Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 11, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Entity File Number | 000-54884 | |
Entity Registrant Name | CHINA UNITED INSURANCE SERVICE, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 30-0826400 | |
Entity Address, Address Line One | 7F, No. 311 Section 3 | |
Entity Address, Address Line Two | Nan-King East Road | |
Entity Address, City or Town | Taipei City | |
Entity Address, Country | TW | |
Entity Address, Postal Zip Code | 105405 | |
City Area Code | 8862 | |
Local Phone Number | 87126958 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 29,421,736 | |
Entity Central Index Key | 0001512927 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 18,536,725 | $ 9,063,338 |
Time deposits | 59,430,315 | 53,339,508 |
Accounts receivable | 15,954,543 | 25,346,250 |
Contract assets | 1,051,721 | 0 |
Marketable securities | 0 | 1,272,573 |
Other current assets | 1,411,513 | 1,491,168 |
Total current assets | 96,384,817 | 90,512,837 |
Right-of-use assets under operating leases | 7,025,747 | 6,524,555 |
Property and equipment, net | 2,204,942 | 2,373,245 |
Intangible assets, net | 303,591 | 381,747 |
Long-term investments | 2,676,399 | 2,835,095 |
Restricted cash - noncurrent | 71,974 | 66,490 |
Deferred tax assets | 908,896 | 1,021,890 |
Other assets | 4,329,829 | 4,012,370 |
TOTAL ASSETS | 113,906,195 | 107,728,229 |
Current liabilities | ||
Commissions payable to sales professionals | 11,316,523 | 12,088,291 |
Short-term loans | 17,988,818 | 14,159,108 |
Contract liabilities | 1,127,249 | 1,119,361 |
Income tax payable - current | 3,002,422 | 3,146,018 |
Operating lease liabilities - current | 3,341,964 | 3,043,056 |
Due to related parties | 56,625 | 94,047 |
Other current liabilities | 10,082,991 | 13,591,034 |
Total current liabilities | 46,916,592 | 47,240,915 |
Income tax payable - noncurrent | 539,636 | 719,515 |
Operating lease liabilities - noncurrent | 3,631,104 | 3,440,343 |
Other liabilities | 899,568 | 1,090,222 |
TOTAL LIABILITIES | 51,986,900 | 52,490,995 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000 issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 10 | 10 |
Common stock, par value $0.00001, 100,000,000 authorized, 29,421,736 issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 294 | 294 |
Additional paid-in capital | 8,190,449 | 8,190,449 |
Statutory reserves | 10,731,421 | 9,463,903 |
Retained earnings | 11,431,159 | 9,097,408 |
Accumulated other comprehensive income | 4,211,579 | 3,889,429 |
Total stockholders' equity attributable to China United's shareholders | 34,564,912 | 30,641,493 |
Noncontrolling interests | 27,354,383 | 24,595,741 |
TOTAL STOCKHOLDERS' EQUITY | 61,919,295 | 55,237,234 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 113,906,195 | $ 107,728,229 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
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 | 29,421,736 |
Common stock, shares outstanding | 29,421,736 | 29,421,736 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||||
Revenue | $ 32,973,680 | $ 29,441,754 | $ 63,503,797 | $ 57,964,964 |
Cost of revenue | 23,536,213 | 22,492,991 | 42,509,645 | 41,992,915 |
Gross profit | 9,437,467 | 6,948,763 | 20,994,152 | 15,972,049 |
Operating expenses: | ||||
Selling | 96,297 | 367,658 | 676,074 | 857,688 |
General and administrative | 6,189,833 | 5,348,270 | 12,280,087 | 12,332,824 |
Total operating expense | 6,286,130 | 5,715,928 | 12,956,161 | 13,190,512 |
Income from operations | 3,151,337 | 1,232,835 | 8,037,991 | 2,781,537 |
Other income (expenses): | ||||
Interest income | 129,779 | 114,011 | 213,777 | 224,902 |
Interest expenses | (46,636) | (60,978) | (89,106) | (120,260) |
Foreign currency exchange loss, net | (427,652) | (131,383) | (99,186) | (187,320) |
Dividend income | 251,328 | 319,235 | 251,328 | 319,235 |
Other - net | 80,669 | 355,270 | 259,609 | 258,468 |
Total other income (expenses), net | (12,512) | 596,155 | 536,422 | 495,025 |
Income before income taxes | 3,138,825 | 1,828,990 | 8,574,413 | 3,276,562 |
Income tax expense | (1,001,598) | (415,792) | (2,400,404) | (1,527,079) |
Net income | 2,137,227 | 1,413,198 | 6,174,009 | 1,749,483 |
Less: net income attributable to noncontrolling interests | (946,344) | (662,404) | (2,572,740) | (1,287,926) |
Net income attributable to China United's shareholders | 1,190,883 | 750,794 | 3,601,269 | 461,557 |
Other comprehensive items, net of tax: | ||||
Foreign currency translation loss | 1,698,987 | 1,517,744 | 507,688 | 950,111 |
Other | 0 | (59) | 364 | (116) |
Total other comprehensive loss | 1,698,987 | 1,517,685 | 508,052 | 949,995 |
Comprehensive income | 3,836,214 | 2,930,883 | 6,682,061 | 2,699,478 |
Less: comprehensive income attributable to noncontrolling interests | (1,495,321) | (1,232,560) | (2,758,642) | (1,623,414) |
Comprehensive income attributable to China United's shareholders | $ 2,340,893 | $ 1,698,323 | $ 3,923,419 | $ 1,076,064 |
Weighted average shares outstanding: | ||||
Basic and diluted | 29,421,736 | 29,421,736 | 29,421,736 | 29,421,736 |
Earnings per share attributable to common stockholders of China United: | ||||
Basic and diluted | $ 0.039 | $ 0.025 | $ 0.118 | $ 0.015 |
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 Income [Member] | Retained Earnings [Member] | Parent [Member] | Noncontrolling Interests [Member] | Total |
Balance at Dec. 31, 2019 | $ 294 | $ 10 | $ 8,190,449 | $ 8,228,904 | $ 417,015 | $ 9,402,294 | $ 26,238,966 | $ 19,512,526 | $ 45,751,492 |
Balance (in shares) at Dec. 31, 2019 | 29,421,736 | 1,000,000 | |||||||
Issuance of preferred stock-based compensation | 980,466 | 980,466 | |||||||
Business acquisition | 1,019 | 1,019 | |||||||
Foreign currency translation loss | 614,584 | 614,584 | 335,527 | 950,111 | |||||
Other comprehensive income (loss) | (77) | (77) | (39) | (116) | |||||
Net income | 461,557 | 461,557 | 1,287,926 | 1,749,483 | |||||
Balance at Jun. 30, 2020 | $ 294 | $ 10 | 8,190,449 | 8,228,904 | 1,031,522 | 9,863,851 | 27,315,030 | 22,117,425 | 49,432,455 |
Balance (in shares) at Jun. 30, 2020 | 29,421,736 | 1,000,000 | |||||||
Balance at Dec. 31, 2019 | $ 294 | $ 10 | 8,190,449 | 8,228,904 | 417,015 | 9,402,294 | 26,238,966 | 19,512,526 | 45,751,492 |
Balance (in shares) at Dec. 31, 2019 | 29,421,736 | 1,000,000 | |||||||
Business acquisition | 1,428,622 | ||||||||
Balance at Dec. 31, 2020 | $ 294 | $ 10 | 8,190,449 | 9,463,903 | 3,889,429 | 9,097,408 | 30,641,493 | 24,595,741 | 55,237,234 |
Balance (in shares) at Dec. 31, 2020 | 29,421,736 | 1,000,000 | |||||||
Balance at Mar. 31, 2020 | $ 294 | $ 10 | 8,190,449 | 8,228,904 | 83,993 | 9,113,057 | 25,616,707 | 20,883,846 | 46,500,553 |
Balance (in shares) at Mar. 31, 2020 | 29,421,736 | 1,000,000 | |||||||
Business acquisition | 1,019 | 1,019 | |||||||
Foreign currency translation loss | 947,568 | 947,568 | 570,176 | 1,517,744 | |||||
Other comprehensive income (loss) | (39) | (39) | (20) | (59) | |||||
Net income | 750,794 | 750,794 | 662,404 | 1,413,198 | |||||
Balance at Jun. 30, 2020 | $ 294 | $ 10 | 8,190,449 | 8,228,904 | 1,031,522 | 9,863,851 | 27,315,030 | 22,117,425 | 49,432,455 |
Balance (in shares) at Jun. 30, 2020 | 29,421,736 | 1,000,000 | |||||||
Balance at Dec. 31, 2020 | $ 294 | $ 10 | 8,190,449 | 9,463,903 | 3,889,429 | 9,097,408 | 30,641,493 | 24,595,741 | 55,237,234 |
Balance (in shares) at Dec. 31, 2020 | 29,421,736 | 1,000,000 | |||||||
Appropriation of reserves | 1,267,518 | (1,267,518) | |||||||
Foreign currency translation loss | 321,910 | 321,910 | 185,778 | 507,688 | |||||
Other comprehensive income (loss) | 240 | 240 | 124 | 364 | |||||
Net income | 3,601,269 | 3,601,269 | 2,572,740 | 6,174,009 | |||||
Balance at Jun. 30, 2021 | $ 294 | $ 10 | 8,190,449 | 10,731,421 | 4,211,579 | 11,431,159 | 34,564,912 | 27,354,383 | 61,919,295 |
Balance (in shares) at Jun. 30, 2021 | 29,421,736 | 1,000,000 | |||||||
Balance at Mar. 31, 2021 | $ 294 | $ 10 | 8,190,449 | 9,463,903 | 3,061,569 | 11,507,794 | 32,224,019 | 25,859,062 | 58,083,081 |
Balance (in shares) at Mar. 31, 2021 | 29,421,736 | 1,000,000 | |||||||
Appropriation of reserves | 1,267,518 | (1,267,518) | |||||||
Foreign currency translation loss | 1,150,010 | 1,150,010 | 548,977 | 1,698,987 | |||||
Net income | 1,190,883 | 1,190,883 | 946,344 | 2,137,227 | |||||
Balance at Jun. 30, 2021 | $ 294 | $ 10 | $ 8,190,449 | $ 10,731,421 | $ 4,211,579 | $ 11,431,159 | $ 34,564,912 | $ 27,354,383 | $ 61,919,295 |
Balance (in shares) at Jun. 30, 2021 | 29,421,736 | 1,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 6,174,009 | $ 1,749,483 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Noncash stock-based compensation | 0 | 1,546,910 |
Depreciation and amortization | 580,884 | 429,543 |
Amortization of right-of-use assets | 1,870,255 | 1,389,078 |
Amortization of bond premium | 58 | 133 |
Gain on sales of marketable securities | (141,203) | (66,846) |
Loss on valuation of financial assets | 212,896 | 6,138 |
Loss on disposals of equipment | 71 | 11,097 |
Deferred income tax | 121,020 | (77,993) |
Net changes in operating assets and liabilities: | ||
Accounts receivable | 9,522,790 | 6,378,684 |
Contract assets | (1,046,822) | (1,246,405) |
Other current assets | (9,684) | 423,757 |
Other assets | (242,568) | (758,501) |
Commission payable to sales professionals | (854,127) | (209,513) |
Contract liabilities | 0 | (918,391) |
Income tax payable | (339,769) | (111,162) |
Other current liabilities | (3,343,428) | (1,567,417) |
Other liabilities | (197,413) | 91,609 |
Lease liabilities | (2,126,670) | (1,578,580) |
Net cash provided by operating activities | 10,180,299 | 5,491,624 |
Cash flows from investing activities: | ||
Cash received from issuance of preferred stock | 0 | 319 |
Purchases of time deposits | (45,655,824) | (38,942,259) |
Proceeds from maturities of time deposits | 39,967,511 | 31,169,243 |
Purchases of marketable securities | (46,370) | (943,791) |
Proceeds from sales of marketable securities | 1,427,731 | 214,243 |
Proceeds from disposal of equipment | 143 | 2,960 |
Purchase of equipment | (298,712) | (737,145) |
Purchase of intangible assets | (17,012) | (37,962) |
Net cash used in investing activities | (4,622,533) | (9,274,392) |
Cash flows from financing activities: | ||
Proceeds from short-term loans | 9,873,845 | 22,000,974 |
Repayment of short-term loans | (6,100,000) | (18,660,000) |
Proceeds from related party borrowings | (39,797) | (278,447) |
Net cash provided by financing activities | 3,734,048 | 3,062,527 |
Foreign currency translation | 187,057 | (494,865) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 9,478,871 | (1,215,106) |
Cash, cash equivalents and restricted cash, beginning balance | 9,129,828 | 12,658,500 |
Cash, cash equivalents and restricted cash, ending balance | 18,608,699 | 11,443,394 |
SUPPLEMENTARY DISCLOSURE: | ||
Interest paid | 87,953 | 121,470 |
Income tax paid | 3,588,250 | 1,837,695 |
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Lease liabilities arising from new right-of-use assets | $ 2,468,173 | $ 1,468,413 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 6 Months Ended |
