Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 18, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Entity Registrant Name | China United Insurance Service, Inc. | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 29,421,736 | |
Trading Symbol | CUII | |
Entity Central Index Key | 0001512927 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 15,450,523 | $ 16,663,942 |
Time deposits | 35,448,840 | 25,740,164 |
Restricted cash equivalents | 0 | 3,320,802 |
Accounts receivable | 10,571,604 | 15,332,355 |
Contract assets | 3,348,094 | 0 |
Other current assets | 1,470,219 | 1,155,678 |
Total current assets | 66,289,280 | 62,212,941 |
Property and equipment, net | 1,285,252 | 1,195,695 |
Operating lease assets | 4,208,685 | 0 |
Intangible assets, net | 439,992 | 575,985 |
Long-term investments | 2,464,067 | 2,477,558 |
Restricted cash - noncurrent | 140,135 | 655,027 |
Other assets | 2,727,227 | 1,764,638 |
TOTAL ASSETS | 77,554,638 | 68,881,844 |
Current liabilities | ||
Short-term loans | 10,433,222 | 8,435,587 |
Income tax payable - current | 1,842,708 | 1,599,146 |
Commission payable to sales professionals | 7,156,446 | 8,014,480 |
Due to related parties | 1,457,665 | 996,565 |
Operating lease liabilities - current | 1,975,856 | 0 |
Other current liabilities | 5,246,076 | 7,348,841 |
Total current liabilities | 28,111,973 | 26,394,619 |
Operating lease liabilities - noncurrent | 2,095,202 | 0 |
Income tax payable - noncurrent | 911,387 | 1,007,323 |
Other liabilities | 1,905,051 | 2,537,072 |
TOTAL LIABILITIES | 33,023,613 | 29,939,014 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000 issued and outstanding | 10 | 10 |
Common stock, par value $0.00001, 100,000,000 authorized, 29,421,736 and 29,452,669 issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 294 | 295 |
Additional paid-in capital | 8,190,449 | 8,190,449 |
Statutory reserves | 8,056,334 | 7,299,123 |
Retained earnings | 10,329,276 | 7,273,227 |
Accumulated other comprehensive loss | (708,276) | (171,318) |
Total stockholders' equity attribute to parent's shareholders | 25,868,087 | 22,591,786 |
Noncontrolling interests | 18,662,938 | 16,351,044 |
TOTAL STOCKHOLDERS' EQUITY | 44,531,025 | 38,942,830 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 77,554,638 | $ 68,881,844 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 1,000,000 | 1,000,000 |
Preferred Stock, shares outstanding | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 29,421,736 | 29,452,669 |
Common stock, shares outstanding | 29,421,736 | 29,452,669 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME / (LOSS) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME / (LOSS) | ||||
Revenue | $ 23,266,852 | $ 16,147,000 | $ 64,449,994 | $ 53,811,717 |
Cost of revenue | 14,374,811 | 9,653,926 | 41,805,241 | 32,972,346 |
Gross profit | 8,892,041 | 6,493,074 | 22,644,753 | 20,839,371 |
Operating expenses: | ||||
Selling | 744,429 | 1,355,033 | 1,741,372 | 2,782,431 |
General and administrative | 4,706,802 | 3,989,414 | 12,934,838 | 12,019,944 |
Total operating expense | 5,451,231 | 5,344,447 | 14,676,210 | 14,802,375 |
Income from operations | 3,440,810 | 1,148,627 | 7,968,543 | 6,036,996 |
Other income (expenses): | ||||
Interest income | 138,408 | 78,287 | 356,896 | 303,079 |
Interest expenses | (64,372) | (28,053) | (144,515) | (79,302) |
Dividend income | (720) | (4,579) | 309,903 | 356,992 |
Other - net | (180,560) | (101,993) | 134,122 | 92,512 |
Total other (expenses) income, net | (107,244) | (56,338) | 656,406 | 673,281 |
Income before income taxes | 3,333,566 | 1,092,289 | 8,624,949 | 6,710,277 |
Income tax expense | 933,985 | 479,399 | 2,254,086 | 2,967,320 |
Net income | 2,399,581 | 612,890 | 6,370,863 | 3,742,957 |
Less: net income attributable to noncontrolling interests | (1,071,427) | (444,571) | (2,557,603) | (2,204,677) |
Net income attributable to parent's shareholders | 1,328,154 | 168,319 | 3,813,260 | 1,538,280 |
Other comprehensive loss | ||||
Foreign currency translation loss | (186,331) | (37,001) | (782,667) | (1,150,482) |
Other | 0 | (156) | 0 | 674 |
Other comprehensive income | (186,331) | (37,157) | (782,667) | (1,149,808) |
Total comprehensive income | 2,213,250 | 575,733 | 5,588,196 | 2,593,149 |
Less: comprehensive income attributable to noncontrolling interests | (1,044,640) | (462,642) | (2,311,894) | (1,822,426) |
Comprehensive income attributable to parent's shareholders | $ 1,168,610 | $ 113,091 | $ 3,276,302 | $ 770,722 |
Weighted average shares outstanding | ||||
Basic and diluted | 29,421,736 | 29,452,669 | 29,432,047 | 29,452,669 |
Earnings per share attributable to common shareholders of the Company: | ||||
Basic and diluted | $ 0.044 | $ 0.006 | $ 0.125 | $ 0.051 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Statutory Reserves [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Parent [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2017 | $ 295 | $ 10 | $ 8,190,449 | $ 5,781,008 | $ 616,019 | $ 6,419,937 | $ 21,007,718 | $ 13,735,656 | $ 34,743,374 |
Balance (in shares) at Dec. 31, 2017 | 29,452,669 | 1,000,000 | |||||||
Appropriation of reserves | (41,483) | 41,483 | |||||||
Foreign currency translation loss | $ 0 | $ 0 | 0 | 0 | (768,002) | 0 | (768,002) | (382,480) | (1,150,482) |
Other comprehensive gain | 0 | 0 | 0 | 0 | 445 | 0 | 445 | 229 | 674 |
Net income | 0 | 0 | 0 | 0 | 0 | 1,538,280 | 1,538,280 | 2,204,677 | 3,742,957 |
Balance at Sep. 30, 2018 | $ 295 | $ 10 | 8,190,449 | 5,739,525 | (151,538) | 7,999,700 | 21,778,441 | 15,558,082 | 37,336,523 |
Balance (in shares) at Sep. 30, 2018 | 29,452,669 | 1,000,000 | |||||||
Balance at Jun. 30, 2018 | $ 295 | $ 10 | 8,190,449 | 5,739,525 | (96,311) | 7,831,381 | 21,665,349 | 15,095,440 | 36,760,789 |
Balance (in shares) at Jun. 30, 2018 | 29,452,669 | 1,000,000 | |||||||
Foreign currency translation loss | (55,141) | (55,141) | 18,140 | (37,001) | |||||
Other comprehensive gain | (86) | (86) | (69) | (156) | |||||
Net income | 168,319 | 168,319 | 444,571 | 612,890 | |||||
Balance at Sep. 30, 2018 | $ 295 | $ 10 | 8,190,449 | 5,739,525 | (151,538) | 7,999,700 | 21,778,441 | 15,558,082 | 37,336,523 |
Balance (in shares) at Sep. 30, 2018 | 29,452,669 | 1,000,000 | |||||||
Balance at Dec. 31, 2018 | $ 295 | $ 10 | 8,190,449 | 7,299,123 | (171,318) | 7,273,227 | 22,591,786 | 16,351,044 | 38,942,830 |
Balance (in shares) at Dec. 31, 2018 | 29,452,669 | 1,000,000 | |||||||
Appropriation of reserves | $ 0 | $ 0 | 757,211 | (757,211) | |||||
Foreign currency translation loss | 0 | 0 | 0 | 0 | (536,958) | 0 | (536,958) | (245,709) | (782,667) |
Retirement of common stock | $ (1) | 0 | (1) | (1) | |||||
Retirement of common stock (in shares) | (30,933) | ||||||||
Net income | $ 0 | 0 | 0 | 0 | 0 | 3,813,260 | 3,813,260 | 2,557,603 | 6,370,863 |
Balance at Sep. 30, 2019 | $ 294 | $ 10 | 8,190,449 | 8,056,334 | (708,276) | 10,329,276 | 25,868,087 | 18,662,938 | 44,531,025 |
Balance (in shares) at Sep. 30, 2019 | 29,421,736 | 1,000,000 | |||||||
Balance at Jun. 30, 2019 | $ 294 | $ 10 | 8,190,449 | 8,058,094 | (548,732) | 8,999,362 | 24,699,477 | 17,648,448 | 42,347,925 |
Balance (in shares) at Jun. 30, 2019 | 29,421,736 | 1,000,000 | |||||||
Appropriation of reserves | (1,760) | 1,760 | |||||||
Acquisition of noncontrolling interest | (30,150) | (30,150) | |||||||
Foreign currency translation loss | (159,544) | (159,544) | (26,787) | (186,331) | |||||
Net income | 1,328,154 | 1,328,154 | 1,071,427 | 2,399,581 | |||||
Balance at Sep. 30, 2019 | $ 294 | $ 10 | $ 8,190,449 | $ 8,056,334 | $ (708,276) | $ 10,329,276 | $ 25,868,087 | $ 18,662,938 | $ 44,531,025 |
Balance (in shares) at Sep. 30, 2019 | 29,421,736 | 1,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 6,370,863 | $ 3,742,957 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 498,178 | 465,362 |
Amortization of bond premium | 132 | |
Gains on sales of financial assets | (18,970) | |
Loss on valuation of financial assets | (24,296) | 130,397 |
Loss on disposal of property and equipment | 20,733 | 5,522 |
Loss on debt forgiveness | 12,744 | |
Deferred income tax | (66,746) | (41,558) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 4,473,238 | 5,642,056 |
Contract assets | (3,304,938) | (2,188,761) |
Other current assets | (265,401) | (777,365) |
Other asset | (3,126,292) | 497,735 |
Income tax payable | 169,161 | (442,909) |
Commissions payable to sales professionals | (735,625) | (1,386,402) |
Other current liabilities | 1,146,646 | (3,022,297) |
Other liabilities | (1,379,390) | (436,690) |
Net cash provided by operating activities | 3,757,161 | 2,200,923 |
Cash flows from investing activities: | ||
Purchases of time deposits | (41,901,757) | (33,790,843) |
Proceeds from maturities of time deposits | 31,802,019 | 33,599,616 |
Purchases of structured deposits | (10,779,677) | |
Proceeds from maturities of structured deposits | 12,087,077 | |
Purchase of long-term investment - REITs | (1,337,876) | |
Proceeds from repayment of loan receivables | 1,498,099 | |
Purchase of marketable securities | (315,442) | |
Proceeds from sales of marketable securities | 364,748 | |
Proceeds from disposals of property and equipment and intangible assets | 22,557 | |
Purchase of property and equipment | (454,612) | (536,272) |
Purchase of intangible assets | (71,568) | (43,827) |
Net cash (used in) provided by investing activities | (10,554,055) | 696,297 |
Cash flows from financing activities: | ||
Proceeds from short-term loans | 21,539,897 | 16,700,000 |
Repayment of short-term loans | (19,542,276) | (16,150,000) |
Proceeds from related party borrowings | 116,581 | 482,484 |
Repayment to related party borrowing | (544,476) | |
Repayment of convertible bonds | (200,000) | |
Net cash provided by financing activities | 2,114,202 | 288,008 |
Foreign currency translation | (366,421) | (571,369) |
Net decrease in cash, cash equivalents and restricted cash | (5,049,113) | 2,613,859 |
Cash, cash equivalents and restricted cash, beginning balance | 20,639,771 | 15,943,564 |
Cash, cash equivalents and restricted cash, ending balance | 15,590,658 | 18,557,423 |
SUPPLEMENTARY DISCLOSURE: | ||
Interest paid | 151,011 | 124,283 |
Income tax paid | $ 2,023,938 | $ 3,493,315 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 9 Months Ended |
Sep. 30, 2019 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES China United Insurance Service, Inc. (“China United”, “CUIS”, or the “Company”) is a Delaware corporation, organized on June 4, 2010 by Yi-Hsiao Mao, a Taiwan citizen, as a listing vehicle for both ZLI Holdings Limited (“CU Hong Kong”) and Action Holdings Financial Limited (“AHFL,” a company incorporated in the British Virgin Islands). The Company’s common stock currently trades over the counter under the ticker symbol “CUII” on the OTC Pink market. In May 2019, AHFL entered into an agreement to make capital contributions of $485,909 (NTD15,000,000) to Ilife International Investment Co., Limited (“Ilife”). After the transaction, the Company owned 93.75% of Ilife. In July 2019, AHFL acquired the remaining 6.25% shares of Ilife, which became the Company's wholly owned subsidiary. The business objective of Ilife is to obtain a non-exclusive license covering certain information technology systems from Law Broker and generate revenues from marketing and making the technologies available to insurance intermediary companies. On June 4, 2019, Ilife entered into an acquisition agreement with the selling shareholder of Uniwill Insurance Broker Co., Ltd (“Uniwill”), Pursuant to the acquisition agreement, Ilife agreed to pay $14,535 (NTD 450,000) in exchange for the insurance brokerage licenses issued to Uniwill by the Taiwanese government, along with right to the Uniwill company name and $6,455 (NTD 200,000) of legal deposits. The Company has no intention of operating the Uniwill existing brokerage business nor retaining any of its sales personnel. Therefore the Company recognized only the acquisition of assets as part of this transaction. The corporate structure as of September 30, 2019 is as follows: |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The unaudited consolidated financial statements include the accounts of China United, its subsidiaries and variable interest entities as shown in the corporate structure in Note 1. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the consolidated financial statements for prior years to the current year’s presentation. Such reclassifications have no effect on net income as previously reported. Basis of Presentation The unaudited consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10‑Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These unaudited consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2018, which were included in the Company’s 2018 Annual Report on Form 10‑K (“2018 Form 10‑K”). The accompanying consolidated balance sheet as of December 31, 2018, has been derived from the Company’s audited consolidated financial statements as of that date. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable includes commission receivables stated at net realizable values. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary at each quarter-end. Management reviews the composition of accounts receivable and analyzes the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. No allowance was deemed necessary as of September 30, 2019 and December 31, 2018. Foreign Currency Transactions The Company’s financial statements are presented in U.S. dollars ($), which is the Company’s reporting and functional currency. The functional currencies of the Company’s subsidiaries are NTD, RMB and HKD. The resulting translation adjustments are reported under other comprehensive income in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 220 (“ASC 220”), “Reporting Comprehensive Income” . Gains and losses resulting from the translation of foreign currency transactions are reflected in the consolidated statements of operations and other comprehensive income (loss). Monetary assets and liabilities denominated in foreign currency are translated at the functional currency using the rate of exchange prevailing at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the consolidated statements of operations and other comprehensive income (loss). The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for financial statements are as follows: Average Rate for the Nine Months Ended September 30, 2019 2018 New Taiwan dollar (NTD) NTD 31.032055 NTD 29.898134 China yuan (RMB) RMB 6.861782 RMB 6.513683 Hong Kong dollar (HKD) HKD 7.837965 HKD 7.839811 United States dollar ($) $ 1.000000 $ 1.000000 Exchange Rate at September 30, 2019 December 31, 2018 New Taiwan dollar (NTD) NTD 31.035195 NTD 30.564919 China yuan (RMB) RMB 7.135956 RMB 6.876443 Hong Kong dollar (HKD) HKD 7.839583 HKD 7.831246 United States dollar ($) $ 1.000000 $ 1.000000 Earnings Per Share Basic earnings per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued. As the holders of preferred stock of the Company are entitled to share equally with the holders of common stock, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the board of directors, the preferred stock is treated as a participating security. When calculating the basic earnings per common share, the two-class method is used to allocate earnings to common stock and participating security as required by ASC Topic 260, “Earnings Per Share.” Potential common shares consist primarily of convertible bonds calculated using the if-converted method. However, convertible bonds were excluded from the calculation of diluted earnings per common share due to the antidilutive effect. As of September 30, 2019 and December 31, 2018, the Company does not have any outstanding convertible bonds. The antidilutive common share equivalents excluded from the computation were nil for both the three months ended September 30, 2019 and 2018, and were nil and 36,047 for the nine months ended September 30, 2019 and 2018, respectively. The calculation for basic and diluted EPS is as follows: Three Months Ended September 30, 2019 2018 Amounts attributable to CUIS shareholders $ 1,328,154 $ 168,319 Less: amount attributable to the participating preferred shareholders (43,658) (5,527) Amounts attributable to CUIS common shareholders 1,284,496 162,792 Effect of dilution — — Income attributable to CUIS common shareholders after dilution $ 1,284,496 $ 162,792 Basic weighted-average number of common shares outstanding 29,421,736 29,452,669 Effect of convertible bond — — Diluted weighted-average number of common shares outstanding 29,421,736 29,452,669 Earnings per share attributable to CUIS common shareholders: Basic $ 0.044 $ 0.006 Diluted $ 0.044 $ 0.006 Nine Months Ended September 30, 2019 2018 Amounts attributable to CUIS shareholders $ 3,813,260 $ 1,538,280 Less: amount attributable to the participating preferred shareholders (125,304) (50,514) Amounts attributable to CUIS common shareholders 3,687,956 1,487,766 Effect of dilution — — Income attributable to CUIS common shareholders after dilution $ 3,687,956 $ 1,487,766 Basic weighted-average number of common shares outstanding 29,432,047 29,452,669 Effect of convertible bond — — Diluted weighted-average number of common shares outstanding 29,432,047 29,452,669 Earnings per share attributable to CUIS common shareholders: Basic $ 0.125 $ 0.051 Diluted $ 0.125 $ 0.051 Long-Term Investments Long-term investments include government bonds held as available-for-sale, investment in real estate investment trusts (“REITs”) measured at fair value through net income, and equity investments under cost method. Available-for-sale investments are carried at fair value and unrealized gains and losses as a result of changes in the fair value are recorded as a separate component within accumulated other comprehensive income in the accompanying consolidated balance sheets. The Company measures equity investments in companies that do not have a readily determinable fair value in which it holds an interest of less than 20% using cost method, and no changes in fair value is recognized in the income statement. As of September 30, 2019 and December 31, 2018, the Company’s long-term investments consisted the following: September 30, 2019 December 31, 2018 Equity investments under cost method $ 1,238,430 $ 1,257,485 Foreign government bonds held for available-for-sale 97,885 99,834 REITs 1,127,752 1,120,239 Total long-term investments $ 2,464,067 $ 2,477,558 Fair Value of Financial Instruments Fair value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels 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 assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments. ¨ Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. The following fair value hierarchy tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018: September 30, 2019 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Long-term investments: Foreign government bonds (available-for-sale debt securities) $ — $ 97,885 $ — $ 97,885 REITs 1,127,752 — — 1,127,752 December 31, 2018 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Marketable securities (included in other current assets): Mutual fund $ 30,800 $ — $ — $ 30,800 Long-term investments: Foreign government bonds (available -for -sale debt securities) — 99,834 — 99,834 REITs 1,120,239 — — 1,120,239 During the nine months ended September 30, 2019, there were no assets or liabilities that were transferred between any of the levels. Marketable securities and long-term investments in REITs – The fair value of the mutual fund and REITs is valued based on quoted market prices in active markets. Foreign government bonds – The fair value of government bonds is valued based on theoretical bond price in Taipei Exchange. The amortized cost of the investment in government bonds is $97,042 and $98,732 as of September 30, 2019 and December 31, 2018, respectively. The government bonds will mature on March 17, 2021. The carrying amounts of financial assets and liabilities in the consolidated balance sheets for cash and cash equivalents, time deposits, restricted cash and cash equivalents, accounts receivable, short-term loans, due to related parties and accrued expense approximate fair value due to the short-term duration of those instruments. Concentration of Risk The Company maintains cash with banks in the USA, People’s Republic of China (“PRC” or “China”), Hong Kong, and Taiwan. Should any bank holding cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Taiwan, a depositor has up to NTD3,000,000 insured by Central Deposit Insurance Corporation (“CDIC”). In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In Hong Kong, a depositor has up to HKD500,000 insured by Hong Kong Deposit Protection Board (“DPB”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”). Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, time deposits, restricted cash, register capital deposits and accounts receivable. As of September 30, 2019 and December 31, 2018, approximately $2,335,000 and $1,751,000 of the Company’s cash and cash equivalents, time deposits, restricted cash equivalents and register capital deposits held by financial institutions, was insured, and the remaining balance of approximately $49,338,000 and $44,289,000, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have an allowance for doubtful accounts. For the three months ended September 30, 2019 and 2018, the Company’s revenues from sale of insurance policies underwritten by these companies were: Three Months Ended September 30, 2019 2018 % of Total % of Total Amount Revenue Amount Revenue Taiwan Life Insurance Co., Ltd. $ % $ % Farglory Life Insurance Co., Ltd. % % TransGlobe Life Insurance Inc. % % For the nine months ended September 30, 2019 and 2018, the Company’s revenues from sale of insurance policies underwritten by these companies were: Nine Months Ended September 30, 2019 2018 % of Total % of Total Amount Revenue Amount Revenue Taiwan Life Insurance Co., Ltd. $ 13,589,908 21 % $ 7,193,135 13 % Farglory Life Insurance Co., Ltd. 12,347,817 19 % 13,325,435 25 % TransGlobe Life Insurance Inc. 7,927,576 12 % 6,876,230 13 % As of September 30, 2019 and December 31, 2018, the Company’s accounts receivable from these companies were: September 30, 2019 December 31, 2018 % of Total % of Total Accounts Accounts Amount Receivable Amount Receivable Taiwan Life Insurance Co., Ltd. $ 2,669,222 25 % $ 2,578,590 17 % Farglory Life Insurance Co., Ltd. 1,547,258 15 % 3,139,404 20 % TransGlobe Life Insurance Inc. 1,475,880 14 % 2,381,181 16 % The Company’s operations are in the PRC, Hong Kong and Taiwan. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, foreign currency exchange and legal environments in the PRC, Hong Kong and Taiwan, and by the state of each economy. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, Hong Kong and Taiwan, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things. New Accounting Pronouncements and Other Guidance New Accounting Pronouncements Effective January 1, 2019: Leases On January 1, 2019, the Company adopted ASU No. 2016‑02, (ASC Topic 842), Leases, which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. The Company adopted ASC 842 as of January 1, 2019 using a modified retrospective transition with no adjustment to its comparative periods in the year of transition. The Company elected the practical expedients, which allow the Company not to reassess prior conclusions with respect to lease identification, lease classification and initial direct costs under ASC 842. The Company did not elect the hindsight practical expedient to determine the lease term or in assessing the likelihood that a The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The adoption of ASC 842 resulted in the recognition of operating lease right-of-use assets of $4.0 million and corresponding operating lease liabilities of $3.7 million as of January 1, 2019 on the consolidated balance sheet. See Note 11 for details. Accounting Standards Issued but Not Yet Adopted Credit Losses In June 2016, the FASB issued ASU No. 2016‑13, (Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. ASU 2016‑13 is effective for public entities for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. The Company is evaluating the impact of the adoption of ASU 2016‑13 on its financial position and results of operations. There were other updates recently issued. The management does not believe that other than disclosed above, the recently issued, but not yet adopted, accounting pronouncements will have a material impact on its financial position results of operations or cash flows. |
CASH, CASH EQUIVALENTS AND REST
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS | 9 Months Ended |
Sep. 30, 2019 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS | NOTE 3 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS Cash, cash equivalents and restricted cash equivalents consisted of the following as of September 30, 2019 and December 31, 2018: September 30, December 31, 2019 2018 Cash and cash equivalents: Cash in banks and on hand $ 15,450,523 $ 7,439,057 Cash equivalents – commercial paper — 654,006 Time deposits – with original maturities less than three months (see Note 4) — 8,570,879 15,450,523 16,663,942 Restricted cash equivalents — 3,320,802 Restricted cash – noncurrent 140,135 655,027 Total cash, cash equivalents and restricted cash shown in the statements of cash flows $ 15,590,658 $ 20,639,771 On March 27, 2019, the Company and China Bills Finance Corporation entered into a repurchase agreement to purchase re-purchase bonds of $1,296,642 (NTD 40,000,000) with 0.48% interest rate per annum. The re-purchase bonds were due in April 2019. As of September 30, 2019, the re-purchase bonds held by the Company was nil. On December 14, 2018, the Company purchased a commercial paper of $654,006 (NTD 19,989,649) with 0.70% interest rate annum and with the maturity date of January 10, 2019. As of September 30, 2019, the Company did not hold any commercial paper. As of September 30, 2019 and December 31, 2018, the Company had restricted cash equivalents of nil and $3,320,802 (NTD101,500,000), which were time deposits with original maturities less than three months and pledged to satisfy the requirements of certain debt agreements. Noncurrent restricted cash includes a mandatory deposit in the bank in conformity with Provisions of the Supervision and Administration of Specialized Insurance Agencies in PRC, which is not allowed to be withdrawn without the permission of the regulatory commission, and a trust account held for the bonus accrued for Law Broker’s general manager. |
TIME DEPOSITS
TIME DEPOSITS | 9 Months Ended |
Sep. 30, 2019 | |
TIME DEPOSITS | |
TIME DEPOSITS | NOTE 4 – TIME DEPOSITS September 30, December 31, 2019 2018 Total time deposits $ 35,448,840 $ 34,311,043 Less: Time deposits – with original maturities less than three months (see Note 3) — (8,570,879) Time deposits – original maturities over three months but less than one year $ 35,448,840 $ 25,740,164 Time Deposits Pledged as Collateral As of September 30, 2019 and December 31, 2018, the Company had time deposits of $5,580,424 and $5,404,889 out of total $35,448,840 and $34,311,043, respectively, pledged as collateral for short-term loans (see Note 5). |
SHORT-TERM LOANS
SHORT-TERM LOANS | 9 Months Ended |
Sep. 30, 2019 | |
SHORT-TERM LOANS | |
SHORT-TERM LOANS | NOTE 5 – SHORT-TERM LOANS The Company’s short-term loans consisted of the following as of September 30, 2019 and December 31, 2018: September 30, December 31, 2019 2018 Credit facility, FEIB $ 2,500,000 $ 2,000,000 Credit facility, O-Bank 3,822,148 3,600,000 Credit facility, CTBC 1,000,000 1,000,000 Credit facility, KGI 3,111,074 1,600,000 Subtotal 10,433,222 8,200,000 Current portion of long-term loans — 235,587 Total short-term loans $ 10,433,222 $ 8,435,587 The Company entered into credit agreements with several commercial banks as follows: ¨ Far Eastern International Bank (“FEIB”): In September 2017, the Company entered into a line of credit agreement with FEIB and borrowings under the revolving credit facility bear interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.85%. As of September 30, 2019 and December 31, 2018, the outstanding balance of the revolving credit facility were $2,500,000 with an interest rate of 3.42% and $2,000,000 with an interest rate of 3.95%, respectively. ¨ O-Bank Co., Ltd. (“O-Bank”): The Company has a revolving credit facility in amount of $4,000,000 with O-Bank, and borrowings under the revolving credit facility bear interest at the TAIFX3 rate plus a margin of 0.5%. As of September 30, 2019 and December 31, 2018, the outstanding balance of the revolving credit facility were $600,000 with an interest rate of 3.37% and $3,600,000 with a weighted average interest rate of 3.63%, respectively. The borrowing is secured by a total amount of $676,651 (NTD 21,000,000) of time deposit. In September 2018, Law Broker entered into a credit agreement with O-Bank and the agreement provides for a $3,222,148 (NTD 100,000,000) revolving credit facility. Borrowings under this agreement bear interest at the TAIFX3 rate plus a margin of 0.75%. As of September 30, 2019, the revolving credit facility was fully drawn down with an interest rate of 1.50%. The credit facility is secured by a total amount of $3,222,148 (NTD 100,000,000) of time deposits. ¨ CTBC Bank Co., Ltd. (“CTBC”): The Company has a revolving credit facility in amount of $1,500,000 with CTBC (“CTBC Loan A”) , and borrowings under the revolving credit facility bear interest at the CTBC’s cost of funds plus a margin of 1%. On December 28, 2018, the Company drew down $1,000,000 with interest at a rate of 4.10% per annum and the amount was paid off in February of 2019. As of September 30, 2019 and December 31, 2018, the Company had the outstanding borrowing of $1,000,000 with an interest rate of 3.44% and $1,000,000 with an interest rate of 3.26% under CTBC Loan A . Law Broker is the guarantor of the credit facility. In August 2018, Law Broker entered into a credit agreement with CTBC providing for a $3,222,148 (NTD 100,000,000) revolving credit facility (“CTBC Loan B”) . As of September 30, 2019, the outstanding loan balance under CTBC Loan B was nil. ¨ KGI Commercial Bank Co., Ltd. (“KGI”): In August 2018, Law Broker entered into a credit agreement with KGI providing for a $1,611,074 (NTD 50,000,000) (“KGI Loan A”). On July 3, 2019, the revolving credit facility was fully drawn down by Law Broker and bears an interest rate of 1.66% per annum. $1,611,074 and nil loan balances were outstanding as of September 30, 2019 and December 31, 2018 under KGI Loan A, respectively. The credit facility is secured by a time deposit of $1,681,625 (RMB 12,000,000). In September 2018, the Company was approved for a line of credit agreement with KGI, pursuant to which the Company has a revolving credit facility of $1,600,000. Borrowings under the agreement bear interest at the LIBOR rate plus a margin of 0.9%. As of September 30, 2019 and December 31, 2018, the Company had the outstanding borrowing of $1,500,000 with a weighted interest rate of 3.06% and $1,600,000 with an interest rate of 3.41%, respectively. On May 15, 2016, Anhou entered into a loan agreement (“Loan A”) with an individual third party with an interest rate of 8% per annum and interest is payable annually . The outstanding balance of Loan A was $123,611 (RMB 850,000) as of December 31, 2018 and the Company paid off the total outstanding loan balance and accrued interest in May 2019. On July 20, 2016, Anhou entered into a loan agreement (“Loan B”) with an individual third party. Loan B bears an interest rate of 8% per annum and interest is payable annually. The outstanding balance of Loan B was $111,976 (RMB 770,000) as of December 31, 2018 and the Company paid off the total outstanding loan balance and accrued interest in May 2019. Total interest expenses for short-term loans incurred were $64,273 and $23,239, respectively, for the three months ended September 30, 2019 and 2018, and were $144,416 and $59,944 for the nine months ended September 30, 2019 and 2018. |
