Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 07, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Takung Art Co., Ltd. | |
Entity Central Index Key | 0001491487 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | TKAT | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 11,271,379 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | true |
INTERIM CONDENSED CONSOLIDATED
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 5,511,461 | $ 5,424,213 |
Restricted cash | 12,435,948 | 16,404,941 |
Account receivables, net | 154,837 | 0 |
Prepayment and other current assets, net | 201,065 | 451,248 |
Amount due from related parties, net | 5,749,246 | 5,834,554 |
Loan receivables | 1,981,571 | 2,010,974 |
Total current assets | 26,034,128 | 30,125,930 |
Non-current assets | ||
Property and equipment, net | 627,379 | 859,826 |
Intangible assets | 22,514 | 22,401 |
Deferred tax assets, net | 549,864 | 540,279 |
Operating lease right-of-use assets | 241,034 | 731,469 |
Amount due from a related party | 0 | 104,128 |
Other non-current assets | 71,766 | 57,470 |
Total non-current assets | 1,512,557 | 2,315,573 |
Total assets | 27,546,685 | 32,441,503 |
Current liabilities | ||
Accrued expenses and other payables | 815,748 | 629,666 |
Customer deposits | 12,435,948 | 16,404,941 |
Advance from customers | 13,612 | 8,788 |
Short-term borrowings from a third party | 1,956,287 | 1,868,345 |
Amount due to related parties | 6,457,827 | 6,862,713 |
Operating lease liabilities - current | 152,954 | 166,987 |
Tax payables | 142,330 | 6,050 |
Total current liabilities | 21,974,706 | 25,947,490 |
Non-current liabilities | ||
Operating lease liabilities, non-current | 80,040 | 48,856 |
Total non-current liabilities | 80,040 | 48,856 |
Total liabilities | 22,054,746 | 25,996,346 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY | ||
Common stock (1,000,000,000 shares authorized; $0.001 par value; 11,271,379 shares issued and outstanding as of June 30, 2020; 11,255,129 shares issued and outstanding as of December 31, 2019) | 11,271 | 11,255 |
Additional paid-in capital | 6,345,877 | 6,320,604 |
(Accumulated deficit) retained earnings | (581,804) | 386,327 |
Accumulated other comprehensive loss | (283,405) | (273,029) |
Total shareholders' equity | 5,491,939 | 6,445,157 |
Total liabilities and shareholders' equity | $ 27,546,685 | $ 32,441,503 |
INTERIM CONDENSED CONSOLIDATE_2
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares, Issued | 11,271,379 | 11,255,129 |
Common stock, shares outstanding | 11,271,379 | 11,225,129 |
INTERIM CONDENSED CONSOLIDATE_3
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue | ||||
Listing fee | $ 380,846 | $ 0 | $ 557,789 | $ 284,090 |
Commission | 1,188,313 | 532,740 | 2,089,136 | 716,080 |
Management fee | 110,006 | 93,343 | 213,526 | 161,614 |
Total revenue | 1,679,165 | 626,083 | 2,860,451 | 1,161,784 |
Cost of revenue | (754,062) | (441,028) | (1,410,576) | (708,307) |
Gross profit | 925,103 | 185,055 | 1,449,875 | 453,477 |
Operating expenses: | ||||
General and administrative expenses | (929,728) | (888,460) | (2,040,175) | (2,163,045) |
Selling expenses | (61,585) | (3,784) | (104,574) | (34,596) |
Total operating expenses | (991,313) | (892,244) | (2,144,749) | (2,197,641) |
Loss from operations | (66,210) | (707,189) | (694,874) | (1,744,164) |
Other income and expenses: | ||||
Other income (expenses) | 65,139 | (79,772) | 103,444 | (101,762) |
Loan interest expense | (39,447) | 0 | (78,360) | 0 |
Exchange gain (loss) | 33,210 | (407,159) | (203,485) | (48,425) |
Total other income (expenses) | 58,902 | (486,931) | (178,401) | (150,187) |
Loss before provision for income taxes | (7,308) | (1,194,120) | (873,275) | (1,894,351) |
Income tax (expense) benefit | (7,461) | 66,584 | (94,856) | 58,022 |
Net loss | (14,769) | (1,127,536) | (968,131) | (1,836,329) |
Foreign currency translation adjustment | (1,608) | 64,753 | (10,376) | 59,273 |
Comprehensive loss | $ (16,377) | $ (1,062,783) | $ (978,507) | $ (1,777,056) |
Loss per common share - basic | $ (0.001) | $ (0.100) | $ (0.086) | $ (0.163) |
Loss per common share - diluted | $ (0.001) | $ (0.100) | $ (0.086) | $ (0.163) |
Weighted average number of common shares outstanding -basic | 11,258,467 | 11,247,773 | 11,256,798 | 11,236,959 |
Weighted average number of common shares outstanding -diluted | 11,258,467 | 11,247,773 | 11,256,798 | 11,236,959 |
INTERIM CONDENSED CONSOLIDATE_4
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Common stock | Additional Paid-in capital | Retained earnings (accumulated deficit) | Accumulated other comprehensive loss | Total |
Balance at Dec. 31, 2018 | $ 11,226 | $ 6,281,790 | $ 4,479,133 | $ (302,702) | $ 10,469,447 |
Balance (in Shares) at Dec. 31, 2018 | 11,226,025 | ||||
Share-based compensation | 16,851 | 16,851 | |||
Net loss | (708,793) | (708,793) | |||
Foreign currency translation adjustment | (5,480) | (5,480) | |||
Balance at Mar. 31, 2019 | $ 11,226 | 6,298,641 | 3,770,340 | (308,182) | 9,772,025 |
Balance (in Shares) at Mar. 31, 2019 | 11,226,025 | ||||
Balance at Dec. 31, 2018 | $ 11,226 | 6,281,790 | 4,479,133 | (302,702) | 10,469,447 |
Balance (in Shares) at Dec. 31, 2018 | 11,226,025 | ||||
Net loss | (1,836,329) | ||||
Foreign currency translation adjustment | 59,273 | ||||
Balance at Jun. 30, 2019 | $ 11,255 | 6,312,372 | 2,642,804 | (243,429) | 8,723,002 |
Balance (in Shares) at Jun. 30, 2019 | 11,255,129 | ||||
Balance at Mar. 31, 2019 | $ 11,226 | 6,298,641 | 3,770,340 | (308,182) | 9,772,025 |
Balance (in Shares) at Mar. 31, 2019 | 11,226,025 | ||||
Issuance of ordinary shares for restricted stock award | $ 29 | 4,012 | 4,041 | ||
Issuance of ordinary shares for restricted stock award (in shares) | 29,104 | ||||
Share-based compensation | 9,719 | 9,719 | |||
Net loss | (1,127,536) | (1,127,536) | |||
Foreign currency translation adjustment | 64,753 | 64,753 | |||
Balance at Jun. 30, 2019 | $ 11,255 | 6,312,372 | 2,642,804 | (243,429) | 8,723,002 |
Balance (in Shares) at Jun. 30, 2019 | 11,255,129 | ||||
Balance at Dec. 31, 2019 | $ 11,255 | 6,320,604 | 386,327 | (273,029) | 6,445,157 |
Balance (in Shares) at Dec. 31, 2019 | 11,255,129 | ||||
Share-based compensation | $ 0 | 5,986 | 0 | 0 | 5,986 |
Net loss | 0 | 0 | (953,362) | 0 | (953,362) |
Foreign currency translation adjustment | 0 | 0 | 0 | (8,768) | (8,768) |
Balance at Mar. 31, 2020 | $ 11,255 | 6,326,590 | (567,035) | (281,797) | 5,489,013 |
Balance (in Shares) at Mar. 31, 2020 | 11,255,129 | ||||
Balance at Dec. 31, 2019 | $ 11,255 | 6,320,604 | 386,327 | (273,029) | 6,445,157 |
Balance (in Shares) at Dec. 31, 2019 | 11,255,129 | ||||
Net loss | (968,131) | ||||
Foreign currency translation adjustment | (10,376) | ||||
Balance at Jun. 30, 2020 | $ 11,271 | 6,345,877 | (581,804) | (283,405) | 5,491,939 |
Balance (in Shares) at Jun. 30, 2020 | 11,271,379 | ||||
Balance at Mar. 31, 2020 | $ 11,255 | 6,326,590 | (567,035) | (281,797) | 5,489,013 |
Balance (in Shares) at Mar. 31, 2020 | 11,255,129 | ||||
Issuance of ordinary shares for restricted stock award | $ 6 | (6) | 0 | 0 | 0 |
Issuance of ordinary shares for restricted stock award (in shares) | 6,250 | ||||
Issuance of ordinary shares for professional services | $ 10 | 13,240 | 0 | 0 | 13,250 |
Issuance of ordinary shares for professional services (in shares) | 10,000 | ||||
Share-based compensation | $ 0 | 6,053 | 0 | 0 | 6,053 |
Net loss | 0 | 0 | (14,769) | 0 | (14,769) |
Foreign currency translation adjustment | 0 | 0 | 0 | (1,608) | (1,608) |
Balance at Jun. 30, 2020 | $ 11,271 | $ 6,345,877 | $ (581,804) | $ (283,405) | $ 5,491,939 |
Balance (in Shares) at Jun. 30, 2020 | 11,271,379 |
INTERIM CONDENSED CONSOLIDATE_5
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net cash (used in) provided by operating activities | $ (3,782,887) | $ 21,615,744 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (18,388) | (33,792) |
Purchase of available-for-sale investments | 0 | (21,372,178) |
Maturity and redemption of available-for-sale investments | 0 | 21,372,178 |
Loan repayment from a third party | 0 | 2,443,251 |
Net cash (used in) provided by investing activities | (18,388) | 2,409,459 |
Cash flows from financing activities: | ||
Proceeds from a related party's loan | 0 | 393,158 |
Loan repayment to a third party | 0 | (2,499,500) |
Net cash used in financing activities | 0 | (2,106,342) |
Effect of exchange rate change on cash, cash equivalents and restricted cash | (80,470) | 10,090 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (3,881,745) | 21,928,951 |
