Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jul. 02, 2020 | |
Document Information Line Items | ||
Entity Registrant Name | Nova Lifestyle, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 5,536,544 | |
Amendment Flag | false | |
Entity Central Index Key | 0001473334 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 6,907,599 | $ 7,423,198 |
Accounts receivable, net | 387,957 | 390,241 |
Advance to suppliers | 27,819,528 | 27,745,184 |
Inventories | 29,356,280 | 29,724,665 |
Consideration receivable | 2,500,000 | 0 |
Prepaid expenses and other receivables | 167,060 | 173,607 |
Current assets of discontinued operations | 0 | 3,041,976 |
Total Current Assets | 67,138,424 | 68,498,871 |
Noncurrent Assets | ||
Plant, property and equipment, net | 261,697 | 136,512 |
Operating lease right-of-use assets, net | 2,644,936 | 2,658,344 |
Lease deposit | 49,715 | 43,260 |
Goodwill | 218,606 | 218,606 |
Total Noncurrent Assets | 3,174,954 | 3,056,722 |
Total Assets | 70,313,378 | 71,555,593 |
Current Liabilities | ||
Accounts payable | 295,826 | 417,918 |
Operating lease liability, current | 570,604 | 481,068 |
Advance from customers | 55,394 | 26,450 |
Accrued liabilities and other payables | 471,707 | 301,764 |
Income tax payable | 50,036 | 22,055 |
Current liabilities of discontinued operations | 0 | 215,445 |
Total Current Liabilities | 1,443,567 | 1,464,700 |
Noncurrent Liabilities | ||
Operating lease liability, non-current | 2,114,099 | 2,211,061 |
Income tax payable | 1,833,411 | 1,833,286 |
Total Noncurrent Liabilities | 3,947,510 | 4,044,347 |
Total Liabilities | 5,391,077 | 5,509,047 |
Contingencies and Commitments | ||
Stockholders' Equity | ||
Common stock, $0.001 par value; 15,000,000 shares authorized, 5,749,604 and 5,741,604 shares issued and outstanding; as of March 31, 2020 and December 31, 2019, respectively | 5,749 | 5,741 |
Additional paid-in capital | 40,278,038 | 40,221,062 |
Statutory reserves | 6,241 | 6,241 |
Accumulated other comprehensive income | 158,215 | 0 |
Treasury stock, at cost, 172,870 shares as of March 31, 2020 and December 31, 2019 | (616,193) | (616,193) |
Retained earnings | 25,090,251 | 26,429,695 |
Total Stockholders' Equity | 64,922,301 | 66,046,546 |
Total Liabilities and Stockholders' Equity | $ 70,313,378 | $ 71,555,593 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, shares issued | 5,749,604 | 5,749,604 |
Common stock, shares outstanding | 5,749,604 | 5,741,604 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Treasury Stock, shares | 172,870 | 172,870 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net Sales | $ 2,203,220 | $ 8,794,742 |
Cost of Sales | 1,424,191 | 6,985,809 |
Gross Profit | 779,029 | 1,808,933 |
Operating Expenses | ||
Selling expenses | 317,416 | 389,240 |
General and administrative expenses | 1,282,719 | 1,695,393 |
Total Operating Expenses | 1,600,135 | 2,084,633 |
Loss From Operations | (821,106) | (275,700) |
Other Income (Expenses) | ||
Foreign exchange transaction loss | (156,013) | (360) |
Interest income (expense), net | 20,825 | (35,444) |
Financial expense | (32,740) | (36,155) |
Total Other Expenses, Net | (167,928) | (71,959) |
Loss Before Income Taxes and Discontinued operations | (989,034) | (347,659) |
Income Tax (Expense) Benefit | (23,879) | 127,779 |
Loss From Continuing Operations | (1,012,913) | (219,880) |
(Loss) Income From Discontinued Operations | (326,531) | 72,349 |
Net Loss | (1,339,444) | (147,531) |
Other Comprehensive Income | ||
Foreign currency translation gain | 158,215 | 0 |
Net Loss and Comprehensive Loss | $ (1,181,229) | $ (147,531) |
Basic and Diluted weighted average shares outstanding (in Shares) | 5,572,196 | 5,732,511 |
Basic and Diluted (in Dollars per share) | $ (0.18) | $ (0.04) |
Basic and Diluted (in Dollars per share) | (0.06) | 0.01 |
Basic and Diluted (in Dollars per share) | $ (0.24) | $ (0.03) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings, Appropriated [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance at Dec. 31, 2018 | $ 5,713 | $ 39,864,003 | $ 6,241 | $ 35,030,419 | $ 74,906,376 | ||
Balance (in Shares) at Dec. 31, 2018 | 5,713,330 | ||||||
Stock issued to employees | $ 2 | 5,773 | 5,775 | ||||
Stock issued to employees (in Shares) | 1,500 | ||||||
Stock issued for service | $ 22 | 159,343 | 159,365 | ||||
Stock issued for service (in Shares) | 22,460 | ||||||
Net (loss) | (147,531) | (147,531) | |||||
Balance at Mar. 31, 2019 | $ 5,737 | 40,029,119 | 6,241 | 34,882,888 | 74,923,985 | ||
Balance (in Shares) at Mar. 31, 2019 | 5,737,290 | ||||||
Balance at Dec. 31, 2019 | $ 5,741 | 40,221,062 | $ (616,193) | 6,241 | 26,429,695 | $ 66,046,546 | |
Balance (in Shares) at Dec. 31, 2019 | 5,741,064 | 5,741,604 | |||||
Stock issued to employees | $ 3 | 6,387 | $ 6,390 | ||||
Stock issued to employees (in Shares) | 3,000 | ||||||
Stock issued for service | $ 5 | 12,745 | 12,750 | ||||
Stock issued for service (in Shares) | 5,000 | ||||||
Stock options vested to board of directors and employees | 37,844 | 37,844 | |||||
Foreign currency translation loss | $ 158,215,000,000 | 158,215,000,000 | |||||
Net (loss) | (1,339,444) | (1,339,444) | |||||
Balance at Mar. 31, 2020 | $ 5,749 | $ 40,278,038 | $ (616,193) | $ 6,241 | $ 25,090,251 | $ 158,215 | $ 64,922,301 |
Balance (in Shares) at Mar. 31, 2020 | 5,749,064 | 5,749,604 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities | ||
Net loss | $ (1,339,444) | $ (147,531) |
Net (loss) income from discontinued operations | (326,531) | 72,349 |
Net loss from continuing operations | (1,012,913) | (219,880) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 15,442 | 9,369 |
Amortization of operating lease right-of-use assets | 142,357 | 107,357 |
Stock compensation expense | 53,789 | 175,962 |
Changes in bad debt allowance | (23) | (169,432) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,307 | 55,016,394 |
Advance to suppliers | (74,345) | 5,005,403 |
Inventories | 368,385 | (92,918) |
Operating lease liabilities | (136,337) | (107,357) |
Other current assets | 1,369 | 8,699 |
Accounts payable | (122,091) | (3,617,093) |
Advance from customers | 28,944 | 6,149 |
Accrued liabilities and other payables | 33,024 | (536,611) |
Taxes payable | 27,936 | (127,857) |
Net Cash (Used in) Provided by Continuing Operations | (672,156) | 55,458,185 |
Net Cash Used in Discontinued Operations | 0 | (177,466) |
Net Cash (Used in) Provided by Operating Activities | (672,156) | 55,280,719 |
Cash Flows From Investing Activities | ||
Cash of subsidiary disposed | (1,462,200) | 0 |
Purchase of property and equipment | 0 | (24,911) |
Net Cash Used in Continuing Operations | (1,462,200) | (24,911) |
Net Cash Provided by Discontinued Operations | 0 | 0 |
Net Cash Used in Investing Activities | (1,462,200) | (24,911) |
Cash Flows From Financing Activities | ||
Proceeds from line of credit and bank loan | 0 | 11,796,018 |
Repayment to line of credit and bank loan | 0 | (18,044,180) |
Net Cash Used in Continuing Operations | 0 | (6,248,162) |
Net Cash Provided by Discontinued Operations | 0 | 0 |
Net Cash Used in Financing Activities | 0 | (6,248,162) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 156,557 | 0 |
Net (decrease) increase in cash and cash equivalents | (1,977,799) | 49,007,646 |
Cash and cash equivalents, beginning of period | 8,885,398 | 890,408 |
Cash and cash equivalents, ending of year | 6,907,599 | 49,898,054 |
Cash paid during the period for: | ||
Income tax payments | 0 | 78 |
Interest expense | 1,596 | 36,143 |
Non-cash financing activities: | ||
Operating lease assets obtained in exchange for operating lease obligation | 0 | 0 |
Discontinued operations: | ||
Income tax payments | 0 | 0 |
Interest expense | 0 | 0 |
Analysis of cash and cash equivalents | ||
Included in cash and cash equivalents per condensed consolidated balance sheets | 6,907,599 | 49,428,662 |
Included in assets of discontinued operations | $ 0 | $ 469,392 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1 - Organization and Description of Business Nova LifeStyle, Inc. (“Nova LifeStyle” or the “Company”), formerly known as Stevens Resources, Inc., was incorporated in the State of Nevada on September 9, 2009. The Company is a U.S. holding company with no material assets other than the ownership interests of its subsidiaries through which it markets, designs and sells furniture worldwide: Nova Furniture Limited in the British Virgin Islands (“Nova Furniture”), Nova Furniture Ltd. in Samoa (“Nova Samoa”), Bright Swallow International Group Limited (“Bright Swallow” or “BSI”), Nova Furniture Macao Commercial Offshore Limited (“Nova Macao”), Diamond Bar Outdoors, Inc. (“Diamond Bar”) and Nova Living (M) SDN. BHD. (“Nova Malaysia”). Nova Macao was organized under the laws of Macao on May 20, 2006, and is a wholly owned subsidiary of Nova Furniture. Diamond Bar was incorporated in California on June 15, 2000. Nova Macao is a trading company, importing, marketing and selling products designed and manufactured by third-party manufacturers for the U.S. and international markets. Diamond Bar markets and sells products manufactured by third-party manufacturers under the Diamond Sofa brand to distributors and retailers principally in the U.S. market. On April 24, 2013, the Company completed the acquisition of Bright Swallow, an established furniture company with a global client base. On December 7, 2017, Nova LifeStyle, Inc. incorporated i Design Blockchain Technology, Inc. (“i Design”) under the laws of the State of California. The purpose of i Design is to build the Company’s own blockchain technology team. This new company will focus on the application of blockchain technology in the furniture industry, including encouraging and facilitating interactions among designers and customers, and building a blockchain-powered platform that enables designers to showcase their products, including current and future furniture designs. This company is in the planning stage and has had minimal operations to date. On December 12, 2019, Nova LifeStyle, Inc. acquired Nova Living (M) SDN. BHD (“Nova Malaysia’), which was incorporated in Malaysia on July 26, 2019. The purpose of this acquisition is to market and sell high-end physiotherapeutic jade mats for use in therapy clinics, hospitality, and real estate projects in Malaysia and other regions in Southeast Asia. On January 7, 2020, the Company transferred its entire interest in Bright Swallow to Y-Tone (Worldwide) Limited, an unrelated third party, for cash consideration of $2.50 million, pursuant to a formal agreement entered into on January 7, 2020. The Company received the payment on May 11, 2020. As of March 31, 2020, operations of Bright Swallow were reported as discontinued operations in the accompanying unaudited condensed consolidated financial statements for all periods presented. Accordingly, assets, liabilities, revenues, expenses and cash flows related to Bright Swallow have been reclassified in the condensed consolidated financial statements as discontinued operations for all periods presented. Additional information with respect to the sale of Bright Swallow is presented at Note 3. The “Company” and “Nova” collectively refer to Nova LifeStyle, the U.S. parent, and its subsidiaries, Nova Furniture, Nova Samoa, Nova Macao, Diamond Bar, i Design, BSI and Nova Malaysia. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 2 - Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. The interim condensed consolidated financial information as of March 31, 2020 and for the three month periods ended March 31, 2020 and 2019 have been prepared without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The interim condensed consolidated financial information should be read in conjunction with the Financial Statements and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, previously filed with the SEC on May 12, 2020. In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s interim condensed consolidated financial position as of March 31, 2020, its interim condensed consolidated results of operations and cash flows for the three month periods ended March 31, 2020 and 2019, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods. Reverse split On December 18, 2019, the Company filed a Certificate of Change with the Secretary of State of Nevada with an effective date of December 20, 2019, at which time a 1-for-5 reverse stock split of the Company’s authorized shares of common stock, par value $0.001, accompanied by a corresponding decrease in the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”), was effected. All references to shares and per share data have been retroactively restated to reflect such split. Use of Estimates In preparing condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include, but are not limited to, revenue recognition, the allowance for bad debt, valuation of inventories, the valuation of stock-based compensation, income taxes and unrecognized tax benefits, valuation allowance for deferred tax assets, assumptions used in assessing impairment of long-lived assets and goodwill, and loss contingencies. Actual results could differ from those estimates. Business Combination For a business combination, the assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree are recognized at the acquisition date and measured at their fair values as of that date. In a business combination achieved in stages, the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, are recognized at the full amounts of their fair values. In a bargain purchase in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any noncontrolling interest in the acquiree, that excess in earnings is recognized as a gain attributable to the acquirer. Deferred tax liability and assets are recognized for the deferred tax consequences of differences between the tax bases and the recognized values of assets acquired and liabilities assumed in a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 740-10. Goodwill Goodwill is the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC Topic 350, “Intangibles-Goodwill and Other,” goodwill is not amortized but is tested for impairment, annually or more frequently when circumstances indicate a possible impairment may exist. Impairment testing is performed at a reporting unit level. An impairment loss generally would be recognized when the carrying amount of the reporting unit exceeds its fair value, with the fair value of the reporting unit determined using discounted cash flow (“DCF”) analysis. A number of significant assumptions and estimates are involved in the application of the DCF analysis to forecast operating cash flows, including the discount rate, the internal rate of return and projections of realizations and costs to produce. Management considers historical experience and all available information at the time the fair values of its reporting units are estimated. ASC Topic 350 also permits an entity to first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the two-step goodwill impairment test is required to be performed. Otherwise, no further testing is required. Performing the qualitative assessment involved identifying the relevant drivers of fair value, evaluating the significance of all identified relevant events and circumstances, and weighing the factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. After evaluating and weighing all these relevant events and circumstances, it was concluded that a positive assertion can be made from the qualitative assessment that it is more likely than not that the fair value of Diamond Bar is greater than its carrying amount. As such, it is not necessary to perform the two-step goodwill impairment test for the Diamond Bar reporting unit. Accordingly, as of March 31, 2020 and 2019, the Company concluded there was no impairment of goodwill of Diamond Bar. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents. Accounts Receivable The Company’s accounts receivable arises from product sales. The Company does not adjust its receivables for the effects of a significant financing component at contract inception if it expects to collect the receivables in one year or less from the time of sale. The Company does not expect to collect receivables greater than one year from the time of sale. The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. An analysis of the allowance for doubtful accounts is as follows: Balance at January 1, 2020 $ 3,942 Provision for the period - Reversal – recoveries by cash (23 ) Balance at March 31, 2020 $ 3,919 During the three months ended March 31, 2020 and 2019, bad debts reversal from continuing operations were $23 and $169,432, respectively. During the three months ended March 31, 2020 and 2019, bad debt provision and write-offs from discontinued operations were $0. Advances to Suppliers Advances to suppliers are reported net of allowance when the Company determines that amounts outstanding are not likely to be collected in cash or utilized against purchase of inventories. Based on its historical record and in normal circumstances, the Company receives goods within 5 to 9 months from the date the advance payment is made. Due to the COVID-19 pandemic, freight transportation of products from our international suppliers has been delayed or suspended during the outbreak. As such, no reserve on supplier prepayments had been made or recorded by the Company. Any provisions for allowance for advances to suppliers, if deemed necessary, are included in general and administrative expenses in the condensed consolidated statements of comprehensive income (loss). During the three months ended March 31, 2020 and 2019, no provision was made on advances to suppliers. Inventories Inventories are stated at the lower of cost and net realizable value, with cost determined on a weighted-average basis. Write-down of potential obsolete or slow moving inventories is recorded based on management’s assumptions about future demands and market conditions. There were no write-downs of inventories from the Company’s continuing operation for the three months ended March 31, 2020 and 2019. There were also no write-downs of inventories from the Company’s discontinued operations for the three months ended March 31, 2019. Plant, Property and Equipment Plant, property and equipment are stated at cost, net of accumulated depreciation and impairment losses, if any. Expenditures for maintenance and repairs are expensed as incurred, while additions, renewals and improvements are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with no salvage value and estimated lives as follows: Computer and office equipment 5 - 10 years Decoration and renovation 5 - 10 years Impairment of Long-Lived Assets Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group asset group exceeds its fair value based on discounted cash flow analysis or appraisals. Treasury Stock Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or charged to additional paid-in capital using the average-cost method. Upon retirement of treasury stock, the amounts in excess of par value are charged entirely to retained earnings. Research and Development Research and development costs are related primarily to the Company designing and testing its new products during the development stage. Research and development costs are recognized in general and administrative expenses and expensed as incurred. Research and development expenses from continuing operations were $12,266 and $16,521 for the three months ended March 31, 2020 and 2019, respectively. During the three months ended March 31, 2020 and 2019, research and development costs from discontinued operations were $0. Income Taxes In its interim financial statements, the Company follows the guidance in ASC 270 “Interim Reporting” and ASC 740 “Income Taxes” whereby the Company utilizes the expected annual effective rate in determining its income tax provision. The income tax benefit for the three months ended March 31, 2020 is approximately $6,000 and is primarily related to quarter-to-date losses generated from U.S. operations. The income tax expense for the three months ended March 31, 2019 is approximately $105,000 and is primarily related to quarter-to-date losses generated from U.S. operations. Income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of ASC Topic 740, when tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Nova Lifestyle, Inc. and Diamond Bar Outdoors, Inc. (“Diamond Bar”) are subject to U.S. federal and state income taxes. Nova Furniture BVI and Bright Swallow International Group Limited (“BSI”) were incorporated in the BVI, Nova Samoa was incorporated in Samoa, and Nova Macau was incorporated in Macau. There is no income tax for companies domiciled in the BVI, Samoa and Macau. Accordingly, the Company’s condensed consolidated financial statements do not present any income tax provisions related to the BVI, Samoa and Macau tax jurisdictions where Nova Furniture BVI and BSI, Nova Samoa and Nova Macau are domiciled. Nova Living (M) SDN. BHD, (“Nova Malaysia”) is incorporated in Malaysia and is subject to Malaysia income taxes. The Tax Cuts and Jobs Act of 2017 (the “Act”) created new taxes on certain foreign-sourced earnings such as global intangible low-taxed income (“GILTI”) under IRC Section 951A, which is effective for the Company for tax years beginning after January 1, 2018. For the quarter ended March 31, 2020, the Company has calculated its best estimate of the impact of the GILTI in its income tax provision in accordance with its understanding of the Act and guidance available as of the date of this filing. A reconciliation of the January 1, 2020 through March 31, 2020 amount of unrecognized tax benefits excluding interest and penalties (“Gross UTB”) is as follows: Gross UTB 2020 Balance $ 12,547 Decrease in unrecorded tax benefits taken, related to the Company’s continuing operations - Foreign exchange adjustment - Balance $ 12,547 At March 31, 2020 and December 31, 2019, the Company had cumulatively accrued approximately $1,403 and $1,278 for estimated interest and penalties related to unrecognized tax benefits, respectively, related to the Company’s continuing operations. The Company recorded interest and penalties related to unrecognized tax benefits as a component of income tax expense, which totaled $125 and $1,600 for the three months ended March 31, 2020, and 2019, respectively, related to the Company’s continuing operations. The Company does not anticipate any significant changes to its unrecognized tax benefits within the next 12 months. At December 31, 2019, the Company had cumulatively accrued approximately $0 for estimated interest and penalties related to unrecognized tax benefits related to the Company’s discontinued operations. The Company recorded interest and penalties related to unrecognized tax benefits as a component of income tax expense, which totaled $nil and $24,000 for the three months ended March 31, 2020, and 2019, respectively, related to the Company’s discontinued operations. As of March 31, 2020, unrecognized tax benefits were approximately $14,000. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate was $14,000 as of March 31, 2020. As of March 31, 2019, unrecognized tax benefits were approximately $0.7 million. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate was $0.7 million as of March 31, 2019. Nova Lifestyle and Diamond Bar are subject to U.S. federal and state income taxes and tax years 2016-2019 remain open to examination by tax authorities in the U.S. Revenue Recognition The Company recognizes revenues when its customers obtain control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identifies contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenues when (or as) it satisfies the performance obligation. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial. Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers. Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, returns and rebates. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to the Company’s customer. The Company’s sales policy allows for product returns within the warranty period if the product is defective and the defects are the Company’s fault. As alternatives to the product return option, the customers have the option of requesting a discount from the Company for products with quality issues or of receiving replacement parts from the Company at no cost. The amount for product returns, the discount provided to the Company’s customers, and the costs for replacement parts were immaterial for the three months ended March 31, 2020 and 2019. The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling expenses on the Company’s condensed consolidated statements of comprehensive income (loss). Cost of Sales Cost of sales consists primarily of costs of finished goods purchased from third-party manufacturers and write-downs of inventory. Shipping and Handling Costs Shipping and handling costs related to delivery of finished goods are included in selling expenses. During the three months ended March 31, 2020 and 2019, shipping and handling costs from continuing operations were $349 and $409, respectively. During the three months ended March 31, 2020 and 2019, shipping and handling costs from discontinued operations were $0. Advertising Advertising expenses consist primarily of costs of promotion and marketing for the Company’s image and products, and costs of direct advertising, and are included in selling expenses. The Company expenses all advertising costs as incurred. Advertising expense from continuing operations was $17,998 and $17,072 for the three months ended March 31, 2020 and 2019, respectively. During the three months ended March 31, 2020 and 2019, advertising expense from discontinued operations were $0. Share-based compensation The Company accounts for share-based compensation awards to officers, directors, employees, and for acquiring goods and services from nonemployees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the vesting period. The Company accounts for forfeitures when they occur. Earnings per Share (EPS) Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares pertaining to warrants, stock options, and similar instruments had been issued and if the additional common shares were dilutive. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding unvested restricted stock, options and warrants, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). The following table presents a reconciliation of basic and diluted loss per share for the three months ended March 31, 2020 and 2019: March 31, 2020 March 31, 2019 Net loss from continuing operations $ (1,012,913 ) $ (219,880 ) Net (loss) income from discontinued operations (326,531 ) 72,349 Net loss (1,339,444 ) (147,531 ) Weighted average shares outstanding – basic and diluted* 5,572,196 5,732,511 Loss from continuing operations per share of common stock – basic and diluted $ (0.18 ) $ (0.04 ) (Loss) Income from discontinued operations per share of common stock – basic and diluted $ (0.06 ) $ 0.01 Loss per share of common stock – basic and diluted $ (0.24 ) $ (0.03 ) * Including 41,307 and 177,993 shares that were granted and vested but not yet issued for the three months ended March 31, 2020 and 2019, respectively. For the three months ended March 31, 2020, 171,667 shares purchasable under warrants, 45,600 shares of unvested restricted stock and options to purchase 340,500 shares of the Company’s stock were excluded from the EPS calculation, as their effects were anti-dilutive. For the three months ended March 31, 2019, 171,667 shares purchasable under warrants and 18,000 unvested restricted stock were excluded from EPS calculation, as their effects were anti-dilutive. Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. One major customer accounted for 10% of the Company’s sales from our continuing operations for the three months ended March 31, 2020 and one major customer accounted for 71% of the Company’s sales from our continuing operations for the three months ended March 31, 2019. Gross accounts receivable from these customers were $253,387 and $6,278,704 as of March 31, 2020 and 2019, respectively. The Company purchased its products from four and five major vendors during the three months ended March 31, 2020 and 2019, accounting for a total of 74% (38%, 15%, 11% and 10% each) and a total of 91% (31%, 19%, 18%, 13% and 10% each) of the Company’s purchase from our continuing operations, respectively. Advances made to these vendors were $40,439 and $4,453,901 as of March 31, 2020 and 2019, respectively. Accounts payable to these vendors was $57,182 and $111,351 as of March 31, 2020 and 2019, respectively. Fair Value of Financial Instruments ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the condensed consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. The carrying value of cash, accounts receivable, advances to suppliers, other receivables, accounts payable, advance from customers, other payables and accrued liabilities approximate estimated fair values because of their short maturities. Foreign Currency Translation and Transactions The condensed consolidated financial statements are presented in United States Dollar (“$” or “USD”), which is also the functional currency of Nova LifeStyle, Nova Furniture, Nova Samoa, Nova Macao, Bright Swallow, Diamond Bar and I Design. The Company's subsidiary with operations in Malaysia uses its local currency, Malaysian Ringgit (“RM”), as its functional currency. An entity’s functional currency is the currency of the primary economic environment in which it operates, which is the currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are re-measured at the applicable rates of exchange in effect at that date. Gains and losses resulting from foreign currency re-measurement are included in the statements of comprehensive loss. The financial statements are presented in U.S. dollars. Assets and liabilities are translated into U.S. dollars at the current exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average of the exchange rates in effect during the reporting period. Stockholders’ equity accounts are translated using the historical exchange rates at the date the entry to stockholders’ equity was recorded, except for the change in retained earnings during the period, which is translated using the historical exchange rates used to translate each period’s income statement. Differences resulting from translating functional currencies to the reporting currency are recorded in accumulated other comprehensive income in the balance sheets. Translation of amounts from RM into U.S. dollars has been made at the following exchange rates: Balance sheet items, except for equity accounts March 31, 2020 RM4.31 to 1 December 31, 2019 RM4.09 to 1 Income statement and cash flows items For the period ended March 31, 2020 RM4.18 to 1 Segment Reporting ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Management determined that the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: the design and sale of furniture. Management concluded that the Company had one reportable segment under ASC 280 because Diamond Bar is a furniture distributor based in California focusing on customers in the US, Bright Swallow is a furniture distributor focusing on customers in Canada, and Nova Macao is a furniture distributor based in Macao focusing on international customers, and Nova Malaysia is a furniture retailer and distributor focusing on customers primarily in Malaysia. They are all operated under the same senior management of the Company, and management views the operations of Diamond Bar, Bright Swallow, Nova Macao and Nova Malaysia as a whole for making business decisions. After the disposal of Nova Dongguan and its subsidiaries in October 2016, all of the Company’s long-lived assets are mainly property, plant and equipment located in the United States for administrative purposes. Net sales to customers by geographic area are determined by reference to the physical locations of the Company’s customers. For example, if the products are delivered to a customer in the US, the sales are recorded as generated in the U.S.; if the customer directs us to ship its |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Note 3 - Discontinued Operations On January 7, 2020, the Company transferred its entire interest in Bright Swallow to Y-Tone (Worldwide) Limited, an unrelated third party, for cash consideration of $2.50 million, pursuant to a formal agreement entered into on January 7, 2020. The Company received the payment on May 11, 2020. As of March 31, 2019, operations of Bright Swallow were reported as discontinued operations in the accompanying unaudited condensed consolidated financial statements for all periods presented. Accordingly, assets, liabilities, revenues, expenses and cash flows related to Bright Swallow have been reclassified in the condensed consolidated financial statements as discontinued operations for all periods presented. The following table summarizes the net assets of Bright Swallow at the date of disposal (January 7, 2020): Cash and cash equivalents $ 1,462,200 Accounts receivable, net 969,841 Advance to suppliers 609,935 Accounts payable (948 ) Advance from customers (126,916 ) Accrued liabilities and other payables (2,553 ) Income tax payable (85,028 ) Net assets of Bright Swallow upon disposal 2,826,531 Consideration receivable as of March 31, 2020 (2,500,000 ) Loss on disposal of subsidiary $ (326,531 ) The following table presents the components of discontinued operations in relation to Bright Swallow reported in the condensed consolidated statements of operations: For the three months ended March 31, 2020 March 31, 2019 Sales - $ 1,866,066 Cost of sales - (1,666,735 ) Operating expenses - (103,446 ) Other expense, net - (676 ) Loss on disposal of subsidiary (326,531 ) - (Loss) Income before income taxes (326,531 ) 95,209 Income tax expense - 22,860 (Loss) income from discontinued operations (326,531 ) 72,349 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | Note 4 - Inventories The inventories as of March 31, 2020 and December 31, 2019 totaled $29,356,280 and $29,724,665, respectively, and were all finished goods. |