Jun. 30, 2021 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES China United Insurance Service, Inc. (“China United” or “CUII”), its subsidiaries and variable-interest entities (collectively referred to herein as the “Company”) primarily engage in insurance brokerage and insurance agency services. The Company markets and sells to customers two broad categories of insurance products: life insurance products and property and casualty insurance products, both focused on meeting the particular insurance needs of individuals. The insurance products are underwritten by some of the leading insurance companies in Taiwan and China. The Company manages its business through aggregating them into three geographic operating segments, Taiwan, the PRC, and Hong Kong. The Company’s common stock currently trades over the counter under the ticker symbol “CUII” on the OTCQB. The corporate structure as of June 30, 2021 is as follows: Note 1: Prime Asia Co., Limited is in process of liquidation. Note 2: The board of directors has made resolution to sell Jiangsu Law Insurance Brokers Co., Limited. As of August 16, 2021, the company has touched base with potential buyers but yet to sign any purchase agreement. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The condensed 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 year to the current year’s presentation. Such reclassifications have no effect on net income and the cash flow statements operating activities as previously reported. Basis of Presentation The condensed 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 six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. These condensed 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, 2020, which were included in the Company’s 2020 Annual Report on Form 10-K (“2020 Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2020, has been derived from the Company’s audited consolidated financial statements as of that date. Use of Estimates The preparation of the Company’s condensed 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 June 30, 2021 and December 31, 2020. Foreign Currency Transactions China United’s financial statements are presented in U.S. dollars ($), which is the China United’s reporting and functional currency. The functional currencies of the China United’s subsidiaries are New Taiwan dollar (“NTD”), China yuan (“RMB”) and Hong Kong dollar (“HKD”). The resulting translation adjustments are reported under other comprehensive income. Gains and losses resulting from the translation of foreign currency transactions are reflected in the consolidated statements of operations and other comprehensive income (loss). Monetary assets and liabilities denominated in foreign currency are translated at the functional currency using the rate of exchange prevailing at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the consolidated statements of operations and other comprehensive income (loss). The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for condensed consolidated financial statements are as follows: Average Rate for the six months ended June 30, 2021 2020 (unaudited) (unaudited) Taiwan dollar (NTD) NTD 28.01126 NTD 29.99166 China yuan (RMB) RMB 6.46967 RMB 7.03241 Hong Kong dollar (HKD) HKD 7.76102 HKD 7.76073 United States dollar ($) $ 1.00000 $ 1.00000 Exchange Rate at June 30, 2021 (unaudited) December 31, 2020 Taiwan dollar (NTD) NTD 27.88079 NTD 28.07725 China yuan (RMB) RMB 6.45488 RMB 6.52765 Hong Kong dollar (HKD) HKD 7.76500 HKD 7.75249 United States dollar ($) $ 1.00000 $ 1.00000 Earnings (Loss) Per Share Basic earnings (loss) 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 FASB ASC Topic 260, “Earnings Per Share.” As of June 30, 2021 and 2020, the Company does not have any potentially dilutive instrument. 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. - The following table summarize financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Time deposits $ 59,430,315 $ — $ — $ 59,430,315 Long-term investments: REITs 1,251,378 — — 1,251,378 Total assets measured at fair value $ 60,681,693 $ — $ — $ 60,681,693 December 31, 2020 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Time deposits $ 53,339,508 $ — $ — $ 53,339,508 Marketable securities: Stock Mutual funds 1,272,573 — — 1,272,573 Long-term investments: Government bonds held for available-for-sale - 107,096 — 107,096 REITs 1,359,100 — — 1,359,100 Total assets measured at fair value $ 55,971,181 $ 107,096 $ — $ 56,078,277 The carrying amounts of current financial assets and liabilities in the consolidated balance sheets for time deposits, approximate fair value due to the short-term duration of those instruments. Marketable securities and long-term investments in REITs – The fair values of mutual funds and REITs were valued based on quoted market prices in active markets. Government bonds – The fair value of government bonds is valued based on theoretical bond price in the Taipei Exchange. According to Taiwan Regulations Governing Deposit of Bond and Acquirement of Insurance by Insurance Agents, Insurance Brokers and Insurance Surveyors (“RGDBAI”) Article 3 and 4, Law Broker is required to maintain a minimum of NTD 3,000,000 ($107,601 and $106,848 as of June 30, 2021 and December 31, 2020, respectively) restricted balance in a separate account or government bonds issued by the central government in order to maintain its insurance license. The government bonds matured on March 17, 2021 and the amortized cost of the bonds was nil and $106,906 (NTD 3,001,620) as of June 30, 2021 and December 31, 2020, respectively. The Company will purchase a similar investment after the maturity of the bonds to maintain the insurance license. Concentration of Risk The Company maintains cash with banks in the USA, People’s Republic of China (“PRC”), Hong Kong, and Taiwan. Should any bank holding the Company’s cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose all or part of its cash deposit 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 deposit and accounts receivable. As of June 30, 2021 and December 31, 2020, approximately $2,606,000 and $2,229,000 of the Company’s cash and cash equivalents, time deposits, and registered capital deposits held by financial institutions, was insured, and the remaining balance of approximately $78,430,000 and 63,222,000, 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 June 30, 2021 and 2020, the Company’s revenues from sale of insurance policies underwritten by these companies were: Three Months Ended June 30, 2021 2020 (unaudited) (unaudited) % of Total % of Total Amount Revenue Amount Revenue TransGlobe Life Insurance Inc. $ 9,185,048 28 % $ 6,856,458 23 % Taiwan Life Insurance Co., Ltd. 5,923,846 18 % 5,627,922 19 % Farglory Life Insurance Co., Ltd. 3,961,983 12 % 3,583,979 12 % Shin Kong Life Insurance Co., Ltd. (*) (*) 3,207,118 11 % (*) The related revenues for the three months ended had not exceeded 10% or more of the consolidated revenues. For the six months ended June 30, 2021 and 2020, the Company’s revenues from sale of insurance policies underwritten by these companies were: Six Months Ended June 30, 2021 2020 (unaudited) (unaudited) % of Total % of Total Amount Revenue Amount Revenue TransGlobe Life Insurance Inc. $ 15,785,677 25 % $ 11,852,412 20 % Taiwan Life Insurance Co., Ltd. 13,155,304 21 % 11,220,597 19 % Farglory Life Insurance Co., Ltd. 8,481,824 13 % 6,963,070 12 % Shin Kong Life Insurance Co., Ltd. (*) (*) 6,269,180 11 % (*) The related revenues for the six months ended had not exceeded 10% or more of the consolidated revenues. As of June 30, 2021 and December 31, 2020, the Company’s accounts receivable from these companies were: June 30, 2021 (unaudited) December 31, 2020 % of Total % of Total Accounts Accounts Amount Receivable Amount Receivable TransGlobe Life Insurance Inc. 4,245,590 27 % 7,761,664 31 % Taiwan Life Insurance Co., Ltd 2,302,067 14 % 4,557,862 18 % Farglory Life Insurance Co., Ltd. 1,764,461 11 % 2,787,586 11 % 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 of operations 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. Stock-Based Compensation The Company accounts for equity-based compensation cost in accordance with ASC 718, Compensation-Stock Compensation Income Taxes The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized. When tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations and other comprehensive income (loss). New Accounting Pronouncements and Other Guidance New Accounting Pronouncements Effective January 1, 2021: Income Tax In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which is intended to simplify various aspects related to accounting for income taxes. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard in the beginning of January 1, 2021, and the adoption did not have any significant impact on the Company’s condensed consolidated financial statements. Equity Securities, Equity-method Investments and Certain Derivatives In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. ASU 2020-01 is effective for the Company in the first quarter of 2021. The adoption did not have any significant impact on the Company’s condensed consolidated financial statements. Accounting Standards Issued but Not Yet Adopted: Credit Losses In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC 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. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions in which the reference LIBOR or another reference rate are expected to be discontinued as a result of the Reference Rate Reform. The standard is effective for all entities. The standard may be adopted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2022. We are currently evaluating the effects of the standard on our consolidated financial statements and related disclosures. Convertible Debt, and Derivatives and Hedging In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity's own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures. The management does not believe that other than disclosed above, accounting pronouncements the recently issued but not yet adopted 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 | 6 Months Ended |
Jun. 30, 2021 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | NOTE 3 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH Cash, cash equivalents and restricted cash consisted of the following as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Cash and cash equivalents: Cash on hand and in banks $ 18,536,725 $ 9,063,338 Time deposits - with original maturities less than three months (see Note 4) — — 18,536,725 9,063,338 Restricted cash – noncurrent 71,974 66,490 Total cash, cash equivalents and restricted cash shown in the statements of cash flows $ 18,608,699 $ 9,129,828 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 officers of Law Insurance Broker Co., Limited (“Law Broker”). |
TIME DEPOSITS
TIME DEPOSITS | 6 Months Ended |
Jun. 30, 2021 | |
TIME DEPOSITS | |
TIME DEPOSITS | NOTE 4 – TIME DEPOSITS June 30, 2021 (unaudited) December 31, 2020 Total time deposits $ 59,430,315 $ 53,339,508 Less: Time deposits – with original maturities less than three months (see Note 3) - — Time deposits – original maturities over three months but less than one year $ 59,430,315 $ 53,339,508 Time Deposits Pledged as Collateral The Company had a total of $21,881,485 (NTD 610.1 million) and $15,930,161 (NTD 447.3 million) restricted time deposits, respectively, as of June 30, 2021 and December 31, 2020. As of June 30, 2021 and December 31, 2020, time deposits of $35,867 (NTD 1 million) and 35,616 (NTD 1 million) were pledged as collateral for the Company’s credit card, respectively. In addition, the Company had time deposits of $21,845,618 and $15,894,545 pledged as collateral for short-term loans, respectively, as of June 30, 2021 and December 31, 2020. See Note 5. |
SHORT-TERM LOANS
SHORT-TERM LOANS | 6 Months Ended |
Jun. 30, 2021 | |
SHORT-TERM LOANS | |
SHORT-TERM LOANS | NOTE 5 – SHORT-TERM LOANS The Company’s short-term loans consisted of the following as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Debt Collateral Debt Collateral Line of Credit Collateral balance value balance value $8.9 million (NTD 250 million) revolving line of credit with Cathay United Bank Company Limited (“CUB”); the loan bears interest at the higher of CUB’s adjustable rates for loans plus a margin of 0.41% or the 1-month TAIBOR rate plus a margin of 0.8% and matures on May 4, 2021. The maturity date was extended to May 4, 2022. Time deposits $ 8,948,818 $ 8,984,685 $ 6,019,108 $ 6,019,108 $4.0 million revolving line of credit with O-Bank; the loan bears interest at the TAIFX3 rate plus a margin of 0.5% and matures on December 29, 2021 Time deposits 4,000,000 4,949,647 4,000,000 4,915,011 $3.1 million revolving line of credit with KGI; the loan bears interest at the TAIFX3 rate plus a margin of 0.9% and matures on February 18, 2022 Time deposits 1,540,000 2,468,616 2,100,000 2,443,003 $1.5 million revolving line of credit with CTBC Bank Co., Ltd. (“CTBC”); the loan bears interest at the CTBC’s cost of funds plus a negotiated margin on individual case basis and matured on August 28, 2021 Time deposits — 1,501,576 1,200,000 1,384,833 $2.5 million revolving line of credit with Far Eastern International Bank (“FEIB”); the loan bears interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.7% and matures on December 17, 2021 Time deposits 2,500,000 2,941,094 840,000 1,132,590 $1.0 million revolving line of credit with E. Sun Bank (“E. Sun”); the loan bears interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.7% and matures on July 16, 2021. This loan have been paid off before issuance date. Time deposits 1,000,000 1,000,000 — — $ 17,988,818 $ 21,845,618 $ 14,159,108 $ 15,894,545 Borrowings under the revolving credit agreements are generally due 90 days or less. Total interest expenses for short-term loans incurred were $46,636 and $60,978, respectively, for the three months ended June 30, 2021 and 2020, and were $$89,106 and $120,260 for the six months ended June 30, 2021 and 2020, respectively. |