Cash, cash equivalents and restricted cash, beginning balance | 21,829,154 | 12,524,086 |
Cash, cash equivalents and restricted cash, ending balance | 17,947,409 | 34,453,037 |
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | ||
Total cash, cash equivalents, and restricted cash as of June 30, 2020 and 2019, respectively | 17,947,409 | 34,453,037 |
Supplemental cash flows information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income tax | $ 29,935 | $ 0 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2020 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Takung Art Co., Ltd and Subsidiaries (“Takung”), a Delaware corporation (formerly Cardigant Medical Inc.) through Hong Kong Takung Art Co., Ltd. (“Hong Kong Takung”), a Hong Kong company and its wholly owned subsidiary, operates an electronic online platform located at www.takungae.com for artists, art dealers and art investors to offer and trade in valuable artwork. Hong Kong Takung was incorporated in Hong Kong on September 17, 2012 and operates an electronic online platform for offering and trading artwork. The Company generates revenue from its services in connection with the offering and trading of artwork on its system, primarily consisting of listing fees, trading commissions, and management fees. The Company conducts business primarily in Hong Kong, People’s Republic of China. Takung (Shanghai) Co., Ltd (“Shanghai Takung”) is a limited liability company, with a registered capital of $1 million, located in the Shanghai Pilot Free Trade Zone. Shanghai Takung was incorporated on July 28, 2015. It is engaged in providing services to its parent company Hong Kong Takung by receiving deposits from and making payments to online artwork traders of Takung for and on behalf of Takung. Shanghai Takung was deregistered on May 8, 2020 and the Company merged the operations of Shanghai Takung with Takung Cultural Development (Tianjin) Co.,Ltd. Takung Cultural Development (Tianjin) Co., Ltd (“Tianjin Takung”) provides technology development services to Hong Kong Takung and also carries out marketing and promotion activities in mainland China. It is engaged in providing services to its parent company Hong Kong Takung by receiving deposits from and making payments to online artwork traders of Takung for and on behalf of Takung when Shanghai Takung was deregistered. Hong Kong Takung Art Holdings Company Limited (“Takung Art Holdings”) was formed in Hong Kong on July 20, 2018 and operates as a holding company to control an online platform for offering, selling and trading whole piece of artwork. Takung Art Holdings was deregistered on April 29, 2020 due to deregistration of Art Era Internet Technology (Tianjin) Co., Ltd as discussed below. Art Era Internet Technology (Tianjin) Co., Ltd (“Art Era”), formed in Tianjin on September 7, 2018, is a directly wholly owned subsidiary of Takung Art Holdings, and formed as a limited liability company with a registered capital of $2 million located in the Pilot Free Trade Zone in Tianjin. Art Era mainly focuses on developing its e-commerce platform for art. Art Era was deregistered on June 18, 2019 due to Company's plan to put off the e-commerce platform development. Hong Kong MQ Group Limited ("Hong Kong MQ") was formed in Hong Kong on November 27, 2018 and currently has no operations. On June 19, 2019, as a result of a private transaction, one (1) share of common stock of Hong Kong MQ was transferred from Ms. Hiu Ngai Ma to the Company. The net asset of Hong Kong MQ was $nil as of the acquisition date. The consideration paid for the ownership transfer, which represent 100% of the issued and outstanding share capital of Hong Kong MQ, was $0.13 (HK$1). Hong Kong MQ became a direct wholly-owned subsidiary of the Company. MQ (Tianjin) Enterprise Management Consulting Co., Ltd. ("Tianjin MQ") was incorporated in Tianjin, PRC on July 9, 2019 and is a directly wholly owned subsidiary of Hong Kong MQ. It was established as a limited liability company with a registered capital of $100,000 located in the Pilot Free Trade Zone in Tianjin. Tianjin MQ will focus on exploring business opportunities and promoting its artwork trading business. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated balance sheet as of December 31, 2019, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements as of June 30, 2020 and for the three and six months ended June 30, 2020 and 2019 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures, which are normally included in financial statements prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”), have been condensed or omitted pursuant to such rules and regulations. Management believes that the disclosures made are adequate to provide a fair presentation. The interim 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. Beginning in 2020, a strain of coronavirus (COVID-19) has spread globally and at this point, the extent to which the COVID-19 may impact operations of the Company is uncertain. The extent of the impact of the coronavirus on the Company's business and operations will depend on several factors, such as the duration, severity, and geographic spread of the pandemic, development of the testing and treatment and stimulus measures of the government. The Company is monitoring and assessing the evolving situation closely and evaluating its potential exposure. The operating results for the six months ended June 30, 2020 may not be indicative of the future operating results for the fiscal year ending December 31, 2020 or other future periods, particularly in light of the uncertain impact COVID-19 could have on the Company's business. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. Dollars. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s interim condensed consolidated financial position as of June 30, 2020, its interim condensed consolidated results of operations and cash flows for the three and six months ended June 30, 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. Recent Accounting Pronouncements Except for the ASUs issued but not yet adopted disclosed in Note 2 to the financial statements on Form 10-K for the fiscal year ended December 31, 2019, previously filed with the SEC, there is no ASU issued by the FASB that is expected to have a material impact on the condensed consolidated financial statements upon adoption. |
PREPAYMENT AND OTHER CURRENT AS
PREPAYMENT AND OTHER CURRENT ASSETS, NET | 6 Months Ended |
Jun. 30, 2020 | |
PREPAYMENT AND OTHER CURRENT ASSETS, NET | |
PREPAYMENT AND OTHER CURRENT ASSETS, NET | 3. PREPAYMENT AND OTHER CURRENT ASSETS, NET Prepayment and other current assets mainly consist of the prepaid tax, prepaid service fees, as well as staff advance. June 30, December 31, 2020 2019 (Unaudited) Prepaid tax $ 33,495 $ 281,582 Prepaid service fees 105,399 132,064 Short-term borrowings to a third party — 53,919 Staff advance 42,944 18,380 Other current assets 19,227 19,222 Less: allowance for doubtful accounts — (53,919) Prepayment and other current assets, net $ 201,065 $ 451,248 No provision for doubtful accounts was recognized for the three and six months ended June 30, 2020 and 2019, respectively. The Company has written off the doubtful account balance and deducted from bad debt provision related to the short-term borrowings to a third party in an amount of $54,193 during the six months ended June 30, 2020. |
ACCOUNT RECEIVABLES, NET
ACCOUNT RECEIVABLES, NET | 6 Months Ended |
Jun. 30, 2020 | |
ACCOUNT RECEIVABLES, NET | |
ACCOUNT RECEIVABLES, NET | 4. ACCOUNT RECEIVABLES, NET Account receivables consisted of the following: June 30, December 31, 2020 2019 (Unaudited) Listing fee $ 154,837 $ — Authorized agent subscription revenue — 560,780 Monthly commission fee — 1,385,420 Others — 53,909 Less: allowance for doubtful accounts — (2,000,109) Account receivables, net $ 154,837 $ — No provision for doubtful accounts was recognized for the three and six months ended June 30, 2020 and 2019, respectively. The Company has written off the doubtful accounts balance and deducted from bad debt provision in an amount of $2,010,251 during the six months ended June 30, 2020. |
LOAN RECEIVABLES
LOAN RECEIVABLES | 6 Months Ended |
Jun. 30, 2020 | |
LOAN RECEIVABLES | |
