share based compensation arrangement of vested in period | 100,000 | |||||||||||||||
Share based compensation intrinsic value | $ 1,159 | |||||||||||||||
Share based compensation arrangement vested in period, fair value | $ 174,360 | 260,944 | $ 496,560 | |||||||||||||
Share based compensation period for recognition | 2 years 9 months 18 days | |||||||||||||||
Weighted average grant date fair value | $ 0.24 | $ 0.61 | $ 0.63 | |||||||||||||
Unrecognized share based compensation expenses | $ 530,052 | |||||||||||||||
Recognized share-based compensation expenses | $ 115,428 | 174,672 | $ (187,485) | |||||||||||||
Share based compensation available for grant | 4,591,700 | |||||||||||||||
2014 Stock incentive plan [Member] | Consultant [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Number of options, granted | 200,000 | 30,000 | ||||||||||||||
Share based compensation for rendering service | 3 years | 3 years | ||||||||||||||
Share based compensation arrangement grants in period | 3,000,000 | |||||||||||||||
2014 Stock incentive plan [Member] | Options [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Number of options, granted | 2,490,000 | 120,000 | 1,930,000 | |||||||||||||
Share based compensation for rendering service | 3 years | 3 years | 3 years | |||||||||||||
2014 Stock incentive plan [Member] | Restricted shares [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share-based compensation expenses | $ 682,424 | 1,091,923 | $ 898,903 | |||||||||||||
Share based compensation for rendering service | 2 years 6 months | 2 years | 2 years | |||||||||||||
Share based compensation arrangement of vested in period | 1,780,000 | |||||||||||||||
Share based compensation period for recognition | 6 months 25 days | |||||||||||||||
Unrecognized share based compensation expenses | $ 524,747 | |||||||||||||||
Share based compensation arrangement grants in period | 150,000 | 200,000 | 3,800,000 | 235,885 | 1,780,000 | |||||||||||
Fair value of restricted shares | $ 0.742 | $ 0.878 | ||||||||||||||
2014 Stock incentive plan [Member] | Restricted shares [Member] | Consultant [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share-based compensation expenses | $ (15,657) | (49,055) | 754,354 | |||||||||||||
Share based compensation arrangement grants in period | 1,150,000 | |||||||||||||||
2014 Stock incentive plan [Member] | Restricted shares [Member] | Consultant [Member] | Share-based Compensation award, Tranche two [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share based compensation for rendering service | 3 years | |||||||||||||||
Share based compensation arrangement grants in period | 50,000 | |||||||||||||||
Restricted Stock Issuance and Allocation Agreement of 2007 Plan [Member] | Nonvested ordinary shares [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share based compensation arrangement grants in period | 3,000,000 | |||||||||||||||
Restricted Stock Issuance and Allocation Agreement of 2007 Plan [Member] | Nonvested ordinary shares [Member] | Not vested under 2007 Plan [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share based compensation arrangement grants in period | 1,900,445 | |||||||||||||||
2010 Equity incentive plan of Rifa Financial Holdings [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share-based compensation expenses | $ 495,848 | |||||||||||||||
Share based compensation for rendering service | 3 years | |||||||||||||||
Share based compensation arrangement grants in period | 1,500 | |||||||||||||||
Fair value of restricted shares | $ 1,188 | |||||||||||||||
Nonvested shares granted percentage | 15.00% | |||||||||||||||
Nonvested shares granted percentage of earnings | 15.00% | |||||||||||||||
2004 Stock incentive plan [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share-based compensation expenses | 51,593 | 546,465 | ||||||||||||||
Number of ordinary shares authorized | 30,688,488 | |||||||||||||||
Share based compensation intrinsic value | 30,659 | 198,084 | 1,881,129 | |||||||||||||
Share based compensation arrangement vested in period, fair value | 1,500,901 | 2,067,037 | ||||||||||||||
2004 Stock incentive plan [Member] | Restricted shares [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share based compensation for rendering service | 3 years | |||||||||||||||
Unrecognized share based compensation expenses | ||||||||||||||||
Share based compensation arrangement grants in period | 1,100,240 | |||||||||||||||
Fair value of restricted shares | $ 1.106 | |||||||||||||||
Recognized share-based compensation expenses | $ 129,801 | $ 324,496 | ||||||||||||||
2004 Stock incentive plan [Member] | Restricted shares [Member] | Employees [Member] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||||||||||