COMMISSIONS PAYABLE TO SALES PR
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | 6 Months Ended |
Jun. 30, 2021 | |
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | |
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | NOTE 6 – COMMISSIONS PAYABLE TO SALES PROFESSIONALS Commissions payable to sales professionals consisted of the following as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Taiwan $ 11,045,729 $ 11,814,222 PRC 270,794 274,069 Hong Kong — — Total commissions payable to sales professionals $ 11,316,523 $ 12,088,291 Commissions payable to sales professionals are usually settled within twelve months. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2021 | |
OTHER CURRENT LIABILITIES | |
OTHER CURRENT LIABILITIES | NOTE 7 – OTHER CURRENT LIABILITIES Other current liabilities were as follows, as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Accrued bonus $ 5,540,204 $ 7,854,488 Payroll payable and other benefits 1,579,041 1,767,417 Accrued business tax and tax withholdings 870,268 1,643,082 Accrued tax penalties — 170,016 Other accrued liabilities 2,093,478 2,156,031 Total other current liabilities $ 10,082,991 $ 13,591,034 Accrued Bonus The Company’s foreign subsidiaries have various bonus plans, which provide cash awards to employees based upon their performance, and had accrued bonus of $3,346,951 and $5,948,157, respectively, related to cash awards to employees as of June 30, 2021 and December 31, 2020. The Company has other compensation plans solely provided by Law Broker to its officers. The compensation plans eligible to Law Broker’s officers include a surplus bonus based on a percentage of income after tax and other performance bonuses such as retention and non-competition. For the three months ended June 30, 2021 and 2020, the bonus expenses to Law Broker’s officers under the compensation plans were $153,120 and $154,044, respectively, and for the six months ended June 30, 2021 and 2020, the bonus expenses to Law Broker’s officers under the compensation plans were $245,016 and $280,252 respectively. As of June 30, 2021 and December 31, 2020, the Company had accrued bonus of $2,193,253 and $1,906,331 payable within next 12 months, and noncurrent accrued bonus of nil and $237,440, respectively, related to the compensation plans for Law Broker’s officers. See Note 14 for additional information of agreements with Law Broker’s officers. |
OTHER LIABILITIES
OTHER LIABILITIES | 6 Months Ended |
Jun. 30, 2021 | |
OTHER LIABILITIES | |
OTHER LIABILITIES | NOTE 8 – OTHER LIABILITIES The Company’s other liabilities consisted of the following as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Due to previous shareholders of AHFL $ 538,005 $ 534,240 Net defined benefit liability 361,563 318,542 Accrued bonus - noncurrent (Note 7) — 237,440 Total other liabilities $ 899,568 $ 1,090,222 Due to Previous Shareholders of AHFL Due to previous shareholders of AHFL is the entire remaining balance payable of the 2012 acquisition cost. On March 27, 2019, the Company and the selling shareholders of Action Holdings Financial Limited (“AHFL”) entered into a sixth amendment to the acquisition agreement, pursuant to which, the Company would make the cash payment in the amount of NTD15 million on or prior to June 30, 2021. In March 2021, the Company entered into a seventh amendment with the selling shareholders in negotiation with the previous shareholders of AHFL to extend the repayment date to March 31, 2024. The amount consisted of 68% and 32% of payables due to related parties and third parties, respectively. As of June 30, 2021 and December 31, 2020, the amount due to previous shareholders of AHFL were $538,005 and $534,240, respectively. The change in amounts was due to foreign currency translation. |
CONTRACTS WITH CUSTOMERS
CONTRACTS WITH CUSTOMERS | 6 Months Ended |
Jun. 30, 2021 | |
CONTRACTS WITH CUSTOMERS | |
CONTRACTS WITH CUSTOMERS | NOTE 9 – CONTRACTS WITH CUSTOMERS Information about accounts receivable, contract assets, and contract liabilities from contracts with customers is as follows: June 30, 2021 (unaudited) December 31, 2020 Accounts receivable $ 15,954,543 $ 25,346,250 Contract assets 1,051,721 — Contract liabilities 1,127,249 1,119,361 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. As of June 30, 2021 and December 31, 2020, the Company had $1,051,721 and nil of contract assets, respectively. Contract Liabilities – AIATW On June 10, 2013, AHFL entered into a Strategic Alliance Agreement (the “Alliance Agreement”) with AIA International Limited Taiwan Branch (“AIATW”), the purpose of which is to promote life insurance products provided by AIATW within Taiwan by insurance agencies or brokerage companies affiliated with AHFL or China United. 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 of approximately $8,326,700 (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 “First Amendment to the Alliance Agreement”) with AIATW. In the First Amendment to the Alliance 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 No. 2 to the Alliance Agreement (the “Second Amendment to the Alliance Agreement”) 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 Second Amendment to the Alliance Agreement, the expiration date of the Strategic Alliance Agreement was extended from May 31, 2018 to December 31, 2021, and the effect of the 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 Alliance Agreement, some of which are as follows: (i) expanding 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) removing 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 an Amendment No. 3 to the Alliance Agreement (the “Third Amendment to the Alliance Agreement”). Pursuant to the Third Amendment to the Alliance Agreement, both AHFL and AIATW agreed to adjust certain terms and conditions set forth this amendment, some of which included (i) except the first contract year (April 15 th th The following table presents the amounts recognized as revenue and refund for each contract year: Contract Revenue Revenue VAT Refund Refund VAT Year Period Execution Fees Amount Amount Amount Amount First 04/15/2013 - 09/30/2014 NTD 50,000,000 NTD 27,137,958 (1) NTD 1,356,898 NTD 20,481,090 (1) NTD 1,024,054 Second 01/01/2016 - 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 01/01/2017 - 12/31/2017 NTD 33,000,000 NTD 12,628,201 (3) NTD 631,410 NTD 18,800,370 (3) NTD 940,019 Fourth 01/01/2018 - 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 01/01/2019 - 12/31/2019 NTD 33,000,000 NTD 9,481,371 (5) NTD 474,069 NTD 21,947,200 (5) NTD 1,097,360 Sixth 01/01/2020 - 12/31/2020 NTD 33,000,000 NTD 12,223,829 (6) NTD 611,191 NTD 19,204,743 (6) NTD 960,237 Seventh 01/01/2021 - 12/31/2021 NTD 33,000,000 NTD — (7) NTD — NTD 31,428,571 (7) NTD 1,571,429 TOTAL NTD 250,000,000 NTD 85,554,959 NTD 4,277,747 NTD 152,540,278 NTD 7,627,016 1) The revenue recognition for the first contract year is based on the annual first year premium (“AFYP”) set in Alliance Agreement, which is different 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 (NTD 27,137,958), net of Value-Added Tax (“VAT”) in 2017 due to uncertainty resolved after Amendment 3 went effective. Besides, 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 based on original agreement and earlier amendments. 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) For the year ended December 31, 2019, the Company recognized the fifth contract year’s revenue amount of $314,953 (NTD9,481,371), net of VAT, and refund the amount of $729,045 (NTD 21,947,200), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency. 6) For the year ended December 31, 2020, the Company recognized the sixth contract year’s revenue amount of $415,186 (NTD 12,223,829), net of VAT, and refund the amount of $652,294 (NTD 19,204,743), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency. 7) The Company estimated VONB and 13-month persistency ratio for the year ending December 31, 2021 and calculated the revenue amount to be nil for the year. The amount will be reassessed every quarter until receiving AIATW’s notice. The Company recognized revenue of nil and $84,066 (NTD2,521,270), net of VAT for the three months ended June 30, 2021 and 2020, and nil and $186,614 (NTD 5,596,869), net of VAT, for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021 and December 31, 2020, the Company had contract liabilities of $1,127,249 and $1,119,361, respectively, related to the Alliance Agreement. |
LEASE
LEASE | 6 Months Ended |
Jun. 30, 2021 | |
LEASE | |
LEASE | NOTE 10 –LEASE The Company recorded its operating lease cost of $1,056,094 and $2,076,967 for the three and six months ended June 30, 2021, and $751,072 and $1,429,420 for the three and six months ended June 30, 2020, 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 June 30, 2021 and December 31, 2020, operating lease right-of-use assets and lease liabilities were as follows: June 30, 2021 (unaudited) December 31, 2020 Right-of-use assets under operating leases $ 7,025,747 $ 6,524,555 Operating lease liabilities – current 3,341,964 3,043,056 Operating lease liabilities – noncurrent 3,631,104 3,440,343 Lease term and discount rate June 30, 2021 (unaudited) December 31, 2020 Weighted average remaining lease term Operating lease 2.47 years 2.64 years Weighted average discount rate Operating lease 3.34 % 3.15 % Supplemental cash flow information related to leases June 30, 2021 (unaudited) December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows related to operating leases $ 2,126,670 $ 3,310,015 Amortization of right-of-use assets under operating leases 1,870,255 3,009,101 The minimum future lease payments as of June 30, 2021 are as follows: Amount 2021 (remainder of year) $ 1,922,117 2022 2,787,051 2023 1,687,081 2024 727,847 2025 103,240 Thereafter — Total minimum lease payments 7,227,336 Less: Interest (254,268) Present value of future minimum lease payments $ 6,973,068 |
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS | 6 Months Ended |
Jun. 30, 2021 | |
NONCONTROLLING INTERESTS | |
NONCONTROLLING INTERESTS | NOTE 11 – NONCONTROLLING INTERESTS Noncontrolling interests consisted of the following as of June 30, 2021 and December 31, 2020: % of Non- Other June 30, controlling December 31, Net Income Comprehensive 2021 Name of Entity Interest 2020 (Loss) Income (unaudited) Law Enterprise 34.05 $ (414,957) $ (119,482) $ 2,762 $ (531,677) Law Broker 34.05 25,177,272 2,523,159 183,296 27,883,727 Uniwill 50.00 (421,035) 146,792 216 (274,027) Rays 1.00 (5,772) (782) — (6,554) PFAL 49.00 423,978 22,504 (419) 446,063 MKI 49.00 (732) (710) — (1,442) PA Taiwan 49.00 (163,013) 1,259 47 (161,707) Total $ 24,595,741 $ 2,572,740 $ 185,902 $ 27,354,383 % of Non- Other controlling December 31, Contribution Net Income Comprehensive December 31, Name of Entity Interest 2019 /Acquisition (Loss) Income 2020 Law Enterprise 34.05 % $ (204,964) $ — $ (241,231) $ 31,238 $ (414,957) Law Broker 34.05 % 19,536,104 — 4,193,314 1,447,854 25,177,272 Uniwill 50.00 % — 1,427,603 (1,918,023) 69,385 (421,035) Rays 1.00 % — 1,019 (6,791) — (5,772) PFAL 49.00 % 351,278 — 71,713 987 423,978 MKI 49.00 % 283 — (1,015) — (732) PA Taiwan 49.00 % (167,531) — 4,227 291 (163,013) PTC Nanjing 49.00 % (2,644) — 1,465 1,179 — Total $ 19,512,526 $ 1,428,622 $ 2,103,659 $ 1,550,934 $ 24,595,741 |
INCOME TAX
INCOME TAX | 6 Months Ended |
Jun. 30, 2021 | |
INCOME TAX | |