LOAN RECEIVABLES | 5. LOAN RECEIVABLES The following table sets forth a summary of the loan agreements in loan receivables balance: Amount in Original Outstanding Reporting Annual Amount Balance Currency Interest Repayment Date Borrower Lender (RMB) (RMB) (USD) Rate Due Date 7/18/2019 Chongqing Aoge Import and Export Co. Tianjin Takung 5,000,000 5,000,000 $ 707,704 0 % 7/17/2020 8/29/2019 Chongqing Aoge Import and Export Co. Tianjin Takung 5,000,000 5,000,000 $ 707,704 0 % 8/28/2020 9/20/2019 Chongqing Aoge Import and Export Co. Tianjin Takung 4,000,000 4,000,000 $ 566,163 0 % 9/19/2020 Total $ 1,981,571 · The interest-free loans (the “RMB Loans”) entered into by Tianjin Takung were guaranteed by Mr. Daquan Wang who is a General Manager and legal representative of Chongqing Aoge Import and Export Co. (“Chongqing”). Mr.Daquan Wang is a citizen of the People’s Republic of China. Both Chongqing and Mr. Daquan Wang are non-related parties to the Company. · Hong Kong Takung entered into loan agreements (the “HKD Loans”) with Friend Sourcing Ltd., a Hong Kong company (“Friend Sourcing”) with interest accruing at a rate of 8% per annum (See Note 8). Friend Sourcing is a non-related party to the Company. The transactions with Friend Sourcing were aimed to meet the Company’s working capital needs in Hong Kong Dollars. Through an understanding between Chongqing and Friend Sourcing, the HKD Loans are “secured” by the RMB Loans. It is the understanding between the parties that the HKD Loans and the RMB Loans will be repaid simultaneously. One of the loan receivables with a repayment due date of July 17, 2020 was overdue. The Company and Chongqing are currently in the process of negotiating a loan extension agreement. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 6 Months Ended |
Jun. 30, 2020 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 6. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: June 30, December 31, 2020 2019 (Unaudited) Furniture, fixtures and equipment $ 205,178 $ 201,093 Leasehold improvements 210,299 343,697 Computer trading and clearing system 3,390,531 3,379,654 Transport equipment 101,819 103,330 Sub-total 3,907,827 4,027,774 Less: accumulated depreciation (3,280,448) (3,167,948) Property and equipment, net $ 627,379 $ 859,826 Depreciation expense was $119,060 and $157,687 for the three months ended June 30, 2020 and 2019, respectively, and $246,990 and $314,466 for the six months ended June 30, 2020 and 2019, respectively. |
ACCRUED EXPENSES AND OTHER PAYA
ACCRUED EXPENSES AND OTHER PAYABLES | 6 Months Ended |
Jun. 30, 2020 | |
ACCRUED EXPENSES AND OTHER PAYABLES | |
ACCRUED EXPENSES AND OTHER PAYABLES | 7 . ACCRUED EXPENSES AND OTHER PAYABLES Accrued expenses and other payables as of June 30, 2020 and December 31, 2019 consisted of the following: June 30, December 31, 2020 2019 (Unaudited) Accruals for professional fees $ 431,240 $ 168,040 Accruals for consulting fees 267,540 311,122 Payroll payables 38,642 79,710 Payables for trading and clearing system 50,550 50,295 Other payables 27,776 20,499 Total accrued expenses and other payables $ 815,748 $ 629,666 |
SHORT-TERM BORROWINGS FROM A TH
SHORT-TERM BORROWINGS FROM A THIRD PARTY | 6 Months Ended |
Jun. 30, 2020 | |
SHORT-TERM BORROWINGS FROM A THIRD PARTY | |
SHORT-TERM BORROWINGS FROM A THIRD PARTY | 8 . SHORT-TERM BORROWINGS FROM A THIRD PARTY In July 2019, Hong Kong Takung entered into HKD Loans with Friend Sourcing with interest accruing at a rate of 8% per annum. The HKD Loans are to provide Hong Kong Takung with sufficient HKD currency to meet its working capital requirements. Friend Sourcing is a non-related party to the Company. In the meantime, Tianjin Takung entered interest-free RMB Loans to another third party as a guarantee for the HKD Loans. The loan amount was $1,981,571 (RMB 14,000,000). Through an understanding between the two third parties, the HKD Loans are "secured" by the RMB Loans. It is an understanding between the parties that when the HKD Loans are repaid, the RMB Loans will be repaid at the same time. June 30, December 31, Annual 2020 2019 Interest Repayment Date Borrower Lender (USD) (USD) Rate Due Date 7/18/2019 Hong Kong Takung Friend Sourcing Ltd. $ 718,433 $ 714,808 8 % 7/17/2020 8/29/2019 Hong Kong Takung Friend Sourcing Ltd. $ 699,732 $ 696,202 8 % 8/28/2020 9/20/2019 Hong Kong Takung Friend Sourcing Ltd. $ 559,786 $ 556,961 8 % 9/19/2020 Less: Discount loan payable $ (21,664) $ (99,626) Total $ 1,956,287 $ 1,868,345 The weighted average interest rate of outstanding short-term borrowings was 8% per annum as of June 30, 2020. The fair value of the short-term borrowings approximates their carrying amounts. One of the short-term borrowings with a repayment due date of July 17 , 2020 was overdue. The Company and Friend Sourcing are currently in the process of negotiating a loan extension agreement. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 6 Months Ended |
Jun. 30, 2020 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
RELATED PARTY BALANCES AND TRANSACTIONS | 9. RELATED PARTY BALANCES AND TRANSACTIONS The following is a list of director and related parties to which the Company has transactions with: (a) Jianping Mao (“Mao”), the Human Resources Management Director of Hong Kong Takung. (b) Shuhai Li (“Li”), the legal representative of Tianjin Takung , resigned on April 3, 2020. (c) Jing Wang ("Wang"), the Chief Financial Officer of the Company since June 1, 2020 and the legal representative of Tianjin Takung since May 28, 2020. Amount due from related parties, net Amount due from related parties consisted of the following as of the years indicated: June 30, December 31, 2020 2019 (Unaudited) Li (b)(i) $ — $ 5,834,554 Wang (c)(i) 5,749,246 — Mao (a) (ii) 102,606 — Less: allowance for doubtful accounts (ii) (102,606) Total current amount due from related parties, net $ 5,749,246 $ 5,834,554 June 30, December 31, 2020 2019 (Unaudited) Mao (a) (ii) $ — $ 104,128 Total noncurrent amount due from a related party $ — $ 104,128 Amount due to related parties Amount due to related parties consisted of the following as of the years indicated: June 30, December 31, 2020 2019 (Unaudited) Li (b) (i) $ — $ 6,418,980 Wang (c)(i) 6,451,530 — Mao (a) (ii) 6,297 443,733 Total current amount due to related parties $ 6,457,827 $ 6,862,713 (i) Amount due to and due from Li and Wang On September 16, 2019, Hong Kong Takung entered into an interest-free loan agreement (the “HK Dollar Working Capital Loan”) with Li for the loan of $6,451,530 (HK$50,000,000) to Hong Kong Takung. The purpose of the loan is to provide Hong Kong Takung with sufficient Hong Kong Dollar-denominated currency to meet its working capital requirements with the maturity date of the loan as May 15, 2020. On May 15, 2020, Hong Kong Takung entered into an extension agreement with Li to extend the HK Dollar Working Capital Loan with a maturity date on May 15, 2021. On May 29, 2020, the loan was transferred to Wang, the Chief Financial Officer of the Company and the legal representative of Tianjin Takung. In the meantime, Tianjin Takung entered into an interest-free loan agreement (the “RMB Working Capital Loan”) with Li for the loan of $5,749,246 (RMB40,619,000) with the maturity date of the loan as May 15, 2020. On May 15, 2020, Tianjin Takung entered into an extension agreement with Li to extend the RMB Working Capital Loan with a maturity date on May 15, 2021.On May 29, 2020, the loan was transferred to Wang. Through an understanding between Wang and the Company, the HK Dollar Working Capital Loan is “secured” by the RMB Working Capital Loan. It is the understanding between the parties that the HK Dollar Working Capital Loan and the RMB Working Capital Loan will be repaid simultaneously. (ii) Amount due to and due from Mao The amount due to Mao is primarily related to the lease from Mao. On May 13, 2019, the Company entered into a non-cancellable lease agreement with a related party, Mao for its office location in Tianjin, PRC. The leased office location is approximately 2,090.61 square meters. The lease will expire on May 12, 2021. The Company is charged rent at a rate of $0.55 per square meter per day. The agreement requires a lump sum payment of $205,211 (RMB1,449,838) every six months and a deposit of $102,606 (RMB724,919). On May 12, 2020, the Company terminated the lease early and recorded a $102,606 associated bad debt provision due to the remote likelihood of collecting the rent deposit. No related lease liability was recognized as of June 30, 2020. On October 16, 2019, Tianjin MQ entered into a non-cancellable lease agreement with Ms. Mao for its office facility in Tianjin, PRC. The leased office location is approximately 1,475.67 square meters. The lease was terminated on February 15, 2020 and monthly rent payment is approximately $24,254 (RMB 170,563). As of June 30, 2020, the amount due to Mao pertinent to this lease agreement was $nil. As of June 30, 2020, Mao also lent a startup deposit of $6,297 to Hong Kong MQ. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2020 | |