Share based compensation arrangement grants in period | 330,085 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2017 | |
CFO Qicheng [Member] | |
Income Tax Contingency [Line Items] | |
Chinese EIT rate | Preferential tax rate of 12.5% in 2013 and 2014. |
Qualification for preferential tax rate | Software Enterprises |
CFO Shenzhen Shangtong [Member] | |
Income Tax Contingency [Line Items] | |
Chinese EIT rate | Preferential tax rate of 12.5% in 2013 and 2014. |
Qualification for preferential tax rate | Software Enterprises |
CFO Meining [Member] | |
Income Tax Contingency [Line Items] | |
Chinese EIT rate | Preferential tax rate of 15% from 2013 to 2015. |
Qualification for preferential tax rate | HNTE |
CFO Genius [Member] | |
Income Tax Contingency [Line Items] | |
Chinese EIT rate | Preferential tax rate of 15% from 2014 to 2015. |
Qualification for preferential tax rate | HNTE |
CFO Tibet Zhisheng [Member] | |
Income Tax Contingency [Line Items] | |
Chinese EIT rate | Preferential tax rate of 9% from 2017 and thereafter |
Qualification for preferential tax rate | Preferential tax rate for enterprises in Tibet, China |
CFO Tibet [Member] | |
Income Tax Contingency [Line Items] | |
Chinese EIT rate | Preferential tax rate of 9% from 2015 to 2017 and 15% thereafter |
Qualification for preferential tax rate | Preferential tax rate for enterprises in Tibet, China |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | |||
Current | $ (578,367) | $ (4,723,267) | $ (2,071,154) |
Deferred | 253,951 | 562,664 | 686,892 |
Total | $ 324,416 | $ 4,160,603 | $ 1,384,262 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Deferred revenue | $ 1,608,723 | $ 1,049,187 |
Accrued expenses and other liabilities | 63,972 | 465,538 |
Net operating loss carrying forwards | 24,662,909 | 14,386,215 |
Gross current deferred tax assets | 26,335,603 | 15,900,940 |
Less: valuation allowance | (24,715,317) | (14,498,497) |
Total deferred tax assets | 1,620,286 | 1,402,443 |
Deferred tax liabilities: | ||
Account receivable and other assets | (220,222) | (235,717) |
Intangible assets | (16,374) | (89,970) |
Total deferred tax liabilities | $ (236,596) | $ (325,687) |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | |||
Income (loss) before tax | $ (42,064,021) | $ (6,805,575) | $ 28,201,950 |
Income tax (benefits) expenses calculated at 25% | (10,516,005) | (1,701,394) | 7,050,488 |
Effect of tax holiday | (14,009) | (4,431,103) | (8,139,429) |
Effect of income tax rate difference in other jurisdictions | (223,454) | 236,759 | 645,873 |
Non-deductible expenses | 10,229,536 | 3,645,741 | 2,559,649 |
Non-taxable income | (3,780,428) | (113,170) | (893,950) |
Change in valuation allowance | 4,628,776 | 6,523,770 | 161,631 |
Income tax expense | $ 324,416 | $ 4,160,603 | $ 1,384,262 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes (Textual) | |||
Effective profit tax rate | 16.50% | ||
Available for distribution tax amount | $ 11,500,000 | ||
Income tax rate, description | In the case of dividends paid by PRC subsidiaries the withholding tax would be 10% not considering the arrangements for the Avoidance of Double Taxation on income and Prevention of Fiscal Evasion with respect to Taxes on Income between mainland and Hong Kong. | ||
Interest on domestic subsidiary | 50.00% | ||
Valuation allowance | $ 24,715,317 | $ 14,498,497 | |
Operating loss carry forwards | $ 86,600,000 | ||
Operating loss carryforwards, expiration date | Dec. 31, 2022 | ||
Additional income tax expense | $ 8,123 | $ 209,418 | $ 1,102,399 |
Income tax holidays, basic net income (loss) per ordinary share | $ 0 | $ 0 | $ 0.01 |
Operating loss carryforwards, description | Operating loss carry forwards includes approximately $86.6 million which will expire by 2022, and $22.1 million which will carry forward indefinitely. | ||
Unrecognized tax benefits term, description | The unrecognized tax benefits within 12 months from December 31, 2017. | ||
CFO Qingdao Zhida [Member] | |||
Income Taxes (Textual) | |||
Income tax rate, description | Under this method, the qualifying entities filed their income tax by calculating as 2.5% of the gross revenues. | ||
PRC [Member] | |||
Income Taxes (Textual) | |||
Effective income tax rate | 25.00% | ||
Income tax rate, description | Under the EIT law and its implementing rules, enterprises that obtain status of "Software Enterprises" are entitled to be exempted from EIT tax for the first two profit-making years and enjoy a preferential 12.5% tax rate, which is half of the standard EIT rate of 25% for the three years thereafter. | ||
HNTE [Member] | |||