Plant, Property and Equipment,
Plant, Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | Note 5 - Plant, Property and Equipment, Net As of March 31, 2020, and December 31, 2019, plant, property and equipment consisted of the following: March 31, 2020 December 31, 2019 Computer and office equipment $ 354,055 $ 346,141 Decoration and renovation 251,412 118,858 Less: accumulated depreciation (343,770 ) (328,487 ) $ 261,697 $ 136,512 Depreciation expense from continuing operations was $15,442 and $9,369 for the three months ended March 31, 2020 and 2019, respectively. Depreciation expense from discontinued operations was $0 for the years ended March 31, 2020 and 2019. |
Advances to Suppliers
Advances to Suppliers | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Other Current Assets [Text Block] | Note 6 - Advances to Suppliers The Company makes advances to certain vendors for inventory purchases. The advances on inventory purchases were $27,819,528 and $27,745,184 as of March 31, 2020 and December 31, 2019, respectively. No impairment charges were made on advances to suppliers for the three months ended March 31, 2020 and 2019. |
Intangible Assets, net
Intangible Assets, net | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | Note 7 - Intangible Assets, net The Company acquired a customer relationship with a fair value of $50,000 on August 31, 2011, as part of its acquisition of Diamond Bar. Concurrently with its acquisition of Diamond Bar, the Company entered into a trademark purchase and assignment agreement for all rights, title and interest in two trademarks (Diamond Sofa and Diamond Furniture) for $200,000 paid in full at the closing. Amortization of said customer relationship and the trademarks is provided using the straight-line method and estimated lives were 5 years each. The Company acquired a customer relationship with a fair value of $6,100,559 on April 24, 2013, as part of its acquisition of Bright Swallow. Amortization of said customer relationship is provided using the straight-line method and its estimated life was 15 years. Intangible assets consisted of the following as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Customer relationship $ 50,000 $ 50,000 Trademarks 200,000 200,000 Less: accumulated amortization (250,000 ) (250,000 ) $ - $ - Amortization of intangible assets from continuing operations was $0 for the three months ended March 31, 2020 and 2019. Amortization of intangible assets from discontinued operations was $0 and $101,676 for the three months ended March 31, 2020 and 2019, respectively. |
Prepaid Expenses and Other Rece
Prepaid Expenses and Other Receivables | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other Income and Other Expense Disclosure [Text Block] | Note 8 - Prepaid Expenses and Other Receivables Prepaid expenses and other receivables consisted of the following at March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Prepaid expenses $ 71,480 $ 148,750 Other receivables 95,580 24,857 $ 167,060 $ 173,607 As of March 31, 2020, and December 31, 2019, prepaid expenses and other receivables mainly represented prepaid insurance and a Paypal account balance. |
Accrued Liabilities and Other P
Accrued Liabilities and Other Payables | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | Note 9 - Accrued Liabilities and Other Payables Accrued liabilities and other payables consisted of the following as of March 31, 2020 and December 31, 2019: 2020 2019 Other payables $ 26,274 $ 33,115 Salary payable 11,681 16,419 Financed insurance premiums 22,644 102,354 Accrued rents 17,777 17,733 Accrued commission 43,182 53,850 Accrued expenses, others 206,927 78,293 Equipment payable 143,222 - $ 471,707 $ 301,764 As of March 31, 2020, and December 31, 2019, other accrued expenses mainly included legal and professional fees, utilities and unpaid operating expenses incurred in Malaysia. Other payables represented other tax payable and rebate. |
Lines of Credit
Lines of Credit | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 10 - Lines of Credit On September 19, 2017, Diamond Bar extended the line of credit up to a maximum of $8,000,000 to mature on June 1, 2019. The annual interest rate was 5.50% as of December 31, 2019. The line of credit was secured by all of the assets of Diamond Bar and is guaranteed by Nova LifeStyle. We paid off our lines of credit upon expiration on June 30, 2019. As of March 31, 2020, and December 31, 2019, Diamond Bar had $0 outstanding on the line of credit. During the three months ended March 31, 2020 and 2019, the Company recorded interest expense of $0 and $35,444, respectively. As of March 31, 2020, and December 31, 2019, we do not have any credit facilities. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 11 - Related Party Transactions On September 30, 2011, Diamond Bar leased a showroom in High Point, North Carolina from the Company’s president who is currently also the Chief Executive Officer and Chairman of the Board. The lease is to be renewed and has been renewed each year since 2011. On April 1, 2020, the Company renewed the lease for an additional one year term. The lease was for the amount of $34,561, with a term of one year. During the three months ended March 31, 2020 and 2019, the Company paid rental amounts of $0 and $17,281 that are included in selling expenses, respectively. On January 4, 2018, the Company entered into a sales representative agreement with a consulting firm, which is owned by the Chief Executive Officer and Chairman of the Board, for sales representative service for a term of two years. On January 4, 2020, the Company renewed the agreement for an additional two years. The Company agreed to compensate the sales representative via commission at predetermined rates of the relevant sales amount. During the three months ended March 31, 2020 and 2019, the Company recorded $27,499 and $44,042 as commission expense to this sales representative consulting firm, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Note 12 - Stockholders’ Equity Share repurchase program On December 12, 2017, the Company issued a press release announcing that the Board of Directors of the Company had approved a 10b-18 share repurchase program to repurchase up to $5 million of its outstanding common stock. Under the repurchase program, shares of the Company’s common stock may be repurchased from time to time over the next 12 months. The program expired on December 8, 2018 and no shares have been repurchased under the program. On June 4, 2019, the Board of Directors of the Company adopted a 10b-18 share repurchase program to repurchase up to $2 million of its common stock. The share repurchase authorization permits shares to be repurchased from time to time at the discretion of the Company’s management, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The program is effective as of June 5, 2019 and will expire on June 4, 2020. During the three months ended March 31, 2020 and 2019, the Company repurchased 0 shares of its common stock. On December 11, 2019, the Company closed out this repurchase program. As of December 31, 2019, the Company repurchased a total of 172,740 shares of its common stock. Warrants The following is a summary of the warrant activity for the three months ended March 31, 2020: Number of Warrants Average Exercise Price Weighted Average Remaining Contractual Term in Years Outstanding at January 1, 2020 171,667 $ 13.55 0.92 Exercisable at January 1, 2020 171,667 $ 13.55 0.92 Granted - - - Exercised / surrendered - - - Expired - - - Outstanding at March 31, 2020 171,667 $ 13.55 0.67 Exercisable at March 31, 2020 171,667 $ 13.55 0.67 Shares Issued to Consultants On June 30, 2017, the Company entered into a consulting agreement with a consultant for business advisory service for a term of 12 months. The Company agreed to compensate the consultant a one-time amount of $10,000 worth of shares of the Company’s common stock based on the price per share on June 30, 2017. The Company also granted the consultant $10,000 worth of shares of the Company’s common stock per month starting from July 1, 2017 for a period of 12 months. The shares were issued pursuant to Nova LifeStyle, Inc.’s 2014 Omnibus Long-Term Incentive Plan (the “Plan”) approved by the Board of Directors (“Board”) of the Company on May 13, 2014 and ratified at the annual shareholder meeting on June 30, 2014. The Plan was registered under Form S-8 on July 30, 2014. On June 12, 2018, the Company renewed the agreement with the consultant for an additional year and agreed to compensate the consultant $10,000 worth of shares of the Company’s common stock per month starting from July 1, 2018 for a period of 12 months. The shares will be issued pursuant to the Plan. On January 31, 2019, the Company terminated the agreement. During the three months ended March 31, 2019, the Company recorded $10,000 as consulting expense. On November 16, 2018, the Company entered into a consulting agreement with a consultant for consulting and strategy services effective on November 16, 2018 for one year. The Company agreed to grant the consultant 20,000 shares of the Company’s common stock. Twenty-five percent (25%) of those shares vested on February 15, 2019 and 25% on May 15, 2019; 25% vested on August 15, 2019 and the remaining 25% vested on November 15, 2019. The fair value of 20,000 shares was $90,000 which was calculated based on the stock price of $4.50 per share on November 16, 2018 and was amortized over the service term. The shares were issued pursuant to the Plan. During the three months ended March 31, 2020 and 2019, the Company amortized $0 and $22,500 as consulting expenses, respectively. On December 1, 2018, the Company entered into a consulting agreement with a consultant for business advisory services effective as of January 1, 2019 and ending on December 31, 2019. The Company granted the consultant $15,000 worth of shares of the Company’s common stock per month starting from January 1, 2019 for 12 months. The shares were granted pursuant to the Plan. On January 1, 2019, the consultant terminated the agreement for personal reasons. On November 16, 2019, the Company entered into a consulting agreement with a consultant for consulting and strategy services effective on November 16, 2019 for a one year term. The Company agreed to grant the consultant 20,000 shares of the Company’s common stock. Twenty-five percent (25%) of those shares vested on February 15, 2020, 25% will vest on May 15, 2020; 25% will vest on August 15, 2020 and the remaining 25% will vest on November 15, 2020. The fair value of 20,000 shares was $51,000 which was calculated based on the stock price of $2.55 per share on November 18, 2019 and will be amortized over the service term. The shares would be issued pursuant to the Plan. During the three months ended March 31, 2020, the Company amortized $12,750 as consulting expenses. Shares and Warrants Issued through Private Placement Private Placement on May 28, 2015 On May 28, 2015, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers (the “Purchasers”) pursuant to which the Company offered to the Purchasers, in a registered direct offering, an aggregate of 594,102 shares of common stock, par value $0.001 per share. Of these, 400,000 shares were sold to the Purchasers at a negotiated purchase price of $10.00 per share, for aggregate gross proceeds to the Company of $4,000,002, before deducting fees to the placement agent and other estimated offering expenses payable by the Company. In accordance with the terms of the Purchase Agreement, the Company exchanged outstanding 2014 Series A Warrants with their holders for 132,006 shares of common stock, and exchanged the outstanding 2014 Series C Warrants with their holders for 62,096 shares of common stock. In a concurrent private placement, the Company also sold to the Purchasers a warrant to purchase one share of the Company’s common stock for each share purchased for cash in the offering, pursuant to that certain Common Stock Purchase Warrant, by and between the Company and each Purchaser (the “2015 Warrants”). The 2015 Warrants became exercisable beginning on the six month anniversary of the date of issuance (the “Initial Exercise Date”) at an exercise price of $13.55 per share and will expire on the five year anniversary of the Initial Exercise Date. The purchase price of one share of the Company’s common stock under the 2015 Warrants is equal to the exercise price. The warrants issued in the private placement described above are exercisable for a fixed number of shares, and are classified as equity instruments under ASC 815-40-25-10. The Company accounted for the warrants issued in the 2015 private placement based on the fair value method under ASC Topic 505, and the fair value of the warrants was calculated using the Black-Scholes model under the following assumptions: estimated life of 5 years, volatility of 107%, risk-free interest rate of 1.55% and dividend yield of 0%. No estimate of forfeitures was made as the Company has a short history of granting options and warrants. The fair value of the warrants issued to investors at grant date was $3,147,530. Shares and Options Issued to Independent Directors On November 7, 2018, the Company entered into stock option agreements under the 2014 Omnibus Long-Term Incentive Plan with the three independent members of the board of directors. The Company agreed to grant the Company’s three independent directors options to purchase an aggregate of 60,000 shares of the Company’s common stock at an exercise price of $5.90 per share, with a term of 5 years. Twenty-five percent (25%) of those stock options vested on November 30, 2018, 25% vested on February 28, 2019, 25% on May 31, 2019, and the remaining 25% vested on August 31, 2019. The fair value of the stock options granted is estimated on the date of the grant using the Black-Scholes option pricing model (“BSOPM”) as described above. The fair value of the options was calculated using the following assumptions: estimated life of ten years, volatility of 84%, risk free interest rate of 3.07%, and dividend yield of 0%. The fair value of 60,000 stock options was $240,105 at the grant date. During the three months ended March 31, 2019, the Company recorded $60,026 as directors’ stock compensation expenses. On November 4, 2019, the Company entered into stock option agreements under the 2014 Omnibus Long-Term Incentive Plan with the three independent members of the board of directors. The Company agreed to grant the Company’s three independent directors options to purchase an aggregate of 60,000 shares of the Company’s common stock at an exercise price of $2.80 per share, with a term of 5 years. Twenty-five percent (25%) of those stock options vested on November 30, 2019, 25% vested on February 28, 2020, 25% on May 31, 2020, and the remaining 25% will vest on August 31, 2020. The fair value of the stock options granted is estimated on the date of the grant using the Black-Scholes option pricing model (“BSOPM”) as described above. The fair value of the options was calculated using the following assumptions: estimated life of ten years, volatility of 87%, risk free interest rate of 1.60%, and dividend yield of 0%. The fair value of 60,000 stock options was $114,740 at the grant date. During the three months ended March 31, 2020, the Company recorded $28,685 as directors’ stock compensation expenses. Shares Issued to Employees and Service Providers On February 27, 2018, the Company renewed an employment agreement with the Company’s Corporate Secretary for a term of one year. The Company agreed to grant an award of 6,000 restricted Stock Units to the officer pursuant to the Company’s 2014 Omnibus Long-Term Incentive Plan. The fair value of these shares was $68,100, which was calculated based on the stock price of $11.35 per share on February 27, 2018, the date the awards were determined by the Compensation Committee of the Board. 