INCOME TAX | NOTE 12 – INCOME TAX The following table reconciles the Company’s statutory tax rates to effective tax rates for the three and six months ended June 30, 2021 and 2020: Three Months Ended June 30, 2021 2020 (unaudited) (unaudited) US statutory rate 21 % 21 % Tax rate difference (1) % (1) % Tax base difference — % (1) % Change in valuation allowance 6 % — % Income tax on undistributed earnings 4 % 10 % Loss in subsidiaries — % 1 % Non-deductible and non-taxable items (3) % (4) % Reversal of deferred tax assets not previously recognized 2 % — % True up of prior year income tax 3 % (3) % Effective tax rate 32 % 23 % Six Months Ended June 30, 2021 2020 (unaudited) (unaudited) US statutory rate 21 % 21 % Tax rate difference (1) % (1) % Change in valuation allowance 5 % — % Income tax on undistributed earnings 4 % 10 % Loss in subsidiaries — % 12 % Non-deductible and non-taxable items (1) % (1) % Utilization of deferred tax assets not previously recognized — % (1) % Provision for uncertain tax position — % 9 % True up of prior year income tax — % (2) % Effective tax rate 28 % 47 % The Company’s income tax expense is mainly generated by its subsidiaries in Taiwan. The Company’s subsidiaries in Taiwan are subject to the statutory tax rate on income reported in the statutory financial statements after appropriate adjustments at 20% and 5% of the tax on any undistributed earnings according to the Income Tax Law of Taiwan. As of June 30, 2021 and December 31, 2020, the Company had current tax payable of $2,804,824 and $2,978,618 for Taiwan income tax, respectively. WFOE and the Consolidated Affiliated Entities (“CAE”) in the PRC are governed by the Income Tax Law of PRC concerning private-run enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriate adjustments. WFOE and CAE had no income tax expenses for the three and six months ended June 30, 2021 and 2020 due to the net operating losses generated in the previous years. 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 8.25% on the estimated assessable profits. As of June 30, 2021 and December 31, 2020, the Company had current tax payable of $17,719 and $13,613 for Hong Kong income tax. The Company is subject to the statutory rate of 21% in the U.S. federal jurisdiction. The Company had no income tax expense for the three and six months ended June 30, 2021 and 2020 due to the loss positions and no GILTI tax obligation existed. The Company recognized a one-time transition tax of $1,199,195 in the year of 2018 based on the Company’s total post-1986 earnings and profits (“E&P”) that it previously deferred from U.S. income tax. As of June 30, 2021 and December 31, 2020, the Company had current tax payable of $179,879 and $153,787 and noncurrent tax payable of $539,636 and $719,515 for U.S. income tax. As of June 30, 2020, the Company recorded an uncertain tax positions approximately of $277,000 related to withholding tax matters in the Taiwan Segment. During the three and six months ended June 30, 2020, the Company recognized interest and penalties of approximately $178,000, in selling, general and administrative expenses. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS The following summarized the Company’s loans payable related parties as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Due to Ms. Lu (A shareholder of Anhou) $ 40,696 $ 78,541 Others 15,929 15,506 Total $ 56,625 $ 94,047 Amounts due to Ms. Lu were borrowings from Ms. Lu to support Anhou’s business operation. The amounts were non-interesting bearing and payable on demand. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 14– COMMITMENTS AND CONTINGENCIES Operating Leases See future minimum annual lease payments in Note 10. Time Deposits Pledged as Collateral See time deposits pledged as collateral in Note 4 and 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 includes: 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 six months ended June 30, 2021, the Company has recorded the compensation expense of $52,000 and $114,207 under the appointment agreement, respectively. For the three and six months ended June 30, 2020, the Company has recorded the compensation expense of $26,846 and $77,282 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 served 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 and conditions in the engagement agreement. Ms. Chao has acted as the general manager or in the equivalent position of Law Broker for a term of at least three years. For the three and six months ended June 30, 2021, the Company has recorded the compensation expense of $101,120 and $130,809 under the engagement agreement, respectively. For the three and six months ended June 30, 2020, the Company has recorded the compensation expense of $127,198 and $202,970 under the engagement agreement, respectively. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2021 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | NOTE 15 – SEGMENT REPORTING The Company organizes and manages its business as three operating segments by operating geographic areas. The business of WFOE, CU Hong Kong and the CAE in PRC was managed and reviewed as PRC segment. The business of AHFL and its subsidiaries in Taiwan was managed and reviewed as Taiwan segment. The business of PFAL was managed and reviewed as Hong Kong segment. PRC and Taiwan segments retain majority of reported consolidated amounts. The geographical distributions of the Company’s financial information for the three and six months ended June 30, 2021 and 2020 were as follows: Three Months Ended June 30, (unaudited) (unaudited) 2021 2020 Geographical Areas Revenue Taiwan $ 32,271,253 $ 28,076,312 PRC 1,265,100 1,748,139 Hong Kong 28,436 50,567 Elimination adjustment (591,109) (433,264) Total revenue $ 32,973,680 $ 29,441,754 Income from operations Taiwan $ 3,169,768 $ 1,141,089 PRC (294,490) 1,560 Hong Kong (11,320) 8,739 Elimination adjustment 287,379 81,447 Total income from operations $ 3,151,337 $ 1,232,835 Net income Taiwan $ 2,488,501 $ 1,364,078 PRC (401,328) 4,206 Hong Kong (10,385) 11,239 Elimination adjustment 60,439 33,675 Total net income $ 2,137,227 $ 1,413,198 Six Months Ended June 30, (unaudited) (unaudited) 2021 2020 Geographical Areas Revenue Taiwan $ 61,122,753 $ 55,419,248 PRC 3,216,569 3,177,436 Hong Kong 139,421 119,186 Elimination adjustment (974,946) (750,906) Total revenue $ 63,503,797 $ 57,964,964 Income from operations Taiwan $ 7,860,497 $ 2,644,371 PRC (298,408) (29,553) Hong Kong 50,173 32,392 Elimination adjustment 425,729 134,327 Total income from operations $ 8,037,991 $ 2,781,537 Net income Taiwan $ 6,421,991 $ 1,709,345 PRC (354,410) (35,751) Hong Kong 45,927 33,011 Elimination adjustment 60,501 42,878 Total net income $ 6,174,009 $ 1,749,483 The geographical distribution of the Company’s financial information as of June 30, 2021 and December 31, 2020 were as follows: June 30, 2021 (unaudited) December 31, 2020 Geographical Areas Reportable assets Taiwan $ 181,536,334 $ 171,037,252 PRC 12,720,055 13,149,306 Hong Kong 961,264 915,628 Elimination adjustment (81,311,458) (77,373,957) Total reportable assets $ 113,906,195 $ 107,728,229 Long-lived assets Taiwan $ 2,026,290 $ 2,198,739 PRC 180,157 175,748 Hong Kong 1,404 1,664 Elimination adjustment (2,909) (2,906) Total long-lived assets $ 2,204,942 $ 2,373,245 Capital investment Taiwan $ 269,416 $ 1,522,189 PRC 29,296 87,903 Hong Kong — 1,576 Total capital investments $ 298,712 $ 1,611,668 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS The Company has evaluated all other 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 follow: On August 13, 2021, the Company along with its wholly owned subsidiary Action Holdings Financial Limited entered into the Amendment 4 to the Acquisition Agreement (this “Amendment”) with Mr. Chwan Hau Li, a member of the board of directors of the Company. Pursuant to the Amendement and as additional consideration for Mr. Li due to certain adjustments, the Company shall issue Mr. Li 864,463 shares of Company’s common stock within two months from August 13, 2021. The foregoing summary description of the Amendment is subject to and qualified in its entirety by the full text of the Amendment, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q and incorporated herein by reference. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The condensed 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 year to the current year’s presentation. Such reclassifications have no effect on net income and the cash flow statements operating activities as previously reported. |
Basis of Presentation | Basis of Presentation The condensed 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 six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. These condensed 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, 2020, which were included in the Company’s 2020 Annual Report on Form 10-K (“2020 Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2020, 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 condensed 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 June 30, 2021 and December 31, 2020. |
Foreign Currency Transactions | Foreign Currency Transactions China United’s financial statements are presented in U.S. dollars ($), which is the China United’s reporting and functional currency. The functional currencies of the China United’s subsidiaries are New Taiwan dollar (“NTD”), China yuan (“RMB”) and Hong Kong dollar (“HKD”). The resulting translation adjustments are reported under other comprehensive income. Gains and losses resulting from the translation of foreign currency transactions are reflected in the consolidated statements of operations and other comprehensive income (loss). Monetary assets and liabilities denominated in foreign currency are translated at the functional currency using the rate of exchange prevailing at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the consolidated statements of operations and other comprehensive income (loss). The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for condensed consolidated financial statements are as follows: Average Rate for the six months ended June 30, 2021 2020 (unaudited) (unaudited) Taiwan dollar (NTD) NTD 28.01126 NTD 29.99166 China yuan (RMB) RMB 6.46967 RMB 7.03241 Hong Kong dollar (HKD) HKD 7.76102 HKD 7.76073 United States dollar ($) $ 1.00000 $ 1.00000 Exchange Rate at June 30, 2021 (unaudited) December 31, 2020 Taiwan dollar (NTD) NTD 27.88079 NTD 28.07725 China yuan (RMB) RMB 6.45488 RMB 6.52765 Hong Kong dollar (HKD) HKD 7.76500 HKD 7.75249 United States dollar ($) $ 1.00000 $ 1.00000 |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) 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 FASB ASC Topic 260, “Earnings Per Share.” As of June 30, 2021 and 2020, the Company does not have any potentially dilutive instrument. |
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. - The following table summarize financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Time deposits $ 59,430,315 $ — $ — $ 59,430,315 Long-term investments: REITs 1,251,378 — — 1,251,378 Total assets measured at fair value $ 60,681,693 $ — $ — $ 60,681,693 December 31, 2020 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Time deposits $ 53,339,508 $ — $ — $ 53,339,508 Marketable securities: Stock Mutual funds 1,272,573 — — 1,272,573 Long-term investments: Government bonds held for available-for-sale - 107,096 — 107,096 REITs 1,359,100 — — 1,359,100 Total assets measured at fair value $ 55,971,181 $ 107,096 $ — $ 56,078,277 The carrying amounts of current financial assets and liabilities in the consolidated balance sheets for time deposits, approximate fair value due to the short-term duration of those instruments. Marketable securities and long-term investments in REITs – The fair values of mutual funds and REITs were valued based on quoted market prices in active markets. Government bonds – The fair value of government bonds is valued based on theoretical bond price in the Taipei Exchange. According to Taiwan Regulations Governing Deposit of Bond and Acquirement of Insurance by Insurance Agents, Insurance Brokers and Insurance Surveyors (“RGDBAI”) Article 3 and 4, Law Broker is required to maintain a minimum of NTD 3,000,000 ($107,601 and $106,848 as of June 30, 2021 and December 31, 2020, respectively) restricted balance in a separate account or government bonds issued by the central government in order to maintain its insurance license. The government bonds matured on March 17, 2021 and the amortized cost of the bonds was nil and $106,906 (NTD 3,001,620) as of June 30, 2021 and December 31, 2020, respectively. The Company will purchase a similar investment after the maturity of the bonds to maintain the insurance license. |