INCOME TAX PAYABLE
INCOME TAX PAYABLE | 9 Months Ended |
Sep. 30, 2019 | |
INCOME TAX PAYABLE | |
INCOME TAX PAYABLE | NOTE 6 – INCOME TAX PAYABLE The Company’s income tax payable consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Taiwan Tax $ 1,613,573 $ 1,416,540 U.S.A. Tax (Note 13) 1,035,371 1,131,307 PRC Tax — 7,590 Hong Kong Tax 105,151 51,032 Total income tax payable $ 2,754,095 $ 2,606,469 Less: current portion (1,842,708) (1,599,146) Income tax payable-noncurrent (Note 13) $ 911,387 $ 1,007,323 |
COMMISSIONS PAYABLE TO SALES PR
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | 9 Months Ended |
Sep. 30, 2019 | |
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | |
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | NOTE 7 – COMMISSIONS PAYABLE TO SALES PROFESSIONALS Commissions payable to sales professionals consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Taiwan $ 6,778,327 $ 7,602,595 PRC 378,119 411,885 Hong Kong — — Total commissions payable to sales professionals $ 7,156,446 $ 8,014,480 Commissions payable to sales professionals are usually settled within twelve months. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2019 | |
OTHER CURRENT LIABILITIES | |
OTHER CURRENT LIABILITIES | NOTE 8 – OTHER CURRENT LIABILITIES Other current liabilities consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Unearned revenue - current 1,459,804 1,028,256 Accrued business tax and tax withholdings 929,662 893,391 Accrued bonus 336,641 2,320,445 Payroll payable and other benefits 667,879 1,360,790 Other accrued liabilities 1,852,090 1,745,959 Total other current liabilities $ 5,246,076 $ 7,348,841 See Note 9 for additional information on current liabilities related to AIA International Limited Taiwan Branch (“AIATW”). |
OTHER LIABILITIES
OTHER LIABILITIES | 9 Months Ended |
Sep. 30, 2019 | |
OTHER LIABILITIES | |
OTHER LIABILITIES | NOTE 9 – OTHER LIABILITIES The Company’s other liabilities consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Unearned revenue - AIATW $ 1,343,938 $ 2,056,513 Due to previous shareholders of AHFL 480,559 480,559 Accrued bonus for Ms. Chao (Note 14) 80,554 — Total other liabilities $ 1,905,051 $ 2,537,072 Unearned revenue – AIATW On June 10, 2013, AHFL entered into a Strategic Alliance Agreement (the “Alliance Agreement”) with AIA International Limited Taiwan Branch (“AIATW”), the purpose to which is to promote life insurance products provided by AIATW within Taiwan by insurance agencies or brokerage companies affiliated with AHFL or CUIS. The original term of the Alliance Agreement was from June 1, 2013 to May 31, 2018. Pursuant to the terms of the Alliance Agreement, AIATW paid AHFL an execution fee approximately $8,068,446 (NTD250,000,000, including the tax of NTD11,904,762, the “Execution Fee”), which is to be recorded as revenue upon fulfilling sales targets and the 13‑month persistency ratio, as defined, over the next five years. The Execution Fee may be required to be recalculated if certain performance targets are not met by AHFL. On September 30, 2014, AHFL entered into a Strategic Alliance Supplemental Agreement (the “Supplemental Agreement”) with AIATW. In the Supplemental Agreement, the performance targets and the provision about refunding the Execution Fee on a pro rata basis when the performance targets are not met were revised. On January 6, 2016, AHFL entered into an Amendment 2 to Strategic Alliance Agreement (the “Amendment No. 2”) with AIATW to further revise certain provisions in the Strategic Alliance Agreement and the previous amendment entered into by and between AHFL and AIATW. To the extent permitted by applicable laws and regulations, AHFL shall assist and encourage any insurance agency company or insurance brokerage company duly approved by the competent government authorities of Taiwan (the “Appointed Broker/Agent”), to cooperate with AIATW for the promotion of life insurance products of AIATW. Pursuant to the Amendment No. 2, the expiration date of the Strategic Alliance Agreement was extended from May 31, 2018 to December 31, 2021, and the effect of the Strategic Alliance Agreement during the period from October 1, 2014 to December 31, 2015 was suspended. In addition, both AHFL and AIATW agreed to adjust certain terms and conditions set forth in the Strategic Alliance Agreement, among which: (i) expand the scope of services to be provided by AHFL to AIATW to include, without limitation, assessment and advice on suitability of cooperative partners, advice on product strategies suitable for promotion channel development, advice on promotion/sales channel improvement, advice on promotion channel marketing and strategic planning, and promotion channel talent training; and (ii) remove certain provisions related to performance milestones and refund of Execution Fees. On March 15, 2016, AHFL issued a promise letter (the “2016 Letter”) to AIATW that AHFL is required to (i) fulfill sales targets and (ii) the 13‑month persistency ratio. On June 14, 2017, with AIATW’s consent, the 2016 Letter was revoked in order to conform with the latest terms and conditions regarding the cooperation between AHFL and AIATW as set forth in a third amendment (Amendment No. 3). Pursuant to the Amendment No. 3, both AHFL and AIATW agreed to adjust certain terms and conditions set forth this amendment, among which (i) except the first contract year (April 15th, 2013 to September 30th, 2014), the sales target of the alliance between the parties shall be changed to (a) value of new business (“VONB”) and (b) the 13‑month persistency ratio; and (ii) AIATW will calculate and recognize the VONB and 13‑month persistency ratio each contract year and inform the Company the result; and (iii) the Company agrees to return the basic business promotion fees to AIATW within thirty (30) days of receipt of the notice sent by AIATW if the Company fails to meet the targets set forth in Amendment No. 3, AIATW reserves the right to offset such amount against the amount payable by it to the Company; and (iv) upon the termination of the Alliance Agreement and its amendments pursuant to the Section 8.2 of the Alliance Agreement, both parties agreed to calculate the amount to be returned or repaid, as applicable, based on the past and current contract years. The Company shall return the basic business promotion fees at NTD 33,000,000 for each contract years within one month after the termination. The following table presents the amounts recognized as revenue and the refunded for each contract year: Revenue Refund Contract Execution Revenue VAT Refund VAT Year Period Fees Amount Amount Amount Amount First 4/15/2013 ~ 9/30/2014 NTD 50,000,000 NTD 27,137,958 (1) NTD 1,356,898 NTD 20,481,090 (1) NTD 1,024,054 Second 1/1/2016 ~ 12/31/2016 NTD 35,000,000 NTD 12,855,000 (2) NTD 642,750 NTD 20,478,333 (2) NTD 1,023,917 Third 1/1/2017 ~ 12/31/2017 NTD 33,000,000 NTD 12,628,201 (3) NTD 631,410 NTD 18,800,370 (3) NTD 940,019 Fourth 1/1/2018 ~ 12/31/2018 NTD 33,000,000 NTD 11,228,600 (4) NTD 561,429 NTD 20,199,971 (4) NTD 1,010,000 Fifth 1/1/2019 ~ 12/31/2019 NTD 33,000,000 NTD 9,694,710 (5) NTD 484,736 NTD 21,733,861 (5) NTD 1,086,693 Sixth 1/1/2020 ~ 12/31/2020 NTD 33,000,000 NTD — NTD — NTD — NTD — Seventh 1/1/2021 ~ 12/31/2021 NTD 33,000,000 NTD — NTD — NTD — NTD — TOTAL NTD 250,000,000 NTD 73,544,469 NTD 3,677,223 NTD 101,693,625 NTD 5,084,683 (1) The revenue recognition for the first contract year is based on the annual first year premium (“AFYP”) set in Alliance Agreement, which is difference from other contract years. From the second contract year to the seventh contract year, the revenue calculation is based on VONB. The Company recognized the first contract year’s revenue amount of $892,742 (NTD27,137,958), net of Value-Added Tax (“VAT”). On December 3, 2015 and February 23, 2016, the Company refunded the amounts of $160,573 (NTD4,761,905), net of VAT, and $530,056 (NTD15,719,185), net of VAT, to AIATW, respectively, due to the portion of performance sales targets not met during the first contract year. (2) For the year ended December 31, 2016, the Company recognized the second contract year’s revenue amount of $422,883 (NTD 12,855,000), net of VAT, and refunded the amount of $690,537 (NTD 20,478,333), net of VAT, due to uncertainty resolved after Amendment 3 went effective. (3) For the year ended December 31, 2017, the Company recognized the third contract year’s revenue amount of $415,423 (NTD12,628,201), net of VAT, and refund amount of $633,955 (NTD18,800,370), net of VAT, for the same contract period based on the calculation of VONB and 13‑month persistency. (4) For the year ended December 31, 2018, the Company recognized the fourth contract year’s revenue amount of $372,650 (NTD11,228,600), net of VAT, and refund amount of $670,389 (NTD 20,199,971), net of VAT, for the same contract period based on the calculation of VONB and 13‑month persistency. (5) The Company estimated VONB and 13‑month persistency ratio for the year ending December 31, 2019 and calculated the revenue amount to be $328,792 (NTD 10,179,446) for the year. The amount will be reassessed every quarter until receiving AIATW’s notice. The Company recognized revenue of $73,691 (NTD 2,281,470) and $92,259 (NTD2,827,107) , net of VAT, for the three months ended September 30, 2019 and 2018, and $234,852 (NTD 7,271,032) and $249,733 (NTD7,466,550) , net of VAT, for the nine months ended September 30, 2019 and 2018 related to this agreement. As of September 30, 2019 and December 31, 2018, the Company had non-current portion of unearned revenue of $1,343,938 and $2,056,513, respectively, and amounts in other current liabilities of $1,459,804 and $1,028,256, respectively, related to the Alliance Agreement. Due to previous shareholders of AHFL Due to previous shareholders of AHFL is the entire remaining balance payable of the acquisition cost. On March 12, 2017, the Company and the selling shareholders of AHFL entered into a fifth amendment to the acquisition agreement, pursuant to which, the Company agreed to make the cash payment in the amount of $480,559 (NTD15 million) on or prior to March 31, 2019. On March 27, 2019, the Company and the selling shareholders of AHFL entered into a sixth amendment to the acquisition agreement, pursuant to which, the Company agreed to make the cash payment in the amount of $480,559 (NTD15 million) on or prior to March 31, 2021. Accrued bonus for Ms. Chao As of September 30, 2019 and December 31, 2018, the Company had a total accrued bonus of $917,382 and $597,631, which included current accrued bonus of $836,828 and $597,631 and noncurrent accrued bonus of $80,554 and nil, respectively. Please see details of the engagement agreement with Ms. Chao in Note 15. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2019 | |
REVENUE | |
REVENUE | NOTE 10 – REVENUE The Company’s revenue is derived from insurance agency and brokerage services. The Company, through its subsidiaries and variable interest entities, sells insurance products provided by insurance companies to individuals, and is compensated in the form of commissions from the respective insurance companies, according to the terms of each service agreement made by and between the Company and the insurance companies. The sale of an insurance product by the Company is considered complete when initial insurance premium is paid by an individual and the insurance policy is approved by the respective insurance company. When a policy is effective, the insurance company is obligated to pay the agreed-upon commission to the Company under the terms of its service agreement with the Company and such commission is recognized as revenue. The Company considers the contracts with insurance companies contain one performance obligation and consideration should be recorded when performance obligation is satisfied at point in time. The amount of revenue to be recognized when the insurance policy is effective includes first year commission and other contingent commission that a significant reversal of revenue would not occur in the subsequent periods. When other contingent commission that could not be determined if a significant reversal of revenue would occur, the Company recognizes the commission after receiving insurance companies’ notice. For the three months ended September 30, 2019 and 2018, the Company recorded revenue of $23,266,852 and $16,147,000, respectively. For the nine months ended September 30, 2019 and 2018, the Company recorded revenue of $64,449,994 and $53,811,717, respectively. Disaggregation information of revenue is disclosed in Note 16. Contract balance September 30, 2019 December 31, 2018 Accounts receivable $ 10, 571,604 $ 15,332,355 Contract assets – current 3,348,094 — Unearned revenue – current (Note 8) 1,459,804 1,028,256 Unearned revenue – noncurrent (Note 9) 1,343,938 2,056,513 Contract assets are the Company’s conditional rights to consideration for completed performance obligation and are in relation to the performance bonus to be rewarded based on the annual performance. The Company recognizes the contingent commission as a contract asset when the performance obligation is fulfilled, and the Company has not had the unconditional rights to the payment. |
LEASE
LEASE | 9 Months Ended |
Sep. 30, 2019 | |
LEASE | |