25% of those shares vested on February 27, 2018, 25% on March 31, 2018, 25% on June 30, 2018 and the remaining 25% vested on September 30, 2018. During the three months ended March 31, 2019, the Company amortized $10,821 as stock compensation. On December 13, 2018, the Company extended an employment agreement with the Company’s Corporate Secretary for a term of one year. The Company agreed to grant an award of 6,000 restricted Stock Units to the officer pursuant to the Company’s 2014 Omnibus Long-Term Incentive Plan. The fair value of these shares was $23,100, which was calculated based on the stock price of $3.85 per share on December 13, 2018, the date the awards were determined by the Compensation Committee of the Board. Twenty-five percent (25%) of those shares vested on December 13, 2018, 25% on March 31, 2019, 25% on June 30, 2019 and the remaining 25% vested on September 30, 2019. During the three months ended March 31, 2019, the Company amortized $5,775 as stock compensation. On December 14, 2019, the Company extended an employment agreement with the Company’s Corporate Secretary for a term of one year. The Company agreed to grant an award of 6,000 restricted Stock Units to the officer pursuant to the Company’s 2014 Omnibus Long-Term Incentive Plan. The fair value of these shares was $12,780, which was calculated based on the stock price of $2.13 per share on January 31, 2020, the date the awards were determined by the Compensation Committee of the Board. Twenty-five percent (25%) of those shares vested on January 31, 2020, 25% on March 31, 2020, 25% on June 30, 2020 and the remaining 25% vested on September 30, 2020. During the three months ended March 31, 2020, the Company amortized $3,195 as stock compensation. Options Issued to Employees On August 24, 2018 (the “Grant Date”), the Board approved an option grant to the Company’s CFO to purchase an aggregate of 7,000 shares of the Company’s common stock at an exercise price of $9.25 per share, with a term of 5 years, pursuant to the Company’s 2014 Omnibus Long-Term Incentive Plan. Fifty percent (50%) of those stock options vested immediately, and the remaining 50% vested on the six-month anniversary of the Grant Date. The fair value of the option granted to the CFO in 2018 is recognized as compensation expense over the vesting period of the stock option award. The fair value of the options was calculated using the following assumptions: estimated life of ten years, volatility of 84%, risk free interest rate of 2.72%, and dividend yield of 0%. The fair value of 7,000 stock options was $43,680 at the grant date. During three months ended March 31, 2019, the Company recorded $21,840 as stock compensation. On August 12, 2019, the Board approved an option grant to the Company’s CFO to purchase an aggregate of 7,000 shares of the Company’s common stock at an exercise price of $3.85 per share, with a term of 5 years, pursuant to the Company’s 2014 Omnibus Long-Term Incentive Plan. Fifty percent (50%) of those stock options vested immediately, and the remaining 50% vested on the six-month anniversary of the Grant Date. The fair value of the option granted to the CFO in 2019 is recognized as compensation expense over the vesting period of the stock option award. The fair value of the options was calculated using the following assumptions: estimated life of ten years, volatility of 87%, risk free interest rate of 1.49%, and dividend yield of 0%. The fair value of 7,000 stock options was $18,318 at the grant date. During the three months ended March 31, 2020, the Company recorded $9,159 as stock compensation. As of March 31, 2020, unrecognized share-based compensation expense was $97,097. Stock option activity under the Company’s stock-based compensation plans is shown below: Number of Average Aggregate Intrinsic (1) Weighted Outstanding at January 1, 2020 340,500 $ 5.97 $ - 3.33 Exercisable at January 1, 2020 292,000 6.48 $ - 3.08 Granted - - - - Exercised - - - - Forfeited - - - - Outstanding at March 31, 2020 340,500 $ 5.97 $ - 3.08 Exercisable at March 31, 2020 310,500 $ 6.27 $ - 2.94 (1) The intrinsic value of the stock options at March 31, 2020 is the amount by which the market value of the Company’s common stock of $1.10 as of March 31, 2020 exceeds the exercise price of the option. Statutory Reserves As a U.S. holding company, the Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiary, Nova Macao, only out of the subsidiary’s retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Nova Macao. Pursuant to the corporate laws of the PRC and Macao, including the PRC Regulations on Enterprises with Foreign Investment, Nova Macao is required to maintain a statutory reserve by appropriating from after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings. As a result of the Macau laws and regulations that require annual appropriations of 10% of after-tax income to be set aside prior to payment of dividends as a general statutory reserve fund until such reserve balance reaches 50% of the subsidiary’s registered capital. Nova Macao is restricted in its ability to transfer a portion of its net assets to the Company as a dividend. Surplus Reserve Fund At March 31, 2020 and December 31, 2019, Nova Macao had surplus reserves of $6,241, representing 50% of its registered capital. Common Welfare Fund The common welfare fund is a voluntary fund to which Nova Macao can elect to transfer 5% to 10% of its net income. This fund can only be utilized on capital items for the collective benefit of the subsidiary’s employees, such as construction of dormitories, cafeteria facilities, and other staff welfare facilities. This fund is non-distributable other than upon liquidation. Nova Macao does not participate in this voluntary fund. |
Geographical Sales
Geographical Sales | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Note 13 - Geographical Sales Geographical distribution of sales from continuing operations consisted of the following for the three months ended March 31, 2020 and 2019: March 31, 2020 March 31, 2019 Geographical Areas North America $ 2,184,856 $ 2,516,038 China - 6,278,704 Other countries 18,364 - $ 2,203,220 $ 8,794,742 |
Lease
Lease | 3 Months Ended |
Mar. 31, 2020 | |
ASU 2016-02 Transition [Abstract] | |
Lessee, Operating Lease, Disclosure [Table Text Block] | Note 14 - Lease On June 17, 2013, the Company entered into a lease agreement for office, warehouse, storage, and distribution space with a five year term, commencing on November 1, 2013 and expiring on October 31, 2018. The lease agreement also provides an option to extend the term for an additional six years. On April 23, 2018, the Company extended the lease for another 36 months with an expiration date of October 31, 2021. The monthly rental payment is $42,000 with an annual 3% increase. The Company has entered into several lease agreements for office and warehouse space in Commerce, California and showroom space in Las Vegas, Nevada and High Point, North Carolina on monthly or annual terms. On July 15, 2019, Nova Malaysia entered into a sublease agreement for warehouse space with a two year term, expiring on July 14, 2021. The monthly rental payment is 20,000 Malaysia Ringgit ($4,783). On October 29, 2019, Nova Malaysia entered into a lease agreement for office space with a two year term, commencing on December 1, 2019 and expiring on November 30, 2021. The monthly rental payment is 9,280 Malaysia Ringgit ($2,219). The operating lease expense for the three months ended March 31, 2020 and 2019 were as follows: Three months ended March 31, 2020 2019 Operating lease cost $ 176,252 $ 155,245 The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2020: Operating Leases 12 months ending March 31, 2021 $ 690,790 2022 658,729 2023 646,433 2024 665,825 Thereafter 338,667 Total undiscounted cash flows 3,000,444 Less: imputed interest (315,741 ) Present value of lease liabilities 2,684,703 Lease Term and Discount Rate March 31, 2020 Weighted-average remaining lease term - years Operating leases - USA 4.59 Operating leases - Malaysia 1.46 Weighted-average discount rate (%) Operating leases - USA 5.00 % Operating leases - Malaysia 3.73 % |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 15 - Commitments and Contingencies Legal Proceedings On December 28, 2018, a federal putative class action complaint was filed by George Barney against the Company and its former and current CEOs and CFOs (Thanh H. Lam, Ya Ming Wong, Jeffery Chuang and Yuen Ching Ho) in the United States District Court for the Central District of California, claiming the Company violated federal securities laws and pursuing remedies under Sections 10(b) and 20(a) of the Security Exchange Act of 1934 and Rule 10b-5 (the “Barney Action”). Richard Deutner and ITENT EDV were subsequently substituted as plaintiffs and, on June 18, 2019, they filed an Amended Complaint. In the Amended Complaint, plaintiffs seek to recover compensatory damages caused by the Company’s alleged violations of federal securities laws during the period from December 3, 2015 through December 20, 2018. Plaintiffs claim that the Company: (1) overstated its purported strategic alliance with a customer in China to operate as lead designer and manufacturer for all furnishings in such customer’s planned $460 million senior care center in China; (2) the Company inflated its reported sales in 2016 and 2017 with the Company’s two major customers; and (3) as a result, the Company’s public statements were materially false and misleading at all relevant times. In support of these claims, plaintiffs rely primarily upon a blog appearing in Seeking Alpha Seeking Alpha Independently of the litigation, the Audit Committee engaged the Company’s auditor to perform special procedures to confirm the reported sales. Those procedures included but were not limited to the examination and testing of relevant documentation relating to the sales made by the Company to the customers identified in the purported research report for the periods 2015-2018, and 100% sampling of all transactions between the Company and the subject customers. The Audit Committee finished its special procedures in March 2019 and the Company’s independent auditor has reported to the Audit Committee that, regarding the four subject customers mentioned in the purported research report, the special procedures resulted in no evidence of fictitious sales or of fictitious customers. Please see the details in the Form 8-K filed by the Company with SEC on March 29, 2019. On March 8, 2019, in the United States District Court for the Central District of California, shareholder Jie Yuan (the “Jie Action”) filed a derivative lawsuit purportedly on behalf of the Company against its former and current CEOs and CFOs (Thanh H. Lam, Ya Ming Wong, Jeffery Chuang and Yuen Ching Ho) and directors (Charlie Huy La, Bin Liu, Umesh Patel, and Min Su) and vice president (Steven Qiang Liu) (collectively, the “Defendants”) seeking to recover any losses the Company sustains as a result of alleged securities violations outlined in the Seeking Alpha Barney On May 15, 2019, Wilson Samuels (the “Samuels Action”) also filed a putative derivative complaint purportedly on behalf of the Company against the same current and former directors and officers named in the Jie Action other than Steven Qiang Liu. That action was filed in the United States District Court for the Central District of California. Samuels repeats the allegations of the Complaint in the Jie Action. Additionally, Samuels claims that, in announcing its change of auditing firms in September 2016, the Company asserted that this change was made because its existing auditor ceased auditing public companies subject to regulation in the United States without disclosing that its new auditing firm was created in a merger of three accounting firms, including a firm whose registration was revoked by the Public Company Accounting Oversight Board. Samuels also claims that the Company redeemed its stock in reliance upon the same purported fraudulent recognition of revenues claimed in the putative class action. He purports to state direct claims under Sections 10(b) and 20 of the Exchange Act and SEC Rule 10b-5. On March 3, 2020, defendants filed in each of the derivative actions motions to stay those proceedings until the Barney Action is resolved or alternatively to dismiss on the grounds that plaintiffs’ failure to make demand upon the Board was not excused and the Complaints otherwise fail to state a claim upon which relief can be granted. By Order entered April 7, 2020, the Court granted defendants’ Motion to Stay and stayed the Jie Action until the Barney Action is resolved. The Motion to Stay and Dismiss remains pending in the Samuels Action. The Court subsequently entered a similar Order in the Samuels Action. It also took a motion the derivative plaintiffs filed to consolidate the proceedings and appoint lead counsel off calendar. While these derivative actions are purportedly asserted on behalf of the Company, it is possible that the Company may directly incur attorneys’ fees and is advancing the costs of defense for its current directors and officers pursuant to contractual and legal indemnity obligations. The Company believes there is no basis to the derivative complaints and they will be vigorously defended. Other than the above, the Company is not currently a party to any legal proceeding, investigation or claim which, in the opinion of the management, is likely to have a material adverse effect on the business, financial condition or results of operations. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 16 - Subsequent Events After the close of the quarter to which these financial statements relate, the Company experienced (and continues to experience) significant adverse impacts of novel coronavirus (COVID-19) and the related public health orders. The Company’s two showrooms and warehouse in Kuala Lumpur have been closed since March 18, 2020. The Los Angeles facility has been closed since March 16, 2020. A skeleton staff worked in that facility each day (i) to receive shipping containers of products delivered from the Company’s contract manufacturers and (ii) to ship products to customers. On May 12, 2020, the Company in Kuala Lumpur office reopened for business. The Company is experiencing reduced demand for its products and an increased level of purchase order cancellations as a result of the COVID-19 pandemic. The third-party contract manufacturers that the Company utilizes in China were closed from the beginning of the Lunar New Year Holiday through the beginning of March. Certain of the Company’s new products are being sourced from manufacturers in India and Malaysia starting in 2020. The factories in India and Malaysia have suspended their operations as a result of the Covid-19 pandemic during March through early May 2020. Currently, the factories in both countries have resumed their operations. Finally, the Company expects that the impact of the COVID-19 outbreak on the United States and world economies will have a material adverse impact on the demand for its products. Because of the significant uncertainties surrounding the COVID-19 pandemic, the extent of the business interruption and the related financial impact cannot be reasonably estimated at this time. On May 4, 2020, the Company received loan proceeds in the amount of approximately $139,802 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months. Diamond Bar intends to use the proceeds for purposes consistent with the PPP. On May 5, 2020, Diamond Bar was granted a loan from Cathay Bank in the aggregate amount of $176,294, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Loan, which was in the form of a Note dated May 5, 2020 matures on May 5, 2022 and bears interest at a rate of 1.00% per annum, payable monthly commencing on May 5, 2020. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations. The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. On June 19, 2020, Diamond Bar was granted a U.S. Small Business Administration (SBA) loan in the aggregate amount of $150,000, pursuant to the Economic Injury Disaster Loan. The Loan, which was in the form of a promissory note dated June 19, 2020 matures on June 18, 2050 and bears interest at a rate of 3.75% per annum, payable monthly beginning 12 months from the date of the promissory note. Funds from the Loan may only be used for working capital. The loan was secured by all tangible and intangible property of the Diamond Bar. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. The interim condensed consolidated financial information as of March 31, 2020 and for the three month periods ended March 31, 2020 and 2019 have been prepared without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The interim condensed consolidated financial information should be read in conjunction with the Financial Statements and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, previously filed with the SEC on May 12, 2020. In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s interim condensed consolidated financial position as of March 31, 2020, its interim condensed consolidated results of operations and cash flows for the three month periods ended March 31, 2020 and 2019, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods. |