INCOME TAXES | |
INCOME TAXES | 10. INCOME TAXES Takung was incorporated in the State of Delaware and is therefore subject to United States income tax. Hong Kong Takung , Takung Art Holdings and Hong Kong MQ were incorporated in Hong Kong S.A.R. People’s Republic of China and are subject to Hong Kong profits tax. Shanghai Takung, Tianjin Takung and Tianjin MQ are PRC corporations and are subject to enterprise taxes in the PRC. United States of America The Coronavirus Aid, Relief and Economy Security (CARES) Act ("the CARES Act, H.R. 748") was signed into law on March 27, 2020. The CARES Act temporarily eliminates the 80% taxable income limitation (as enacted under the Tax Cuts and Jobs Act of 2017) for net operation loss (“NOL”) deductions for 2018-2020 tax years and reinstated NOL carrybacks for the 2018-2020 tax years. Moreover, the CARES Act also temporarily increases the business interest deduction limitations from 30% to 50% of adjusted taxable income for the 2019 and 2020 taxable year. Lastly, the Tax Act technical correction classifies qualified improvement property as 15-year recovery period, allowing the bonus depreciation deduction to be claimed for such property retroactively as if it was included in the Tax Act at the time of enactment. The Company does not anticipate a material impact on its financial statements as of June 30, 2020 due to the recent enactment. As of June 30, 2020 and December 31, 2019, the Company in the United States had $2,570,094 and $2,167,494 in net operating loss carry forwards available to offset future taxable income, respectively. For net operating losses arising after December 31, 2017, the Tax Act limits the Company's ability to utilize NOL carryforwards to 80% of taxable income and carryforward the NOL indefinitely . NOLs generated prior to January 1, 2018 will not be subject to the taxable income limitation and will begin to expire in 2033 if not utilized. Hong Kong The two-tier profits tax rates system was introduced under the Inland Revenue (Amendment)(No.3) Ordinance 2018 (“the Ordinance”) of Hong Kong became effective for the assessment year 2018/2019. Under the two-tier profit tax rates regime, the profits tax rate for the first HKD 2 million (approximately $257,705) of assessable profits of a corporation will be subject to the lowered tax rate, 8.25% while the remaining assessable profits will be subject to the legacy tax rate, 16.5%. The Ordinance only allows one entity within a group of “connected entities” is eligible for the two-tier tax rate benefit. An entity is a connected entity of another entity if (1) one of them has control over the other; (2) both of them are under the control (more than 50% of the issued share capital) of the same entity; (3) in the case of the first entity being a natural person carrying on a sole proprietorship business-the other entity is the same person carrying on another sole proprietorship business. Since Hong Kong Takung, Takung Art Holdings and Hong Kong MQ are wholly owned and under the control of Takung U.S, these entities are connected entities. Under the Ordinance, it is an entity’s election to nominate the entity that will be subject to the two-tier profits tax rates on its profits tax return. The election is irrevocable. The Company elected Hong Kong Takung to be subject to the two-tier profits tax rates. The provision for current income and deferred taxes of Hong Kong Takung has been calculated by applying the new tax rate of 8.25%. Takung Art Holdings and Hong Kong MQ still apply the original tax rate of 16.5% for its provision for current income and deferred taxes. PRC In accordance with the relevant tax laws and regulations of the PRC, a company registered in the PRC is subject to income taxes within the PRC at the applicable tax rate on taxable income. All the PRC subsidiaries were subject to income tax at a rate of 25%. The income tax provision consists of the following components: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Current: Federal $ — $ — $ — $ — State — — — — Foreign (131) — (101,692) — Total Current $ (131) $ — $ (101,692) $ — Deferred: Federal $ — $ — $ — $ — State — — — — Foreign (7,330) 66,584 6,836 58,022 Total Deferred $ (7,330) $ 66,584 $ 6,836 $ 58,022 Total income tax (expense) benefit $ (7,461) $ 66,584 $ (94,856) $ 58,022 A reconciliation between the Company’s actual provision for income taxes and the provision at the Hong Kong statutory rate is as follows: For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Loss before income tax expense $ (7,308) $ (1,194,120) $ (873,275) $ (1,894,351) Computed tax benefit with statutory tax rate 1,207 197,073 144,091 312,567 Impact of different tax rates in other jurisdictions (3,342) 12,427 1,677 16,794 Impact of preferred tax rate 2,666 (82,047) (54,519) (125,895) Non-deductible items: Tax effect of non-deductible expenses (170,572) (11,061) (183,900) (17,886) Changes in valuation allowance 162,756 (49,808) 134,157 (127,558) Others (176) — (136,362) — Total income tax (expense) benefit $ (7,461) $ 66,584 $ (94,856) $ 58,022 The effective tax rate was (102.1)% and 5.6% for the three months ended June 30, 2020 and 2019, respectively, and (10.9)% and 3.1% for the six months ended June 30, 2020 and 2019, respectively. Uncertain tax positions The reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions is as follows: June 30, December 31, 2020 2019 Uncertain tax liabilities, beginning of period $ — $ — Additions for tax position of current period 73,357 — Uncertain tax liabilities, end of period $ 73,357 $ — The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by the respective jurisdictions, where applicable. The statute of limitations for the tax returns varies by jurisdictions. The amounts of uncertain tax liabilities listed above are based on the recognition and measurement criteria of ASC Topic 740, and the balance is presented as current liability in the interim condensed consolidated financial statements as of June 30, 2020. The Company anticipated that the settlements with the taxing authority are remitted within one year. Our policy is to include interest and penalty charges related to uncertain tax liabilities as necessary in the provision for income taxes. The Company has a liability for accrued interest of $nil as of June 30, 2020 and December 31, 2019, respectively. Our subsidiary, Hong Kong Takung, has been recently selected for routine examination for its tax years ended 31 December 2016 through 2018 by Hong Kong Inland Revenue Department (“IRD”). As of June 30, 2020 and December 31, 2019, the Company had $73,357 and $nil, respectively, of uncertain tax liabilities related to the different methodology of certain tax non-deductible expenses applied by the IRD. The examination is currently in progress. Due to the uncertain tax regulations, it is possible that the ultimate resolution of uncertain tax positions may result in an adverse finding and we would be subject to additional liability which could be materially different from these estimates. In such circumstances, we will record additional tax expense or tax benefit in the period in which such the resolution occurs. The Company does not expect the position of uncertain tax liabilities will significantly fluctuate within the next twelve months. The statute of limitations for the Internal Revenue Services to assess the income tax returns on a taxpayer expires three years from the due date of the profits tax return or the date on which it was filed, whichever is later. In accordance with the Hong Kong profits tax regulations, a tax assessment by the IRD may be initiated within six years after the relevant year of assessment, but extendable to 10 years in the case of potential willful underpayment or evasion. In accordance with PRC Tax Administration Law on the Levying and Collection of Taxes, the PRC tax authorities generally have up to five years to assess underpaid tax plus penalties and interest for PRC entities’ tax filings. In the case of tax evasion, which is not clearly defined in the law, there is no limitation on the tax years open for investigation. Accordingly, the PRC entities remain subject to examination by the tax authorities based on the above. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2020 | |