LEASE | NOTE 11 –LEASE The Company has operating leases for its offices with lease terms ranging from one to six years. We determine if an arrangement is a lease at inception of the contract and whether a contract is or contains a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides us the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, we consider it to be, or contain, a lease. We record a right-of-use asset and a corresponding lease liability based on the present value of the minimum lease payments. The lease term used in the calculation of right-of-use assets and lease liabilities include renewal and termination options that are reasonably certain to be exercised. Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. Our leases do not provide an implicit borrowing rate, and we estimate the Company’s incremental borrowing rate to discount the lease payments based on information available at lease commencement. The Company recorded operating lease cost of $701,341 and $2,076,084 for the three and nine months ended September 30, 2019, respectively. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As of September 30, 2019, operating lease right-of-use assets and lease liabilities were as follows: September 30, 2019 Operating lease right-of-use assets $ 4,208,685 Operating lease liabilities – current 1,975,856 Operating lease liabilities – noncurrent 2,095,202 Lease term and discount rate September 30, 2019 Weighted average remaining lease term Operating lease 2.16 years Weighted average discount rate Operating lease 3.01 % Supplemental cash flow information related to leases September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows related to operating leases $ 2,044,913 The minimum future lease payments as of September 30, 2019 are as follows: Amount 2019 (reminder of year) $ 627,216 2020 1,933,392 2021 1,213,059 2022 320,781 2023 112,208 Thereafter 57,265 Total minimum lease payments 4,263,921 Less: Interest (192,863) Present value of future minimum lease payments $ 4,071,058 |
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS | 9 Months Ended |
Sep. 30, 2019 | |
NON-CONTROLLING INTERESTS | |
NON-CONTROLLING INTERESTS | NOTE 12– NON-CONTROLLING INTERESTS Non-controlling interests consisted of the following as of September 30, 2019 and December 31, 2018: % of Non- Other controlling December 31, Comprehensive September 30, Name of Entity Interest 2018 Net Income (Loss) Loss 2019 Law Enterprise % $ (72,557) $ (120,610) $ (9,665) $ (202,832) Law Broker % 16,149,662 2,507,567 (235,090) 18,422,139 PFAL % 436,742 178,396 (521) 614,617 MKI % (2,630) (514) — (3,144) PA Taiwan % (157,762) (7,192) (166) (165,120) PTC Nanjing % (2,411) (44) (267) (2,722) Total $ 16,351,044 $ 2,557,603 $ (245,709) $ 18,662,938 % of Non- Other controlling December 31, Comprehensive December 31, Name of Entity Interest 2017 Net Income (Loss) Income (Loss) 2018 Law Enterprise 34.05 % $ (243,240) $ 193,308 $ (22,625) $ (72,557) Law Broker 34.05 % 13,900,341 2,655,344 (406,023) 16,149,662 PFAL 49.00 % 228,079 208,918 (255) 436,742 MKI 49.00 % (2,117) (513) — (2,630) PA Taiwan 49.00 % (145,442) (11,789) (531) (157,762) PTC Nanjing 49.00 % (1,965) (26) (420) (2,411) Total $ 13,735,656 $ 3,045,242 $ (429,854) $ 16,351,044 |
INCOME TAX
INCOME TAX | 9 Months Ended |
Sep. 30, 2019 | |
INCOME TAX | |
INCOME TAX | NOTE 13 – INCOME TAX The following table reconciles the Company’s statutory tax rates to effective tax rates for the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, 2019 2018 US statutory rate 21 % 21 % Tax rate difference (1) % (3) % Tax base difference — % 2 % Income tax on undistributed earnings 4 % 6 % Loss in subsidiaries 5 % 14 % Un-deductible and non-taxable items — % 1 % True up of prior year income tax 2 % 3 % Utilization of deferred tax not recognized in prior year (3) % — % Effective tax rate 28 % 44 % Nine Months Ended September 30, 2019 2018 US statutory rate 21 % 21 % Tax rate difference (1) % (1) % Tax base difference — % 1 % Income tax on undistributed earnings 4 % 4 % Loss in subsidiaries 3 % 3 % Un-deductible and non-taxable items — % (1) % True up of prior year income tax — % 4 % Withholding tax — % 13 % Utilization of deferred tax not recognized in prior year (1) % — % Effective tax rate 26 % 44 % The Company’s income tax expense is mainly contributed by its subsidiaries in Taiwan and PRC. The Company’s subsidiaries in Taiwan are governed by the Income Tax Law of Taiwan and are subject to a statutory tax rate at 20% on income reported in the statutory financial statements after appropriate adjustments. In addition, Income Tax Law of Taiwan provides that a company is taxed at additional 5% on any undistributed earnings. CU WFOE and the VIE in the PRC are governed by the Income Tax Law of the PRC concerning the private-run enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriated adjustments, except for Jiangsu. For Jiangsu, according to the requirement of local tax authorities, the tax basis is deemed as 10% of total revenue, instead of net income. The Company’s subsidiaries in Hong Kong are governed by the Inland Revenue Ordinance Tax Law of Hong Kong and are generally subject to a profit tax at the rate of 16.5% on the estimated assessable profits. The 2017 Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted into law on December 22, 2017. The 2017 Tax Act significantly revised the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. The Company has determined the implication of the tax rate reduction does not have any impact on the consolidated financial statements. One-time transition tax is based on the Company’s total post‑1986 earnings and profits (“E&P”) that it previously deferred from U.S. income taxes. The Company completed its calculation and recorded $1,199,195 of the transition tax on undistributed earnings of non-U.S. subsidiaries during the six months ended June 30, 2018 and recorded as part of income tax payable. As of September 30, 2019 and December 31, 2018, the Company had current transition tax payable of $123,984 and $95,936 and noncurrent transition tax payable of $911,387 and $1,007,323. In addition, the 2017 Tax Act also creates a new requirement that certain income (i.e., Global Intangible Low-Taxed Income (“GILTI”)) earned by controlled foreign corporations (“CFCs”) must be included currently in the gross income of the CFCs’ U.S. shareholder income. GILTI is the excess of the shareholder’s net CFC tested income over the net deemed tangible income return, which is currently defined as the excess of (1) 10 percent of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. The Company has elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. For the three and nine months ended September 30, 2019 and 2018, no GILTI tax obligation existed and the GILTI tax expense was nil. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2019 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 14 – RELATED PARTY TRANSACTIONS Due to related parties The following summarizes the payable balances due to related parties as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Due to Mr. Mao (Principal shareholder of the Company)* $ 386,985 $ 391,311 Ms. Lu (Shareholder of Law Anhou) 83,057 — Accrued bonus for Ms. Chao (CEO of Lawbroker) 917,382 597,631 Accrued bonus for Ms. Lee (President of Lawbroker) 125,941 — Others 24,854 7,623 Total due to related parties 1,538,219 996,565 Less: Accrued bonus for Ms. Chao – noncurrent (Note 9) (80,554) — Total $ 1,457,665 $ 996,565 *Amounts due to Mr. Mao bear no interest and are payable on demand. |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Sep. 30, 2019 | |
COMMITMENTS | |
COMMITMENTS | NOTE 15– COMMITMENTS Operating lease See future minimum annual lease payments in Note 11. Pledged securities See time deposits pledged as collateral for short-term loans in Note 5. Appointment agreement On December 21, 2018, Law Broker entered into an appointment agreement with Shu-Fen, Lee (“Ms. Lee”), pursuant to which, she serves as the president of Law Broker from December 21, 2018 to December 20, 2021. Ms. Lee’s primary responsibilities include 1) overall business planning, 2) implementation of resolution of the shareholders’ meeting or the board of directors, 3) the appointment and dismissal of the Law Broker’s employees and sales professionals, except for internal auditors, 4) financial management and application, 5) being the representative of Law Broker, 6) other matters assigned by the board of directors. According to the agreement, Ms. Lee’s compensation plan include: 1) base salary, 2) managerial allowance, 3) surplus bonus based on 1.25% of Law Broker’s income after tax, and 4) annual year-end bonus. For the three and nine months ended September 30, 2019, the Company has recorded the compensation expense of $89,408 and $125,954 under the appointment agreement, respectively. Engagement agreement On May 10, 2016, Law Broker entered into an engagement agreement with Hui-Hsien Chao ("Ms. Chao"), pursuant to which, she serves as the general manager of Law Broker from December 29, 2015 to December 28, 2018. The engagement agreement with Ms. Chao was renewed in 2019 and her service period has extended to December 20, 2021. Ms. Chao's primary responsibilities are to assist Law Broker in operating and managing insurance agency business. According to the engagement agreement, Ms. Chao's Bonus plans include: 1) execution, 2) long-term service fees, 3) pension and 4) non-competition. The payment of such bonuses will only occur upon satisfaction of certain condition and subject to the terms in the engagement agreement. Ms. Chao acts as the general manager or equivalent position of Law Broker for a term of at least three years. For the three and nine months ended September 30, 2019, the Company has recorded the performance bonus of $213,190 and $375,718 under the engagement agreement, respectively. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2019 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | NOTE 16 – SEGMENT REPORTING The geographical distributions of the Company’s financial information for the nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended September 30, 2019 2018 Geographical Areas Revenue Taiwan $ 21,053,131 $ 13,906,215 PRC 1,965,552 2,218,780 Hong Kong 248,152 37,508 Elimination adjustment 17 (15,503) Total revenue $ 23,266,852 $ 16,147,000 Income (loss) from operations Taiwan $ 3,181,981 $ 1,459,437 PRC 45,213 (313,616) Hong Kong 179,428 (28,782) Elimination adjustment 34,188 31,588 Total income from operations $ 3,440,810 $ 1,148,627 Net income (loss) Taiwan $ 2,180,558 $ 962,757 PRC 62,290 (320,329) Hong Kong 151,941 (28,895) Elimination adjustment 4,792 (643) Total net income $ 2,399,581 $ 612,890 The geographical distributions of the Company’s financial information for the nine months ended September 30, 2019 and 2018 were as follows: Nine Months Ended September 30, Geographical Areas 2019 2018 Revenue Taiwan $ 57,036,548 $ 45,645,006 PRC 6,749,851 8,094,122 Hong Kong 671,061 118,580 Elimination adjustment (7,466) (45,991) Total revenue $ 64,449,994 $ 53,811,717 Income (loss) from operations Taiwan $ 7,112,388 $ 6,052,549 PRC 325,018 (31,913) Hong Kong 426,774 (81,564) Elimination adjustment 104,363 97,924 Total income from operations $ 7,968,543 $ 6,036,996 Net income (loss) Taiwan $ 5,666,549 $ 3,856,534 PRC 329,141 (30,925) Hong Kong 364,074 (82,700) Elimination adjustment 11,099 48 Total net income $ 6,370,863 $ 3,742,957 The geographical distribution of the Company’s financial information as of September 30, 2019 and December 31, 2018 were as follows: September 30, 2019 December 31, 2018 Geographical Areas Long-lived assets Taiwan $ 1,166,496 $ 1,092,576 PRC 119,422 102,383 Hong Kong 647 736 Elimination adjustment (1,313) — Total long-lived assets $ 1,285,252 $ 1,195,695 Reportable assets Taiwan $ 133,941,607 $ 100,220,270 PRC 12,342,380 11,796,388 Hong Kong 1,450,412 1,015,400 Elimination adjustment (70,179,761) (44,150,214) Total reportable assets $ 77,554,638 $ 68,881,844 Capital investment Taiwan $ 403,066 $ 641,873 PRC 51,546 53,158 Hong Kong — 997 Total capital investments $ 454,612 $ 696,028 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date these consolidated financial statements were issued and determine that there were no subsequent events or transactions that require recognition or disclosures in the consolidated financial statements except for the follows: On October 1, 2019, the Board of Directors of Prime Financial Asia Limited ("PFAL") agreed to dissolve its wholly-owned company, Max Key Investments Limited ("MKI"). Subsequent to the dissolution of MKI, Prime Asia Co., Limited ("PA Taiwan") would become the wholly-owned subsidiary of PFAL. On October 1, 2019, the Board of Directors of PFAL declared to distribute cash dividends of $191,376 (HKD 1,500,000) to its shareholders due to its continuous profitable business operations in the past years. The Company renewed the revolving credit line agreement with CTBC, and the maturity date of the revolving credit facility is August 31. 2020. On October 15, 2019, the Company drew down $500,000 from the revolving credit facility with an interest rate of 3.2% per annum. On November 4, 2019, the Company drew down $2,500,000 from FEIB with an interest rate of 3.05% per annum. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The unaudited consolidated financial statements include the accounts of China United, its subsidiaries and variable interest entities as shown in the corporate structure in Note 1. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the consolidated financial statements for prior years to the current year’s presentation. Such reclassifications have no effect on net income as previously reported. Basis of Presentation The unaudited consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10‑Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These unaudited consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2018, which were included in the Company’s 2018 Annual Report on Form 10‑K (“2018 Form 10‑K”). The accompanying consolidated balance sheet as of December 31, 2018, has been derived from the Company’s audited consolidated financial statements as of that date. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable includes commission receivables stated at net realizable values. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary at each quarter-end. Management reviews the composition of accounts receivable and analyzes the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. No allowance was deemed necessary as of September 30, 2019 and December 31, 2018. |
Foreign Currency Transactions | Foreign Currency Transactions The Company’s financial statements are presented in U.S. dollars ($), which is the Company’s reporting and functional currency. The functional currencies of the Company’s subsidiaries are NTD, RMB and HKD. The resulting translation adjustments are reported under other comprehensive income in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 220 (“ASC 220”), “Reporting Comprehensive Income” . Gains and losses resulting from the translation of foreign currency transactions are reflected in the consolidated statements of operations and other comprehensive income (loss). Monetary assets and liabilities denominated in foreign currency are translated at the functional currency using the rate of exchange prevailing at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the consolidated statements of operations and other comprehensive income (loss). The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for financial statements are as follows: Average Rate for the Nine Months Ended September 30, 2019 2018 New Taiwan dollar (NTD) NTD 31.032055 NTD 29.898134 China yuan (RMB) RMB 6.861782 RMB 6.513683 Hong Kong dollar (HKD) HKD 7.837965 HKD 7.839811 United States dollar ($) $ 1.000000 $ 1.000000 Exchange Rate at September 30, 2019 December 31, 2018 New Taiwan dollar (NTD) NTD 31.035195 NTD 30.564919 China yuan (RMB) RMB 7.135956 RMB 6.876443 Hong Kong dollar (HKD) HKD 7.839583 HKD 7.831246 United States dollar ($) $ 1.000000 $ 1.000000 |