Reverse Split, Policy [Policy Text Block | Reverse split On December 18, 2019, the Company filed a Certificate of Change with the Secretary of State of Nevada with an effective date of December 20, 2019, at which time a 1-for-5 reverse stock split of the Company’s authorized shares of common stock, par value $0.001, accompanied by a corresponding decrease in the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”), was effected. All references to shares and per share data have been retroactively restated to reflect such split. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates In preparing condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include, but are not limited to, revenue recognition, the allowance for bad debt, valuation of inventories, the valuation of stock-based compensation, income taxes and unrecognized tax benefits, valuation allowance for deferred tax assets, assumptions used in assessing impairment of long-lived assets and goodwill, and loss contingencies. Actual results could differ from those estimates. |
Business Combinations Policy [Policy Text Block] | Business Combination For a business combination, the assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree are recognized at the acquisition date and measured at their fair values as of that date. In a business combination achieved in stages, the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, are recognized at the full amounts of their fair values. In a bargain purchase in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any noncontrolling interest in the acquiree, that excess in earnings is recognized as a gain attributable to the acquirer. Deferred tax liability and assets are recognized for the deferred tax consequences of differences between the tax bases and the recognized values of assets acquired and liabilities assumed in a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 740-10. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill is the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC Topic 350, “Intangibles-Goodwill and Other,” goodwill is not amortized but is tested for impairment, annually or more frequently when circumstances indicate a possible impairment may exist. Impairment testing is performed at a reporting unit level. An impairment loss generally would be recognized when the carrying amount of the reporting unit exceeds its fair value, with the fair value of the reporting unit determined using discounted cash flow (“DCF”) analysis. A number of significant assumptions and estimates are involved in the application of the DCF analysis to forecast operating cash flows, including the discount rate, the internal rate of return and projections of realizations and costs to produce. Management considers historical experience and all available information at the time the fair values of its reporting units are estimated. ASC Topic 350 also permits an entity to first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the two-step goodwill impairment test is required to be performed. Otherwise, no further testing is required. Performing the qualitative assessment involved identifying the relevant drivers of fair value, evaluating the significance of all identified relevant events and circumstances, and weighing the factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. After evaluating and weighing all these relevant events and circumstances, it was concluded that a positive assertion can be made from the qualitative assessment that it is more likely than not that the fair value of Diamond Bar is greater than its carrying amount. As such, it is not necessary to perform the two-step goodwill impairment test for the Diamond Bar reporting unit. Accordingly, as of March 31, 2020 and 2019, the Company concluded there was no impairment of goodwill of Diamond Bar. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | Accounts Receivable The Company’s accounts receivable arises from product sales. The Company does not adjust its receivables for the effects of a significant financing component at contract inception if it expects to collect the receivables in one year or less from the time of sale. The Company does not expect to collect receivables greater than one year from the time of sale. The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. An analysis of the allowance for doubtful accounts is as follows: Balance at January 1, 2020 $ 3,942 Provision for the period - Reversal – recoveries by cash (23 ) Balance at March 31, 2020 $ 3,919 During the three months ended March 31, 2020 and 2019, bad debts reversal from continuing operations were $23 and $169,432, respectively. During the three months ended March 31, 2020 and 2019, bad debt provision and write-offs from discontinued operations were $0. |
Advances to Suppliers Policy [Policy Text Block] | Advances to Suppliers Advances to suppliers are reported net of allowance when the Company determines that amounts outstanding are not likely to be collected in cash or utilized against purchase of inventories. Based on its historical record and in normal circumstances, the Company receives goods within 5 to 9 months from the date the advance payment is made. Due to the COVID-19 pandemic, freight transportation of products from our international suppliers has been delayed or suspended during the outbreak. As such, no reserve on supplier prepayments had been made or recorded by the Company. Any provisions for allowance for advances to suppliers, if deemed necessary, are included in general and administrative expenses in the condensed consolidated statements of comprehensive income (loss). During the three months ended March 31, 2020 and 2019, no provision was made on advances to suppliers. |
Inventory, Policy [Policy Text Block] | Inventories Inventories are stated at the lower of cost and net realizable value, with cost determined on a weighted-average basis. Write-down of potential obsolete or slow moving inventories is recorded based on management’s assumptions about future demands and market conditions. There were no write-downs of inventories from the Company’s continuing operation for the three months ended March 31, 2020 and 2019. |
Property, Plant and Equipment, Policy [Policy Text Block] | Plant, Property and Equipment Plant, property and equipment are stated at cost, net of accumulated depreciation and impairment losses, if any. Expenditures for maintenance and repairs are expensed as incurred, while additions, renewals and improvements are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with no salvage value and estimated lives as follows: Computer and office equipment 5 - 10 years Decoration and renovation 5 - 10 years |
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | Impairment of Long-Lived Assets Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group asset group exceeds its fair value based on discounted cash flow analysis or appraisals. |
Stockholders' Equity, Policy [Policy Text Block] | Treasury Stock Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or charged to additional paid-in capital using the average-cost method. Upon retirement of treasury stock, the amounts in excess of par value are charged entirely to retained earnings. |
Research and Development Expense, Policy [Policy Text Block] | Research and Development Research and development costs are related primarily to the Company designing and testing its new products during the development stage. Research and development costs are recognized in general and administrative expenses and expensed as incurred. Research and development expenses from continuing operations were $12,266 and $16,521 for the three months ended March 31, 2020 and 2019, respectively. During the three months ended March 31, 2020 and 2019, research and development costs from discontinued operations were $0. |
Income Tax, Policy [Policy Text Block] | Income Taxes In its interim financial statements, the Company follows the guidance in ASC 270 “Interim Reporting” and ASC 740 “Income Taxes” whereby the Company utilizes the expected annual effective rate in determining its income tax provision. The income tax benefit for the three months ended March 31, 2020 is approximately $6,000 and is primarily related to quarter-to-date losses generated from U.S. operations. The income tax expense for the three months ended March 31, 2019 is approximately $105,000 and is primarily related to quarter-to-date losses generated from U.S. operations. Income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of ASC Topic 740, when tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Nova Lifestyle, Inc. and Diamond Bar Outdoors, Inc. (“Diamond Bar”) are subject to U.S. federal and state income taxes. Nova Furniture BVI and Bright Swallow International Group Limited (“BSI”) were incorporated in the BVI, Nova Samoa was incorporated in Samoa, and Nova Macau was incorporated in Macau. There is no income tax for companies domiciled in the BVI, Samoa and Macau. Accordingly, the Company’s condensed consolidated financial statements do not present any income tax provisions related to the BVI, Samoa and Macau tax jurisdictions where Nova Furniture BVI and BSI, Nova Samoa and Nova Macau are domiciled. Nova Living (M) SDN. BHD, (“Nova Malaysia”) is incorporated in Malaysia and is subject to Malaysia income taxes. The Tax Cuts and Jobs Act of 2017 (the “Act”) created new taxes on certain foreign-sourced earnings such as global intangible low-taxed income (“GILTI”) under IRC Section 951A, which is effective for the Company for tax years beginning after January 1, 2018. For the quarter ended March 31, 2020, the Company has calculated its best estimate of the impact of the GILTI in its income tax provision in accordance with its understanding of the Act and guidance available as of the date of this filing. A reconciliation of the January 1, 2020 through March 31, 2020 amount of unrecognized tax benefits excluding interest and penalties (“Gross UTB”) is as follows: Gross UTB 2020 Balance $ 12,547 Decrease in unrecorded tax benefits taken, related to the Company’s continuing operations - Foreign exchange adjustment - Balance $ 12,547 At March 31, 2020 and December 31, 2019, the Company had cumulatively accrued approximately $1,403 and $1,278 for estimated interest and penalties related to unrecognized tax benefits, respectively, related to the Company’s continuing operations. The Company recorded interest and penalties related to unrecognized tax benefits as a component of income tax expense, which totaled $125 and $1,600 for the three months ended March 31, 2020, and 2019, respectively, related to the Company’s continuing operations. The Company does not anticipate any significant changes to its unrecognized tax benefits within the next 12 months. At December 31, 2019, the Company had cumulatively accrued approximately $0 for estimated interest and penalties related to unrecognized tax benefits related to the Company’s discontinued operations. The Company recorded interest and penalties related to unrecognized tax benefits as a component of income tax expense, which totaled $nil and $24,000 for the three months ended March 31, 2020, and 2019, respectively, related to the Company’s discontinued operations. As of March 31, 2020, unrecognized tax benefits were approximately $14,000. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate was $14,000 as of March 31, 2020. As of March 31, 2019, unrecognized tax benefits were approximately $0.7 million. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate was $0.7 million as of March 31, 2019. Nova Lifestyle and Diamond Bar are subject to U.S. federal and state income taxes and tax years 2016-2019 remain open to examination by tax authorities in the U.S. |
Revenue [Policy Text Block] | Revenue Recognition The Company recognizes revenues when its customers obtain control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identifies contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenues when (or as) it satisfies the performance obligation. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial. Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers. Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, returns and rebates. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to the Company’s customer. The Company’s sales policy allows for product returns within the warranty period if the product is defective and the defects are the Company’s fault. As alternatives to the product return option, the customers have the option of requesting a discount from the Company for products with quality issues or of receiving replacement parts from the Company at no cost. The amount for product returns, the discount provided to the Company’s customers, and the costs for replacement parts were immaterial for the three months ended March 31, 2020 and 2019. The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling expenses on the Company’s condensed consolidated statements of comprehensive income (loss). |
Cost of Goods and Service [Policy Text Block] | Cost of Sales Cost of sales consists primarily of costs of finished goods purchased from third-party manufacturers and write-downs of inventory. |
Shipping and Handling Cost, Policy [Policy Text Block] | Shipping and Handling Costs Shipping and handling costs related to delivery of finished goods are included in selling expenses. During the three months ended March 31, 2020 and 2019, shipping and handling costs from continuing operations were $349 and $409, respectively. During the three months ended March 31, 2020 and 2019, shipping and handling costs from discontinued operations were $0. |
Advertising Cost [Policy Text Block] | Advertising Advertising expenses consist primarily of costs of promotion and marketing for the Company’s image and products, and costs of direct advertising, and are included in selling expenses. The Company expenses all advertising costs as incurred. Advertising expense from continuing operations was $17,998 and $17,072 for the three months ended March 31, 2020 and 2019, respectively. During the three months ended March 31, 2020 and 2019, advertising expense from discontinued operations were $0. |
Share-based Payment Arrangement [Policy Text Block] | Share-based compensation The Company accounts for share-based compensation awards to officers, directors, employees, and for acquiring goods and services from nonemployees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the vesting period. The Company accounts for forfeitures when they occur. |