LEASES | |
LEASES | 11. LEASES The Company has operating leases for its office facilities and artwork storages. The Company's leases have remaining terms of less than one year to approximately six years. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes. The following table provides a summary of leases by balance sheet location as of June 30, 2020: As of June 30, Assets/liabilities Classification 2020 (Unaudited) Assets Operating lease right-of-use assets Operating lease assets $ 241,034 Liabilities Current Operating lease liability - current Current operating lease liabilities $ 152,954 Long-term Operating lease liability - non-current Long-term operating lease liabilities 80,040 Total lease liabilities $ 232,994 The operating lease expenses for the three months and six months ended June 30, 2020 and 2019 were as follows: Three Months Ended June 30, Six Months Ended June 30, Lease Cost Classification 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Operating lease cost Cost of revenue, general and administrative expenses $ 160,850 $ 86,395 $ 361,212 $ 137,173 Total lease cost $ 160,850 $ 86,395 $ 361,212 $ 137,173 Maturities of operating lease liabilities at June 30, 2020 were as follows: Operating Maturity of Lease Liabilities Leases 2020 (remaining) $ 131,141 2021 76,936 2022 14,154 2023 14,154 2024 14,154 Thereafter — Total lease payments $ 250,539 Less: interest (17,545) Present value of lease payments $ 232,994 Six Months Ended June 30, Lease Term and Discount Rate 2020 2019 (Unaudited) (Unaudited) Weighted-average remaining lease term (years) Operating leases 2.32 2.06 Weighted-average discount rate (%) Operating leases 8 % 8 % Six Months Ended June 30, Other Information 2020 2019 (Unaudited) (Unaudited) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 111,303 $ 94,573 Leased assets obtained in exchange for new operating lease liabilities 115,667 275,189 |
LOSS PER SHARE
LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2020 | |
LOSS PER SHARE | |
LOSS PER SHARE | 12. LOSS PER SHARE Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Numerator: Net loss $ (14,769) $ (1,127,536) $ (968,131) $ (1,836,329) Denominator: Weighted-average shares outstanding -Basic 11,258,467 11,247,773 11,256,798 11,236,959 Stock options and restricted shares — — — — Weighted-average shares outstanding -Diluted 11,258,467 11,247,773 11,256,798 11,236,959 Loss per share -Basic (0.001) (0.100) (0.086) (0.163) -Diluted (0.001) (0.100) (0.086) (0.163) Due to the loss for the three and six months ended June 30, 2019, approximately 148,890 and 15,000 options and restricted shares, respectively, were excluded from the calculation of diluted net loss per share. Due to the loss for three and six months ended June 30, 2020 approximately 100,890 options were excluded from the calculation of diluted net loss per share. |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
CONTINGENCIES | |
CONTINGENCIES | 13. CONTINGENCIES Around May and June 2020, the Company received two summonses regarding the institution of two individual proceedings against Shanghai Takung, Tianjin Takung and Hong Kong Takung in the Shanghai Pudong People’s Court, China, as a result of contractual disputes and misrepresentations over ownership units made by a certain service agent. The claims amounted to approximately $0.23 million. Subsequently, one of the plaintiffs with a claim amount of $0.15 million withdrew his claim against Tianjin Takung on July 1, 2020. The withdrawal was approved by the Shanghai Pudong People’s court on July 20, 2020. Meanwhile, the other litigation proceeding with a claim amount of approximately $0.08 million has been transferred to the Tianjin City Beicheng District People’s Court on July 22, 2020. The Company hired legal counsel to evaluate the cases. The Company believes that both these claims are both without merit and intends to vigorously defend itself. Currently, the outstanding case is under review by the Tianjin City Beicheng District People’s Court. On or around July 2020, a third claim was filed in the Shanghai Pudong People’s Court, China against Hong Kong Takung on the basis of, alleged breaches of contract. The claim amount has yet to be determined. In the opinion of management, it is not probable that the Company will incur any losses arising from the above litigation cases. As such, as of June 30, 2020 the Company has not accrued any liability in connection with potential losses from the legal proceedings. Except for the above, as of June 30, 2020 and through the issuance date of the condensed consolidated financial statements included in this Form 10-Q, the Company does not have any other significant indemnification claims. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date of issuance of the interim condensed consolidated financial statements, there were no other subsequent events occurred that would require recognition or disclosure in the interim condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | Basis of Presentation The accompanying consolidated balance sheet as of December 31, 2019, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements as of June 30, 2020 and for the three and six months ended June 30, 2020 and 2019 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures, which are normally included in financial statements prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”), have been condensed or omitted pursuant to such rules and regulations. Management believes that the disclosures made are adequate to provide a fair presentation. The interim 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. Beginning in 2020, a strain of coronavirus (COVID-19) has spread globally and at this point, the extent to which the COVID-19 may impact operations of the Company is uncertain. The extent of the impact of the coronavirus on the Company's business and operations will depend on several factors, such as the duration, severity, and geographic spread of the pandemic, development of the testing and treatment and stimulus measures of the government. The Company is monitoring and assessing the evolving situation closely and evaluating its potential exposure. The operating results for the six months ended June 30, 2020 may not be indicative of the future operating results for the fiscal year ending December 31, 2020 or other future periods, particularly in light of the uncertain impact COVID-19 could have on the Company's business. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. Dollars. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s interim condensed consolidated financial position as of June 30, 2020, its interim condensed consolidated results of operations and cash flows for the three and six months ended June 30, 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Except for the ASUs issued but not yet adopted disclosed in Note 2 to the financial statements on Form 10-K for the fiscal year ended December 31, 2019, previously filed with the SEC, there is no ASU issued by the FASB that is expected to have a material impact on the condensed consolidated financial statements upon adoption. |
PREPAYMENT AND OTHER CURRENT _2
PREPAYMENT AND OTHER CURRENT ASSETS, NET (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
PREPAYMENT AND OTHER CURRENT ASSETS, NET | |
Schedule of Prepayment and other current assets, net | June 30, December 31, 2020 2019 (Unaudited) Prepaid tax $ 33,495 $ 281,582 Prepaid service fees 105,399 132,064 Short-term borrowings to a third party — 53,919 Staff advance 42,944 18,380 Other current assets 19,227 19,222 Less: allowance for doubtful accounts — (53,919) Prepayment and other current assets, net $ 201,065 $ 451,248 |
ACCOUNT RECEIVABLES, NET (Table
ACCOUNT RECEIVABLES, NET (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounts Receivable | |
Schedule of account receivables | Account receivables consisted of the following: June 30, December 31, 2020 2019 (Unaudited) Listing fee $ 154,837 $ — Authorized agent subscription revenue — 560,780 Monthly commission fee — 1,385,420 Others — 53,909 Less: allowance for doubtful accounts — (2,000,109) Account receivables, net $ 154,837 $ — |
LOAN RECEIVABLES (Tables)
LOAN RECEIVABLES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Loans Receivable | |