Concentration of Risk | Concentration of Risk The Company maintains cash with banks in the USA, People’s Republic of China (“PRC”), Hong Kong, and Taiwan. Should any bank holding the Company’s cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose all or part of its cash deposit 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 deposit and accounts receivable. As of June 30, 2021 and December 31, 2020, approximately $2,606,000 and $2,229,000 of the Company’s cash and cash equivalents, time deposits, and registered capital deposits held by financial institutions, was insured, and the remaining balance of approximately $78,430,000 and 63,222,000, 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 June 30, 2021 and 2020, the Company’s revenues from sale of insurance policies underwritten by these companies were: Three Months Ended June 30, 2021 2020 (unaudited) (unaudited) % of Total % of Total Amount Revenue Amount Revenue TransGlobe Life Insurance Inc. $ 9,185,048 28 % $ 6,856,458 23 % Taiwan Life Insurance Co., Ltd. 5,923,846 18 % 5,627,922 19 % Farglory Life Insurance Co., Ltd. 3,961,983 12 % 3,583,979 12 % Shin Kong Life Insurance Co., Ltd. (*) (*) 3,207,118 11 % (*) The related revenues for the three months ended had not exceeded 10% or more of the consolidated revenues. For the six months ended June 30, 2021 and 2020, the Company’s revenues from sale of insurance policies underwritten by these companies were: Six Months Ended June 30, 2021 2020 (unaudited) (unaudited) % of Total % of Total Amount Revenue Amount Revenue TransGlobe Life Insurance Inc. $ 15,785,677 25 % $ 11,852,412 20 % Taiwan Life Insurance Co., Ltd. 13,155,304 21 % 11,220,597 19 % Farglory Life Insurance Co., Ltd. 8,481,824 13 % 6,963,070 12 % Shin Kong Life Insurance Co., Ltd. (*) (*) 6,269,180 11 % (*) The related revenues for the six months ended had not exceeded 10% or more of the consolidated revenues. As of June 30, 2021 and December 31, 2020, the Company’s accounts receivable from these companies were: June 30, 2021 (unaudited) December 31, 2020 % of Total % of Total Accounts Accounts Amount Receivable Amount Receivable TransGlobe Life Insurance Inc. 4,245,590 27 % 7,761,664 31 % Taiwan Life Insurance Co., Ltd 2,302,067 14 % 4,557,862 18 % Farglory Life Insurance Co., Ltd. 1,764,461 11 % 2,787,586 11 % 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 of operations 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. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for equity-based compensation cost in accordance with ASC 718, Compensation-Stock Compensation |
Income Taxes | Income Taxes The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized. When tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations and other comprehensive income (loss). |
New Accounting Pronouncements and Other Guidance | New Accounting Pronouncements and Other Guidance New Accounting Pronouncements Effective January 1, 2021: Income Tax In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which is intended to simplify various aspects related to accounting for income taxes. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard in the beginning of January 1, 2021, and the adoption did not have any significant impact on the Company’s condensed consolidated financial statements. Equity Securities, Equity-method Investments and Certain Derivatives In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. ASU 2020-01 is effective for the Company in the first quarter of 2021. The adoption did not have any significant impact on the Company’s condensed consolidated financial statements. Accounting Standards Issued but Not Yet Adopted: Credit Losses In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC 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. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions in which the reference LIBOR or another reference rate are expected to be discontinued as a result of the Reference Rate Reform. The standard is effective for all entities. The standard may be adopted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2022. We are currently evaluating the effects of the standard on our consolidated financial statements and related disclosures. Convertible Debt, and Derivatives and Hedging In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity's own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures. The management does not believe that other than disclosed above, accounting pronouncements the recently issued but not yet adopted 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) | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Intercompany Foreign Currency Balances | Average Rate for the six months ended June 30, 2021 2020 (unaudited) (unaudited) Taiwan dollar (NTD) NTD 28.01126 NTD 29.99166 China yuan (RMB) RMB 6.46967 RMB 7.03241 Hong Kong dollar (HKD) HKD 7.76102 HKD 7.76073 United States dollar ($) $ 1.00000 $ 1.00000 Exchange Rate at June 30, 2021 (unaudited) December 31, 2020 Taiwan dollar (NTD) NTD 27.88079 NTD 28.07725 China yuan (RMB) RMB 6.45488 RMB 6.52765 Hong Kong dollar (HKD) HKD 7.76500 HKD 7.75249 United States dollar ($) $ 1.00000 $ 1.00000 |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table summarize financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Time deposits $ 59,430,315 $ — $ — $ 59,430,315 Long-term investments: REITs 1,251,378 — — 1,251,378 Total assets measured at fair value $ 60,681,693 $ — $ — $ 60,681,693 December 31, 2020 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Time deposits $ 53,339,508 $ — $ — $ 53,339,508 Marketable securities: Stock Mutual funds 1,272,573 — — 1,272,573 Long-term investments: Government bonds held for available-for-sale - 107,096 — 107,096 REITs 1,359,100 — — 1,359,100 Total assets measured at fair value $ 55,971,181 $ 107,096 $ — $ 56,078,277 |
Schedule Of Revenue From Insurance Services | For the three months ended June 30, 2021 and 2020, the Company’s revenues from sale of insurance policies underwritten by these companies were: Three Months Ended June 30, 2021 2020 (unaudited) (unaudited) % of Total % of Total Amount Revenue Amount Revenue TransGlobe Life Insurance Inc. $ 9,185,048 28 % $ 6,856,458 23 % Taiwan Life Insurance Co., Ltd. 5,923,846 18 % 5,627,922 19 % Farglory Life Insurance Co., Ltd. 3,961,983 12 % 3,583,979 12 % Shin Kong Life Insurance Co., Ltd. (*) (*) 3,207,118 11 % (*) The related revenues for the three months ended had not exceeded 10% or more of the consolidated revenues. For the six months ended June 30, 2021 and 2020, the Company’s revenues from sale of insurance policies underwritten by these companies were: Six Months Ended June 30, 2021 2020 (unaudited) (unaudited) % of Total % of Total Amount Revenue Amount Revenue TransGlobe Life Insurance Inc. $ 15,785,677 25 % $ 11,852,412 20 % Taiwan Life Insurance Co., Ltd. 13,155,304 21 % 11,220,597 19 % Farglory Life Insurance Co., Ltd. 8,481,824 13 % 6,963,070 12 % Shin Kong Life Insurance Co., Ltd. (*) (*) 6,269,180 11 % (*) The related revenues for the six months ended had not exceeded 10% or more of the consolidated revenues. |
Schedule Of Accounts Receivable From Related Parties | As of June 30, 2021 and December 31, 2020, the Company’s accounts receivable from these companies were: June 30, 2021 (unaudited) December 31, 2020 % of Total % of Total Accounts Accounts Amount Receivable Amount Receivable TransGlobe Life Insurance Inc. 4,245,590 27 % 7,761,664 31 % Taiwan Life Insurance Co., Ltd 2,302,067 14 % 4,557,862 18 % Farglory Life Insurance Co., Ltd. 1,764,461 11 % 2,787,586 11 % |
CASH, CASH EQUIVALENTS AND RE_2
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | |
Schedule of cash, cash equivalents and restricted cash | Cash, cash equivalents and restricted cash consisted of the following as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Cash and cash equivalents: Cash on hand and in banks $ 18,536,725 $ 9,063,338 Time deposits - with original maturities less than three months (see Note 4) — — 18,536,725 9,063,338 Restricted cash – noncurrent 71,974 66,490 Total cash, cash equivalents and restricted cash shown in the statements of cash flows $ 18,608,699 $ 9,129,828 |
TIME DEPOSITS (Tables)
TIME DEPOSITS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
TIME DEPOSITS | |
Schedule of time deposits | June 30, 2021 (unaudited) December 31, 2020 Total time deposits $ 59,430,315 $ 53,339,508 Less: Time deposits – with original maturities less than three months (see Note 3) - — Time deposits – original maturities over three months but less than one year $ 59,430,315 $ 53,339,508 |
SHORT-TERM LOANS (Tables)
SHORT-TERM LOANS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
SHORT-TERM LOANS | |
Schedule of short-term loans | The Company’s short-term loans consisted of the following as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Debt Collateral Debt Collateral Line of Credit Collateral balance value balance value $8.9 million (NTD 250 million) revolving line of credit with Cathay United Bank Company Limited (“CUB”); the loan bears interest at the higher of CUB’s adjustable rates for loans plus a margin of 0.41% or the 1-month TAIBOR rate plus a margin of 0.8% and matures on May 4, 2021. The maturity date was extended to May 4, 2022. Time deposits $ 8,948,818 $ 8,984,685 $ 6,019,108 $ 6,019,108 $4.0 million revolving line of credit with O-Bank; the loan bears interest at the TAIFX3 rate plus a margin of 0.5% and matures on December 29, 2021 Time deposits 4,000,000 4,949,647 4,000,000 4,915,011 $3.1 million revolving line of credit with KGI; the loan bears interest at the TAIFX3 rate plus a margin of 0.9% and matures on February 18, 2022 Time deposits 1,540,000 2,468,616 2,100,000 2,443,003 $1.5 million revolving line of credit with CTBC Bank Co., Ltd. (“CTBC”); the loan bears interest at the CTBC’s cost of funds plus a negotiated margin on individual case basis and matured on August 28, 2021 Time deposits — 1,501,576 1,200,000 1,384,833 $2.5 million revolving line of credit with Far Eastern International Bank (“FEIB”); the loan bears interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.7% and matures on December 17, 2021 Time deposits 2,500,000 2,941,094 840,000 1,132,590 $1.0 million revolving line of credit with E. Sun Bank (“E. Sun”); the loan bears interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.7% and matures on July 16, 2021. This loan have been paid off before issuance date. Time deposits 1,000,000 1,000,000 — — $ 17,988,818 $ 21,845,618 $ 14,159,108 $ 15,894,545 |
COMMISSIONS PAYABLE TO SALES _2
COMMISSIONS PAYABLE TO SALES PROFESSIONALS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | |
Schedule of commissions payable to professionals | Commissions payable to sales professionals consisted of the following as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Taiwan $ 11,045,729 $ 11,814,222 PRC 270,794 274,069 Hong Kong — — Total commissions payable to sales professionals $ 11,316,523 $ 12,088,291 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
OTHER CURRENT LIABILITIES | |
Schedule of other current liabilities | Other current liabilities were as follows, as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Accrued bonus $ 5,540,204 $ 7,854,488 Payroll payable and other benefits 1,579,041 1,767,417 Accrued business tax and tax withholdings 870,268 1,643,082 Accrued tax penalties — 170,016 Other accrued liabilities 2,093,478 2,156,031 Total other current liabilities $ 10,082,991 $ 13,591,034 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
OTHER LIABILITIES | |