Earnings Per Share, Policy [Policy Text Block] | Earnings per Share (EPS) Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares pertaining to warrants, stock options, and similar instruments had been issued and if the additional common shares were dilutive. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding unvested restricted stock, options and warrants, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). The following table presents a reconciliation of basic and diluted loss per share for the three months ended March 31, 2020 and 2019: March 31, 2020 March 31, 2019 Net loss from continuing operations $ (1,012,913 ) $ (219,880 ) Net (loss) income from discontinued operations (326,531 ) 72,349 Net loss (1,339,444 ) (147,531 ) Weighted average shares outstanding – basic and diluted* 5,572,196 5,732,511 Loss from continuing operations per share of common stock – basic and diluted $ (0.18 ) $ (0.04 ) (Loss) Income from discontinued operations per share of common stock – basic and diluted $ (0.06 ) $ 0.01 Loss per share of common stock – basic and diluted $ (0.24 ) $ (0.03 ) * Including 41,307 and 177,993 shares that were granted and vested but not yet issued for the three months ended March 31, 2020 and 2019, respectively. For the three months ended March 31, 2020, 171,667 shares purchasable under warrants, 45,600 shares of unvested restricted stock and options to purchase 340,500 shares of the Company’s stock were excluded from the EPS calculation, as their effects were anti-dilutive. For the three months ended March 31, 2019, 171,667 shares purchasable under warrants and 18,000 unvested restricted stock were excluded from EPS calculation, as their effects were anti-dilutive. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. One major customer accounted for 10% of the Company’s sales from our continuing operations for the three months ended March 31, 2020 and one major customer accounted for 71% of the Company’s sales from our continuing operations for the three months ended March 31, 2019. Gross accounts receivable from these customers were $253,387 and $6,278,704 as of March 31, 2020 and 2019, respectively. The Company purchased its products from four and five major vendors during the three months ended March 31, 2020 and 2019, accounting for a total of 74% (38%, 15%, 11% and 10% each) and a total of 91% (31%, 19%, 18%, 13% and 10% each) of the Company’s purchase from our continuing operations, respectively. Advances made to these vendors were $40,439 and $4,453,901 as of March 31, 2020 and 2019, respectively. Accounts payable to these vendors was $57,182 and $111,351 as of March 31, 2020 and 2019, respectively. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the condensed consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. The carrying value of cash, accounts receivable, advances to suppliers, other receivables, accounts payable, advance from customers, other payables and accrued liabilities approximate estimated fair values because of their short maturities. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation and Transactions The condensed consolidated financial statements are presented in United States Dollar (“$” or “USD”), which is also the functional currency of Nova LifeStyle, Nova Furniture, Nova Samoa, Nova Macao, Bright Swallow, Diamond Bar and I Design. The Company's subsidiary with operations in Malaysia uses its local currency, Malaysian Ringgit (“RM”), as its functional currency. An entity’s functional currency is the currency of the primary economic environment in which it operates, which is the currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are re-measured at the applicable rates of exchange in effect at that date. Gains and losses resulting from foreign currency re-measurement are included in the statements of comprehensive loss. The financial statements are presented in U.S. dollars. Assets and liabilities are translated into U.S. dollars at the current exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average of the exchange rates in effect during the reporting period. Stockholders’ equity accounts are translated using the historical exchange rates at the date the entry to stockholders’ equity was recorded, except for the change in retained earnings during the period, which is translated using the historical exchange rates used to translate each period’s income statement. Differences resulting from translating functional currencies to the reporting currency are recorded in accumulated other comprehensive income in the balance sheets. Translation of amounts from RM into U.S. dollars has been made at the following exchange rates: Balance sheet items, except for equity accounts March 31, 2020 RM4.31 to 1 December 31, 2019 RM4.09 to 1 Income statement and cash flows items For the period ended March 31, 2020 RM4.18 to 1 |
Segment Reporting, Policy [Policy Text Block] | Segment Reporting ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Management determined that the Company’s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in one business and industry segment: the design and sale of furniture. Management concluded that the Company had one reportable segment under ASC 280 because Diamond Bar is a furniture distributor based in California focusing on customers in the US, Bright Swallow is a furniture distributor focusing on customers in Canada, and Nova Macao is a furniture distributor based in Macao focusing on international customers, and Nova Malaysia is a furniture retailer and distributor focusing on customers primarily in Malaysia. They are all operated under the same senior management of the Company, and management views the operations of Diamond Bar, Bright Swallow, Nova Macao and Nova Malaysia as a whole for making business decisions. After the disposal of Nova Dongguan and its subsidiaries in October 2016, all of the Company’s long-lived assets are mainly property, plant and equipment located in the United States for administrative purposes. Net sales to customers by geographic area are determined by reference to the physical locations of the Company’s customers. For example, if the products are delivered to a customer in the US, the sales are recorded as generated in the U.S.; if the customer directs us to ship its products to China, the sales are recorded as sold in China. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements Recent Adopted Accounting Standards In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for Level 1, Level 2 and Level 3 instruments in the fair value hierarchy. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for any eliminated or modified disclosures. The Company applied the new standard beginning January 1, 2020. Recently issued accounting pronouncements not yet adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. Adoption of the ASUs is on a modified retrospective basis. As a smaller reporting company, the standard will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact that the standard will have on its condensed consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis. As a smaller reporting company, the standard will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistent application among reporting entities. The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this update will have on its financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies (Tables) [Line Items] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | An analysis of the allowance for doubtful accounts is as follows: Balance at January 1, 2020 $ 3,942 Provision for the period - Reversal – recoveries by cash (23 ) Balance at March 31, 2020 $ 3,919 |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | A reconciliation of the January 1, 2020 through March 31, 2020 amount of unrecognized tax benefits excluding interest and penalties (“Gross UTB”) is as follows: Gross UTB 2020 Balance $ 12,547 Decrease in unrecorded tax benefits taken, related to the Company’s continuing operations - Foreign exchange adjustment - Balance $ 12,547 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table presents a reconciliation of basic and diluted loss per share for the three months ended March 31, 2020 and 2019: March 31, 2020 March 31, 2019 Net loss from continuing operations $ (1,012,913 ) $ (219,880 ) Net (loss) income from discontinued operations (326,531 ) 72,349 Net loss (1,339,444 ) (147,531 ) Weighted average shares outstanding – basic and diluted* 5,572,196 5,732,511 Loss from continuing operations per share of common stock – basic and diluted $ (0.18 ) $ (0.04 ) (Loss) Income from discontinued operations per share of common stock – basic and diluted $ (0.06 ) $ 0.01 Loss per share of common stock – basic and diluted $ (0.24 ) $ (0.03 ) * Including 41,307 and 177,993 shares that were granted and vested but not yet issued for the three months ended March 31, 2020 and 2019, respectively. |
Schedule of Exchange Rates [Table Text Block] | Translation of amounts from RM into U.S. dollars has been made at the following exchange rates: Balance sheet items, except for equity accounts March 31, 2020 RM4.31 to 1 December 31, 2019 RM4.09 to 1 Income statement and cash flows items For the period ended March 31, 2020 RM4.18 to 1 |
Property Plant and Equipment Estimated Useful Lives [Member] | |
Summary of Significant Accounting Policies (Tables) [Line Items] | |
Property, Plant and Equipment [Table Text Block] | Depreciation of property and equipment is provided using the straight-line method for substantially all assets with no salvage value and estimated lives as follows: Computer and office equipment 5 - 10 years Decoration and renovation 5 - 10 years |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | Cash and cash equivalents $ 1,462,200 Accounts receivable, net 969,841 Advance to suppliers 609,935 Accounts payable (948 ) Advance from customers (126,916 ) Accrued liabilities and other payables (2,553 ) Income tax payable (85,028 ) Net assets of Bright Swallow upon disposal 2,826,531 Consideration receivable as of March 31, 2020 (2,500,000 ) Loss on disposal of subsidiary $ (326,531 ) For the three months ended March 31, 2020 March 31, 2019 Sales - $ 1,866,066 Cost of sales - (1,666,735 ) Operating expenses - (103,446 ) Other expense, net - (676 ) Loss on disposal of subsidiary (326,531 ) - (Loss) Income before income taxes (326,531 ) 95,209 Income tax expense - 22,860 (Loss) income from discontinued operations (326,531 ) 72,349 |
Plant, Property and Equipment_2
Plant, Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Member] | |
Plant, Property and Equipment, Net (Tables) [Line Items] | |
Property, Plant and Equipment [Table Text Block] | As of March 31, 2020, and December 31, 2019, plant, property and equipment consisted of the following: March 31, 2020 December 31, 2019 Computer and office equipment $ 354,055 $ 346,141 Decoration and renovation 251,412 118,858 Less: accumulated depreciation (343,770 ) (328,487 ) $ 261,697 $ 136,512 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Intangible assets consisted of the following as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Customer relationship $ 50,000 $ 50,000 Trademarks 200,000 200,000 Less: accumulated amortization (250,000 ) (250,000 ) $ - $ - |
Prepaid Expenses and Other Re_2
Prepaid Expenses and Other Receivables (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Current Assets [Table Text Block] | Prepaid expenses and other receivables consisted of the following at March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Prepaid expenses $ 71,480 $ 148,750 Other receivables 95,580 24,857 $ 167,060 $ 173,607 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Payables (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Accrued Liabilities [Table Text Block] | Accrued liabilities and other payables consisted of the following as of March 31, 2020 and December 31, 2019: 2020 2019 Other payables $ 26,274 $ 33,115 Salary payable 11,681 16,419 Financed insurance premiums 22,644 102,354 Accrued rents 17,777 17,733 Accrued commission 43,182 53,850 Accrued expenses, others 206,927 78,293 Equipment payable 143,222 - $ 471,707 $ 301,764 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | The following is a summary of the warrant activity for the three months ended March 31, 2020: Number of Warrants Average Exercise Price Weighted Average Remaining Contractual Term in Years Outstanding at January 1, 2020 171,667 $ 13.55 0.92 Exercisable at January 1, 2020 171,667 $ 13.55 0.92 Granted - - - Exercised / surrendered - - - Expired - - - Outstanding at March 31, 2020 171,667 $ 13.55 0.67 Exercisable at March 31, 2020 171,667 $ 13.55 0.67 |
Share-based Payment Arrangement, Option, Activity [Table Text Block] | Stock option activity under the Company’s stock-based compensation plans is shown below: Number of Average Aggregate Intrinsic (1) Weighted Outstanding at January 1, 2020 340,500 $ 5.97 $ - 3.33 Exercisable at January 1, 2020 292,000 6.48 $ - 3.08 Granted - - - - Exercised - - - - Forfeited - - - - Outstanding at March 31, 2020 340,500 $ 5.97 $ - 3.08 Exercisable at March 31, 2020 310,500 $ 6.27 $ - 2.94 |
Geographical Sales (Tables)
Geographical Sales (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | Geographical distribution of sales from continuing operations consisted of the following for the three months ended March 31, 2020 and 2019: March 31, 2020 March 31, 2019 Geographical Areas North America $ 2,184,856 $ 2,516,038 China - 6,278,704 Other countries 18,364 - $ 2,203,220 $ 8,794,742 |
Lease (Tables)
Lease (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ASU 2016-02 Transition [Abstract] | |
Lease, Cost [Table Text Block] | The operating lease expense for the three months ended March 31, 2020 and 2019 were as follows: Three months ended March 31, 2020 2019 Operating lease cost $ 176,252 $ 155,245 March 31, 2020 Weighted-average remaining lease term - years Operating leases - USA 4.59 Operating leases - Malaysia 1.46 Weighted-average discount rate (%) Operating leases - USA 5.00 % Operating leases - Malaysia 3.73 % |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2020: Operating Leases 12 months ending March 31, 2021 $ 690,790 2022 658,729 2023 646,433 2024 665,825 Thereafter 338,667 Total undiscounted cash flows 3,000,444 Less: imputed interest (315,741 ) Present value of lease liabilities 2,684,703 |
Organization and Description _2
Organization and Description of Business (Details) - USD ($) $ in Thousands | Jan. 27, 2020 | Jan. 07, 2020 |
Accounting Policies [Abstract] | ||
Proceeds from Sale of Buildings | $ 2,500 | $ 2,500 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | |
Accounts Receivable, Credit Loss Expense (Reversal) | $ (23) | $ (169,432) | |
Inventory Write-down | 0 | 0 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 1,403 | $ 1,278 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 125 | 1,600 | |
Unrecognized Tax Benefits | 12,547 | 12,547 | |
Revenues | $ 2,203,220 | $ 8,794,742 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number (in Shares) | 41,307 | 177,993 | |
Number of Operating Segments | 1 | ||
Warrant [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 171,667 | 171,667 | |
Restricted Stock [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 45,600 | 18,000 | |
Share-based Payment Arrangement, Option [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 340,500 | ||
UNITED STATES | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Income Tax Expense (Benefit) | $ 6,000 | $ 105,000 | |
Continuing Operations [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Accounts Receivable, Credit Loss Expense (Reversal) | 23 | 169,432 | |
Research and Development Expense | 12,266 | 16,521 | |
Advertising Expense | 17,998 | 17,072 | |
Discontinued Operations [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Accounts Receivable, Credit Loss Expense (Reversal) | 0 | 0 | |
Research and Development Expense | 0 | 0 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 24,000 | ||
Unrecognized Tax Benefits | 700,000 | ||
Customer Concentration Risk [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Accounts Receivable, before Allowance for Credit Loss, Current | $ 253,387 | $ 6,278,704 | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration Risk, Percentage | 10.00% | 71.00% | |
Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration Risk, Percentage | 74.00% | 91.00% | |
Accounts Receivable, before Allowance for Credit Loss | $ 40,439 | $ 4,453,901 | |