Earnings Per Share | Earnings Per Share Basic earnings per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued. As the holders of preferred stock of the Company are entitled to share equally with the holders of common stock, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the board of directors, the preferred stock is treated as a participating security. When calculating the basic earnings per common share, the two-class method is used to allocate earnings to common stock and participating security as required by ASC Topic 260, “Earnings Per Share.” Potential common shares consist primarily of convertible bonds calculated using the if-converted method. However, convertible bonds were excluded from the calculation of diluted earnings per common share due to the antidilutive effect. As of September 30, 2019 and December 31, 2018, the Company does not have any outstanding convertible bonds. The antidilutive common share equivalents excluded from the computation were nil for both the three months ended September 30, 2019 and 2018, and were nil and 36,047 for the nine months ended September 30, 2019 and 2018, respectively. The calculation for basic and diluted EPS is as follows: Three Months Ended September 30, 2019 2018 Amounts attributable to CUIS shareholders $ 1,328,154 $ 168,319 Less: amount attributable to the participating preferred shareholders (43,658) (5,527) Amounts attributable to CUIS common shareholders 1,284,496 162,792 Effect of dilution — — Income attributable to CUIS common shareholders after dilution $ 1,284,496 $ 162,792 Basic weighted-average number of common shares outstanding 29,421,736 29,452,669 Effect of convertible bond — — Diluted weighted-average number of common shares outstanding 29,421,736 29,452,669 Earnings per share attributable to CUIS common shareholders: Basic $ 0.044 $ 0.006 Diluted $ 0.044 $ 0.006 Nine Months Ended September 30, 2019 2018 Amounts attributable to CUIS shareholders $ 3,813,260 $ 1,538,280 Less: amount attributable to the participating preferred shareholders (125,304) (50,514) Amounts attributable to CUIS common shareholders 3,687,956 1,487,766 Effect of dilution — — Income attributable to CUIS common shareholders after dilution $ 3,687,956 $ 1,487,766 Basic weighted-average number of common shares outstanding 29,432,047 29,452,669 Effect of convertible bond — — Diluted weighted-average number of common shares outstanding 29,432,047 29,452,669 Earnings per share attributable to CUIS common shareholders: Basic $ 0.125 $ 0.051 Diluted $ 0.125 $ 0.051 |
Long-Term Investments | Long-Term Investments Long-term investments include government bonds held as available-for-sale, investment in real estate investment trusts (“REITs”) measured at fair value through net income, and equity investments under cost method. Available-for-sale investments are carried at fair value and unrealized gains and losses as a result of changes in the fair value are recorded as a separate component within accumulated other comprehensive income in the accompanying consolidated balance sheets. The Company measures equity investments in companies that do not have a readily determinable fair value in which it holds an interest of less than 20% using cost method, and no changes in fair value is recognized in the income statement. As of September 30, 2019 and December 31, 2018, the Company’s long-term investments consisted the following: September 30, 2019 December 31, 2018 Equity investments under cost method $ 1,238,430 $ 1,257,485 Foreign government bonds held for available-for-sale 97,885 99,834 REITs 1,127,752 1,120,239 Total long-term investments $ 2,464,067 $ 2,477,558 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels 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 assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments. ¨ Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. The following fair value hierarchy tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018: September 30, 2019 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Long-term investments: Foreign government bonds (available-for-sale debt securities) $ — $ 97,885 $ — $ 97,885 REITs 1,127,752 — — 1,127,752 December 31, 2018 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Marketable securities (included in other current assets): Mutual fund $ 30,800 $ — $ — $ 30,800 Long-term investments: Foreign government bonds (available -for -sale debt securities) — 99,834 — 99,834 REITs 1,120,239 — — 1,120,239 During the nine months ended September 30, 2019, there were no assets or liabilities that were transferred between any of the levels. Marketable securities and long-term investments in REITs – The fair value of the mutual fund and REITs is valued based on quoted market prices in active markets. Foreign government bonds – The fair value of government bonds is valued based on theoretical bond price in Taipei Exchange. The amortized cost of the investment in government bonds is $97,042 and $98,732 as of September 30, 2019 and December 31, 2018, respectively. The government bonds will mature on March 17, 2021. The carrying amounts of financial assets and liabilities in the consolidated balance sheets for cash and cash equivalents, time deposits, restricted cash and cash equivalents, accounts receivable, short-term loans, due to related parties and accrued expense approximate fair value due to the short-term duration of those instruments. |
Concentration of Risk | Concentration of Risk The Company maintains cash with banks in the USA, People’s Republic of China (“PRC” or “China”), Hong Kong, and Taiwan. Should any bank holding cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Taiwan, a depositor has up to NTD3,000,000 insured by Central Deposit Insurance Corporation (“CDIC”). In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In Hong Kong, a depositor has up to HKD500,000 insured by Hong Kong Deposit Protection Board (“DPB”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”). Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, time deposits, restricted cash, register capital deposits and accounts receivable. As of September 30, 2019 and December 31, 2018, approximately $2,335,000 and $1,751,000 of the Company’s cash and cash equivalents, time deposits, restricted cash equivalents and register capital deposits held by financial institutions, was insured, and the remaining balance of approximately $49,338,000 and $44,289,000, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have an allowance for doubtful accounts. For the three months ended September 30, 2019 and 2018, the Company’s revenues from sale of insurance policies underwritten by these companies were: Three Months Ended September 30, 2019 2018 % of Total % of Total Amount Revenue Amount Revenue Taiwan Life Insurance Co., Ltd. $ % $ % Farglory Life Insurance Co., Ltd. % % TransGlobe Life Insurance Inc. % % For the nine months ended September 30, 2019 and 2018, the Company’s revenues from sale of insurance policies underwritten by these companies were: Nine Months Ended September 30, 2019 2018 % of Total % of Total Amount Revenue Amount Revenue Taiwan Life Insurance Co., Ltd. $ 13,589,908 21 % $ 7,193,135 13 % Farglory Life Insurance Co., Ltd. 12,347,817 19 % 13,325,435 25 % TransGlobe Life Insurance Inc. 7,927,576 12 % 6,876,230 13 % As of September 30, 2019 and December 31, 2018, the Company’s accounts receivable from these companies were: September 30, 2019 December 31, 2018 % of Total % of Total Accounts Accounts Amount Receivable Amount Receivable Taiwan Life Insurance Co., Ltd. $ 2,669,222 25 % $ 2,578,590 17 % Farglory Life Insurance Co., Ltd. 1,547,258 15 % 3,139,404 20 % TransGlobe Life Insurance Inc. 1,475,880 14 % 2,381,181 16 % The Company’s operations are in the PRC, Hong Kong and Taiwan. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, foreign currency exchange and legal environments in the PRC, Hong Kong and Taiwan, and by the state of each economy. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, Hong Kong and Taiwan, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things. |
New Accounting Pronouncements Effective January 1, 2019 | New Accounting Pronouncements Effective January 1, 2019: Leases On January 1, 2019, the Company adopted ASU No. 2016‑02, (ASC Topic 842), Leases, which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. The Company adopted ASC 842 as of January 1, 2019 using a modified retrospective transition with no adjustment to its comparative periods in the year of transition. The Company elected the practical expedients, which allow the Company not to reassess prior conclusions with respect to lease identification, lease classification and initial direct costs under ASC 842. The Company did not elect the hindsight practical expedient to determine the lease term or in assessing the likelihood that a The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The adoption of ASC 842 resulted in the recognition of operating lease right-of-use assets of $4.0 million and corresponding operating lease liabilities of $3.7 million as of January 1, 2019 on the consolidated balance sheet. See Note 11 for details. Accounting Standards Issued but Not Yet Adopted Credit Losses In June 2016, the FASB issued ASU No. 2016‑13, (Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. ASU 2016‑13 is effective for public entities for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. The Company is evaluating the impact of the adoption of ASU 2016‑13 on its financial position and results of operations. There were other updates recently issued. The management does not believe that other than disclosed above, the recently issued, but not yet adopted, accounting pronouncements will have a material impact on its financial position results of operations or cash flows. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Intercompany Foreign Currency Balances | The exchange rates used for financial statements are as follows: Average Rate for the Nine Months Ended September 30, 2019 2018 New Taiwan dollar (NTD) NTD 31.032055 NTD 29.898134 China yuan (RMB) RMB 6.861782 RMB 6.513683 Hong Kong dollar (HKD) HKD 7.837965 HKD 7.839811 United States dollar ($) $ 1.000000 $ 1.000000 Exchange Rate at September 30, 2019 December 31, 2018 New Taiwan dollar (NTD) NTD 31.035195 NTD 30.564919 China yuan (RMB) RMB 7.135956 RMB 6.876443 Hong Kong dollar (HKD) HKD 7.839583 HKD 7.831246 United States dollar ($) $ 1.000000 $ 1.000000 |
Schedule of Earnings Per Share, Basic and Diluted | The calculation for basic and diluted EPS is as follows: Three Months Ended September 30, 2019 2018 Amounts attributable to CUIS shareholders $ 1,328,154 $ 168,319 Less: amount attributable to the participating preferred shareholders (43,658) (5,527) Amounts attributable to CUIS common shareholders 1,284,496 162,792 Effect of dilution — — Income attributable to CUIS common shareholders after dilution $ 1,284,496 $ 162,792 Basic weighted-average number of common shares outstanding 29,421,736 29,452,669 Effect of convertible bond — — Diluted weighted-average number of common shares outstanding 29,421,736 29,452,669 Earnings per share attributable to CUIS common shareholders: Basic $ 0.044 $ 0.006 Diluted $ 0.044 $ 0.006 Nine Months Ended September 30, 2019 2018 Amounts attributable to CUIS shareholders $ 3,813,260 $ 1,538,280 Less: amount attributable to the participating preferred shareholders (125,304) (50,514) Amounts attributable to CUIS common shareholders 3,687,956 1,487,766 Effect of dilution — — Income attributable to CUIS common shareholders after dilution $ 3,687,956 $ 1,487,766 Basic weighted-average number of common shares outstanding 29,432,047 29,452,669 Effect of convertible bond — — Diluted weighted-average number of common shares outstanding 29,432,047 29,452,669 Earnings per share attributable to CUIS common shareholders: Basic $ 0.125 $ 0.051 Diluted $ 0.125 $ 0.051 |
Available-for-sale Securities | September 30, 2019 December 31, 2018 Equity investments under cost method $ 1,238,430 $ 1,257,485 Foreign government bonds held for available-for-sale 97,885 99,834 REITs 1,127,752 1,120,239 Total long-term investments $ 2,464,067 $ 2,477,558 |
Fair Value Measurements, Recurring and Nonrecurring | The following fair value hierarchy tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018: September 30, 2019 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Long-term investments: Foreign government bonds (available-for-sale debt securities) $ — $ 97,885 $ — $ 97,885 REITs 1,127,752 — — 1,127,752 December 31, 2018 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Marketable securities (included in other current assets): Mutual fund $ 30,800 $ — $ — $ 30,800 Long-term investments: Foreign government bonds (available -for -sale debt securities) — 99,834 — 99,834 REITs 1,120,239 — — 1,120,239 |
Schedule Of Revenue From Insurance Services | For the three months ended September 30, 2019 and 2018, the Company’s revenues from sale of insurance policies underwritten by these companies were: Three Months Ended September 30, 2019 2018 % of Total % of Total Amount Revenue Amount Revenue Taiwan Life Insurance Co., Ltd. $ % $ % Farglory Life Insurance Co., Ltd. % % TransGlobe Life Insurance Inc. % % For the nine months ended September 30, 2019 and 2018, the Company’s revenues from sale of insurance policies underwritten by these companies were: Nine Months Ended September 30, 2019 2018 % of Total % of Total Amount Revenue Amount Revenue Taiwan Life Insurance Co., Ltd. $ 13,589,908 21 % $ 7,193,135 13 % Farglory Life Insurance Co., Ltd. 12,347,817 19 % 13,325,435 25 % TransGlobe Life Insurance Inc. 7,927,576 12 % 6,876,230 13 % |
Schedule Of Accounts Receivable From Related Parties | As of September 30, 2019 and December 31, 2018, the Company’s accounts receivable from these companies were: September 30, 2019 December 31, 2018 % of Total % of Total Accounts Accounts Amount Receivable Amount Receivable Taiwan Life Insurance Co., Ltd. $ 2,669,222 25 % $ 2,578,590 17 % Farglory Life Insurance Co., Ltd. 1,547,258 15 % 3,139,404 20 % TransGlobe Life Insurance Inc. 1,475,880 14 % 2,381,181 16 % |
CASH, CASH EQUIVALENTS AND RE_2
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS | |
Schedule of Cash and Cash Equivalents | Cash, cash equivalents and restricted cash equivalents consisted of the following as of September 30, 2019 and December 31, 2018: September 30, December 31, 2019 2018 Cash and cash equivalents: Cash in banks and on hand $ 15,450,523 $ 7,439,057 Cash equivalents – commercial paper — 654,006 Time deposits – with original maturities less than three months (see Note 4) — 8,570,879 15,450,523 16,663,942 Restricted cash equivalents — 3,320,802 Restricted cash – noncurrent 140,135 655,027 Total cash, cash equivalents and restricted cash shown in the statements of cash flows $ 15,590,658 $ 20,639,771 |
TIME DEPOSITS (Tables)