Schedule of other noncurrent liabilities | The Company’s other liabilities consisted of the following as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Due to previous shareholders of AHFL $ 538,005 $ 534,240 Net defined benefit liability 361,563 318,542 Accrued bonus - noncurrent (Note 7) — 237,440 Total other liabilities $ 899,568 $ 1,090,222 |
CONTRACTS WITH CUSTOMERS (Table
CONTRACTS WITH CUSTOMERS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
CONTRACTS WITH CUSTOMERS | |
Schedule of revenue recognition guidance | Information about accounts receivable, contract assets, and contract liabilities from contracts with customers is as follows: June 30, 2021 (unaudited) December 31, 2020 Accounts receivable $ 15,954,543 $ 25,346,250 Contract assets 1,051,721 — Contract liabilities 1,127,249 1,119,361 |
Schedule of recognized of revenue and refund | The following table presents the amounts recognized as revenue and refund for each contract year: Contract Revenue Revenue VAT Refund Refund VAT Year Period Execution Fees Amount Amount Amount Amount First 04/15/2013 - 09/30/2014 NTD 50,000,000 NTD 27,137,958 (1) NTD 1,356,898 NTD 20,481,090 (1) NTD 1,024,054 Second 01/01/2016 - 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 01/01/2017 - 12/31/2017 NTD 33,000,000 NTD 12,628,201 (3) NTD 631,410 NTD 18,800,370 (3) NTD 940,019 Fourth 01/01/2018 - 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 01/01/2019 - 12/31/2019 NTD 33,000,000 NTD 9,481,371 (5) NTD 474,069 NTD 21,947,200 (5) NTD 1,097,360 Sixth 01/01/2020 - 12/31/2020 NTD 33,000,000 NTD 12,223,829 (6) NTD 611,191 NTD 19,204,743 (6) NTD 960,237 Seventh 01/01/2021 - 12/31/2021 NTD 33,000,000 NTD — (7) NTD — NTD 31,428,571 (7) NTD 1,571,429 TOTAL NTD 250,000,000 NTD 85,554,959 NTD 4,277,747 NTD 152,540,278 NTD 7,627,016 1) The revenue recognition for the first contract year is based on the annual first year premium (“AFYP”) set in Alliance Agreement, which is different 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 (NTD 27,137,958), net of Value-Added Tax (“VAT”) in 2017 due to uncertainty resolved after Amendment 3 went effective. Besides, 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 based on original agreement and earlier amendments. 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) For the year ended December 31, 2019, the Company recognized the fifth contract year’s revenue amount of $314,953 (NTD9,481,371), net of VAT, and refund the amount of $729,045 (NTD 21,947,200), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency. 6) For the year ended December 31, 2020, the Company recognized the sixth contract year’s revenue amount of $415,186 (NTD 12,223,829), net of VAT, and refund the amount of $652,294 (NTD 19,204,743), net of VAT, for the same contract period based on the calculation of VONB and 13-month persistency. 7) The Company estimated VONB and 13-month persistency ratio for the year ending December 31, 2021 and calculated the revenue amount to be nil for the year. The amount will be reassessed every quarter until receiving AIATW’s notice. |
LEASE (Tables)
LEASE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
LEASE | |
Schedule of operating lease right-of-use assets and lease liabilities | June 30, 2021 (unaudited) December 31, 2020 Right-of-use assets under operating leases $ 7,025,747 $ 6,524,555 Operating lease liabilities – current 3,341,964 3,043,056 Operating lease liabilities – noncurrent 3,631,104 3,440,343 |
Schedule of lease term and discount rate | Lease term and discount rate June 30, 2021 (unaudited) December 31, 2020 Weighted average remaining lease term Operating lease 2.47 years 2.64 years Weighted average discount rate Operating lease 3.34 % 3.15 % |
Schedule of supplemental cash flow information related to leases | Supplemental cash flow information related to leases June 30, 2021 (unaudited) December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows related to operating leases $ 2,126,670 $ 3,310,015 Amortization of right-of-use assets under operating leases 1,870,255 3,009,101 |
Schedule of future minimum rental payments | The minimum future lease payments as of June 30, 2021 are as follows: Amount 2021 (remainder of year) $ 1,922,117 2022 2,787,051 2023 1,687,081 2024 727,847 2025 103,240 Thereafter — Total minimum lease payments 7,227,336 Less: Interest (254,268) Present value of future minimum lease payments $ 6,973,068 |
NONCONTROLLING INTERESTS (Table
NONCONTROLLING INTERESTS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
NONCONTROLLING INTERESTS | |
Schedule of noncontrolling interests | % of Non- Other June 30, controlling December 31, Net Income Comprehensive 2021 Name of Entity Interest 2020 (Loss) Income (unaudited) Law Enterprise 34.05 $ (414,957) $ (119,482) $ 2,762 $ (531,677) Law Broker 34.05 25,177,272 2,523,159 183,296 27,883,727 Uniwill 50.00 (421,035) 146,792 216 (274,027) Rays 1.00 (5,772) (782) — (6,554) PFAL 49.00 423,978 22,504 (419) 446,063 MKI 49.00 (732) (710) — (1,442) PA Taiwan 49.00 (163,013) 1,259 47 (161,707) Total $ 24,595,741 $ 2,572,740 $ 185,902 $ 27,354,383 % of Non- Other controlling December 31, Contribution Net Income Comprehensive December 31, Name of Entity Interest 2019 /Acquisition (Loss) Income 2020 Law Enterprise 34.05 % $ (204,964) $ — $ (241,231) $ 31,238 $ (414,957) Law Broker 34.05 % 19,536,104 — 4,193,314 1,447,854 25,177,272 Uniwill 50.00 % — 1,427,603 (1,918,023) 69,385 (421,035) Rays 1.00 % — 1,019 (6,791) — (5,772) PFAL 49.00 % 351,278 — 71,713 987 423,978 MKI 49.00 % 283 — (1,015) — (732) PA Taiwan 49.00 % (167,531) — 4,227 291 (163,013) PTC Nanjing 49.00 % (2,644) — 1,465 1,179 — Total $ 19,512,526 $ 1,428,622 $ 2,103,659 $ 1,550,934 $ 24,595,741 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
INCOME TAX | |
Schedule of reconciles the Company's statutory tax rates to effective tax rates | The following table reconciles the Company’s statutory tax rates to effective tax rates for the three and six months ended June 30, 2021 and 2020: Three Months Ended June 30, 2021 2020 (unaudited) (unaudited) US statutory rate 21 % 21 % Tax rate difference (1) % (1) % Tax base difference — % (1) % Change in valuation allowance 6 % — % Income tax on undistributed earnings 4 % 10 % Loss in subsidiaries — % 1 % Non-deductible and non-taxable items (3) % (4) % Reversal of deferred tax assets not previously recognized 2 % — % True up of prior year income tax 3 % (3) % Effective tax rate 32 % 23 % Six Months Ended June 30, 2021 2020 (unaudited) (unaudited) US statutory rate 21 % 21 % Tax rate difference (1) % (1) % Change in valuation allowance 5 % — % Income tax on undistributed earnings 4 % 10 % Loss in subsidiaries — % 12 % Non-deductible and non-taxable items (1) % (1) % Utilization of deferred tax assets not previously recognized — % (1) % Provision for uncertain tax position — % 9 % True up of prior year income tax — % (2) % Effective tax rate 28 % 47 % |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
Schedule of due to related parties | The following summarized the Company’s loans payable related parties as of June 30, 2021 and December 31, 2020: June 30, 2021 (unaudited) December 31, 2020 Due to Ms. Lu (A shareholder of Anhou) $ 40,696 $ 78,541 Others 15,929 15,506 Total $ 56,625 $ 94,047 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
SEGMENT REPORTING | |
Schedule of revenue by major customers by reporting segments | Three Months Ended June 30, (unaudited) (unaudited) 2021 2020 Geographical Areas Revenue Taiwan $ 32,271,253 $ 28,076,312 PRC 1,265,100 1,748,139 Hong Kong 28,436 50,567 Elimination adjustment (591,109) (433,264) Total revenue $ 32,973,680 $ 29,441,754 Income from operations Taiwan $ 3,169,768 $ 1,141,089 PRC (294,490) 1,560 Hong Kong (11,320) 8,739 Elimination adjustment 287,379 81,447 Total income from operations $ 3,151,337 $ 1,232,835 Net income Taiwan $ 2,488,501 $ 1,364,078 PRC (401,328) 4,206 Hong Kong (10,385) 11,239 Elimination adjustment 60,439 33,675 Total net income $ 2,137,227 $ 1,413,198 Six Months Ended June 30, (unaudited) (unaudited) 2021 2020 Geographical Areas Revenue Taiwan $ 61,122,753 $ 55,419,248 PRC 3,216,569 3,177,436 Hong Kong 139,421 119,186 Elimination adjustment (974,946) (750,906) Total revenue $ 63,503,797 $ 57,964,964 Income from operations Taiwan $ 7,860,497 $ 2,644,371 PRC (298,408) (29,553) Hong Kong 50,173 32,392 Elimination adjustment 425,729 134,327 Total income from operations $ 8,037,991 $ 2,781,537 Net income Taiwan $ 6,421,991 $ 1,709,345 PRC (354,410) (35,751) Hong Kong 45,927 33,011 Elimination adjustment 60,501 42,878 Total net income $ 6,174,009 $ 1,749,483 |
Schedule of long-lived assets | The geographical distribution of the Company’s financial information as of June 30, 2021 and December 31, 2020 were as follows: June 30, 2021 (unaudited) December 31, 2020 Geographical Areas Reportable assets Taiwan $ 181,536,334 $ 171,037,252 PRC 12,720,055 13,149,306 Hong Kong 961,264 915,628 Elimination adjustment (81,311,458) (77,373,957) Total reportable assets $ 113,906,195 $ 107,728,229 Long-lived assets Taiwan $ 2,026,290 $ 2,198,739 PRC 180,157 175,748 Hong Kong 1,404 1,664 Elimination adjustment (2,909) (2,906) Total long-lived assets $ 2,204,942 $ 2,373,245 Capital investment Taiwan $ 269,416 $ 1,522,189 PRC 29,296 87,903 Hong Kong — 1,576 Total capital investments $ 298,712 $ 1,611,668 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Details) | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
New Taiwan dollar (NTD) | |||
Foreign Currency Average Rate Translation | 28.01126 | 29.99166 | |
Foreign Currency Exchange Rate, Translation | 27.88079 | 28.07725 | |
China yuan (RMB) | |||
Foreign Currency Average Rate Translation | 6.46967 | 7.03241 | |
Foreign Currency Exchange Rate, Translation | 6.45488 | 6.52765 | |
Hong Kong dollar (HKD) | |||
Foreign Currency Average Rate Translation | 7.76102 | 7.76073 | |
Foreign Currency Exchange Rate, Translation | 7.76500 | 7.75249 | |
United States dollar ($) | |||
Foreign Currency Average Rate Translation | 1 | 1 | |
Foreign Currency Exchange Rate, Translation | 1 | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value of Financial Instruments (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Time deposits | $ 59,430,315 | $ 53,339,508 |
Marketable securities: | ||
Stock Mutual funds | 1,272,573 | |
Long-term investment: | ||
Government bonds held for available-for-sale | 107,096 | |
REITs | 1,251,378 | 1,359,100 |
Total assets measured at fair value | 60,681,693 | 56,078,277 |
Fair Value, Inputs, Level 1 | ||
Time deposits | 59,430,315 | 53,339,508 |
Marketable securities: | ||
Stock Mutual funds | 1,272,573 | |
Long-term investment: | ||
REITs | 1,251,378 | 1,359,100 |
Total assets measured at fair value | $ 60,681,693 | 55,971,181 |
Fair Value, Inputs, Level 2 | ||
Long-term investment: | ||
Government bonds held for available-for-sale | 107,096 | |
Total assets measured at fair value | $ 107,096 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk (Revenue) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Concentration Risk [Line Items] | ||||
Amount of Revenue | $ 32,973,680 | $ 29,441,754 | $ 63,503,797 | $ 57,964,964 |
Revenues | Customer concentration | TransGlobe Life Insurance Inc | ||||
Concentration Risk [Line Items] | ||||
Amount of Revenue | $ 9,185,048 | $ 6,856,458 | $ 15,785,677 | $ 11,852,412 |
Concentration risk percentage | 28.00% | 23.00% | 25.00% | 20.00% |
Revenues | Customer concentration | Taiwan Life Insurance Co., Ltd | ||||
Concentration Risk [Line Items] | ||||
Amount of Revenue | $ 5,923,846 | $ 5,627,922 | $ 13,155,304 | $ 11,220,597 |
Concentration risk percentage | 18.00% | 19.00% | 21.00% | 19.00% |
Revenues | Customer concentration | Farglory Life Insurance Co., Ltd. | ||||
Concentration Risk [Line Items] | ||||
Amount of Revenue | $ 3,961,983 | $ 3,583,979 | $ 8,481,824 | $ 6,963,070 |
Concentration risk percentage | 12.00% | 12.00% | 13.00% | 12.00% |
Revenues | Customer concentration | Shin Kong Life Insurance Co., Ltd. | ||||
Concentration Risk [Line Items] | ||||
Amount of Revenue | $ 3,207,118 | $ 6,269,180 | ||
Concentration risk percentage | 11.00% | 11.00% |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk ( Accounts Receivable) (Details) - Credit concentration - Accounts receivable - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