Accounts Payable | $ 111,351 | $ 57,182 | |
Major Vendor A [Member] | Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration Risk, Percentage | 38.00% | 31.00% | |
Major Vendor B [Member] | Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration Risk, Percentage | 15.00% | 19.00% | |
Major Vendor C [Member] | Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration Risk, Percentage | 11.00% | 13.00% | |
Major Vendor D [Member] | Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration Risk, Percentage | 10.00% | 10.00% | |
Shipping and Handling [Member] | Continuing Operations [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Revenues | $ 349 | $ 409 | |
Shipping and Handling [Member] | Discontinued Operations [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Revenues | 0 | 0 | |
Diamond Bar [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Goodwill, Impairment Loss | $ 0 | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of Accounts, Notes, Loans and Financing Receivable | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Abstract] | |
Balance at January 1, 2020 | $ 3,942 |
Provision for the period | 0 |
Reversal – recoveries by cash | (23) |
Balance at March 31, 2020 | $ 3,919 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of Estimated Useful Lives of Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Computer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 5 years |
Computer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 10 years |
Museum Decoration and Renovation [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 5 years |
Museum Decoration and Renovation [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of Unrecognized Tax Benefits Roll Forward | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Schedule of Unrecognized Tax Benefits Roll Forward [Abstract] | |
Balance – January 1, 2020 | $ 12,547 |
Balance – March 31, 2020 | 12,547 |
Decrease in unrecorded tax benefits taken, related to the Company’s continuing operations | 0 |
Foreign exchange adjustment | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of Earnings per Share, Basic and Diluted - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Schedule of Earnings per Share, Basic and Diluted [Abstract] | |||
Net loss from continuing operations | $ (1,012,913) | $ (219,880) | |
Net (loss) income from discontinued operations | (326,531) | 72,349 | |
Net loss | $ (1,339,444) | $ (147,531) | |
Weighted average shares outstanding – basic and diluted | [1] | 5,572,196 | 5,732,511 |
– basic and diluted | $ (0.18) | $ (0.04) | |
– basic and diluted | (0.06) | 0.01 | |
– basic and diluted | $ (0.24) | $ (0.03) | |
[1] | Including 41,307 and 177,993 shares that were granted and vested but not yet issued for the three months ended March 31, 2020 and 2019, respectively. |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of Exchange Rates | Mar. 31, 2020 | Dec. 31, 2019 |
Income Statement and Cash Flows Items [Member] | ||
Balance sheet items, except for equity accounts | ||
Exchange rates | 1 | |
Balance Sheet Items [Member] | ||
Balance sheet items, except for equity accounts | ||
Exchange rates | 1 | 1 |
China, Yuan Renminbi | Income Statement and Cash Flows Items [Member] | ||
Balance sheet items, except for equity accounts | ||
Exchange rates | 4.18 | |
China, Yuan Renminbi | Balance Sheet Items [Member] | ||
Balance sheet items, except for equity accounts | ||
Exchange rates | 4.31 | 4.09 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | Jan. 27, 2020 | Jan. 07, 2020 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Proceeds from Sale of Buildings | $ 2,500 | $ 2,500 |
Discontinued Operations (Deta_2
Discontinued Operations (Details) - Disposal Groups, Including Discontinued Operations - USD ($) | Jan. 07, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Disposal Groups, Including Discontinued Operations [Abstract] | |||
Cash and equivalents | $ 1,462,200 | ||
Accounts receivable, net | 969,841 | ||
Advance to suppliers, net | 609,935 | ||
Accounts payable | (948) | ||
Advance from customers | (126,916) | ||
Accrued liabilities and other payables | (2,553) | ||
Income tax payable | (85,028) | ||
Net assets of Bright Swallow upon disposal | 2,826,531 | ||
Consideration receivable as of March 31, 2020 | (2,500,000) | ||
$ (326,531) | $ (326,531) | $ 0 | |
Sales | 0 | 1,866,066 | |
Cost of sales | 0 | (1,666,735) | |
Operating expenses | 0 | (103,446) | |
Other expense, net | (676) | ||
(Loss) income before income taxes | (326,531) | 95,209 | |
Income tax (benefit) expense | 0 | 22,860 | |
(Loss) income from discontinued operations | $ (326,531) | $ 72,349 |
Inventories (Details)
Inventories (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Inventory, Net | $ 29,356,280 | $ 29,724,665 |
Plant, Property and Equipment_3
Plant, Property and Equipment, Net (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 15,442 | $ 9,369 |
Depreciation and Amortization, Discontinued Operations | $ 0 | $ 0 |
Plant, Property and Equipment_4
Plant, Property and Equipment, Net (Details) - Schedule of Property, Plant and Equipment - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (343,770) | $ (328,487) |
Property, plant and equipment, net | 261,697 | 136,512 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 354,055 | 346,141 |
Museum Decoration and Renovation [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 251,412 | $ 118,858 |
Advances to Suppliers (Details)
Advances to Suppliers (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Disclosure Text Block Supplement [Abstract] | ||
Prepaid Supplies | $ 27,819,528 | $ 27,745,184 |
Intangible Assets, net (Details
Intangible Assets, net (Details) | Apr. 24, 2013USD ($) | Aug. 31, 2011USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) |
Intangible Assets, net (Details) [Line Items] | |||||
Amortization of Intangible Assets | $ 3 | ||||
Customer Relationships [Member] | |||||
Intangible Assets, net (Details) [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | $ 50,000 | $ 50,000 | |||
Trademarks [Member] | |||||
Intangible Assets, net (Details) [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 200,000 | $ 200,000 | |||
Computer Software, Intangible Asset [Member] | |||||
Intangible Assets, net (Details) [Line Items] | |||||
Amortization of Intangible Assets | 0 | ||||
Diamond Bar [Member] | Customer Relationships [Member] | |||||
Intangible Assets, net (Details) [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | $ 50,000 | ||||
Finite-Lived Intangible Assets, Amortization Method | straight-line method | ||||
Diamond Bar [Member] | Trademarks [Member] | |||||
Intangible Assets, net (Details) [Line Items] | |||||
Number of trademarks acquired | 2 | ||||
Payments to Acquire Intangible Assets | $ 200,000 | ||||
Finite-Lived Intangible Assets, Amortization Method | straight-line method | ||||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||||
Bright Swallow International Group Limited [Member] | Customer Relationships [Member] | |||||
Intangible Assets, net (Details) [Line Items] | |||||
Finite-Lived Intangible Assets, Amortization Method | straight-line method | ||||
Finite-Lived Intangible Asset, Useful Life | 15 years | ||||
Finite-lived Intangible Assets, Fair Value Disclosure | $ 6,100,559 | ||||
Discontinued Operations [Member] | |||||
Intangible Assets, net (Details) [Line Items] | |||||
Amortization of Intangible Assets | $ 0 | $ 101,676 |
Intangible Assets, net (Detai_2
Intangible Assets, net (Details) - Schedule of Finite-Lived Intangible Assets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Less: accumulated amortization | $ (250,000) | $ (250,000) |
Intangible assets, net | 0 | 0 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 50,000 | 50,000 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 200,000 | $ 200,000 |
Prepaid Expenses and Other Re_3
Prepaid Expenses and Other Receivables (Details) - Schedule of Other Current Assets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Other Current Assets [Abstract] | ||
Prepaid expenses | $ 71,480 | $ 148,750 |
Other receivables | 95,580 | 24,857 |
$ 167,060 | $ 173,607 |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Payables (Details) - Schedule of Accrued Liabilitites - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Accrued Liabilitites [Abstract] | ||
Other payables | $ 26,274 | $ 33,115 |
Salary payable | 11,681 | 16,419 |
Financed insurance premiums | 22,644 | 102,354 |
Accrued rents | 17,777 | 17,733 |
Accrued commission | 43,182 | 53,850 |
Accrued expenses, others | 206,927 | 78,293 |
Equipment payable | 143,222 | |
$ 471,707 | $ 301,764 |
Lines of Credit (Details)
Lines of Credit (Details) - Diamond Bar [Member] - Line of Credit [Member] - USD ($) | Sep. 19, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Lines of Credit (Details) [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 8,000,000 | |||
Line of Credit Facility, Expiration Date | Jun. 1, 2019 | |||
Line of Credit Facility, Interest Rate at Period End | 5.50% | |||
Line of Credit Facility, Collateral | The line of credit was secured by all of the assets of Diamond Bar and is guaranteed by Nova LifeStyle. | |||
Long-term Line of Credit | $ 0 | $ 0 | ||
Interest Expense, Debt | $ 0 | $ 35,444 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jan. 04, 2020 | Jan. 04, 2018 | Sep. 30, 2011 | Mar. 31, 2020 | Mar. 31, 2019 |
Chief Executive Officer and Chairman of the Board [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Consulting Agreement, Term | 2 years | 2 years | |||
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party | $ 27,499 | $ 44,042 | |||
Diamond Bar [Member] | Building [Member] | President [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Related Party Transaction, Description of Transaction | Diamond Bar leased a showroom in High Point, North Carolina from the Company’s president who is currently also the Chief Executive Officer and Chairman of the Board. | ||||
Lessee, Operating Lease, Renewal Term | 1 year | ||||
Operating Leases, Rent Expense, Minimum Rentals | $ 34,561 | ||||
Operating Leases, Rent Expense | $ 0 | $ 17,281 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Dec. 14, 2019 | Nov. 16, 2019 | Nov. 04, 2019 | Aug. 12, 2019 | Dec. 13, 2018 | Dec. 01, 2018 | Nov. 16, 2018 | Nov. 07, 2018 | Apr. 24, 2018 | Feb. 27, 2018 | Sep. 26, 2017 | Aug. 29, 2017 | Jun. 30, 2017 | May 28, 2015 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2019 | Jun. 04, 2019 | Dec. 12, 2017 |
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Stock Repurchase Program, Authorized Amount (in Dollars) | $ 2,000,000 | $ 5,000,000 | ||||||||||||||||||
Stock Repurchased During Period, Shares (in Shares) | 0 | 0 | ||||||||||||||||||
Stock Issued During Period, Value, Issued for Services (in Dollars) | $ 12,750 | $ 159,365 | ||||||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | ||||||||||||||||||
Share-based Payment Arrangement, Noncash Expense (in Dollars) | $ 53,789 | 175,962 | ||||||||||||||||||
Shares Issued, Value, Share-based Payment Arrangement, before Forfeiture (in Dollars) | 6,390 | 5,775 | ||||||||||||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount (in Dollars) | 97,097 | |||||||||||||||||||
Statutory Equity Reserves (in Dollars) | 6,241 | $ 6,241 | ||||||||||||||||||
2014 Omnibus Long-Term Incentive Plan [Member] | August 292017 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ 9.25 | |||||||||||||||||||
Share Based Compensation, Options, Term | 5 years | |||||||||||||||||||
2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Payment Arrangement, Tranche One [Member] | August 292017 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | |||||||||||||||||||
2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Payment Arrangement, Tranche Two [Member] | August 292017 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | |||||||||||||||||||
Consulting Service Agreement [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Consulting Agreement, Term | 12 years | |||||||||||||||||||
Consulting Agreement, Vesting Terms | The Company agreed to compensate the consultant a one-time amount of $10,000 worth of shares of the Company’s common stock based on the price per share on June 30, 2017. The Company also granted the consultant $10,000 worth of shares of the Company’s common stock per month starting from July 1, 2017 for a period of 12 months. The shares were issued pursuant to Nova LifeStyle, Inc.’s 2014 Omnibus Long-Term Incentive Plan (the “Plan”) approved by the Board of Directors (“Board”) of the Company on May 13, 2014 and ratified at the annual shareholder meeting on June 30, 2014. The Plan was registered under Form S-8 on July 30, 2014. On June 12, 2018, the Company renewed the agreement with the consultant for an additional year and agreed to compensate the consultant $10,000 worth of shares of the Company’s common stock per month starting from July 1, 2018 for a period of 12 months. | |||||||||||||||||||
Share-based Payment Arrangement, Expense (in Dollars) | 10,000 | |||||||||||||||||||
Consulting Agreement #2 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Payment Arrangement, Expense (in Dollars) | $ 0 | 22,500 | ||||||||||||||||||
Consulting Service Agreement #7 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Treasury Stock, Shares, Acquired (in Shares) | 172,740 | |||||||||||||||||||
Consulting Agreement #2 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Consulting Agreement, Term | 1 year | |||||||||||||||||||
Consulting Agreement #2 [Member] | Share-based Payment Arrangement, Tranche One [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Consulting Agreement #2 [Member] | Share-based Payment Arrangement, Tranche Two [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Consulting Agreement #2 [Member] | Share-based Payment Arrangement, Tranche Three [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Consulting Agreement #2 [Member] | Share-based Compensation Award, Tranche Four [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Consulting Agreement #2 [Member] | Share-based Compensation Award, Tranche Five[Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Consulting Agreement #2 [Member] | Monthly Award [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services (in Shares) | 20,000 | |||||||||||||||||||
Consulting Agreement #15 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Payment Arrangement, Expense (in Dollars) | $ 12,750 | |||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services (in Shares) | 20,000 | |||||||||||||||||||
Other Commitments, Description | The Company granted the consultant $15,000 worth of shares of the Company’s common stock per month starting from January 1, 2019 for 12 months | |||||||||||||||||||
Share Price (in Dollars per share) | $ 2.55 | |||||||||||||||||||
Warrants, Fair Value of Warrants, Granted (in Dollars) | $ 3,147,530 | |||||||||||||||||||
Consulting Agreement #15 [Member] | Share-based Payment Arrangement, Tranche One [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Consulting Agreement #15 [Member] | Share-based Payment Arrangement, Tranche Two [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Consulting Agreement #15 [Member] | Share-based Payment Arrangement, Tranche Three [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Consulting Agreement #15 [Member] | Share-based Compensation Award, Tranche Four [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Consulting Agreement #15 [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Value, Issued for Services (in Dollars) | $ 51,000 | |||||||||||||||||||
Consulting Service Agreement #12 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Consulting Agreement, Term | 12 months | |||||||||||||||||||
Corporate Secretary [Member] | February 27, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share Price (in Dollars per share) | $ 11.35 | |||||||||||||||||||
Share-based Payment Arrangement, Noncash Expense (in Dollars) | 10,821 | |||||||||||||||||||
Shares Issued, Value, Share-based Payment Arrangement, before Forfeiture (in Dollars) | $ 68,100 | |||||||||||||||||||
Corporate Secretary [Member] | December 13, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Value, Issued for Services (in Dollars) | $ 3.85 | |||||||||||||||||||
Share-based Payment Arrangement, Noncash Expense (in Dollars) | 5,775 | |||||||||||||||||||