TIME DEPOSITS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
TIME DEPOSITS | |
TIME DEPOSITS | September 30, December 31, 2019 2018 Total time deposits $ 35,448,840 $ 34,311,043 Less: Time deposits – with original maturities less than three months (see Note 3) — (8,570,879) Time deposits – original maturities over three months but less than one year $ 35,448,840 $ 25,740,164 |
SHORT-TERM LOANS (Tables)
SHORT-TERM LOANS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
SHORT-TERM LOANS | |
Schedule of short-term debt | The Company’s short-term loans consisted of the following as of September 30, 2019 and December 31, 2018: September 30, December 31, 2019 2018 Credit facility, FEIB $ 2,500,000 $ 2,000,000 Credit facility, O-Bank 3,822,148 3,600,000 Credit facility, CTBC 1,000,000 1,000,000 Credit facility, KGI 3,111,074 1,600,000 Subtotal 10,433,222 8,200,000 Current portion of long-term loans — 235,587 Total short-term loans $ 10,433,222 $ 8,435,587 |
INCOME TAX PAYABLE (Tables)
INCOME TAX PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
INCOME TAX PAYABLE | |
Schedule of taxes payable | The Company’s income tax payable consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Taiwan Tax $ 1,613,573 $ 1,416,540 U.S.A. Tax (Note 13) 1,035,371 1,131,307 PRC Tax — 7,590 Hong Kong Tax 105,151 51,032 Total income tax payable $ 2,754,095 $ 2,606,469 Less: current portion (1,842,708) (1,599,146) Income tax payable-noncurrent (Note 13) $ 911,387 $ 1,007,323 |
COMMISSIONS PAYABLE TO SALES _2
COMMISSIONS PAYABLE TO SALES PROFESSIONALS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | |
Schedule of commissions payable | Commissions payable to sales professionals consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Taiwan $ 6,778,327 $ 7,602,595 PRC 378,119 411,885 Hong Kong — — Total commissions payable to sales professionals $ 7,156,446 $ 8,014,480 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
OTHER CURRENT LIABILITIES | |
Schedule of other current liabilities | Other current liabilities consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Unearned revenue - current 1,459,804 1,028,256 Accrued business tax and tax withholdings 929,662 893,391 Accrued bonus 336,641 2,320,445 Payroll payable and other benefits 667,879 1,360,790 Other accrued liabilities 1,852,090 1,745,959 Total other current liabilities $ 5,246,076 $ 7,348,841 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
OTHER LIABILITIES | |
Schedule of other noncurrent liabilities | The Company’s other liabilities consisted of the following as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Unearned revenue - AIATW $ 1,343,938 $ 2,056,513 Due to previous shareholders of AHFL 480,559 480,559 Accrued bonus for Ms. Chao (Note 14) 80,554 — Total other liabilities $ 1,905,051 $ 2,537,072 |
Schedule of contract with customer | The following table presents the amounts recognized as revenue and the refunded for each contract year: Revenue Refund Contract Execution Revenue VAT Refund VAT Year Period Fees Amount Amount Amount Amount First 4/15/2013 ~ 9/30/2014 NTD 50,000,000 NTD 27,137,958 (1) NTD 1,356,898 NTD 20,481,090 (1) NTD 1,024,054 Second 1/1/2016 ~ 12/31/2016 NTD 35,000,000 NTD 12,855,000 (2) NTD 642,750 NTD 20,478,333 (2) NTD 1,023,917 Third 1/1/2017 ~ 12/31/2017 NTD 33,000,000 NTD 12,628,201 (3) NTD 631,410 NTD 18,800,370 (3) NTD 940,019 Fourth 1/1/2018 ~ 12/31/2018 NTD 33,000,000 NTD 11,228,600 (4) NTD 561,429 NTD 20,199,971 (4) NTD 1,010,000 Fifth 1/1/2019 ~ 12/31/2019 NTD 33,000,000 NTD 9,694,710 (5) NTD 484,736 NTD 21,733,861 (5) NTD 1,086,693 Sixth 1/1/2020 ~ 12/31/2020 NTD 33,000,000 NTD — NTD — NTD — NTD — Seventh 1/1/2021 ~ 12/31/2021 NTD 33,000,000 NTD — NTD — NTD — NTD — TOTAL NTD 250,000,000 NTD 73,544,469 NTD 3,677,223 NTD 101,693,625 NTD 5,084,683 (1) The revenue recognition for the first contract year is based on the annual first year premium (“AFYP”) set in Alliance Agreement, which is difference from other contract years. From the second contract year to the seventh contract year, the revenue calculation is based on VONB. The Company recognized the first contract year’s revenue amount of $892,742 (NTD27,137,958), net of Value-Added Tax (“VAT”). On December 3, 2015 and February 23, 2016, the Company refunded the amounts of $160,573 (NTD4,761,905), net of VAT, and $530,056 (NTD15,719,185), net of VAT, to AIATW, respectively, due to the portion of performance sales targets not met during the first contract year. (2) For the year ended December 31, 2016, the Company recognized the second contract year’s revenue amount of $422,883 (NTD 12,855,000), net of VAT, and refunded the amount of $690,537 (NTD 20,478,333), net of VAT, due to uncertainty resolved after Amendment 3 went effective. (3) For the year ended December 31, 2017, the Company recognized the third contract year’s revenue amount of $415,423 (NTD12,628,201), net of VAT, and refund amount of $633,955 (NTD18,800,370), net of VAT, for the same contract period based on the calculation of VONB and 13‑month persistency. (4) For the year ended December 31, 2018, the Company recognized the fourth contract year’s revenue amount of $372,650 (NTD11,228,600), net of VAT, and refund amount of $670,389 (NTD 20,199,971), net of VAT, for the same contract period based on the calculation of VONB and 13‑month persistency. (5) The Company estimated VONB and 13‑month persistency ratio for the year ending December 31, 2019 and calculated the revenue amount to be $328,792 (NTD 10,179,446) for the year. The amount will be reassessed every quarter until receiving AIATW’s notice. |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
REVENUE | |
Schedule of revenue recognition guidance | Contract balance September 30, 2019 December 31, 2018 Accounts receivable $ 10, 571,604 $ 15,332,355 Contract assets – current 3,348,094 — Unearned revenue – current (Note 8) 1,459,804 1,028,256 Unearned revenue – noncurrent (Note 9) 1,343,938 2,056,513 |
LEASE (Tables)
LEASE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
LEASE | |
Schedule of operating lease right-of-use assets and lease liabilities | Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As of September 30, 2019, operating lease right-of-use assets and lease liabilities were as follows: September 30, 2019 Operating lease right-of-use assets $ 4,208,685 Operating lease liabilities – current 1,975,856 Operating lease liabilities – noncurrent 2,095,202 |
Schedule of lease term and discount rate | Lease term and discount rate September 30, 2019 Weighted average remaining lease term Operating lease 2.16 years Weighted average discount rate Operating lease 3.01 % |
Schedule of supplemental cash flow information related to leases | Supplemental cash flow information related to leases September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows related to operating leases $ 2,044,913 |
Schedule of future minimum rental payments | Amount 2019 (reminder of year) $ 627,216 2020 1,933,392 2021 1,213,059 2022 320,781 2023 112,208 Thereafter 57,265 Total minimum lease payments 4,263,921 Less: Interest (192,863) Present value of future minimum lease payments $ 4,071,058 |
NON-CONTROLLING INTERESTS (Tabl
NON-CONTROLLING INTERESTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
NON-CONTROLLING INTERESTS | |
Schedule of non-controlling interests | Non-controlling interests consisted of the following as of September 30, 2019 and December 31, 2018: % of Non- Other controlling December 31, Comprehensive September 30, Name of Entity Interest 2018 Net Income (Loss) Loss 2019 Law Enterprise % $ (72,557) $ (120,610) $ (9,665) $ (202,832) Law Broker % 16,149,662 2,507,567 (235,090) 18,422,139 PFAL % 436,742 178,396 (521) 614,617 MKI % (2,630) (514) — (3,144) PA Taiwan % (157,762) (7,192) (166) (165,120) PTC Nanjing % (2,411) (44) (267) (2,722) Total $ 16,351,044 $ 2,557,603 $ (245,709) $ 18,662,938 % of Non- Other controlling December 31, Comprehensive December 31, Name of Entity Interest 2017 Net Income (Loss) Income (Loss) 2018 Law Enterprise 34.05 % $ (243,240) $ 193,308 $ (22,625) $ (72,557) Law Broker 34.05 % 13,900,341 2,655,344 (406,023) 16,149,662 PFAL 49.00 % 228,079 208,918 (255) 436,742 MKI 49.00 % (2,117) (513) — (2,630) PA Taiwan 49.00 % (145,442) (11,789) (531) (157,762) PTC Nanjing 49.00 % (1,965) (26) (420) (2,411) Total $ 13,735,656 $ 3,045,242 $ (429,854) $ 16,351,044 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
INCOME TAX | |
Schedule of effective income tax rate reconciliation | The following table reconciles the Company’s statutory tax rates to effective tax rates for the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, 2019 2018 US statutory rate 21 % 21 % Tax rate difference (1) % (3) % Tax base difference — % 2 % Income tax on undistributed earnings 4 % 6 % Loss in subsidiaries 5 % 14 % Un-deductible and non-taxable items — % 1 % True up of prior year income tax 2 % 3 % Utilization of deferred tax not recognized in prior year (3) % — % Effective tax rate 28 % 44 % Nine Months Ended September 30, 2019 2018 US statutory rate 21 % 21 % Tax rate difference (1) % (1) % Tax base difference — % 1 % Income tax on undistributed earnings 4 % 4 % Loss in subsidiaries 3 % 3 % Un-deductible and non-taxable items — % (1) % True up of prior year income tax — % 4 % Withholding tax — % 13 % Utilization of deferred tax not recognized in prior year (1) % — % Effective tax rate 26 % 44 % |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
RELATED PARTY TRANSACTIONS | |
Schedule of Related Party Transactions | The following summarizes the payable balances due to related parties as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Due to Mr. Mao (Principal shareholder of the Company)* $ 386,985 $ 391,311 Ms. Lu (Shareholder of Law Anhou) 83,057 — Accrued bonus for Ms. Chao (CEO of Lawbroker) 917,382 597,631 Accrued bonus for Ms. Lee (President of Lawbroker) 125,941 — Others 24,854 7,623 Total due to related parties 1,538,219 996,565 Less: Accrued bonus for Ms. Chao – noncurrent (Note 9) (80,554) — Total $ 1,457,665 $ 996,565 *Amounts due to Mr. Mao bear no interest and are payable on demand. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
SEGMENT REPORTING | |
Schedule of Revenue by Major Customers by Reporting Segments | The geographical distributions of the Company’s financial information for the nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended September 30, 2019 2018 Geographical Areas Revenue Taiwan $ 21,053,131 $ 13,906,215 PRC 1,965,552 2,218,780 Hong Kong 248,152 37,508 Elimination adjustment 17 (15,503) Total revenue $ 23,266,852 $ 16,147,000 Income (loss) from operations Taiwan $ 3,181,981 $ 1,459,437 PRC 45,213 (313,616) Hong Kong 179,428 (28,782) Elimination adjustment 34,188 31,588 Total income from operations $ 3,440,810 $ 1,148,627 Net income (loss) Taiwan $ 2,180,558 $ 962,757 PRC 62,290 (320,329) Hong Kong 151,941 (28,895) Elimination adjustment 4,792 (643) Total net income $ 2,399,581 $ 612,890 The geographical distributions of the Company’s financial information for the nine months ended September 30, 2019 and 2018 were as follows: Nine Months Ended September 30, Geographical Areas 2019 2018 Revenue Taiwan $ 57,036,548 $ 45,645,006 PRC 6,749,851 8,094,122 Hong Kong 671,061 118,580 Elimination adjustment (7,466) (45,991) Total revenue $ 64,449,994 $ 53,811,717 Income (loss) from operations Taiwan $ 7,112,388 $ 6,052,549 PRC 325,018 (31,913) Hong Kong 426,774 (81,564) Elimination adjustment 104,363 97,924 Total income from operations $ 7,968,543 $ 6,036,996 Net income (loss) Taiwan $ 5,666,549 $ 3,856,534 PRC 329,141 (30,925) Hong Kong 364,074 (82,700) Elimination adjustment 11,099 48 Total net income $ 6,370,863 $ 3,742,957 |
Schedule of long-lived assets | The geographical distribution of the Company’s financial information as of September 30, 2019 and December 31, 2018 were as follows: September 30, 2019 December 31, 2018 Geographical Areas Long-lived assets Taiwan $ 1,166,496 $ 1,092,576 PRC 119,422 102,383 Hong Kong 647 736 Elimination adjustment (1,313) — Total long-lived assets $ 1,285,252 $ 1,195,695 Reportable assets Taiwan $ 133,941,607 $ 100,220,270 PRC 12,342,380 11,796,388 Hong Kong 1,450,412 1,015,400 Elimination adjustment (70,179,761) (44,150,214) Total reportable assets $ 77,554,638 $ 68,881,844 Capital investment Taiwan $ 403,066 $ 641,873 PRC 51,546 53,158 Hong Kong — 997 Total capital investments $ 454,612 $ 696,028 |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) | Jun. 04, 2019TWD ($) | Jun. 04, 2019USD ($) | Jul. 31, 2019 | May 31, 2019TWD ($) | May 31, 2019USD ($) |
Ilife | AHFL | |||||
Ownership percentage | 93.75% | 93.75% | |||
Percentage of remaining ownership interest acquired | 6.25% | ||||
AHFL | Ilife | |||||
capital contributions | $ 15,000,000 | $ 485,909 | |||
Ilife | Uniwill | |||||
Consideration for insurance brokerage licenses | $ 450,000 | $ 14,535 | |||
Legal deposits | $ 200,000 | $ 6,455 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Taiwan | |||
Foreign Currency Average Rate Translation | 31.032055 | 29.898134 | |
Foreign Currency Exchange Rate, Translation | 31.035195 | 30.564919 | |
China yuan [Member] | |||
Foreign Currency Average Rate Translation | 6.861782 | 6.513683 | |
Foreign Currency Exchange Rate, Translation | 7.135956 | 6.876443 | |
Hong Kong, Dollars | |||
Foreign Currency Average Rate Translation | 7.837965 | 7.839811 | |
Foreign Currency Exchange Rate, Translation | 7.839583 | 7.831246 | |
United States of America, Dollars | |||
Foreign Currency Average Rate Translation | 1 | 1 | |
Foreign Currency Exchange Rate, Translation | 1 | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Amounts attributable to CUIS shareholders | $ 1,328,154 | $ 168,319 | $ 3,813,260 | $ 1,538,280 |
Less: amount attributable to the participating preferred shareholders | (43,658) | (5,527) | (125,304) | (50,514) |
Amounts attributable to CUIS common shareholders: | 1,284,496 | 162,792 | 3,687,956 | 1,487,766 |
Effect of dilution | 0 | 0 | 0 | 0 |
Income attributable to CUIS common shareholders after dilution | $ 1,284,496 | $ 162,792 | $ 3,687,956 | $ 1,487,766 |
Basic weighted-average number of common shares outstanding | 29,421,736 | 29,452,669 | 29,432,047 | 29,452,669 |
Effect of convertible bonds | 0 | 0 | 0 | 0 |
Diluted weighted-average number of common shares outstanding | 29,421,736 | 29,452,669 | 29,432,047 | 29,452,669 |
Earnings per share attributable to CUIS common shareholders: | ||||
Basic | $ 0.044 | $ 0.006 | $ 0.125 | $ 0.051 |
Diluted | $ 0.044 | $ 0.006 | $ 0.125 | $ 0.051 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Long-Term Investments (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Equity investments accounted for the cost method | $ 1,238,430 | $ 1,257,485 |
Foreign government bonds held for available-for-sale | 97,885 | 99,834 |
REITs | 1,127,752 | 1,120,239 |
Long-term Investments, Total | $ 2,464,067 | $ 2,477,558 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value of Financial Instruments (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Marketable securities (in other current assets): | ||
Mutual fund | $ 30,800 | |
Long-term investment: | ||
Foreign government bonds | $ 97,885 | 99,834 |
REITs | 1,127,752 | 1,120,239 |
Fair Value, Inputs, Level 1 [Member] | ||
Marketable securities (in other current assets): | ||