TransGlobe Life Insurance Inc | ||
Concentration Risk [Line Items] | ||
Accounts Receivable, Net | $ 4,245,590 | $ 7,761,664 |
Percentage of accounts receivable | 27.00% | 31.00% |
Taiwan Life Insurance Co., Ltd | ||
Concentration Risk [Line Items] | ||
Accounts Receivable, Net | $ 2,302,067 | $ 4,557,862 |
Percentage of accounts receivable | 14.00% | 18.00% |
Farglory Life Insurance Co., Ltd. | ||
Concentration Risk [Line Items] | ||
Accounts Receivable, Net | $ 1,764,461 | $ 2,787,586 |
Percentage of accounts receivable | 11.00% | 11.00% |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)segment | Jun. 30, 2020USD ($) | Jun. 30, 2021TWD ($) | Jun. 30, 2021CNY (¥) | Jun. 30, 2021HKD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020TWD ($) | |
Disclosure of Summary Of Significant Accounting Policies | |||||||||
Regulatory Requirements Minimum Amount | $ 107,601 | $ 107,601 | $ 3,000,000 | $ 106,848 | |||||
Cost or Amortized Cost | 0 | 0 | 106,906 | $ 3,001,620 | |||||
Cash, Uninsured Amount | $ 250,000 | $ 250,000 | |||||||
Tax Benefit Percentage Expected to be Realized Upon Settlement | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | ||||
Revenue | $ 32,973,680 | $ 29,441,754 | $ 63,503,797 | $ 57,964,964 | |||||
Number of Operating Segments | segment | 3 | ||||||||
Compensation costs for awards granted to nonemployees | 52,000 | 26,846 | $ 114,207 | 77,282 | |||||
Taiwan | |||||||||
Disclosure of Summary Of Significant Accounting Policies | |||||||||
Cash, FDIC Insured Amount | $ 3,000,000 | ||||||||
CHINA | |||||||||
Disclosure of Summary Of Significant Accounting Policies | |||||||||
Cash, FDIC Insured Amount | ¥ | ¥ 500,000 | ||||||||
HONG KONG | |||||||||
Disclosure of Summary Of Significant Accounting Policies | |||||||||
Cash, FDIC Insured Amount | $ 500,000 | ||||||||
Credit concentration | |||||||||
Disclosure of Summary Of Significant Accounting Policies | |||||||||
Cash, FDIC Insured Amount | 2,606,000 | 2,606,000 | 2,229,000 | ||||||
Cash, Uninsured Amount | 78,430,000 | 78,430,000 | $ 63,222,000 | ||||||
Uniwill | |||||||||
Disclosure of Summary Of Significant Accounting Policies | |||||||||
Compensation costs for awards granted to nonemployees | $ 0 | $ 0 | $ 0 | $ 980,466 |
CASH, CASH EQUIVALENTS AND RE_3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||||
Cash on hand and in banks | $ 18,536,725 | $ 9,063,338 | ||
Time deposits - with original maturities less than three months (see Note 4) | 0 | |||
Total cash and cash equivalents | 18,536,725 | 9,063,338 | ||
Restricted cash - noncurrent | 71,974 | 66,490 | ||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | $ 18,608,699 | $ 9,129,828 | $ 11,443,394 | $ 12,658,500 |
TIME DEPOSITS (Details)
TIME DEPOSITS (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
TIME DEPOSITS | ||
Total time deposits | $ 59,430,315 | $ 53,339,508 |
Less: Time deposits - original maturities less than three months (see Note 3) | 0 | |
Time deposits - original maturities over three months but less than one year | $ 59,430,315 | $ 53,339,508 |
TIME DEPOSITS - Additional Info
TIME DEPOSITS - Additional Information (Details) $ in Millions | Jun. 30, 2021USD ($) | Jun. 30, 2021TWD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020TWD ($) |
TIME DEPOSITS | ||||
Restricted Time Deposits | $ 21,881,485 | $ 610.1 | $ 15,930,161 | $ 447.3 |
Time Deposits, Pledged As Collateral For Credit Card | 35,867 | $ 1 | 35,616 | $ 1 |
Restricted Cash | $ 21,845,618 | $ 15,894,545 |
SHORT-TERM LOANS (Details)
SHORT-TERM LOANS (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021TTD ($) | Dec. 31, 2020USD ($) | |
Short-term Debt [Line Items] | ||||||
Line of Credit, Current | $ 17,988,818 | $ 17,988,818 | $ 14,159,108 | |||
Collateral value | 21,845,618 | 21,845,618 | 15,894,545 | |||
Total short term loans | 17,988,818 | 17,988,818 | 14,159,108 | |||
Credit facility, O-Bank | ||||||
Short-term Debt [Line Items] | ||||||
Line of Credit, Current | 4,000,000 | 4,000,000 | 4,000,000 | |||
Collateral value | 4,949,647 | 4,949,647 | 4,915,011 | |||
Credit facility, CUB | ||||||
Short-term Debt [Line Items] | ||||||
Line of Credit, Current | 8,948,818 | 8,948,818 | 6,019,108 | |||
Collateral value | 8,984,685 | 8,984,685 | 6,019,108 | |||
Line of Credit Facility, Maximum Borrowing Capacity | 8,900,000 | 8,900,000 | $ 250 | |||
Credit facility, KGI | ||||||
Short-term Debt [Line Items] | ||||||
Line of Credit, Current | 1,540,000 | 1,540,000 | 2,100,000 | |||
Collateral value | 2,468,616 | 2,468,616 | 2,443,003 | |||
Credit Facility E Sun Bank | ||||||
Short-term Debt [Line Items] | ||||||
Line of Credit, Current | 1,000,000 | 1,000,000 | ||||
Collateral value | 1,000,000 | 1,000,000 | ||||
Credit facility, FEIB | ||||||
Short-term Debt [Line Items] | ||||||
Line of Credit, Current | 2,500,000 | 2,500,000 | 840,000 | |||
Collateral value | 2,941,094 | 2,941,094 | 1,132,590 | |||
Credit facility, CTBC | ||||||
Short-term Debt [Line Items] | ||||||
Line of Credit, Current | 1,200,000 | |||||
Collateral value | 1,501,576 | $ 1,501,576 | $ 1,384,833 | |||
Adjustable rates for loans | Credit facility, CUB | ||||||
Short-term Debt [Line Items] | ||||||
Debt Instrument, Description of Variable Rate Basis | 0.41% | |||||
1 month TAIBOR rate | Credit facility, CUB | ||||||
Short-term Debt [Line Items] | ||||||
Debt Instrument, Description of Variable Rate Basis | 0.80% | |||||
O Bank [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | 4,000,000 | $ 4,000,000 | ||||
Debt Instrument, Description of Variable Rate Basis | 0.50% | |||||
CTBC Bank [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,500,000 | $ 1,500,000 | ||||
Eastern International Bank [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | 2,500,000 | $ 2,500,000 | ||||
Eastern International Bank [Member] | LIBOR | ||||||
Short-term Debt [Line Items] | ||||||
Debt Instrument, Description of Variable Rate Basis | 0.70% | |||||
KGI Commercial Bank Co Ltd [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | 3,100,000 | $ 3,100,000 | ||||
Debt Instrument, Description of Variable Rate Basis | 0.90% | |||||
Interest Expense, Short-term Borrowings | 46,636 | $ 60,978 | $ 89,106 | $ 120,260 | ||
E Sun Bank [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000 | $ 1,000,000 | ||||
E Sun Bank [Member] | LIBOR | ||||||
Short-term Debt [Line Items] | ||||||
Debt Instrument, Description of Variable Rate Basis | 0.70% |
COMMISSIONS PAYABLE TO SALES _3
COMMISSIONS PAYABLE TO SALES PROFESSIONALS (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Commission payable to sales professionals | $ 11,316,523 | $ 12,088,291 |
Taiwan | ||
Commission payable to sales professionals | 11,045,729 | 11,814,222 |
PRC | ||
Commission payable to sales professionals | 270,794 | 274,069 |
Hong Kong | ||
Commission payable to sales professionals | $ 0 | $ 0 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
OTHER CURRENT LIABILITIES | ||
Accrued bonus | $ 5,540,204 | $ 7,854,488 |
Payroll payable and other benefits | 1,579,041 | 1,767,417 |
Accrued business tax and tax withholdings | 870,268 | 1,643,082 |
Accrued tax penalties | 0 | 170,016 |
Other accrued liabilities | 2,093,478 | 2,156,031 |
Total other current liabilities | $ 10,082,991 | $ 13,591,034 |
OTHER CURRENT LIABILITIES - Add
OTHER CURRENT LIABILITIES - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||||
Accrued bonus current | $ 5,540,204 | $ 5,540,204 | $ 7,854,488 | ||
Accrued bonus non current | 0 | 0 | 237,440 | ||
Accrued bonus amount | 3,346,951 | 3,346,951 | 5,948,157 | ||
Compensation Plan [Member] | |||||
Debt Instrument [Line Items] | |||||
Accrued bonus current | 2,193,253 | 2,193,253 | 1,906,331 | ||
Accrued bonus non current | 0 | 0 | $ 237,440 | ||
Bonus expense | $ 153,120 | $ 154,044 | $ 245,016 | $ 280,252 |
OTHER LIABILITIES - Other noncu
OTHER LIABILITIES - Other noncurrent liabilities (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
OTHER LIABILITIES | ||
Due to previous shareholders of AHFL | $ 538,005 | $ 534,240 |
Net defined benefit liability | 361,563 | 318,542 |
Accrued bonus-noncurrent (Note 7) | 0 | 237,440 |
Total other liabilities | $ 899,568 | $ 1,090,222 |
OTHER LIABILITIES - Additional
OTHER LIABILITIES - Additional Information (Details) $ in Millions | 6 Months Ended | ||
Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 27, 2019TWD ($) | |
OTHER LIABILITIES | |||
Payables due to related parties | 68.00% | ||
Due to related parties and third parties | 32.00% | ||
Amount due to previous shareholders to AHFL | $ 538,005 | $ 534,240 | $ 15 |
CONTRACTS WITH CUSTOMERS - Cont
CONTRACTS WITH CUSTOMERS - Contract balance (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
CONTRACTS WITH CUSTOMERS | ||
Accounts receivable | $ 15,954,543 | $ 25,346,250 |
Contract assets | 1,051,721 | 0 |
Contract liabilities | $ 1,127,249 | $ 1,119,361 |
CONTRACTS WITH CUSTOMERS - Reve
CONTRACTS WITH CUSTOMERS - Revenue and refund for each contract (Details) | Jun. 14, 2017TWD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2020TWD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2021TWD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2020TWD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020TWD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019TWD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018TWD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017TWD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016TWD ($) | Jun. 30, 2021TWD ($) | Dec. 31, 2020TWD ($) | Dec. 31, 2019TWD ($) | Dec. 31, 2018TWD ($) | Dec. 31, 2017TWD ($) | Dec. 31, 2016TWD ($) | Feb. 23, 2016USD ($) | Feb. 23, 2016TWD ($) | Dec. 03, 2015USD ($) | Dec. 03, 2015TWD ($) | Jun. 10, 2013USD ($) | Jun. 10, 2013TWD ($) |
Basic Business Promotion Fees | $ 33,000,000 | ||||||||||||||||||||||||||||||
Revenue Amount | $ 0 | $ 84,066 | $ 2,521,270 | $ 0 | $ 186,614 | $ 5,596,869 | |||||||||||||||||||||||||
Strategic Alliance Agreement [Member] | |||||||||||||||||||||||||||||||
Execution Fees | $ 250,000,000 | ||||||||||||||||||||||||||||||
Revenue Amount | $ 85,554,959 | ||||||||||||||||||||||||||||||
Revenue VAT Amount | $ 4,277,747 | ||||||||||||||||||||||||||||||
Refund Amount | 152,540,278 | ||||||||||||||||||||||||||||||
Refund VAT Amount | 7,627,016 | ||||||||||||||||||||||||||||||
Strategic Alliance Agreement [Member] | |||||||||||||||||||||||||||||||
Execution Fees | $ 8,326,700 | $ 250,000,000 | |||||||||||||||||||||||||||||
Revenue Amount | $ 0 | ||||||||||||||||||||||||||||||
Refund Amount | $ 11,904,762 | ||||||||||||||||||||||||||||||
Contract liabilities - noncurrent | $ 1,127,249 | $ 1,127,249 | $ 1,119,361 | ||||||||||||||||||||||||||||
First Year [Member] | |||||||||||||||||||||||||||||||
Basic Business Promotion Fees | 50,000,000 | ||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Revenue Amount | $ 27,137,958 | ||||||||||||||||||||||||||||||
Revenue VAT Amount | 1,356,898 | ||||||||||||||||||||||||||||||
Refund Amount | 20,481,090 | ||||||||||||||||||||||||||||||
Refund VAT Amount | 1,024,054 | ||||||||||||||||||||||||||||||
First Year [Member] | Strategic Alliance Agreement [Member] | |||||||||||||||||||||||||||||||
Revenue Amount | $ 892,742 | $ 27,137,958 | |||||||||||||||||||||||||||||
Second Year [Member] | |||||||||||||||||||||||||||||||
Basic Business Promotion Fees | $ 35,000,000 | ||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Revenue Amount | $ 12,855,000 | ||||||||||||||||||||||||||||||
Revenue VAT Amount | $ 642,750 | ||||||||||||||||||||||||||||||
Refund Amount | 20,478,333 | ||||||||||||||||||||||||||||||
Refund VAT Amount | 1,023,917 | ||||||||||||||||||||||||||||||
Second Year [Member] | Strategic Alliance Agreement [Member] | |||||||||||||||||||||||||||||||
Revenue Amount | $ 422,883 | $ 12,855,000 | |||||||||||||||||||||||||||||
Refund Amount | $ 690,537 | $ 20,478,333 | |||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Revenue Amount | $ 12,628,201 | ||||||||||||||||||||||||||||||
Revenue VAT Amount | $ 631,410 | ||||||||||||||||||||||||||||||
Refund Amount | 18,800,370 | ||||||||||||||||||||||||||||||
Refund VAT Amount | 940,019 | ||||||||||||||||||||||||||||||