Employmet Agreement, Term | 1 year | |||||||||||||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares) | 6,000 | |||||||||||||||||||
Corporate Secretary [Member] | December 14, 2019 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Payment Arrangement, Expense (in Dollars) | 3,195 | |||||||||||||||||||
Share Price (in Dollars per share) | $ 2.13 | |||||||||||||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares) | 6,000 | |||||||||||||||||||
Stock Issued During Period, Value, Restricted Stock Award, Gross (in Dollars) | $ 12,780 | |||||||||||||||||||
Corporate Secretary [Member] | Share-based Payment Arrangement, Tranche One [Member] | December 13, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Corporate Secretary [Member] | Share-based Payment Arrangement, Tranche One [Member] | December 14, 2019 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Corporate Secretary [Member] | Share-based Payment Arrangement, Tranche Two [Member] | December 13, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Corporate Secretary [Member] | Share-based Payment Arrangement, Tranche Two [Member] | December 14, 2019 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Corporate Secretary [Member] | Share-based Payment Arrangement, Tranche Three [Member] | December 13, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Corporate Secretary [Member] | Share-based Payment Arrangement, Tranche Three [Member] | December 14, 2019 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Corporate Secretary [Member] | Share-based Compensation Award, Tranche Four [Member] | December 13, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Corporate Secretary [Member] | Share-based Compensation Award, Tranche Four [Member] | December 14, 2019 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Agreement with Three Furniture Designers [Member] | Share-based Payment Arrangement, Tranche One [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Agreement with Three Furniture Designers [Member] | Share-based Payment Arrangement, Tranche Two [Member] | February 27, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Agreement with Three Furniture Designers [Member] | Share-based Payment Arrangement, Tranche Three [Member] | February 27, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Agreement with Three Furniture Designers [Member] | Share-based Compensation Award, Tranche Four [Member] | February 27, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Consulting Agreement #9 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Payment Arrangement, Expense (in Dollars) | 9,159 | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | November 7, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share Price (in Dollars per share) | $ 0.0307 | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 60,000 | |||||||||||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ 5.90 | |||||||||||||||||||
Share Based Compensation, Options, Term | 5 years | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 84.00% | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | |||||||||||||||||||
Option, Grant Date Fair Value (in Dollars) | $ 240,105 | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | April 102017 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Payment Arrangement, Expense (in Dollars) | 60,026 | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | November 4, 2019 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Dividend Rate | 0.00% | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 60,000 | |||||||||||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ 2.80 | |||||||||||||||||||
Share Based Compensation, Options, Term | 5 years | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 87.00% | |||||||||||||||||||
Option, Grant Date Fair Value (in Dollars) | $ 114,740 | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 10 years | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.60% | |||||||||||||||||||
Share-based Payment Arrangement, Noncash Expense (in Dollars) | $ 28,685 | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | September 26, 2017 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Option, Grant Date Fair Value (in Dollars) | $ 18,318 | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Payment Arrangement, Tranche One [Member] | November 7, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Payment Arrangement, Tranche One [Member] | November 4, 2019 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Payment Arrangement, Tranche Two [Member] | November 7, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Payment Arrangement, Tranche Two [Member] | November 4, 2019 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Payment Arrangement, Tranche Three [Member] | November 7, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Payment Arrangement, Tranche Three [Member] | November 4, 2019 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Compensation Award, Tranche Four [Member] | November 7, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Director [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Compensation Award, Tranche Four [Member] | November 4, 2019 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||||||||||
Chief Financial Officer [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | August 292017 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 7,000 | |||||||||||||||||||
Chief Financial Officer [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | August 24, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 7,000 | |||||||||||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ 3.85 | |||||||||||||||||||
Share Based Compensation, Options, Term | 5 years | |||||||||||||||||||
Chief Financial Officer [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | August 12, 2019 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 87.00% | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 10 years | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.49% | |||||||||||||||||||
Chief Financial Officer [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Payment Arrangement, Tranche One [Member] | August 24, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | |||||||||||||||||||
Chief Financial Officer [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | Share-based Payment Arrangement, Tranche Two [Member] | August 24, 2018 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | |||||||||||||||||||
President [Member] | 2014 Omnibus Long-Term Incentive Plan [Member] | August 292017 [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Share-based Payment Arrangement, Expense (in Dollars) | $ 21,840 | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 84.00% | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | |||||||||||||||||||
Option, Grant Date Fair Value (in Dollars) | $ 43,680 | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 10 years | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.72% | |||||||||||||||||||
Private Placement [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Private Placement Number of Shares Authorized (in Shares) | 594,102 | |||||||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | |||||||||||||||||||
Stock Issued During Period, Shares, New Issues (in Shares) | 400,000 | |||||||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | $ 10 | |||||||||||||||||||
Proceeds from Issuance or Sale of Equity (in Dollars) | $ 4,000,002 | |||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 13.55 | |||||||||||||||||||
Warrants, Term | 5 years | |||||||||||||||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Term | 5 years | |||||||||||||||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Volatility Rate | 107.00% | |||||||||||||||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Risk Free Interest Rate | 1.55% | |||||||||||||||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Dividend Rate | 0.00% | |||||||||||||||||||
Private Placement [Member] | Series A Warrants [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 132,006 | |||||||||||||||||||
Private Placement [Member] | Series C Warrants [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 62,096 | |||||||||||||||||||
Nova Macao [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Statutory reserve, after-tax income percentage | 10.00% | |||||||||||||||||||
Nova Dongguan [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Statutory reserve, percentage of registered capital | 50.00% | |||||||||||||||||||
Nova Dongguan [Member] | Minimum [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Common welfare fund, voluntary contribution | 5% | |||||||||||||||||||
Nova Dongguan [Member] | Maximum [Member] | ||||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||||||||||
Common welfare fund, voluntary contribution | 10% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of Stockholders' Equity Note, Warrants or Rights - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Schedule of Stockholders' Equity Note, Warrants or Rights [Abstract] | ||
Number of Warrants Outstanding | 171,667 | |
Warrants Outstanding, Average Exercise Price | $ 13.55 | $ 13.55 |
Warrants Outstanding, Weighted Average Remaining Contractual Term in Years | 244 days | 335 days |
Number of Warrants Exercisable | 171,667 | |
Warrants Exercisable, Average Exercise Price | $ 13.55 | $ 13.55 |
Warrants Exercisable, Weighted Average Remaining Contractual Term in Years | 244 days | 335 days |
Number of Warrants Granted | 0 | |
Warrants Granted, Average Exercise Price | $ 0 | |
Number of Warrants Exercised | 0 | |
Warrants Exercised, Average Exercise Price | $ 0 | |
Number of Warrants Expired | 0 | |
Warrants Expired, Average Exercise Price | $ 0 | |
Number of Warrants Outstanding | 171,667 | |
Number of Warrants Exercisable | 171,667 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Share-based Compensation, Stock Options, Activity - USD ($) | Dec. 31, 2019 | Mar. 31, 2020 | |
Share-based Compensation, Stock Options, Activity [Abstract] | |||
Number of Shares, Outstanding | 340,500 | ||
Average Exercise Price per Share, Outstanding | $ 5.97 | ||
Weighted Average Remaining Contractual Term in Years, Outstanding | 3 years 120 days | 3 years 29 days | |
Number of Shares, Exercisable | 292,000 | ||
Average Exercise Price per Share, Exercisable | $ 6.48 | ||
Weighted Average Remaining Contractual Term in Years, Exercisable | 3 years 29 days | 2 years 343 days | |
Number of Shares, Exercised | 0 | ||
Average Exercise Price per Share, Exercised | $ 0 | ||
Number of Shares, Forfeited | 0 | ||
Average Exercise Price per Share, Forfeited | $ 0 | ||
Number of Shares, Outstanding | 340,500 | ||
Average Exercise Price per Share, Outstanding | $ 5.97 | ||
Aggregate Intrinsic Value, Outstanding | [1] | $ 0 | |
Number of Shares, Exercisable | 310,500 | ||
Average Exercise Price per Share, Exercisable | $ 6.27 | ||
Aggregate Intrinsic Value, Exercisable | [1] | $ 0 | |
[1] | The intrinsic value of the stock options at March 31, 2020 is the amount by which the market value of the Company's common stock of $1.10 as of March 31, 2020 exceeds the exercise price of the option. |
Geographical Sales (Details) -
Geographical Sales (Details) - Schedule of Sales by Geographic Region - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Geographical Areas | ||
Sales | $ 2,203,220 | $ 8,794,742 |
North America [Member] | ||
Geographical Areas | ||
Sales | 2,184,856 | 2,516,038 |
CHINA | ||
Geographical Areas | ||
Sales | 0 | 6,278,704 |
Other Countries [Member] | ||
Geographical Areas | ||
Sales | $ 18,364 | $ 0 |
Lease (Details)
Lease (Details) | Oct. 29, 2019USD ($) | Oct. 29, 2019HKD ($) | Jul. 15, 2019USD ($) | Jul. 15, 2019HKD ($) | Jan. 07, 2014 | Jun. 17, 2013USD ($) | Apr. 23, 2018 |
Lease (Details) [Line Items] | |||||||
Description of Lessor Leasing Arrangements, Operating Leases | the Company entered into a lease agreement for office, warehouse, storage, and distribution space with a five year term, commencing on November 1, 2013 and expiring on October 31, 2018. | ||||||
Land, Buildings and Improvements [Member] | Diamond Bar [Member] | |||||||
Lease (Details) [Line Items] | |||||||
Lessee, Operating Lease, Term of Contract | 5 years | 36 months | |||||
Lessee, Operating Lease, Renewal Term | 6 years | ||||||
Operating Leases, Rent Expense, Minimum Rentals | $ 42,000 | ||||||
Operating lease, annual rent expense increase | 3.00% | ||||||
Land, Buildings and Improvements [Member] | Bright Swallow International Group Limited [Member] | |||||||
Lease (Details) [Line Items] | |||||||
Lessee, Operating Lease, Term of Contract | 2 years | 2 years | |||||
Operating Leases, Rent Expense, Minimum Rentals | $ 9,280 | $ 2,219 | $ 4,783 | ||||
Building [Member] | Diamond Bar [Member] | |||||||
Lease (Details) [Line Items] | |||||||
Rental Income, Nonoperating | $ 20,000 |
Lease (Details) - Schedule of l
Lease (Details) - Schedule of lease Cost - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lease (Details) - Schedule of lease Cost [Line Items] | ||
Operating lease cost | $ 176,252 | $ 155,245 |
UNITED STATES | ||
Lease (Details) - Schedule of lease Cost [Line Items] | ||
Operating leases | 4 years 215 days | |
Operating leases | 5.00% | |
MALAYSIA | ||
Lease (Details) - Schedule of lease Cost [Line Items] | ||
Operating leases | 1 year 167 days | |
Operating leases | 3.73% |
Lease (Details) - Schedule of F
Lease (Details) - Schedule of Future Minimum Rental Payments for Operating Leases | Mar. 31, 2020USD ($) |
Schedule of Future Minimum Rental Payments for Operating Leases [Abstract] | |
2021 | $ 690,790 |
2022 | 658,729 |
2023 | 646,433 |
2024 | 665,825 |
Thereafter | 338,667 |
Total undiscounted cash flows | 3,000,444 |
Less: imputed interest | (315,741) |
Present value of lease liabilities | $ 2,684,703 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Dec. 28, 2018 |
Commitments and Contingencies Disclosure [Abstract] | |
Loss Contingency, Allegations | On December 28, 2018, a federal putative class action complaint was filed by George Barney against the Company and its former and current CEOs and CFOs (Thanh H. Lam, Ya Ming Wong, Jeffery Chuang and Yuen Ching Ho) in the United States District Court for the Central District of California, claiming the Company violated federal securities laws and pursuing remedies under Sections 10(b) and 20(a) of the Security Exchange Act of 1934 and Rule 10b-5 (the “Barney Action”). Richard Deutner and ITENT EDV were subsequently substituted as plaintiffs and, on June 18, 2019, they filed an Amended Complaint. In the Amended Complaint, plaintiffs seek to recover compensatory damages caused by the Company’s alleged violations of federal securities laws during the period from December 3, 2015 through December 20, 2018. Plaintiffs claim that the Company: (1) overstated its purported strategic alliance with a customer in China to operate as lead designer and manufacturer for all furnishings in such customer’s planned $460 million senior care center in China; (2) the Company inflated its reported sales in 2016 and 2017 with the Company’s two major customers; and (3) as a result, the Company’s public statements were materially false and misleading at all relevant times. In support of these claims, plaintiffs rely primarily upon a blog appearing in Seeking Alpha on December 21, 2018 in which it was claimed that an investigation of the Company failed to confirm the existence of several entities identified as significant customers, Plaintiffs purported to verify some of the information alleged in the Seeking Alpha blog. By Order entered December 2, 2019, the Court denied defendants’ Motion to Dismiss the Amended Complaint. Defendants have accordingly filed an Answer to the Amended Complaint denying its material allegations. The Court also entered a scheduling order setting a final pretrial conference for July 20, 2020. |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | Jun. 19, 2020 | May 05, 2020 | May 04, 2020 |
Subsequent Events (Details) [Line Items] | |||
Borrowings under Guaranteed Investment Agreements | $ 139,802 | ||
Debt Instrument, Description | The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. | ||
Debt Instrument, Term | 2 years | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | 1.00% | 1.00% |
Debt Instrument, Face Amount | $ 150,000 | $ 176,294 | |
Debt Instrument, Maturity Date | Jun. 18, 2050 | May 5, 2022 |