Mutual fund | 30,800 | |
Long-term investment: | ||
Foreign government bonds | 0 | 0 |
REITs | 1,127,752 | 1,120,239 |
Fair Value, Inputs, Level 2 [Member] | ||
Marketable securities (in other current assets): | ||
Mutual fund | 0 | |
Long-term investment: | ||
Foreign government bonds | 97,885 | 99,834 |
REITs | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Marketable securities (in other current assets): | ||
Mutual fund | 0 | |
Long-term investment: | ||
Foreign government bonds | 0 | 0 |
REITs | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk (Revenue) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Farglory Life Insurance Co., Ltd. [Member] | ||||
Financial Services Revenues | $ 6,048,897 | $ 1,993,854 | $ 13,589,908 | $ 7,193,135 |
Financial Services Percentage | 26.00% | 12.00% | 21.00% | 13.00% |
Taiwan Life Insurance Co., Ltd [Member] | ||||
Financial Services Revenues | $ 3,662,473 | $ 4,067,273 | $ 12,347,817 | $ 13,325,435 |
Financial Services Percentage | 16.00% | 25.00% | 19.00% | 25.00% |
TransGlobe Life Insurance Inc [Member] | ||||
Financial Services Revenues | $ 2,952,262 | $ 2,514,042 | $ 7,927,576 | $ 6,876,230 |
Financial Services Percentage | 13.00% | 16.00% | 12.00% | 13.00% |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk ( Accounts Receivable) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Farglory Life Insurance Co., Ltd. [Member] | ||
Accounts Receivable, Net | $ 2,669,222 | $ 2,578,590 |
Percentage of accounts receivable | 25.00% | 17.00% |
Taiwan Life Insurance Co., Ltd [Member] | ||
Accounts Receivable, Net | $ 1,547,258 | $ 3,139,404 |
Percentage of accounts receivable | 15.00% | 20.00% |
TransGlobe Life Insurance Inc [Member] | ||
Accounts Receivable, Net | $ 1,475,880 | $ 2,381,181 |
Percentage of accounts receivable | 14.00% | 16.00% |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2019HKD ($)shares | Sep. 30, 2018shares | Sep. 30, 2019USD ($)shares | Sep. 30, 2018shares | Sep. 30, 2019CNY (¥) | Sep. 30, 2019TWD ($) | Sep. 30, 2019USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Disclosure of Summary Of Significant Accounting Policies | |||||||||
Cash, Uninsured Amount | $ 250,000 | ||||||||
Lessor, Operating Lease, Term of Contract | 12 months | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares | 0 | 0 | 0 | 36,047 | |||||
Assets transferred between levels | $ 0 | ||||||||
Liabilities transferred between levels | $ 0 | ||||||||
Available-for-sale Debt Securities, Amortized Cost Basis | 97,042 | $ 98,732 | |||||||
Operating Lease, Right-of-Use Asset | 4,208,685 | $ 4,000,000 | 0 | ||||||
Operating Lease, Liability | 4,071,058 | $ 3,700,000 | |||||||
Credit Concentration Risk [Member] | |||||||||
Disclosure of Summary Of Significant Accounting Policies | |||||||||
Cash, FDIC Insured Amount | 2,335,000 | 1,751,000 | |||||||
Cash, Uninsured Amount | $ 49,338,000 | $ 44,289,000 | |||||||
Taiwan | |||||||||
Disclosure of Summary Of Significant Accounting Policies | |||||||||
Cash, FDIC Insured Amount | $ 3,000,000 | ||||||||
HONG KONG | |||||||||
Disclosure of Summary Of Significant Accounting Policies | |||||||||
Cash, FDIC Insured Amount | ¥ | ¥ 500,000 | ||||||||
CHINA | |||||||||
Disclosure of Summary Of Significant Accounting Policies | |||||||||
Cash, FDIC Insured Amount | $ 500,000 |
CASH, CASH EQUIVALENTS AND RE_3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS (Details) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 14, 2018TWD ($) | Dec. 14, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS | ||||||
Cash on hand and in banks | $ 15,450,523 | $ 7,439,057 | ||||
Cash equivalents - commercial paper | 0 | 654,006 | $ 19,989,649 | $ 654,006 | ||
Time deposits - with original maturities less than three months (see Note 4) | 0 | 8,570,879 | ||||
Total cash and cash equivalents | 15,450,523 | 16,663,942 | ||||
Restricted cash equivalents | 0 | 3,320,802 | ||||
Restricted cash - noncurrent | 140,135 | 655,027 | ||||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | $ 15,590,658 | $ 20,639,771 | $ 18,557,423 | $ 15,943,564 |
CASH, CASH EQUIVALENTS AND RE_4
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS - Additional Information (Details) | Dec. 14, 2018TWD ($) | Sep. 30, 2019USD ($) | Mar. 27, 2019TWD ($) | Mar. 27, 2019USD ($) | Dec. 31, 2018TWD ($) | Dec. 31, 2018USD ($) | Dec. 14, 2018USD ($) |
Debt Instrument, Repurchase Amount | $ 0 | $ 40,000,000 | $ 1,296,642 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 0.48% | 0.48% | |||||
Commercial Paper, at Carrying Value | $ 19,989,649 | 0 | $ 654,006 | $ 654,006 | |||
Commercial Paper Interest Rate Stated Percentage | 0.70% | 0.70% | |||||
Restricted Cash and Cash Equivalents, Current | $ 0 | 3,320,802 | |||||
Debt Instrument, Maturity Date | Jan. 10, 2019 | ||||||
Time Deposits [Member] | |||||||
Restricted Cash and Cash Equivalents, Current | $ 101,500,000 | $ 3,320,802 |
TIME DEPOSITS (Details)
TIME DEPOSITS (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
TIME DEPOSITS | ||
Total time deposits | $ 35,448,840 | $ 34,311,043 |
Less: Time deposits - with original maturities less than three months (see Note 3) | (8,570,879) | |
Time deposits - original maturities over three months but less than one year | $ 35,448,840 | $ 25,740,164 |
TIME DEPOSITS - Additional Info
TIME DEPOSITS - Additional Information (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
TIME DEPOSITS | ||
Restricted Cash | $ 5,580,424 | $ 5,404,889 |
Time Deposits, at Carrying Value | $ 35,448,840 | $ 34,311,043 |
SHORT-TERM LOANS (Details)
SHORT-TERM LOANS (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Short-term Debt [Line Items] | ||
Line of Credit, Current | $ 10,433,222 | $ 8,200,000 |
Current portion of long-term loans | 0 | 235,587 |
Total short term loans | 10,433,222 | 8,435,587 |
Credit facility, FEIB [Member] | ||
Short-term Debt [Line Items] | ||
Line of Credit, Current | 2,500,000 | 2,000,000 |
Credit facility, O-Bank [Member] | ||
Short-term Debt [Line Items] | ||
Line of Credit, Current | 3,822,148 | 3,600,000 |
Credit facility, CTBC [Member] | ||
Short-term Debt [Line Items] | ||
Line of Credit, Current | 1,000,000 | 1,000,000 |
Credit facility, KGI [Member] | ||
Short-term Debt [Line Items] | ||
Line of Credit, Current | $ 3,111,074 | $ 1,600,000 |
SHORT-TERM LOANS - Additional i
SHORT-TERM LOANS - Additional information (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||
Sep. 30, 2018TWD ($) | Sep. 30, 2017 | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019TWD ($) | Sep. 30, 2019USD ($) | Jul. 03, 2019 | Dec. 31, 2018CNY (¥) | Dec. 31, 2018USD ($) | Dec. 28, 2018USD ($) | Dec. 27, 2018 | Dec. 07, 2018USD ($) | Sep. 30, 2018USD ($) | Aug. 31, 2018TWD ($) | Aug. 31, 2018USD ($) | |
Short-term Debt [Line Items] | |||||||||||||||||
Short-term Debt | $ 10,433,222 | $ 8,435,587 | |||||||||||||||
Interest Expense, Short-term Borrowings | $ 64,273 | $ 23,239 | $ 144,416 | $ 59,944 | |||||||||||||
O Bank [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Short-term Debt | $ 600,000 | $ 3,600,000 | |||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 3.37% | 3.37% | 3.63% | 3.63% | |||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000,000 | $ 4,000,000 | $ 3,222,148 | ||||||||||||||
Debt Instrument, Description of Variable Rate Basis | 1.50% | ||||||||||||||||
Cash Collateral for Borrowed Securities | $ 100,000,000 | $ 21,000,000 | $ 676,651 | 3,222,148 | |||||||||||||
O Bank [Member] | LIBOR | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Debt Instrument, Description of Variable Rate Basis | 0.75% | 0.50% | |||||||||||||||
CTBC Bank [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Short-term Debt | $ 1,000,000 | $ 1,000,000 | |||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 3.44% | 3.44% | 3.26% | 3.26% | 4.10% | ||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,500,000 | $ 1,000,000 | $ 100,000,000 | $ 3,222,148 | |||||||||||||
CTBC Bank [Member] | LIBOR | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Debt Instrument, Description of Variable Rate Basis | 1.00% | ||||||||||||||||
Eastern International Bank [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Short-term Debt | $ 2,500,000 | $ 2,000,000 | $ 2,500,000 | ||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 3.42% | 3.42% | 3.95% | 3.95% | 3.95% | ||||||||||||
Eastern International Bank [Member] | LIBOR | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Debt Instrument, Description of Variable Rate Basis | 0.85% | ||||||||||||||||
KGI Commercial Bank Co Ltd [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 1.66% | 3.41% | 3.41% | 3.41% | |||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,600,000 | $ 50,000,000 | $ 1,611,074 | ||||||||||||||
Cash Collateral for Borrowed Securities | ¥ 12,000,000 | $ 1,681,625 | |||||||||||||||
Weighted average interest rate (as a percent) | 3.06% | 3.06% | |||||||||||||||
KGI Commercial Bank Co Ltd [Member] | LIBOR | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Debt Instrument, Description of Variable Rate Basis | 0.90% |
INCOME TAX PAYABLE (Details)
INCOME TAX PAYABLE (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Taxes Payable [Line Items] | ||
Total tax payable | $ 2,754,095 | $ 2,606,469 |
Less: current portion | (1,842,708) | (1,599,146) |
Income tax payable - noncurrent (Note 13) | 911,387 | 1,007,323 |
Taiwan | ||
Taxes Payable [Line Items] | ||
Total tax payable | 1,613,573 | 1,416,540 |
USA Tax [Member] | ||
Taxes Payable [Line Items] | ||
Total tax payable | 1,035,371 | 1,131,307 |
PRC | ||
Taxes Payable [Line Items] | ||
Total tax payable | 7,590 | |
Hong Kong Tax [Member] | ||
Taxes Payable [Line Items] | ||
Total tax payable | $ 105,151 | $ 51,032 |
COMMISSIONS PAYABLE TO SALES _3
COMMISSIONS PAYABLE TO SALES PROFESSIONALS (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Commissions payable to sales professionals | $ 7,156,446 | $ 8,014,480 |
TW [Member] | ||
Commissions payable to sales professionals | 6,778,327 | 7,602,595 |
PRC | ||
Commissions payable to sales professionals | 378,119 | 411,885 |
Hong Kong | ||
Commissions payable to sales professionals | $ 0 | $ 0 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
OTHER CURRENT LIABILITIES | ||
Unearned revenue - current | $ 1,459,804 | $ 1,028,256 |
Accrued business tax and tax withholdings | 929,662 | 893,391 |
Accrued bonus | 336,641 | 2,320,445 |
Payroll payable and other benefits | 667,879 | 1,360,790 |
Other accrued liabilities | 1,852,090 | 1,745,959 |
Total other current liabilities | $ 5,246,076 | $ 7,348,841 |
OTHER LIABILITIES - Other noncu
OTHER LIABILITIES - Other noncurrent liabilities (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
OTHER LIABILITIES | ||
Unearned revenue - AIATW | $ 1,343,938 | $ 2,056,513 |
Due to previous shareholders of AHFL | 480,559 | 480,559 |
Accrued bonus for Ms. Chao (Note 14) | 80,554 | 0 |
Total other liabilities | $ 1,905,051 | $ 2,537,072 |
OTHER LIABILITIES - Revenue and
OTHER LIABILITIES - Revenue and the refunded (Details) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019TWD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018TWD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019TWD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018TWD ($) | Sep. 30, 2018USD ($) | |
Revenue Amount | $ 2,281,470 | $ 73,691 | $ 2,827,107 | $ 92,259 | $ 7,271,032 | $ 234,852 | $ 7,466,550 | $ 249,733 |
Strategic Alliance Agreement [Member] | ||||||||
Execution Fees | 250,000,000 | 250,000,000 | ||||||
Revenue Amount | 73,544,469 | |||||||
Revenue VAT Amount | 3,677,223 | |||||||
Refund Amount | 101,693,625 | 101,693,625 | ||||||
Refund VAT Amount | 5,084,683 | $ 5,084,683 | ||||||
First Year [Member] | Strategic Alliance Agreement [Member] | ||||||||
Contract Initiation Date | Apr. 15, 2013 | Apr. 15, 2013 | ||||||
Contract Maturity Date | Sep. 30, 2014 | Sep. 30, 2014 | ||||||
Execution Fees | 50,000,000 | $ 50,000,000 | ||||||
Revenue Amount | 27,137,958 | |||||||
Revenue VAT Amount | 1,356,898 | |||||||
Refund Amount | 20,481,090 | 20,481,090 | ||||||
Refund VAT Amount | 1,024,054 | $ 1,024,054 | ||||||
Second Year [Member] | Strategic Alliance Agreement [Member] | ||||||||
Contract Initiation Date | Jan. 1, 2016 | Jan. 1, 2016 | ||||||
Contract Maturity Date | Dec. 31, 2016 | Dec. 31, 2016 | ||||||
Execution Fees | 35,000,000 | $ 35,000,000 | ||||||
Revenue Amount | 12,855,000 | |||||||
Revenue VAT Amount | 642,750 | |||||||
Refund Amount | 20,478,333 | 20,478,333 | ||||||
Refund VAT Amount | 1,023,917 | $ 1,023,917 | ||||||
Third Year [Member] | Strategic Alliance Agreement [Member] | ||||||||
Contract Initiation Date | Jan. 1, 2017 | Jan. 1, 2017 | ||||||
Contract Maturity Date | Dec. 31, 2017 | Dec. 31, 2017 | ||||||
Execution Fees | 33,000,000 | $ 33,000,000 | ||||||
Revenue Amount | 12,628,201 | |||||||
Revenue VAT Amount | 631,410 | |||||||
Refund Amount | 18,800,370 | 18,800,370 | ||||||
Refund VAT Amount | 940,019 | $ 940,019 | ||||||
Fourth Year [Member] | Strategic Alliance Agreement [Member] | ||||||||
Contract Initiation Date | Jan. 1, 2018 | Jan. 1, 2018 | ||||||
Contract Maturity Date | Dec. 31, 2018 | Dec. 31, 2018 | ||||||
Execution Fees | 33,000,000 | $ 33,000,000 | ||||||
Revenue Amount | 11,228,600 | |||||||
Revenue VAT Amount | 561,429 | |||||||
Refund Amount | 20,199,971 | 20,199,971 | ||||||
Refund VAT Amount | 1,010,000 | $ 1,010,000 | ||||||
Fifth Year [Member] | Strategic Alliance Agreement [Member] | ||||||||
Contract Initiation Date | Jan. 1, 2019 | Jan. 1, 2019 | ||||||
Contract Maturity Date | Dec. 31, 2019 | Dec. 31, 2019 | ||||||
Execution Fees | 33,000,000 | $ 33,000,000 | ||||||
Revenue Amount | 9,694,710 | |||||||
Revenue VAT Amount | 484,736 | |||||||
Refund Amount | 21,733,861 | 21,733,861 | ||||||
Refund VAT Amount | 1,086,693 | $ 1,086,693 | ||||||
Sixth Year [Member] | Strategic Alliance Agreement [Member] | ||||||||
Contract Initiation Date | Jan. 1, 2020 | Jan. 1, 2020 | ||||||
Contract Maturity Date | Dec. 31, 2020 | Dec. 31, 2020 | ||||||
Execution Fees | 33,000,000 | $ 33,000,000 | ||||||
Revenue Amount | 0 | |||||||
Revenue VAT Amount | 0 | |||||||
Refund Amount | 0 | 0 | ||||||
Refund VAT Amount | 0 | $ 0 | ||||||
Seventh Year [Member] | Strategic Alliance Agreement [Member] | ||||||||
Contract Initiation Date | Jan. 1, 2021 | Jan. 1, 2021 | ||||||
Contract Maturity Date | Dec. 31, 2021 | Dec. 31, 2021 | ||||||
Execution Fees | 33,000,000 | $ 33,000,000 | ||||||
Revenue Amount | 0 | |||||||
Revenue VAT Amount | 0 | |||||||
Refund Amount | 0 | 0 | ||||||
Refund VAT Amount | $ 0 | $ 0 |
OTHER LIABILITIES - Long-term d
OTHER LIABILITIES - Long-term debt instruments (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
LONG-TERM LOANS | ||
Less: current portion (Note 5) | $ 0 | $ (235,587) |
OTHER LIABILITIES - Additional
OTHER LIABILITIES - Additional Information (Details) | Dec. 14, 2018 | Jun. 14, 2017TWD ($) | May 15, 2016 | Jun. 10, 2013TWD ($) | Jul. 20, 2016 | Sep. 30, 2019TWD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018TWD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019TWD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018TWD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2019TWD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018TWD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017TWD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016TWD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2019USD ($) | Mar. 27, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018TWD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Feb. 23, 2016TWD ($) | Feb. 23, 2016USD ($) | Dec. 03, 2015TWD ($) | Dec. 03, 2015USD ($) | Jun. 10, 2013USD ($) |