Income Taxes (Textual) | |||
Income tax rate, description | Under the EIT Law and its implementing rules, an enterprise which qualifies as a "high and new technology enterprise" ("the HNTE") is entitled to a tax rate of 15%. |
American Depositary Shares (101
American Depositary Shares ("ADS") Plan (Details) - shares | 1 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2017 | |
American Depositary Shares ("ADS") Plan (Textual) | ||
Ordinary shares issued | 4,000,000 | |
Exercise of options and vesting of granted shares | 2,298,695 | |
2004 Plan and 2014 Plan [Member] | ||
American Depositary Shares ("ADS") Plan (Textual) | ||
Exchanged received | 800,000 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net Income (Loss) Per Share [Abstract] | |||
Net income (loss) attributable to China Finance Online Co. Limited | $ (36,736,553) | $ (1,678,813) | $ 22,482,416 |
Weighted average ordinary shares outstanding used in computing basic net income (loss) per share | 113,601,949 | 113,213,912 | 110,997,871 |
Plus: Incremental shares from assumed conversions of stock options, restricted shares and nonvested shares | 14,131,892 | ||
Weighted average ordinary shares outstanding used in computing diluted net income (loss) per share | 113,601,949 | 113,213,912 | 125,129,763 |
Net income (loss) per share attributable to China Finance Online Co. Limited | |||
- basic | $ (0.32) | $ (0.01) | $ 0.20 |
- diluted | $ (0.32) | $ (0.01) | $ 0.18 |
Net Income (Loss) Per Share 103
Net Income (Loss) Per Share (Details Textual) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Options [Member] | ||
Net Income (Loss) Per Share (Textual) | ||
Antidilutive shares | 5,286,305 | 8,498,868 |
Restricted shares [Member] | ||
Net Income (Loss) Per Share (Textual) | ||
Antidilutive shares | 4,906,268 | 2,843,252 |
Nonvested shares (Member) | ||
Net Income (Loss) Per Share (Textual) | ||
Antidilutive shares | 3,000,000 | 3,000,000 |
Mainland China Contribution 104
Mainland China Contribution Plan and Profit Appropriation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Mainland China Contribution Plan and Profit Appropriation (Textual) | |||
Total provisions | $ 4,768,614 | $ 5,255,982 | $ 4,353,944 |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Noncontrolling Interest [Line Items] | |||
Balance, Beginning | $ (4,369,874) | $ 11,191,054 | $ 10,926,072 |
Dividends paid to noncontrolling interest | (10,117,946) | (6,509,680) | |
Changes in controlling ownership interest | (211,123) | 320,956 | |
Paid-in capital from noncontrolling shareholders | 641 | ||
Share-based compensation (Note 16) | 3,068,213 | 5,575,877 | 6,056,033 |
Deconsolidation | 809,692 | 2,510,775 | |
Net income (loss) | (5,651,884) | (9,287,365) | 4,335,272 |
Balance, Ending | (8,335,071) | (4,369,874) | 11,191,054 |
Commodities brokerage Services [Member] | |||
Noncontrolling Interest [Line Items] | |||
Balance, Beginning | (4,524,931) | 11,418,320 | 10,994,060 |
Dividends paid to noncontrolling interest | (10,117,946) | (6,509,680) | |
Changes in controlling ownership interest | 171,542 | 1,393,508 | |
Paid-in capital from noncontrolling shareholders | 641 | ||
Share-based compensation (Note 16) | 876,995 | 1,162,066 | 724,285 |
Deconsolidation | 809,692 | 2,404,822 | |
Net income (loss) | (6,388,746) | (9,563,735) | 4,815,506 |
Balance, Ending | (9,226,990) | (4,524,931) | 11,418,320 |
Investment Advisory services [Member] | |||
Noncontrolling Interest [Line Items] | |||
Balance, Beginning | |||
Dividends paid to noncontrolling interest | |||
Changes in controlling ownership interest | |||
Paid-in capital from noncontrolling shareholders | |||
Share-based compensation (Note 16) | |||
Deconsolidation | |||
Net income (loss) | |||
Balance, Ending | |||
Institution Subscription services [Member] | |||
Noncontrolling Interest [Line Items] | |||
Balance, Beginning | |||
Dividends paid to noncontrolling interest | |||
Changes in controlling ownership interest | |||
Paid-in capital from noncontrolling shareholders | |||
Share-based compensation (Note 16) | |||
Deconsolidation | |||
Net income (loss) | |||
Balance, Ending | |||
Rifa Financial Holdings Brokerage services [Member] | |||
Noncontrolling Interest [Line Items] | |||
Balance, Beginning | 155,057 | (227,266) | (31,679) |
Dividends paid to noncontrolling interest | |||
Changes in controlling ownership interest | |||
Paid-in capital from noncontrolling shareholders | |||
Share-based compensation (Note 16) | |||
Deconsolidation | 105,953 | ||
Net income (loss) | 736,862 | 276,370 | (195,587) |
Balance, Ending | 891,919 | 155,057 | (227,266) |
Other [Member] | |||
Noncontrolling Interest [Line Items] | |||