Schedule of the loan agreements in loan receivables balance | The following table sets forth a summary of the loan agreements in loan receivables balance: Amount in Original Outstanding Reporting Annual Amount Balance Currency Interest Repayment Date Borrower Lender (RMB) (RMB) (USD) Rate Due Date 7/18/2019 Chongqing Aoge Import and Export Co. Tianjin Takung 5,000,000 5,000,000 $ 707,704 0 % 7/17/2020 8/29/2019 Chongqing Aoge Import and Export Co. Tianjin Takung 5,000,000 5,000,000 $ 707,704 0 % 8/28/2020 9/20/2019 Chongqing Aoge Import and Export Co. Tianjin Takung 4,000,000 4,000,000 $ 566,163 0 % 9/19/2020 Total $ 1,981,571 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of Property and equipment | Property and equipment consisted of the following: June 30, December 31, 2020 2019 (Unaudited) Furniture, fixtures and equipment $ 205,178 $ 201,093 Leasehold improvements 210,299 343,697 Computer trading and clearing system 3,390,531 3,379,654 Transport equipment 101,819 103,330 Sub-total 3,907,827 4,027,774 Less: accumulated depreciation (3,280,448) (3,167,948) Property and equipment, net $ 627,379 $ 859,826 |
ACCRUED EXPENSES AND OTHER PA_2
ACCRUED EXPENSES AND OTHER PAYABLES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
ACCRUED EXPENSES AND OTHER PAYABLES | |
Schedule of Accrued expenses and other payables | Accrued expenses and other payables as of June 30, 2020 and December 31, 2019 consisted of the following: June 30, December 31, 2020 2019 (Unaudited) Accruals for professional fees $ 431,240 $ 168,040 Accruals for consulting fees 267,540 311,122 Payroll payables 38,642 79,710 Payables for trading and clearing system 50,550 50,295 Other payables 27,776 20,499 Total accrued expenses and other payables $ 815,748 $ 629,666 |
SHORT-TERM BORROWINGS FROM A _2
SHORT-TERM BORROWINGS FROM A THIRD PARTY (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
SHORT-TERM BORROWINGS FROM A THIRD PARTY | |
Schedule of the loan agreements in short-term borrowing balances | June 30, December 31, Annual 2020 2019 Interest Repayment Date Borrower Lender (USD) (USD) Rate Due Date 7/18/2019 Hong Kong Takung Friend Sourcing Ltd. $ 718,433 $ 714,808 8 % 7/17/2020 8/29/2019 Hong Kong Takung Friend Sourcing Ltd. $ 699,732 $ 696,202 8 % 8/28/2020 9/20/2019 Hong Kong Takung Friend Sourcing Ltd. $ 559,786 $ 556,961 8 % 9/19/2020 Less: Discount loan payable $ (21,664) $ (99,626) Total $ 1,956,287 $ 1,868,345 |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
Schedule of amount due from related parties transactions | The following is a list of director and related parties to which the Company has transactions with: (a) Jianping Mao (“Mao”), the Human Resources Management Director of Hong Kong Takung. (b) Shuhai Li (“Li”), the legal representative of Tianjin Takung , resigned on April 3, 2020. (c) Jing Wang ("Wang"), the Chief Financial Officer of the Company since June 1, 2020 and the legal representative of Tianjin Takung since May 28, 2020. Amount due from related parties, net Amount due from related parties consisted of the following as of the years indicated: June 30, December 31, 2020 2019 (Unaudited) Li (b)(i) $ — $ 5,834,554 Wang (c)(i) 5,749,246 — Mao (a) (ii) 102,606 — Less: allowance for doubtful accounts (ii) (102,606) Total current amount due from related parties, net $ 5,749,246 $ 5,834,554 June 30, December 31, 2020 2019 (Unaudited) Mao (a) (ii) $ — $ 104,128 Total noncurrent amount due from a related party $ — $ 104,128 Amount due to related parties Amount due to related parties consisted of the following as of the years indicated: June 30, December 31, 2020 2019 (Unaudited) Li (b) (i) $ — $ 6,418,980 Wang (c)(i) 6,451,530 — Mao (a) (ii) 6,297 443,733 Total current amount due to related parties $ 6,457,827 $ 6,862,713 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
INCOME TAXES | |
Schedule of income tax provision | The income tax provision consists of the following components: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Current: Federal $ — $ — $ — $ — State — — — — Foreign (131) — (101,692) — Total Current $ (131) $ — $ (101,692) $ — Deferred: Federal $ — $ — $ — $ — State — — — — Foreign (7,330) 66,584 6,836 58,022 Total Deferred $ (7,330) $ 66,584 $ 6,836 $ 58,022 Total income tax (expense) benefit $ (7,461) $ 66,584 $ (94,856) $ 58,022 |
Schedule of Company's actual provision for income taxes | A reconciliation between the Company’s actual provision for income taxes and the provision at the Hong Kong statutory rate is as follows: For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Loss before income tax expense $ (7,308) $ (1,194,120) $ (873,275) $ (1,894,351) Computed tax benefit with statutory tax rate 1,207 197,073 144,091 312,567 Impact of different tax rates in other jurisdictions (3,342) 12,427 1,677 16,794 Impact of preferred tax rate 2,666 (82,047) (54,519) (125,895) Non-deductible items: Tax effect of non-deductible expenses (170,572) (11,061) (183,900) (17,886) Changes in valuation allowance 162,756 (49,808) 134,157 (127,558) Others (176) — (136,362) — Total income tax (expense) benefit $ (7,461) $ 66,584 $ (94,856) $ 58,022 |
Schedule of reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions | The reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions is as follows: June 30, December 31, 2020 2019 Uncertain tax liabilities, beginning of period $ — $ — Additions for tax position of current period 73,357 — Uncertain tax liabilities, end of period $ 73,357 $ — |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
LEASES | |
Schedule of Leases | The following table provides a summary of leases by balance sheet location as of June 30, 2020: As of June 30, Assets/liabilities Classification 2020 (Unaudited) Assets Operating lease right-of-use assets Operating lease assets $ 241,034 Liabilities Current Operating lease liability - current Current operating lease liabilities $ 152,954 Long-term Operating lease liability - non-current Long-term operating lease liabilities 80,040 Total lease liabilities $ 232,994 |
Schedule of Lease Expenses | The operating lease expenses for the three months and six months ended June 30, 2020 and 2019 were as follows: Three Months Ended June 30, Six Months Ended June 30, Lease Cost Classification 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Operating lease cost Cost of revenue, general and administrative expenses $ 160,850 $ 86,395 $ 361,212 $ 137,173 Total lease cost $ 160,850 $ 86,395 $ 361,212 $ 137,173 |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities at June 30, 2020 were as follows: Operating Maturity of Lease Liabilities Leases 2020 (remaining) $ 131,141 2021 76,936 2022 14,154 2023 14,154 2024 14,154 Thereafter — Total lease payments $ 250,539 Less: interest (17,545) Present value of lease payments $ 232,994 |
Schedule of Lease Term and Discount Rate | Six Months Ended June 30, Lease Term and Discount Rate 2020 2019 (Unaudited) (Unaudited) Weighted-average remaining lease term (years) Operating leases 2.32 2.06 Weighted-average discount rate (%) Operating leases 8 % 8 % |
Schedule of Other Information | Six Months Ended June 30, Other Information 2020 2019 (Unaudited) (Unaudited) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 111,303 $ 94,573 Leased assets obtained in exchange for new operating lease liabilities 115,667 275,189 |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
LOSS PER SHARE | |
Schedule of the basic and diluted Loss Per Share | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Numerator: Net loss $ (14,769) $ (1,127,536) $ (968,131) $ (1,836,329) Denominator: Weighted-average shares outstanding -Basic 11,258,467 11,247,773 11,256,798 11,236,959 Stock options and restricted shares — — — — Weighted-average shares outstanding -Diluted 11,258,467 11,247,773 11,256,798 11,236,959 Loss per share -Basic (0.001) (0.100) (0.086) (0.163) -Diluted (0.001) (0.100) (0.086) (0.163) |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS - Additional Information (Details) | 6 Months Ended | |
Jun. 30, 2020HKD ($) | Jun. 30, 2020USD ($) | |
Art Era Internet Technology Tianjin Co Ltd [Member] | ||
Organization And Description Of Business [Line Items] | ||
Equity Method Investment Summarized Financial Information, Equity | $ 2,000,000 | |
Subsidiary of Limited Liability Company or Limited Partnership, Date | Sep. 7, 2018 | Sep. 7, 2018 |
MQ (Tianjin) Enterprise Management Consulting Co Ltd [Member] | ||
Organization And Description Of Business [Line Items] | ||
Equity Method Investment Summarized Financial Information, Equity | $ 100,000 | |
Subsidiary of Limited Liability Company or Limited Partnership, Date | Jul. 9, 2019 | Jul. 9, 2019 |