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||
Deferred Revenue, Noncurrent | $ 1,343,938 | $ 2,056,513 | |||||||||||||||||||||||||||||||
Deferred Revenue, Current | 1,459,804 | 1,028,256 | |||||||||||||||||||||||||||||||
Due to Officers or Stockholders | $ 15,000,000 | $ 15,000,000 | 480,559 | $ 480,559 | |||||||||||||||||||||||||||||
Contract with customer liability, Revenue recognized | $ 2,281,470 | $ 73,691 | $ 2,827,107 | $ 92,259 | 7,271,032 | $ 234,852 | $ 7,466,550 | $ 249,733 | |||||||||||||||||||||||||
Basic Business Promotion Fees | $ 33,000,000 | ||||||||||||||||||||||||||||||||
Accrued Bonuses, Current | 336,641 | 2,320,445 | |||||||||||||||||||||||||||||||
Accrued bonus for Ms. Chao (Note 14) | 80,554 | 0 | |||||||||||||||||||||||||||||||
Long-term Debt | 1,905,051 | 2,537,072 | |||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 0.48% | ||||||||||||||||||||||||||||||||
Debt Instrument, Maturity Date | Jan. 10, 2019 | ||||||||||||||||||||||||||||||||
Loan A [Member] | |||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||
Long-term Debt | ¥ 850,000 | 123,611 | |||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ||||||||||||||||||||||||||||||||
Debt Instrument, Maturity Date | May 1, 2019 | ||||||||||||||||||||||||||||||||
Loan B [Member] | |||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||
Long-term Debt | ¥ 770,000 | 111,976 | |||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ||||||||||||||||||||||||||||||||
Debt Instrument, Maturity Date | May 1, 2019 | ||||||||||||||||||||||||||||||||
Supplementary Agreement [Member] | First Year [Member] | |||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||
Contract with customer liability, Revenue recognized | $ 27,137,958 | $ 892,742 | |||||||||||||||||||||||||||||||
Strategic Alliance Agreement [Member] | |||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||
Execution Fee Amount Paid | $ 250,000,000 | $ 8,068,446 | |||||||||||||||||||||||||||||||
Tax On Execution Fee | $ 11,904,762 | ||||||||||||||||||||||||||||||||
Strategic Alliance Agreement [Member] | Second Year [Member] | |||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||
Customer Refund Liability, Noncurrent | $ 20,478,333 | $ 690,537 | |||||||||||||||||||||||||||||||
Contract with customer liability, Revenue recognized | $ 12,855,000 | $ 422,883 | |||||||||||||||||||||||||||||||
Strategic Alliance Agreement [Member] | Third Year [Member] | |||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||
Customer Refund Liability, Noncurrent | $ 18,800,370 | $ 633,955 | |||||||||||||||||||||||||||||||
Contract with customer liability, Revenue recognized | $ 12,628,201 | $ 415,423 | |||||||||||||||||||||||||||||||
Strategic Alliance Agreement [Member] | Fourth Year [Member] | |||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||
Customer Refund Liability, Noncurrent | $ 20,199,971 | 670,389 | |||||||||||||||||||||||||||||||
Contract with customer liability, Revenue recognized | $ 11,228,600 | $ 372,650 | |||||||||||||||||||||||||||||||
Strategic Alliance Agreement [Member] | Fourth Year [Member] | Scenario, Forecast [Member] | |||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||
Contract with customer liability, Revenue recognized | $ 10,179,446 | $ 328,792 | |||||||||||||||||||||||||||||||
Ms Chao [Member] | |||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||
Accrued Bonuses | 917,382 | 597,631 | |||||||||||||||||||||||||||||||
Accrued Bonuses, Current | 836,828 | 597,631 | |||||||||||||||||||||||||||||||
Accrued bonus for Ms. Chao (Note 14) | 80,554 | 0 | |||||||||||||||||||||||||||||||
AIATW [Member] | |||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||
Deferred Revenue, Noncurrent | 1,343,938 | 2,056,513 | |||||||||||||||||||||||||||||||
Customer Refund Liability, Noncurrent | $ 15,719,185 | $ 530,056 | $ 4,761,905 | $ 160,573 | |||||||||||||||||||||||||||||
Deferred Revenue, Current | $ 1,459,804 | $ 1,028,256 |
REVENUE - Disaggregation inform
REVENUE - Disaggregation information of revenue (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
REVENUE | ||
Accounts receivable | $ 10,571,604 | $ 15,332,355 |
Contract assets - current | 3,348,094 | 0 |
Unearned revenue - current (Note 8) | 1,459,804 | 1,028,256 |
Unearned revenue - noncurrent (Note 9) | $ 1,343,938 | $ 2,056,513 |
REVENUE - Additional Informatio
REVENUE - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
REVENUE | ||||
Revenues | $ 23,266,852 | $ 16,147,000 | $ 64,449,994 | $ 53,811,717 |
LEASE - Operating lease right-o
LEASE - Operating lease right-of-use assets and lease liabilities (Details) - USD ($) | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
LEASE | |||
Operating lease right-of-use assets | $ 4,208,685 | $ 4,000,000 | $ 0 |
Operating lease liabilities - current | 1,975,856 | 0 | |
Operating lease liabilities - noncurrent | $ 2,095,202 | $ 0 |
LEASE - Lease term and discount
LEASE - Lease term and discount rate (Details) | Sep. 30, 2019 |
LEASE | |
Weighted average remaining lease term, Operating lease | 2 years 1 month 28 days |
Weighted average discount rate, Operating lease | 3.01% |
LEASE - Supplemental cash flow
LEASE - Supplemental cash flow information related to leases (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows related to operating leases | $ 2,044,913 |
LEASE - Minimum future lease pa
LEASE - Minimum future lease payments (Details) - USD ($) | Sep. 30, 2019 | Jan. 01, 2019 |
LEASE | ||
2019 (reminder of year) | $ 627,216 | |
2020 | 1,933,392 | |
2021 | 1,213,059 | |
2022 | 320,781 | |
2023 | 112,208 | |
Thereafter | 57,265 | |
Total minimum lease payments | 4,263,921 | |
Less: Interest | (192,863) | |
Present value of future minimum lease payments | $ 4,071,058 | $ 3,700,000 |
LEASE - Additional Information
LEASE - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
LEASE | ||
Operating Lease, Cost | $ 701,341 | $ 2,076,084 |
NON-CONTROLLING INTERESTS (Deta
NON-CONTROLLING INTERESTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Non-Controlling Interests [Line Items] | ||||||
Net Income (Loss) | $ 1,071,427 | $ 444,571 | $ 2,557,603 | $ 2,204,677 | $ 3,045,242 | |
Other Comprehensive Income (Loss) | (245,709) | (429,854) | ||||
Noncontrolling Interests | $ 18,662,938 | $ 18,662,938 | $ 16,351,044 | $ 13,735,656 | ||
Law Enterprise [Member] | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 34.05% | 34.05% | 34.05% | |||
Net Income (Loss) | $ (120,610) | $ 193,308 | ||||
Other Comprehensive Income (Loss) | (9,665) | (22,625) | ||||
Noncontrolling Interests | $ (202,832) | $ (202,832) | $ (72,557) | (243,240) | ||
Law Broker [Member] | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 34.05% | 34.05% | 34.05% | |||
Net Income (Loss) | $ 2,507,567 | $ 2,655,344 | ||||
Other Comprehensive Income (Loss) | (235,090) | (406,023) | ||||
Noncontrolling Interests | $ 18,422,139 | $ 18,422,139 | $ 16,149,662 | 13,900,341 | ||
PFAL [Member] | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 49.00% | 49.00% | 49.00% | |||
Net Income (Loss) | $ 178,396 | $ 208,918 | ||||
Other Comprehensive Income (Loss) | (521) | (255) | ||||
Noncontrolling Interests | $ 614,617 | $ 614,617 | $ 436,742 | 228,079 | ||
MKI [Member] | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 49.00% | 49.00% | 49.00% | |||
Net Income (Loss) | $ (514) | $ (513) | ||||
Other Comprehensive Income (Loss) | 0 | 0 | ||||
Noncontrolling Interests | $ (3,144) | $ (3,144) | $ (2,630) | (2,117) | ||
PA Taiwan [Member] | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 49.00% | 49.00% | 49.00% | |||
Net Income (Loss) | $ (7,192) | $ (11,789) | ||||
Other Comprehensive Income (Loss) | (166) | (531) | ||||
Noncontrolling Interests | $ (165,120) | $ (165,120) | $ (157,762) | (145,442) | ||
PTC Nanjing [Member] | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 49.00% | 49.00% | 49.00% | |||
Net Income (Loss) | $ (44) | $ (26) | ||||
Other Comprehensive Income (Loss) | (267) | (420) | ||||
Noncontrolling Interests | $ (2,722) | $ (2,722) | $ (2,411) | $ (1,965) |
INCOME TAX - Effective Income t
INCOME TAX - Effective Income tax rate reconciliation (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
INCOME TAX | ||||
US statutory rate | 21.00% | 21.00% | 21.00% | 21.00% |
Tax rate difference | (1.00%) | (3.00%) | (1.00%) | (1.00%) |
Tax base difference | 2.00% | 1.00% | ||
Income tax on undistributed earnings | 4.00% | 6.00% | 4.00% | 4.00% |
Loss in subsidiaries | 5.00% | 14.00% | 3.00% | 3.00% |
Un-deductible and non-taxable items | 1.00% | (1.00%) | ||
True up of prior year income tax | 2.00% | 3.00% | 4.00% | |
Withholding tax | 13.00% | |||
Utilization of deferred tax not recognized in prior year | (3.00%) | (1.00%) | ||
Effective tax rate | 28.00% | 44.00% | 26.00% | 44.00% |
INCOME TAX - Additional Informa
INCOME TAX - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Schedule of Income Tax [Line Items] | ||||||
Tax per financial statements | 28.00% | 44.00% | 26.00% | 44.00% | ||
Tax Basis Percentage On Revenue | 10.00% | |||||
Additional Income Tax Rate On Undistributed Earnings | 5.00% | |||||
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 21.00% | 21.00% | 21.00% | 21.00% | ||
Undistributed Earnings, Diluted | $ 1,199,195 | |||||
Current transition tax payable | $ 123,984 | $ 123,984 | $ 95,936 | |||
Noncurrent transition tax payable | $ 911,387 | $ 911,387 | $ 1,007,323 | |||
Taiwan | ||||||
Schedule of Income Tax [Line Items] | ||||||
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 20.00% | |||||
Maximum [Member] | ||||||
Schedule of Income Tax [Line Items] | ||||||
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 35.00% | |||||
Minimum [Member] | ||||||
Schedule of Income Tax [Line Items] | ||||||
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 21.00% | |||||
Hong Kong | ||||||
Schedule of Income Tax [Line Items] | ||||||
Tax per financial statements | 16.50% | |||||
Subsidiary [Member] | ||||||
Schedule of Income Tax [Line Items] | ||||||
Tax per financial statements | 25.00% |
RELATED PARTY TRANSACTIONS - Lo
RELATED PARTY TRANSACTIONS - Loans payable to related parties (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||
Due to related parties, Total | $ 1,538,219 | $ 996,565 |
Less: Accrued bonus for Ms. Chao - noncurrent (Note 9) | (80,554) | 0 |
Due to related parties, Total | 1,457,665 | 996,565 |
Mr.Mao [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties, Total | 386,985 | 391,311 |
Ms.Lu [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties, Total | 83,057 | 0 |
Ms Chao [Member] | ||
Related Party Transaction [Line Items] | ||
Less: Accrued bonus for Ms. Chao - noncurrent (Note 9) | (80,554) | 0 |
Due to related parties, Total | 917,382 | 597,631 |
Ms. Lee [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties, Total | 125,941 | 0 |
Others [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties, Total | $ 24,854 | $ 7,623 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
RELATED PARTY TRANSACTIONS | ||||
Revenues | $ 23,266,852 | $ 16,147,000 | $ 64,449,994 | $ 53,811,717 |
General and Administrative Expense | $ 4,706,802 | $ 3,989,414 | $ 12,934,838 | $ 12,019,944 |
COMMITMENTS (Details)
COMMITMENTS (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
COMMITMENTS | ||
Surplus Bonus Percentage | 1.25% | |
Compensation expenses | $ 89,408 | $ 125,954 |
Performance Bonus | $ 213,190 | $ 375,718 |
Number of years | 3 |
SEGMENT REPORTING - Revenue by
SEGMENT REPORTING - Revenue by major customers by reporting segments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | ||||
Total revenue | $ 23,266,852 | $ 16,147,000 | $ 64,449,994 | $ 53,811,717 |
Income (loss) from operations | ||||
Total income from operations | 3,440,810 | 1,148,627 | 7,968,543 | 6,036,996 |
Net income (loss) | ||||
Total net income | 2,399,581 | 612,890 | 6,370,863 | 3,742,957 |
Elimination adjustment | ||||
Revenue | ||||
Total revenue | 17 | (15,503) | (7,466) | (45,991) |
Income (loss) from operations | ||||
Total income from operations | 34,188 | 31,588 | 104,363 | 97,924 |
Net income (loss) | ||||
Total net income | 4,792 | (643) | 11,099 | 48 |
Taiwan | ||||
Revenue | ||||
Total revenue | 21,053,131 | 13,906,215 | 57,036,548 | 45,645,006 |
Income (loss) from operations | ||||
Total income from operations | 3,181,981 | 1,459,437 | 7,112,388 | 6,052,549 |
Net income (loss) | ||||
Total net income | 2,180,558 | 962,757 | 5,666,549 | 3,856,534 |
PRC | ||||
Revenue | ||||
Total revenue | 1,965,552 | 2,218,780 | 6,749,851 | 8,094,122 |
Income (loss) from operations | ||||
Total income from operations | 45,213 | (313,616) | 325,018 | (31,913) |
Net income (loss) | ||||
Total net income | 62,290 | (320,329) | 329,141 | (30,925) |
Hong Kong | ||||
Revenue | ||||
Total revenue | 248,152 | 37,508 | 671,061 | 118,580 |
Income (loss) from operations | ||||
Total income from operations | 179,428 | (28,782) | 426,774 | (81,564) |
Net income (loss) | ||||
Total net income | $ 151,941 | $ (28,895) | $ 364,074 | $ (82,700) |
SEGMENT REPORTING - Long term l
SEGMENT REPORTING - Long term liabilities (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Long-lived assets | ||
Total long-lived assets | $ 1,285,252 | $ 1,195,695 |
Reportable assets | ||
Total reportable assets | 77,554,638 | 68,881,844 |
Capital Investment | ||
Total capital investments | 454,612 | 696,028 |
Elimination adjustment | ||
Long-lived assets | ||
Total long-lived assets | (1,313) | 0 |
Reportable assets | ||
Total reportable assets | (70,179,761) | (44,150,214) |
Taiwan | ||
Long-lived assets | ||
Total long-lived assets | 1,166,496 | 1,092,576 |
Reportable assets | ||
Total reportable assets | 133,941,607 | 100,220,270 |
Capital Investment | ||
Total capital investments | 403,066 | 641,873 |
PRC | ||
Long-lived assets | ||
Total long-lived assets | 119,422 | 102,383 |
Reportable assets | ||
Total reportable assets | 12,342,380 | 11,796,388 |
Capital Investment | ||
Total capital investments | 51,546 | 53,158 |
Hong Kong | ||
Long-lived assets | ||
Total long-lived assets | 647 | 736 |
Reportable assets | ||
Total reportable assets | 1,450,412 | 1,015,400 |
Capital Investment | ||
Total capital investments | $ 0 | $ 997 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Nov. 04, 2019USD ($) | Oct. 15, 2019USD ($) | Oct. 01, 2019HKD ($) | Oct. 01, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 27, 2019 |
Proceeds from short-term loans | $ 21,539,897 | $ 16,700,000 | |||||
Interest rate (as percent) | 0.48% | ||||||
Credit facility, CTBC [Member] | Subsequent Event [Member] | |||||||
Proceeds from short-term loans | $ 500,000 | ||||||
Interest rate (as percent) | 3.20% | ||||||
Credit facility, FEIB [Member] | Subsequent Event [Member] | |||||||
Proceeds from short-term loans | $ 2,500,000 | ||||||
Interest rate (as percent) | 3.05% | ||||||
PFAL [Member] | Subsequent Event [Member] | |||||||
Cash dividend | $ 1,500,000 | $ 191,376 |