Balance, Beginning | (36,309) | ||
Dividends paid to noncontrolling interest | |||
Changes in controlling ownership interest | 320,956 | ||
Paid-in capital from noncontrolling shareholders | |||
Share-based compensation (Note 16) | |||
Deconsolidation | |||
Net income (loss) | (284,647) | ||
Balance, Ending |
Commitments and Contingencie106
Commitments and Contingencies (Details) | Dec. 31, 2017USD ($) |
Commitments and Contingencies [Abstract] | |
2,017 | $ 5,562,828 |
2,018 | 4,950,715 |
2,019 | 4,181,357 |
Total | $ 14,694,900 |
Commitments and Contingencie107
Commitments and Contingencies (Details Textual) ¥ in Millions | 1 Months Ended | 12 Months Ended | |||
May 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) | |
Commitments and Contingencies (Textual) | |||||
Operating leases, rent expense | $ 5,597,774 | $ 5,555,144 | $ 6,044,119 | ||
Accrual amount | 3,000,000 | ||||
Expected insurance recovery | $ 3,000,000 | ||||
Damage amount | $ 7,700,000 | ¥ 50 | |||
Other commitments, description | On January 16, 2018, lead plaintiffs informed the court that checks representing all but $2,759.76 of the net settlement amount had been cashed, requested that the court authorize a second and final distribution for the remaining amount, and requested that the court enter the judgment. | ||||
Board of Directors [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Litigation expenses | $ 3,000,000 |
Segment and Geographic Infor108
Segment and Geographic Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Net revenues | $ 53,181,824 | $ 95,591,331 | $ 144,106,738 |
Less: intersegment sales | (10,559,174) | (12,533,435) | (36,701,972) |
Net revenues from external customer | 42,622,650 | 83,057,896 | 107,404,766 |
Cost of revenues | 21,933,678 | 20,380,258 | 20,478,238 |
Less: intersegment cost of revenues | (739,501) | ||
Cost of revenues after elimination | 21,933,678 | 20,380,258 | 19,738,737 |
Operating expenses: | |||
General and administrative | 15,250,086 | 19,836,498 | 17,993,787 |
Product development | 16,208,000 | 14,485,444 | 10,738,730 |
Sales and marketing | 29,467,593 | 50,083,441 | 46,474,107 |
Loss from impairment of intangible assets | 291,817 | 1,111,149 | 250,360 |
Loss from impairment of goodwill | 6,659,691 | ||
Total segments operating expenses | 72,456,876 | 104,982,508 | 111,523,031 |
Less: intersegment operating expenses | (11,239,380) | (12,806,285) | (36,066,047) |
Total operating expenses | 61,217,496 | 92,176,223 | 75,456,984 |
Government subsidies | 230,174 | 1,194,775 | 251,828 |
Income (loss) from operations | (40,298,350) | (28,303,810) | 12,460,873 |
Total segments assets | 297,696,496 | 317,412,863 | 336,003,975 |
Less: intersegment asset balances | (183,092,643) | (149,789,037) | (191,938,818) |
Total assets | 114,603,853 | 167,623,826 | 144,065,157 |
Commodities brokerage services [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 3,698,857 | 69,980,296 | 113,720,922 |
Less: intersegment sales | (1,110,431) | (10,003,579) | (34,018,268) |
Net revenues from external customer | 2,588,426 | 59,976,717 | 79,702,654 |
Cost of revenues | (60,504) | 5,729,464 | 4,975,361 |
Less: intersegment cost of revenues | |||
Cost of revenues after elimination | (60,504) | 5,729,464 | 4,975,361 |
Operating expenses: | |||
General and administrative | 4,511,167 | 6,026,102 | 4,026,984 |
Product development | 1,776,007 | 3,374,144 | 2,549,731 |
Sales and marketing | 11,115,488 | 46,648,934 | 69,674,657 |
Loss from impairment of intangible assets | 1,111,149 | 250,360 | |
Loss from impairment of goodwill | 6,659,691 | ||
Total segments operating expenses | 17,402,662 | 63,820,020 | 76,501,732 |
Less: intersegment operating expenses | (1,110,431) | (10,003,579) | (35,907,706) |
Total operating expenses | 16,292,231 | 53,816,441 | 40,594,026 |
Government subsidies | 230,174 | 1,194,775 | 251,828 |
Income (loss) from operations | (13,413,127) | 1,625,587 | 34,385,095 |
Total segments assets | 21,569,350 | 42,343,571 | 109,286,634 |
Less: intersegment asset balances | (13,995,983) | (13,508,587) | (51,101,320) |
Total assets | 7,573,367 | 28,834,984 | 58,185,314 |
Subscription services and other related services [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 23,984,993 | 16,654,534 | 27,236,753 |
Less: intersegment sales | (9,232,502) | (2,529,856) | (2,683,704) |
Net revenues from external customer | 14,752,491 | 14,124,678 | 24,553,049 |
Cost of revenues | 7,453,185 | 10,392,343 | 14,321,339 |
Less: intersegment cost of revenues | (739,501) | ||
Cost of revenues after elimination | 7,453,185 | 10,392,343 | 13,581,838 |
Operating expenses: | |||
General and administrative | 7,565,268 | 10,090,294 | 11,148,924 |