HongKong Takung Assets And Equity of Artworks Exchange Co Ltd [Member] | ||
Organization And Description Of Business [Line Items] | ||
Entity Incorporation, Date of Incorporation | Sep. 17, 2012 | Sep. 17, 2012 |
Takung Shanghai Co Ltd [Member] | ||
Organization And Description Of Business [Line Items] | ||
Entity Incorporation, Date of Incorporation | Jul. 28, 2015 | Jul. 28, 2015 |
Capital Units, Value | $ 1,000,000 | |
Hong Kong MQ [Member] | ||
Organization And Description Of Business [Line Items] | ||
Net Assets | $ 0 | |
Percentage Of Investments Acquired From Issued And Outstanding Shares | 100.00% | |
Payments to Acquire Investments | $ 1 | $ 0.13 |
PREPAYMENT AND OTHER CURRENT _3
PREPAYMENT AND OTHER CURRENT ASSETS, NET (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
PREPAYMENT AND OTHER CURRENT ASSETS, NET | ||
Prepaid tax | $ 33,495 | $ 281,582 |
Prepaid service fees | 105,399 | 132,064 |
Short-term borrowings to third party | 0 | 53,919 |
Staff advance | 42,944 | 18,380 |
Other current assets | 19,227 | 19,222 |
Less: allowance for doubtful accounts | 0 | (53,919) |
Prepayment and other current assets, net | $ 201,065 | $ 451,248 |
PREPAYMENT AND OTHER CURRENT _4
PREPAYMENT AND OTHER CURRENT ASSETS, NET - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Provision for Doubtful Accounts | $ 0 | $ 0 | $ 0 | $ 0 |
Provision for doubtful accounts | 2,010,251 | |||
Write off bad debt provision | 2,010,251 | |||
Short-term borrowings to a third party | ||||
Provision for doubtful accounts | 54,193 | |||
Write off bad debt provision | $ 54,193 |
ACCOUNT RECEIVABLES, NET (Detai
ACCOUNT RECEIVABLES, NET (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Less: allowance for doubtful accounts | $ (2,000,109) | |
Account receivables, net | $ 154,837 | 0 |
Listing Fee | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, Gross, Current | $ 154,837 | 0 |
Authorized agent subscription revenue | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, Gross, Current | 560,780 | |
Monthly commission fee | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, Gross, Current | 1,385,420 | |
Others | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, Gross, Current | $ 53,909 |
ACCOUNT RECEIVABLES, NET - Addi
ACCOUNT RECEIVABLES, NET - Additional information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
ACCOUNT RECEIVABLES, NET | ||||
Provision for Doubtful Accounts | $ 0 | $ 0 | $ 0 | $ 0 |
Provision for doubtful accounts | 2,010,251 | |||
Write off bad debt provision | $ 2,010,251 |
LOAN RECEIVABLES (Details)
LOAN RECEIVABLES (Details) | 6 Months Ended | ||
Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | |
Loans and Leases Receivable, Balance Amount | $ | $ 1,981,571 | $ 2,010,974 | |
Loan Receivable One | |||
Loans And Leases Receivable, Initiation Date | Jul. 18, 2019 | ||
Loans And Leases Receivable, Name Of Borrower | Chongqing Aoge Import and Export Co. | ||
Loans And Leases Receivable, Name Of Lender | Tianjin Takung | ||
Loans and Leases Receivable, Net Amount | ¥ 5,000,000 | 707,704 | |
Loans and Leases Receivable, Balance Amount | ¥ 5,000,000 | ||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 0.00% | ||
Loans and Leases Receivable, Maturity Date | Jul. 17, 2020 | ||
Loan Receivable Two | |||
Loans And Leases Receivable, Initiation Date | Aug. 29, 2019 | ||
Loans And Leases Receivable, Name Of Borrower | Chongqing Aoge Import and Export Co. | ||
Loans And Leases Receivable, Name Of Lender | Tianjin Takung | ||
Loans and Leases Receivable, Net Amount | ¥ 5,000,000 | 707,704 | |
Loans and Leases Receivable, Balance Amount | ¥ 5,000,000 | ||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 0.00% | ||
Loans and Leases Receivable, Maturity Date | Aug. 28, 2020 | ||
Loan Receivable Three | |||
Loans And Leases Receivable, Initiation Date | Sep. 20, 2019 | ||
Loans And Leases Receivable, Name Of Borrower | Chongqing Aoge Import and Export Co. | ||
Loans And Leases Receivable, Name Of Lender | Tianjin Takung | ||
Loans and Leases Receivable, Net Amount | ¥ 4,000,000 | $ 566,163 | |
Loans and Leases Receivable, Balance Amount | ¥ 4,000,000 | ||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 0.00% | ||
Loans and Leases Receivable, Maturity Date | Sep. 19, 2020 |
LOAN RECEIVABLES - Additional i
LOAN RECEIVABLES - Additional information (Details) | Jun. 30, 2020 |
Friend Sourcing Ltd [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 8.00% |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Cost | ||
Furniture, fixtures and equipment | $ 205,178 | $ 201,093 |
Leasehold improvements | 210,299 | 343,697 |
Computer trading and clearing system | 3,390,531 | 3,379,654 |
Transport equipment | 101,819 | 103,330 |
Sub-total | 3,907,827 | 4,027,774 |
Less: accumulated depreciation | (3,280,448) | (3,167,948) |
Property and equipment, net | $ 627,379 | $ 859,826 |
PROPERTY AND EQUIPMENT, NET - A
PROPERTY AND EQUIPMENT, NET - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
PROPERTY AND EQUIPMENT, NET | ||||
Depreciation | $ 119,060 | $ 157,687 | $ 246,990 | $ 314,466 |
ACCRUED EXPENSES AND OTHER PA_3
ACCRUED EXPENSES AND OTHER PAYABLES (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
ACCRUED EXPENSES AND OTHER PAYABLES | ||
Accruals for professional fees | $ 431,240 | $ 168,040 |
Accruals for consulting fees | 267,540 | 311,122 |
Payroll payables | 38,642 | 79,710 |
Payables for trading and clearing system | 50,550 | 50,295 |
Other payables | 27,776 | 20,499 |
Total accrued expenses and other payables | $ 815,748 | $ 629,666 |
SHORT-TERM BORROWINGS FROM A _3
SHORT-TERM BORROWINGS FROM A THIRD PARTY (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Less: Dicount loan payable | $ (21,664) | $ (99,626) |
Short-term Debt | $ 1,956,287 | 1,868,345 |
Short Term Debt One [Member] | ||
Debt Instrument, Issuance Date | Jul. 18, 2019 | |
Debt Instrument Borrower | Hong Kong Takung | |
Debt Instrument, Lender | Friend Sourcing Ltd. | |
Short-term Debt, Annual Interest Rate | 8.00% | |
Debt Instrument, Repayment Due Date | Jul. 17, 2020 | |
Short-term Debt | $ 718,433 | 714,808 |
Short Term Debt Two [Member] | ||
Debt Instrument, Issuance Date | Aug. 29, 2019 | |
Debt Instrument Borrower | Hong Kong Takung | |
Debt Instrument, Lender | Friend Sourcing Ltd. | |
Short-term Debt, Annual Interest Rate | 8.00% | |
Debt Instrument, Repayment Due Date | Aug. 28, 2020 | |
Short-term Debt | $ 699,732 | 696,202 |
Short Term Debt Three [Member] | ||
Debt Instrument, Issuance Date | Sep. 20, 2019 | |
Debt Instrument Borrower | Hong Kong Takung | |
Debt Instrument, Lender | Friend Sourcing Ltd. | |
Short-term Debt, Annual Interest Rate | 8.00% | |
Debt Instrument, Repayment Due Date | Sep. 19, 2020 | |
Short-term Debt | $ 559,786 | $ 556,961 |
SHORT-TERM BORROWINGS FROM A _4
SHORT-TERM BORROWINGS FROM A THIRD PARTY - Additional Information (Details) | Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jul. 31, 2019 |
Debt, Weighted Average Interest Rate | 8.00% | 8.00% | 8.00% | |
Short-term Debt | $ 1,956,287 | $ 1,868,345 | ||
Tianjin Takung [Member] | ||||
Short-term Debt | ¥ 14,000,000 | $ 1,981,571 |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS - Due from and to related party (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Less: allowance for doubtful accounts | $ (2,000,109) | |
Amount due from related parties, net | $ 5,749,246 | 5,834,554 |
Amount due from a related party | 0 | 104,128 |
Due to Related Parties, Current | 6,457,827 | 6,862,713 |
Wang | ||
Amount due from related parties, net | 5,749,246 | |
Due to Related Parties, Current | 6,451,530 | |
Li | ||
Amount due from related parties, net | 5,834,554 | |
Due to Related Parties, Current | 6,418,980 | |
Mao | ||
Less: allowance for doubtful accounts | (102,606) | |
Amount due from related parties, net | 102,606 | |
Amount due from a related party | 104,128 | |
Due to Related Parties, Current | $ 6,297 | $ 443,733 |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS - Additional Information (Details) | Feb. 15, 2020CNY (¥) | Feb. 15, 2020USD ($) | Oct. 16, 2019m² | Sep. 16, 2019HKD ($) | May 13, 2019CNY (¥)m² | May 13, 2019USD ($)m² | Oct. 18, 2018CNY (¥) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 16, 2019USD ($) | May 13, 2019USD ($) | Oct. 18, 2018USD ($) |
Related Party Transaction [Line Items] | ||||||||||||
Bad debt provision | $ 2,000,109 | |||||||||||
Operating Lease, Liability, Current | $ 152,954 | 166,987 | ||||||||||