Third Year [Member] | Strategic Alliance Agreement [Member] | |||||||||||||||||||||||||||||||
Revenue Amount | $ 415,423 | $ 12,628,201 | |||||||||||||||||||||||||||||
Refund Amount | $ 633,955 | $ 18,800,370 | |||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Revenue Amount | $ 11,228,600 | ||||||||||||||||||||||||||||||
Revenue VAT Amount | $ 561,429 | ||||||||||||||||||||||||||||||
Refund Amount | 20,199,971 | ||||||||||||||||||||||||||||||
Refund VAT Amount | 1,010,000 | ||||||||||||||||||||||||||||||
Fourth Year [Member] | Strategic Alliance Agreement [Member] | |||||||||||||||||||||||||||||||
Revenue Amount | $ 372,650 | $ 11,228,600 | |||||||||||||||||||||||||||||
Refund Amount | $ 670,389 | $ 20,199,971 | |||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Revenue Amount | $ 9,481,371 | ||||||||||||||||||||||||||||||
Revenue VAT Amount | $ 474,069 | ||||||||||||||||||||||||||||||
Refund Amount | 21,947,200 | ||||||||||||||||||||||||||||||
Refund VAT Amount | 1,097,360 | ||||||||||||||||||||||||||||||
Fifth Year [Member] | Strategic Alliance Agreement [Member] | |||||||||||||||||||||||||||||||
Revenue Amount | $ 314,953 | $ 9,481,371 | |||||||||||||||||||||||||||||
Refund Amount | $ 729,045 | $ 21,947,200 | |||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Revenue Amount | $ 12,223,829 | 415,186 | $ 12,223,829 | ||||||||||||||||||||||||||||
Revenue VAT Amount | $ 611,191 | ||||||||||||||||||||||||||||||
Refund Amount | $ 652,294 | 19,204,743 | $ 19,204,743 | ||||||||||||||||||||||||||||
Refund VAT Amount | 960,237 | ||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Revenue Amount | $ 0 | ||||||||||||||||||||||||||||||
Revenue VAT Amount | $ 0 | ||||||||||||||||||||||||||||||
Refund Amount | 31,428,571 | ||||||||||||||||||||||||||||||
Refund VAT Amount | $ 1,571,429 | ||||||||||||||||||||||||||||||
AIATW [Member] | |||||||||||||||||||||||||||||||
Refund Amount | $ 530,056 | $ 15,719,185 | $ 160,573 | $ 4,761,905 |
LEASE - Operating lease right-o
LEASE - Operating lease right-of-use assets and lease liabilities (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
LEASE | ||
Right-of-use assets under operating leases | $ 7,025,747 | $ 6,524,555 |
Operating lease liabilities - current | 3,341,964 | 3,043,056 |
Operating lease liabilities - noncurrent | $ 3,631,104 | $ 3,440,343 |
LEASE - Lease term and discount
LEASE - Lease term and discount rate (Details) | Jun. 30, 2021 | Dec. 31, 2020 |
LEASE | ||
Weighted average remaining lease term, Operating lease | 2 years 5 months 19 days | 2 years 7 months 20 days |
Weighted average discount rate, Operating lease | 3.34% | 3.15% |
LEASE - Supplemental cash flow
LEASE - Supplemental cash flow information related to leases (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities | |||
Operating cash flows related to operating leases | $ 2,126,670 | $ 3,310,015 | |
Amortization of right-of-use assets under operating leases | $ 1,870,255 | $ 1,389,078 | $ 3,009,101 |
LEASE - Minimum future lease pa
LEASE - Minimum future lease payments (Details) | Jun. 30, 2021USD ($) |
LEASE | |
2021 (reminder of year) | $ 1,922,117 |
2022 | 2,787,051 |
2023 | 1,687,081 |
2024 | 727,847 |
2025 | 103,240 |
Total minimum lease payments | 7,227,336 |
Less: Interest | (254,268) |
Present value of future minimum lease payments | $ 6,973,068 |
LEASE - Additional Information
LEASE - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
LEASE | ||||
Operating Lease, Cost | $ 1,056,094 | $ 751,072 | $ 2,076,967 | $ 1,429,420 |
NONCONTROLLING INTERESTS (Detai
NONCONTROLLING INTERESTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Non-Controlling Interests [Line Items] | ||||||
Contribution | $ 1,019 | $ 1,019 | $ 1,428,622 | |||
Net Income (Loss) | $ 946,344 | $ 662,404 | $ 2,572,740 | $ 1,287,926 | 2,103,659 | |
Other Comprehensive Income (Loss) | 185,902 | 1,550,934 | ||||
Noncontrolling Interests | $ 27,354,383 | $ 27,354,383 | $ 24,595,741 | $ 19,512,526 | ||
Law Enterprise [Member] | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 34.05% | 34.05% | 34.05% | |||
Contribution | $ 0 | |||||
Net Income (Loss) | $ (119,482) | (241,231) | ||||
Other Comprehensive Income (Loss) | 2,762 | 31,238 | ||||
Noncontrolling Interests | $ (531,677) | $ (531,677) | $ (414,957) | (204,964) | ||
Law Broker | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 34.05% | 34.05% | 34.05% | |||
Contribution | $ 0 | |||||
Net Income (Loss) | $ 2,523,159 | 4,193,314 | ||||
Other Comprehensive Income (Loss) | 183,296 | 1,447,854 | ||||
Noncontrolling Interests | $ 27,883,727 | $ 27,883,727 | $ 25,177,272 | 19,536,104 | ||
PFAL [Member] | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 49.00% | 49.00% | 49.00% | |||
Contribution | $ 0 | |||||
Net Income (Loss) | $ 22,504 | 71,713 | ||||
Other Comprehensive Income (Loss) | (419) | 987 | ||||
Noncontrolling Interests | $ 446,063 | $ 446,063 | $ 423,978 | 351,278 | ||
Uniwill | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 50.00% | 50.00% | 50.00% | |||
Contribution | $ 1,427,603 | |||||
Net Income (Loss) | $ 146,792 | (1,918,023) | ||||
Other Comprehensive Income (Loss) | 216 | 69,385 | ||||
Noncontrolling Interests | $ (274,027) | $ (274,027) | $ (421,035) | 0 | ||
Rays | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 1.00% | 1.00% | 1.00% | |||
Contribution | $ 1,019 | |||||
Net Income (Loss) | $ (782) | (6,791) | ||||
Other Comprehensive Income (Loss) | 0 | 0 | ||||
Noncontrolling Interests | $ (6,554) | $ (6,554) | $ (5,772) | 0 | ||
MKI [Member] | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 49.00% | 49.00% | 49.00% | |||
Contribution | $ 0 | |||||
Net Income (Loss) | $ (710) | (1,015) | ||||
Other Comprehensive Income (Loss) | 0 | 0 | ||||
Noncontrolling Interests | $ (1,442) | $ (1,442) | $ (732) | 283 | ||
PA Taiwan [Member] | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 49.00% | 49.00% | 49.00% | |||
Contribution | $ 0 | |||||
Net Income (Loss) | $ 1,259 | 4,227 | ||||
Other Comprehensive Income (Loss) | 47 | 291 | ||||
Noncontrolling Interests | $ (161,707) | $ (161,707) | $ (163,013) | (167,531) | ||
PTC Nanjing [Member] | ||||||
Non-Controlling Interests [Line Items] | ||||||
% of Non-controlling Interests | 49.00% | |||||
Contribution | $ 0 | |||||
Net Income (Loss) | 1,465 | |||||
Other Comprehensive Income (Loss) | 1,179 | |||||
Noncontrolling Interests | $ 0 | $ (2,644) |
INCOME TAX - Effective Income t
INCOME TAX - Effective Income tax rate reconciliation (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
INCOME TAX | ||||
US statutory rate | 21.00% | 21.00% | 0.21% | 0.21% |
Tax rate difference | (1.00%) | (1.00%) | (0.01%) | (0.01%) |
Tax base difference | 0.00% | (1.00%) | ||
Change in valuation allowance | 6.00% | 0.00% | 0.05% | |
Income tax on undistributed earnings | 4.00% | 10.00% | 0.04% | 0.10% |
Loss in subsidiaries | 0.00% | 1.00% | 0.12% | |
Non-deductible and non-taxable items | (3.00%) | (4.00%) | (0.01%) | (0.01%) |
Reversal / Utilization of deferred tax assets not previously recognized | 2.00% | 0.00% | (0.01%) | |
Provision for uncertain tax position | 0.09% | |||
True up of prior year income tax | 3.00% | (3.00%) | (0.02%) | |
Effective tax rate | 32.00% | 23.00% | 0.28% | 0.47% |
INCOME TAX - Additional Informa
INCOME TAX - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Schedule of Income Tax [Line Items] | |||||
Tax per financial statements | 32.00% | 23.00% | 0.28% | 0.47% | |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 6.00% | 0.00% | 0.05% | ||
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 21.00% | 21.00% | 0.21% | 0.21% | |
Undistributed Earnings, Diluted | $ 1,199,195 | ||||
Accrued Income Taxes, Noncurrent | $ 539,636 | 539,636 | $ 719,515 | ||
Accrued Income Taxes, Current | 3,002,422 | 3,002,422 | 3,146,018 | ||
Taxes Payable, Current | 179,879 | $ 179,879 | 153,787 | ||
Uncertain tax positions | $ 277,000 | $ 277,000 | |||
Unrecognized Tax Benefits, Income Tax Penalties Expense | $ 178,000 | $ 178,000 | |||
New Taiwan dollar (NTD) | |||||
Schedule of Income Tax [Line Items] | |||||
Additional Income Tax Rate On Undistributed Earnings | 5.00% | ||||
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 20.00% | ||||
Taxes Payable, Current | 2,804,824 | $ 2,804,824 | 2,978,618 | ||
Hong Kong | |||||
Schedule of Income Tax [Line Items] | |||||
Tax per financial statements | 8.25% | ||||
Taxes Payable, Current | $ 17,719 | $ 17,719 | $ 13,613 | ||
Subsidiary [Member] | |||||
Schedule of Income Tax [Line Items] | |||||
Tax per financial statements | 25.00% |
RELATED PARTY TRANSACTIONS - Du
RELATED PARTY TRANSACTIONS - Due to related parties (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||
Due to related parties, Total | $ 56,625 | $ 94,047 |
Ms.Lu [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties, Total | 40,696 | 78,541 |
Others [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties, Total | $ 15,929 | $ 15,506 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
COMMITMENTS AND CONTINGENCIES | ||||
Surplus Bonus Percentage | 1.25% | |||
Compensation expenses | $ 52,000 | $ 26,846 | $ 114,207 | $ 77,282 |
Number of years | 3 years | |||
Performance Bonus | $ 101,120 | $ 127,198 | $ 130,809 | $ 202,970 |
SEGMENT REPORTING - Revenue by
SEGMENT REPORTING - Revenue by major customers by reporting segments (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)segment | Jun. 30, 2020USD ($) | |
Schedule of Geographical Sales [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Revenue | ||||
Revenue | $ 32,973,680 | $ 29,441,754 | $ 63,503,797 | $ 57,964,964 |
Income from operations | ||||
Total income from operations | 3,151,337 | 1,232,835 | 8,037,991 | 2,781,537 |
Net income | ||||
Total net income | 2,137,227 | 1,413,198 | 6,174,009 | 1,749,483 |
Elimination adjustment | ||||
Revenue | ||||
Revenue | (591,109) | (433,264) | (974,946) | (750,906) |
Income from operations | ||||
Total income from operations | 287,379 | 81,447 | 425,729 | 134,327 |
Net income | ||||
Total net income | 60,439 | 33,675 | 60,501 | 42,878 |
New Taiwan dollar (NTD) | ||||
Revenue | ||||
Revenue | 32,271,253 | 28,076,312 | 61,122,753 | 55,419,248 |
Income from operations | ||||
Total income from operations | 3,169,768 | 1,141,089 | 7,860,497 | 2,644,371 |
Net income | ||||
Total net income | 2,488,501 | 1,364,078 | 6,421,991 | 1,709,345 |
PRC | ||||
Revenue | ||||
Revenue | 1,265,100 | 1,748,139 | 3,216,569 | 3,177,436 |
Income from operations | ||||
Total income from operations | (294,490) | 1,560 | (298,408) | (29,553) |
Net income | ||||
Total net income | (401,328) | 4,206 | (354,410) | (35,751) |
Hong Kong | ||||
Revenue | ||||
Revenue | 28,436 | 50,567 | 139,421 | 119,186 |
Income from operations | ||||
Total income from operations | (11,320) | 8,739 | 50,173 | 32,392 |
Net income | ||||
Total net income | $ (10,385) | $ 11,239 | $ 45,927 | $ 33,011 |
SEGMENT REPORTING - Long term l
SEGMENT REPORTING - Long term liabilities (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Long-lived assets | ||
Total long-lived assets | $ 2,204,942 | $ 2,373,245 |
Reportable assets | ||
Total reportable assets | 113,906,195 | 107,728,229 |
Capital Investment | ||
Total capital investments | 298,712 | 1,611,668 |
Elimination adjustment | ||
Long-lived assets | ||
Total long-lived assets | (2,909) | (2,906) |
Reportable assets | ||
Total reportable assets | (81,311,458) | (77,373,957) |
New Taiwan dollar (NTD) | ||
Long-lived assets | ||
Total long-lived assets | 2,026,290 | 2,198,739 |
Reportable assets | ||
Total reportable assets | 181,536,334 | 171,037,252 |
Capital Investment | ||
Total capital investments | 269,416 | 1,522,189 |
PRC | ||
Long-lived assets | ||
Total long-lived assets | 180,157 | 175,748 |
Reportable assets | ||
Total reportable assets | 12,720,055 | 13,149,306 |
Capital Investment | ||
Total capital investments | 29,296 | 87,903 |
Hong Kong | ||
Long-lived assets | ||
Total long-lived assets | 1,404 | 1,664 |
Reportable assets | ||
Total reportable assets | 961,264 | 915,628 |
Capital Investment | ||
Total capital investments | $ 0 | $ 1,576 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Aug. 13, 2021shares |
Amendment | Subsequent Event | Mr. Chwan Hau Li [Member] | |
Issuance of common stock | 864,463 |