Product development | 23,502,362 | 12,995,022 | 8,188,718 |
Sales and marketing | 16,830,525 | 13,029,524 | 12,139,100 |
Loss from impairment of intangible assets | 291,817 | ||
Loss from impairment of goodwill | |||
Total segments operating expenses | 48,189,972 | 36,114,840 | 31,476,742 |
Less: intersegment operating expenses | (9,439,947) | (2,524,975) | (47,620) |
Total operating expenses | 38,750,025 | 33,589,865 | 31,429,122 |
Government subsidies | |||
Income (loss) from operations | (31,450,719) | (29,857,530) | (20,457,911) |
Total segments assets | 187,122,375 | 197,412,591 | 179,706,230 |
Less: intersegment asset balances | (149,214,015) | (116,348,234) | (122,077,495) |
Total assets | 37,908,360 | 81,064,357 | 57,628,735 |
Hong Kong brokerage services [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 25,497,974 | 8,956,501 | 3,149,063 |
Less: intersegment sales | (216,241) | ||
Net revenues from external customer | 25,281,733 | 8,956,501 | 3,149,063 |
Cost of revenues | 14,540,997 | 4,258,451 | 1,181,538 |
Less: intersegment cost of revenues | |||
Cost of revenues after elimination | 14,540,997 | 4,258,451 | 1,181,538 |
Operating expenses: | |||
General and administrative | 3,930,479 | 3,992,953 | 2,978,161 |
Product development | |||
Sales and marketing | 2,933,763 | 1,054,695 | 566,396 |
Loss from impairment of intangible assets | |||
Loss from impairment of goodwill | |||
Total segments operating expenses | 6,864,242 | 5,047,648 | 3,544,557 |
Less: intersegment operating expenses | (689,002) | (277,731) | (110,721) |
Total operating expenses | 6,175,240 | 4,769,917 | 3,433,836 |
Government subsidies | |||
Income (loss) from operations | 4,565,496 | (71,867) | (1,466,311) |
Total segments assets | 89,004,771 | 77,656,701 | 47,011,111 |
Less: intersegment asset balances | (19,882,645) | (19,932,216) | (18,760,003) |
Total assets | $ 69,122,126 | $ 57,724,485 | $ 28,251,108 |
Segment and Geographic Infor109
Segment and Geographic Information (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Net revenues | $ 42,622,650 | $ 83,057,896 | $ 107,404,766 |
Commodities brokerage services revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 2,588,426 | 59,976,717 | 79,702,654 |
Financial information and advisory services revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 10,271,822 | 10,696,523 | 17,205,459 |
Advertising revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 3,588,499 | 2,893,707 | 7,023,399 |
Hong Kong brokerage services revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 25,281,733 | 8,956,501 | 3,149,063 |
Others [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | $ 892,170 | $ 534,448 | $ 324,191 |
Segment and Geographic Infor110
Segment and Geographic Information (Details Textual) | 12 Months Ended |
Dec. 31, 2017Segments | |
Segment and Geographic Information [Textual] | |
Number of operating segments | 3 |
Statutory Reserves and Restr111
Statutory Reserves and Restricted Net Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statutory Reserves and Restricted Net Assets (Textual) | |||
Statutory reserves tax profit, description | These reserve funds include the (1) general reserve, (2) enterprise expansion fund and (3) staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires annual appropriations of not less than 10% of after-tax profit (as determined under accounting principles and financial regulations applicable to PRC enterprises at each year-end); the other two funds are to be made at the discretion of the board of directors of each of the Group's subsidiaries. | ||
Statutory reserves PRC subsidiaries | $ 59,293 | $ 353,069 | $ 1,820,080 |
Statutory reserves | 9,052,883 | $ 8,993,590 | |
Statutory reserves not available for distribution | $ 34,555,406 |
Schedule I Balance Sheets (Deta
Schedule I Balance Sheets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||||
Cash and cash equivalents | $ 38,692,871 | $ 66,151,439 | $ 85,734,048 | $ 32,538,513 |
Prepaid expenses and other current assets | 4,198,301 | 8,241,042 | ||
Total current assets | 101,617,132 | 148,461,165 | ||
Total assets | 114,603,853 | 167,623,826 | 144,065,157 | |
Current liabilities: | ||||
Contingent liability | 2,760 | 3,000,000 | ||
Amounts due to subsidiaries, VIEs and VIE's subsidiaries | 170,058 | 865,036 | ||
Total current liabilities | 68,511,497 | 84,893,888 | ||
Shareholders' equity | ||||
Ordinary shares (118,098,018 and 118,098,018 shares issued and outstanding as of December 31, 2016 and 2017, respectively) | 57,000,417 | 56,973,632 | ||
Additional paid-in capital | 34,368,210 | 32,176,992 | ||
Accumulated other comprehensive income | 6,654,191 | 4,253,643 | ||