Current portions of this loan receivable | 5,749,246 | 5,834,554 | ||||||||||
Noncurrent portions of this loan receivable | 0 | $ 104,128 | ||||||||||
Liu Zhenying [Member] | Loans Payable [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt Instrument, Face Amount | $ 50,000,000 | $ 6,451,530 | ||||||||||
Debt Instrument, Maturity Date | May 15, 2020 | |||||||||||
Liu Zhenying [Member] | Loans Payable [Member] | Tianjin Takung [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Receivable with Imputed Interest, Face Amount | ¥ 40,619,000 | $ 5,749,246 | ||||||||||
Receivable with Imputed Interest, Due Date | May 15, 2020 | |||||||||||
Mao | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Leases, Area of Leased Office Location | m² | 2,090.61 | 2,090.61 | ||||||||||
Leases, Rent Charged Per Square Meter Per day | $ 0.55 | |||||||||||
Payments for Rent | ¥ 1,449,838 | $ 205,211 | ||||||||||
Security Deposit for lease | ¥ 724,919 | $ 102,606 | ||||||||||
Bad debt provision | 102,606 | |||||||||||
Operating Lease, Liability, Current | 0 | |||||||||||
MQ (Tianjin) Enterprise Management Consulting Co Ltd [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Leases, Area of Leased Office Location | m² | 1,475.67 | |||||||||||
Payments for Rent | ¥ 170,563 | $ 24,254 | ||||||||||
Operating Lease, Liability, Current | 0 | |||||||||||
Startup Deposit | $ 6,297 |
INCOME TAXES - Income Tax Provi
INCOME TAXES - Income Tax Provision (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Current: | ||||
Federal | $ 0 | $ 0 | $ 0 | $ 0 |
State | 0 | 0 | 0 | 0 |
Foreign | (131) | 0 | (101,692) | 0 |
Total Current | (131) | 0 | (101,692) | 0 |
Deferred: | ||||
Federal | 0 | 0 | 0 | 0 |
State | 0 | 0 | 0 | 0 |
Foreign | (7,330) | 66,584 | 6,836 | 58,022 |
Total Deferred | (7,330) | 66,584 | 6,836 | 58,022 |
Total income tax (expense) benefit | $ (7,461) | $ 66,584 | $ (94,856) | $ 58,022 |
INCOME TAXES - Actual Provision
INCOME TAXES - Actual Provision for Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
INCOME TAXES | ||||
Loss before income tax expense | $ (7,308) | $ (1,194,120) | $ (873,275) | $ (1,894,351) |
Computed tax benefit with statutory tax rate | 1,207 | 197,073 | 144,091 | 312,567 |
Impact of different tax rates in other jurisdictions | (3,342) | 12,427 | 1,677 | 16,794 |
Impact of preferred tax rate | 2,666 | (82,047) | (54,519) | (125,895) |
Non-deductible items: | ||||
Tax effect of non-deductible expenses | (170,572) | (11,061) | (183,900) | (17,886) |
Changes in valuation allowance | 162,756 | (49,808) | 134,157 | (127,558) |
Others | (176) | 0 | (136,362) | 0 |
Total income tax (expense) benefit | $ (7,461) | $ 66,584 | $ (94,856) | $ 58,022 |
INCOME TAXES - Uncertain Tax Po
INCOME TAXES - Uncertain Tax Positions (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
INCOME TAXES | ||
Uncertain tax liabilities, beginning of period | $ 0 | $ 0 |
Additions for tax position of current period | 73,357 | 0 |
Uncertain tax liabilities, end of period | $ 73,357 | $ 0 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) $ in Millions | Mar. 27, 2020 | Jun. 30, 2020HKD ($) | Jun. 30, 2019 | Jun. 30, 2020HKD ($) | Jun. 30, 2019 | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Income Taxes [Line Items] | |||||||
CARES, elimination of taxable income limitation (as a percent) | 80.00% | ||||||
Recovery period for qualified improvement property | 15 years | ||||||
Operating Loss Carryforwards | $ 2,570,094 | $ 2,167,494 | |||||
Percentage of Net Operating Loss carryforwards | 80.00% | ||||||
Assessable Profit | $ 2 | $ 2 | 257,705 | ||||
Effective Income Tax Rate Reconciliation, Percent | (102.10%) | 5.60% | (10.90%) | 3.10% | |||
Liability for accrued interest | 0 | 0 | |||||
Taxpayer Expiry Term | 3 years | ||||||
Tax Assessment Initiated Term | 6 years | ||||||
Tax Assessment Extendable Term | 10 years | ||||||
Income Tax Slab One Rate [Member] | |||||||
Income Taxes [Line Items] | |||||||
CARES, business interest deduction limitations (as a percent) | 30.00% | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 8.25% | ||||||
Income Tax Slab Two Rate [Member] | |||||||
Income Taxes [Line Items] | |||||||
CARES, business interest deduction limitations (as a percent) | 50.00% | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 16.50% | ||||||
Hong Kong Subsidiaries [Member] | |||||||
Income Taxes [Line Items] | |||||||
Uncertain tax liabilities | $ 73,357 | $ 0 | |||||
Hong Kong Subsidiaries [Member] | Income Tax Slab One Rate [Member] | |||||||
Income Taxes [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Percent | 8.25% | ||||||
Hong Kong Subsidiaries [Member] | Income Tax Slab Two Rate [Member] | |||||||
Income Taxes [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Percent | 16.50% | ||||||
PRC [Member] | |||||||
Income Taxes [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% |
LEASES (Details)
LEASES (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
LEASES | ||
Operating lease right-of-use assets | $ 241,034 | $ 731,469 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Operating lease right-of-use assets | |
Operating lease liabilities - current | $ 152,954 | 166,987 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OperatingLeaseLiabilityCurrent us-gaap:DueToRelatedPartiesCurrent | |
Operating lease liabilities, non-current | $ 80,040 | $ 48,856 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating lease liabilities, non-current | |
Total lease liabilities | $ 232,994 |
LEASES - Operating Lease Expens
LEASES - Operating Lease Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
LEASES | ||||
Operating lease cost | $ 160,850 | $ 86,395 | $ 361,212 | $ 137,173 |
Total lease cost | $ 160,850 | $ 86,395 | $ 361,212 | $ 137,173 |
LEASES - Operating Lease Liabil
LEASES - Operating Lease Liabilities (Details) | Jun. 30, 2020USD ($) |
LEASES | |
2020 (remaining) | $ 131,141 |
2021 | 76,936 |
2022 | 14,154 |
2023 | 14,154 |
2024 | 14,154 |
Thereafter | 0 |
Total lease payments | 250,539 |
Less: interest | (17,545) |
Present value of lease payments | $ 232,994 |
LEASES - Lease Term and Discoun
LEASES - Lease Term and Discount Rate (Details) | Jun. 30, 2020 | Jun. 30, 2019 |
Weighted-average remaining lease term (years) | ||
Operating Lease, Weighted Average Remaining Lease Term | 2 years 3 months 25 days | 2 years 22 days |
Operating Lease, Weighted Average Discount Rate, Percent | 8.00% | 8.00% |
LEASES - Other Information (Det
LEASES - Other Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
LEASES | ||
Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows from operating leases | $ 111,303 | $ 94,573 |
Leased assets obtained in exchange for new operating lease liabilities | $ 115,667 | $ 275,189 |
LEASES - Additional Information
LEASES - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Lessee, Operating Lease, Description | The Company has operating leases for its office facilities and artwork storages. The Company's leases have remaining terms of less than one year to approximately six years. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term |
Minimum [Member] | |
Operating Lease, Remaining Lease Term | 1 year |
Maximum [Member] | |
Operating Lease, Remaining Lease Term | 6 years |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | ||||||
Net loss | $ (14,769) | $ (953,362) | $ (1,127,536) | $ (708,793) | $ (968,131) | $ (1,836,329) |
Denominator: | ||||||
Weighted-average shares outstanding - Basic | 11,258,467 | 11,247,773 | 11,256,798 | 11,236,959 | ||
Stock options and restricted shares | 0 | 0 | 0 | 0 | ||
Weighted-average shares outstanding - Diluted | 11,258,467 | 11,247,773 | 11,256,798 | 11,236,959 | ||
Loss per share | ||||||
-Basic | $ (0.001) | $ (0.100) | $ (0.086) | $ (0.163) | ||
-Diluted | $ (0.001) | $ (0.100) | $ (0.086) | $ (0.163) |
LOSS PER SHARE - Additional Inf
LOSS PER SHARE - Additional Information (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 100,890 | 148,890 | 100,890 | 15,000 |
CONTINGENCIES - (Details)
CONTINGENCIES - (Details) $ in Thousands | Jul. 22, 2020USD ($) | Jul. 01, 2020USD ($) | Jun. 30, 2020USD ($)claimitem | May 31, 2020USD ($)claimitem |
Loss Contingencies [Line Items] | ||||
Number of summons received | item | 2 | 2 | ||
Claim amounted | $ 230 | $ 230 | ||
Number of claims filed | claim | 2 | 2 | ||
Claim revoked against Tianjin Takung | ||||
Loss Contingencies [Line Items] | ||||
Claim amounted | $ 150 | |||
Litigation two | ||||
Loss Contingencies [Line Items] | ||||
Claim amounted | $ 80 |