Retained deficits | (43,976,136) | (7,239,583) | ||
Total shareholders' equity | 54,046,682 | 86,164,684 | 88,038,371 | 75,541,436 |
Total liabilities and shareholders' equity | 114,603,853 | 167,623,826 | ||
Parent Company [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 7,614,175 | 9,427,287 | 971,500 | 1,383,205 |
Amounts due from subsidiaries, VIEs and VIE's subsidiaries | 9,845,705 | 9,874,248 | ||
Prepaid expenses and other current assets | 144,353 | 3,224,614 | ||
Dividends receivable | ||||
Total current assets | 17,604,233 | 22,526,149 | ||
Investments in subsidiaries, VIEs and VIE's subsidiaries | 46,306,964 | 77,036,485 | ||
Total assets | 63,911,197 | 99,562,634 | ||
Current liabilities: | ||||
Accrued expenses and other current liabilities | 91,143 | 301,076 | ||
Contingent liability | 2,760 | 3,000,000 | ||
Amounts due to subsidiaries, VIEs and VIE's subsidiaries | 9,770,611 | 10,096,874 | ||
Total current liabilities | 9,864,514 | 13,397,950 | ||
Shareholders' equity | ||||
Ordinary shares (118,098,018 and 118,098,018 shares issued and outstanding as of December 31, 2016 and 2017, respectively) | 57,000,417 | 56,973,632 | ||
Additional paid-in capital | 34,368,210 | 32,176,992 | ||
Accumulated other comprehensive income | 6,654,191 | 4,253,643 | ||
Retained deficits | (43,976,136) | (7,239,583) | ||
Total shareholders' equity | 54,046,682 | 86,164,684 | $ 88,038,371 | $ 64,615,364 |
Total liabilities and shareholders' equity | $ 63,911,197 | $ 99,562,634 |
Schedule I Balance Sheets (Pare
Schedule I Balance Sheets (Parenthetical) (Details Textual) - shares | Dec. 31, 2017 | Dec. 31, 2016 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Ordinary shares, shares issued | 118,098,018 | 118,098,018 |
Ordinary shares, shares outstanding | 118,098,018 | 118,098,018 |
Schedule I - Financial informat
Schedule I - Financial information of Parent Company - Statements of Comprehensive Income (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Statement of Income Captions [Line Items] | |||
Cost of revenues | $ 21,933,678 | $ 20,380,258 | $ 19,738,737 |
Gross loss | 20,688,972 | 62,677,638 | 87,666,029 |
Operating expenses: | |||
General and administrative | 15,250,086 | 19,836,498 | 17,993,787 |
Product development | 16,208,000 | 14,485,444 | 10,738,730 |
Sales and marketing | 29,467,593 | 50,083,441 | 46,474,107 |
Share-based compensation | 3,068,213 | 5,575,877 | 6,056,033 |
Total operating expenses | 61,217,496 | 92,176,223 | 75,456,984 |
Interest income | 487,007 | 1,050,781 | 2,648,026 |
Exchange loss, net | (131,461) | (55,117) | (766,162) |
Other income (loss), net | (282,775) | (303,332) | (937,431) |
Gain from sales of cost method investment | 4,648,302 | ||
Net income (loss) | (36,736,553) | (1,678,813) | 22,482,416 |
Other comprehensive income (loss), net of tax: | |||
Changes in foreign currency translation adjustment | 2,400,548 | (4,343,652) | (3,467,043) |
Other comprehensive income (loss), net of tax | 2,400,548 | (4,343,652) | (3,467,043) |
Comprehensive income (loss) | (39,987,889) | (15,309,830) | 23,350,645 |
Parent Company [Member] | |||
Condensed Statement of Income Captions [Line Items] | |||
Cost of revenues | 84,717 | 34,740 | |
Gross loss | (84,717) | (34,740) | |
Operating expenses: | |||
General and administrative | 1,122,440 | 2,150,680 | 1,226,800 |
Product development | |||
Sales and marketing | 181,073 | ||
Share-based compensation | 782,196 | 2,382,934 | 3,812,733 |
Total operating expenses | 2,085,709 | 4,533,614 | 5,039,533 |
Interest income | 2,246 | 47 | |
Equity in earnings (deficits) of subsidiaries, VIEs and VIE's subsidiaries | (34,540,850) | 3,049,831 | 28,643,095 |
Exchange loss, net | (2,785) | (159,868) | (1,011,509) |
Other income (loss), net | (24,738) | (422) | (109,684) |
Gain from sales of cost method investment | |||
Net income (loss) | (36,736,553) | (1,678,813) | 22,482,416 |
Other comprehensive income (loss), net of tax: | |||
Changes in foreign currency translation adjustment | 2,400,548 | (4,343,652) | (3,467,043) |
Other comprehensive income (loss), net of tax | 2,400,548 | (4,343,652) | (3,467,043) |
Comprehensive income (loss) | $ (34,336,005) | $ (6,022,465) | $ 19,015,373 |
Schedule I - Financial infor115
Schedule I - Financial information of Parent Company - Statement of Shareholders' Equity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | |||
Balance | $ 86,164,684 | $ 88,038,371 | $ 75,541,436 |
Issuance of ordinary shares for the plan of stock options and restricted shares | 520 | ||
Exercise of share options by employees | 26,785 | 117,632 | 293,654 |
Exercise of share options by non-employees | 175,200 | ||
Restricted shares issued | 20 | ||
Share-based compensation | 3,068,213 | 5,575,877 | 6,056,033 |
Net income (loss) | (36,736,553) | (1,678,813) | 22,482,416 |
Balance | $ 54,046,682 | 86,164,684 | 88,038,371 |
Ordinary shares [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Balance | $ 56,856,000 | $ 56,386,606 | |
Balance, shares | 118,098,018 | 118,098,018 | 112,417,933 |
Issuance of ordinary shares for the plan of stock options and restricted shares | $ 520 | ||
Issuance of ordinary shares for the plan of stock options and restricted shares, shares | 4,000,000 | ||
Exercise of share options by employees | $ 26,785 | $ 117,632 | $ 293,654 |
Exercise of share options by employees, shares | 435,000 | ||
Exercise of share options by non-employees | $ 175,200 | ||
Exercise of share options by non-employees, shares | 1,095,000 | ||
Restricted shares issued | $ 20 | ||
Restricted shares issued, shares | 150,085 | ||
Share-based compensation | |||
Balance | $ 56,856,000 | ||
Balance, shares | 118,098,018 | 118,098,018 | 118,098,018 |
Additional paid-in capital [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Balance | $ 28,145,846 | ||
Issuance of ordinary shares for the plan of stock options and restricted shares | |||
Exercise of share options by employees | |||
Exercise of share options by non-employees | |||
Restricted shares issued | |||
Share-based compensation | $ 2,191,218 | 4,413,811 | 5,331,748 |
Balance | 28,145,846 | ||
Accumulated other comprehensive income (loss) [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Balance | 8,597,295 | ||
Issuance of ordinary shares for the plan of stock options and restricted shares | |||
Exercise of share options by employees | |||
Exercise of share options by non-employees | |||
Restricted shares issued | |||
Share-based compensation | |||
Balance | 8,597,295 | ||
Retained earnings (deficits) [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Balance | (5,560,770) | (28,043,186) | |
Issuance of ordinary shares for the plan of stock options and restricted shares | |||
Exercise of share options by employees | |||
Exercise of share options by non-employees | |||
Restricted shares issued | |||
Share-based compensation | |||
Balance | (5,560,770) | ||
Parent Company [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Balance | 86,164,684 | 88,038,371 | 64,615,364 |
Issuance of ordinary shares for the plan of stock options and restricted shares | 520 | ||
Exercise of share options by employees | 26,785 | 117,632 | 293,654 |
Exercise of share options by non-employees | 175,200 | ||
Restricted shares issued | 20 | ||
Share-based compensation | 782,196 | 2,382,934 | |
Equity pick up from compensation of VIE's subsidiaries | 2,030,877 | 3,812,733 | |
Changes in controlling ownership interest | (382,665) | (1,393,508) | |
Foreign currency translation adjustment | 2,400,548 | (4,343,652) | (3,467,043) |
Net income (loss) | (36,736,553) | (1,678,813) | 22,482,416 |
Balance | 54,046,682 | 86,164,684 | 88,038,371 |
Parent Company [Member] | Ordinary shares [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Balance | $ 56,973,632 | $ 56,856,000 | $ 56,386,606 |
Balance, shares | 118,098,018 | 118,098,018 | 112,417,933 |
Issuance of ordinary shares for the plan of stock options and restricted shares | $ 520 | ||
Issuance of ordinary shares for the plan of stock options and restricted shares, shares | 4,000,000 | ||
Exercise of share options by employees | $ 26,785 | $ 117,632 | $ 293,654 |
Exercise of share options by employees, shares | 435,000 | ||
Exercise of share options by non-employees | $ 175,200 | ||
Exercise of share options by non-employees, shares | 1,095,000 | ||
Restricted shares issued | $ 20 | ||
Restricted shares issued, shares | 150,085 | ||
Share-based compensation | |||
Share-based compensation, shares | |||
Equity pick up from compensation of VIE's subsidiaries | |||
Changes in controlling ownership interest | |||
Foreign currency translation adjustment | |||
Net income (loss) | |||
Balance | $ 57,000,417 | $ 56,973,632 | $ 56,856,000 |
Balance, shares | 118,098,018 | 118,098,018 | 118,098,018 |
Parent Company [Member] | Additional paid-in capital [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Balance | $ 32,176,992 | $ 28,145,846 | $ 24,207,606 |
Issuance of ordinary shares for the plan of stock options and restricted shares | |||
Exercise of share options by employees | |||
Exercise of share options by non-employees | |||
Restricted shares issued | |||
Share-based compensation | 782,196 | 2,382,934 | |
Equity pick up from compensation of VIE's subsidiaries | 1,409,022 | 2,030,877 | 3,812,733 |
Changes in controlling ownership interest | (382,665) | (1,393,508) | |
Foreign currency translation adjustment | |||
Net income (loss) | |||
Balance | 34,368,210 | 32,176,992 | 28,145,846 |
Parent Company [Member] | Accumulated other comprehensive income (loss) [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Balance | 4,253,643 | 8,597,295 | 12,064,338 |
Issuance of ordinary shares for the plan of stock options and restricted shares | |||
Exercise of share options by employees | |||
Exercise of share options by non-employees | |||
Restricted shares issued | |||
Share-based compensation | |||
Equity pick up from compensation of VIE's subsidiaries | |||
Changes in controlling ownership interest | |||
Foreign currency translation adjustment | 2,400,548 | (4,343,652) | (3,467,043) |
Net income (loss) | |||
Balance | 6,654,191 | 4,253,643 | 8,597,295 |
Parent Company [Member] | Retained earnings (deficits) [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Balance | (7,239,583) | (5,560,770) | (28,043,186) |
Issuance of ordinary shares for the plan of stock options and restricted shares | |||
Exercise of share options by employees | |||
Exercise of share options by non-employees | |||
Restricted shares issued | |||
Share-based compensation | |||
Equity pick up from compensation of VIE's subsidiaries | |||
Changes in controlling ownership interest | |||
Foreign currency translation adjustment | |||
Net income (loss) | (36,736,553) | (1,678,813) | 22,482,416 |
Balance | $ (43,976,136) | $ (7,239,583) | $ (5,560,770) |
Schedule I - Financial infor116
Schedule I - Financial information of Parent Company - Statement of Cash Flows (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | |||
Net income (loss) | $ (36,736,553) | $ (1,678,813) | $ 22,482,416 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Share-based compensation | 3,068,213 | 5,575,877 | 6,056,033 |
Equity in deficits (earnings) of subsidiaries, VIEs and VIE's subsidiaries | 13,404 | 138,124 | 66,970 |
Changes in assets and liabilities: | |||
Prepaid expenses and other current assets | (1,105,245) | (1,856,549) | 369,290 |
Rental deposits | 15,652 | (169,148) | (204,811) |
Accrued expenses and other current liabilities | (3,483,073) | 1,573,833 | 2,596,050 |
Net cash (used in) provided by operating activities | (26,323,261) | (21,342,292) | 19,816,980 |
Investing activities: | |||
Proceeds from sales of cost method investment | 7,959,237 | ||
Net cash provided by (used in) investing activities | 15,832,444 | (3,318,921) | 40,557,824 |
Financing activities: | |||
Proceeds from stock options exercised by employees | 26,786 | 142,618 | 294,193 |
Proceeds from stock options exercised by nonemployees | 175,200 | ||
Net cash provided by financing activities | (19,056,395) | 9,702,412 | (5,592,080) |
Net (decrease) increase in cash and cash equivalents | (27,458,568) | (19,582,609) | 53,195,535 |
Cash and cash equivalents, beginning of year | 66,151,439 | 85,734,048 | 32,538,513 |
Cash and cash equivalents, end of year | 38,692,871 | 66,151,439 | 85,734,048 |
Parent Company [Member] | |||
Operating activities: | |||
Net income (loss) | (36,736,553) | (1,678,813) | 22,482,416 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Share-based compensation | 782,196 | 2,382,934 | 3,812,733 |
Equity in deficits (earnings) of subsidiaries, VIEs and VIE's subsidiaries | 34,540,850 | (3,049,831) | (28,643,095) |
Changes in assets and liabilities: | |||
Prepaid expenses and other current assets | 83,021 | 65,990 | 20,339 |
Amounts due from subsidiaries, VIEs and VIE's subsidiaries | 28,544 | (2,523,274) | 142,303 |
Rental deposits | 66,893 | ||
Accrued expenses and other current liabilities | (211,691) | (3,712) | (8,035) |
Amounts due to subsidiaries, VIEs and VIE's subsidiaries | (326,263) | (3,409,764) | 1,065,088 |
Net cash (used in) provided by operating activities | (1,839,898) | (8,216,470) | (1,061,358) |
Investing activities: | |||
Dividend received from subsidiaries | 16,529,639 | 1,011,931 | |
Capital paid to subsidiaries | (3,000,000) | ||
Proceeds from sales of cost method investment | 2,168,868 | ||
Net cash provided by (used in) investing activities | 16,529,639 | 180,799 | |
Financing activities: | |||
Proceeds from stock options exercised by employees | 26,786 | 142,618 | 293,654 |
Proceeds from stock options exercised by nonemployees | 175,200 | ||
Net cash provided by financing activities | 26,786 | 142,618 | 468,854 |
Net (decrease) increase in cash and cash equivalents | (1,813,112) | 8,455,787 | (411,705) |
Cash and cash equivalents, beginning of year | 9,427,287 | 971,500 | 1,383,205 |
Cash and cash equivalents, end of year | $ 7,614,175 | $ 9,427,287 | $ 971,500 |