Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | JMU Ltd |
Entity Central Index Key | 0001527762 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Trading Symbol | JMU |
Entity Shell Company | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Common Stock, Shares Outstanding | 1,476,208,670 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Current assets: | ||
Cash and cash equivalents | $ 356,673 | $ 4,912,170 |
Accounts receivable, net of allowance of $nil and $295,472 as of December 31, 2017 and 2018 | 176,120 | 3,295,818 |
Inventories | 585,760 | 538,660 |
Prepaid expenses and other current assets, net | 1,121,495 | 2,245,788 |
Amounts due from related parties, net of allowance for $nil and $676,476 as of December 31, 2017 and 2018 | 2,378,709 | 3,062,797 |
Total current assets | 4,618,757 | 14,055,233 |
Non-current assets: | ||
Property and equipment, net | 406,021 | 1,795,233 |
Acquired intangible assets, net | 0 | 10,263,941 |
Investment | 0 | 768,486 |
Goodwill | 0 | 108,940,433 |
Deferred tax assets | 0 | 156,782 |
Other non-current assets | 0 | 161,723 |
Total non-current assets | 406,021 | 122,086,598 |
TOTAL ASSETS | 5,024,778 | 136,141,831 |
Current liabilities: | ||
Short-term bank borrowings (including short-term bank borrowings of VIE without recourse to the Company of $7,684,859 and $7,272,198 as of December 31, 2017 and 2018, respectively) | 7,272,198 | 7,684,859 |
Accounts and notes payable (including accounts and notes payable of VIE without recourse to the Company of $3,980,560 and $540,899 as of December 31, 2017 and 2018, respectively) | 542,732 | 3,980,826 |
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of VIE without recourse to the Company of $8,345,461 and $5,336,699 as of December 31, 2017 and 2018, respectively) | 6,916,744 | 9,292,260 |
Advance from customers (including advance from customers of VIE without recourse to the Company of $1,243,739 and $422,702 as of December 31, 2017 and 2018, respectively) | 422,816 | 1,243,739 |
Amounts due to related parties (including amounts due to related parties of VIE without recourse to the Company of $87,385 and $3,311,752 as of December 31, 2017 and 2018, respectively) | 5,134,709 | 603,883 |
Total current liabilities | 20,289,199 | 22,805,567 |
Non-current liabilities: | ||
Other non-current liabilities (including other non-current liabilities of VIE without recourse to the Company of $1,386,749 and $nil as of December 31, 2017 and 2018, respectively) | 29,540 | 1,534,449 |
Deferred tax liabilities (including deferred tax liabilities of the VIE without recourse to the Company of $nil and $nil as of December 31, 2017 and 2018, respectively) | 0 | 2,565,985 |
Amount due to related parties (including amount due to related parties of the VIE without recourse to the Company of $5,685,971 and $6,892,316 as of December 31, 2017 and 2018, respectively) | 6,892,316 | 5,685,971 |
Total non-current liabilities | 6,921,856 | 9,786,405 |
TOTAL LIABILITIES | 27,211,055 | 32,591,972 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Ordinary shares ($0.00001 par value; 1,476,208,670 shares authorized, 1,476,208,670 shares issued and outstanding as of December 31, 2017 and 2018) | 14,768 | 14,766 |
Additional paid-in capital | 634,016,215 | 634,070,842 |
Accumulated deficit | (637,143,041) | (513,903,256) |
Accumulated other comprehensive loss | (19,074,219) | (16,632,493) |
Total shareholders' equity/(deficit) | (22,186,277) | 103,549,859 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 5,024,778 | $ 136,141,831 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts receivable, net of allowance | $ 295,472 | $ 0 |
Amounts due from related parties, net of allowance | 676,476 | 0 |
Accounts payable | 542,732 | 3,980,826 |
Accrued expenses and other current liabilities | 6,916,744 | 9,292,260 |
Advance from customers | 422,816 | 1,243,739 |
Amounts due to related parties | 5,134,709 | 603,883 |
Amounts due to related parties | 6,892,316 | 5,685,971 |
Other non-current liabilities | 29,540 | 1,534,449 |
Deferred tax liabilities | $ 0 | $ 2,565,985 |
Ordinary shares, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Ordinary shares, shares authorized | 1,476,208,670 | 1,476,208,670 |
Ordinary shares, shares issued | 1,476,208,670 | 1,476,208,670 |
Common shares, shares outstanding | 1,476,208,670 | 1,476,208,670 |
VIEs [Member] | ||
Short-term loan | $ 7,272,198 | $ 7,684,859 |
Accounts payable | 540,899 | 3,980,560 |
Accrued expenses and other current liabilities | 5,336,699 | 8,345,461 |
Advance from customers | 422,702 | 1,243,739 |
Amounts due to related parties | 3,311,752 | 87,385 |
Amounts due to related parties | 6,892,316 | 5,685,971 |
Other non-current liabilities | 0 | 1,386,749 |
Deferred tax liabilities | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total revenues | $ 36,455,296 | $ 88,736,549 | $ 73,201,161 |
Cost of revenues | (35,579,218) | (88,187,781) | (72,856,808) |
Gross profit | 876,078 | 548,768 | 344,353 |
Operating expenses: | |||
Selling and marketing (including share-based compensation of $680,124, $538,897 for the years ended December 31, 2016 and 2017 , respectively and reversal of $241,150 for the year ended December 31, 2018) | (5,792,802) | (15,206,658) | (20,405,602) |
General and administrative (including share-based compensation of $417,419, $528,889 and $184,445 for the years ended December 31, 2016, 2017 and 2018, respectively) | (4,303,062) | (6,696,601) | (7,530,851) |
Impairment loss | (115,178,704) | (147,018,425) | 0 |
Total operating expenses | (125,274,568) | (168,921,684) | (27,936,453) |
Loss from operations | (124,398,490) | (168,372,916) | (27,592,100) |
Interest income/(expense), net | (906,510) | (411,164) | 26,147 |
Other income/(expense), net | (33,191) | 27,921 | 39,351 |
Loss before provision for income taxes | (125,338,191) | (168,756,159) | (27,526,602) |
Income tax benefits | 2,098,406 | 6,857,180 | 2,233,457 |
Net loss | (123,239,785) | (161,898,979) | (25,293,145) |
Net loss attributable to holders of ordinary shares of JMU Limited | $ (123,239,785) | $ (161,898,979) | $ (25,293,145) |
Net loss per ordinary share | |||
Basic | $ (0.08) | $ (0.11) | $ (0.02) |
Diluted | $ (0.08) | $ (0.11) | $ (0.02) |
Weighted average shares used in calculating net loss per ordinary share | |||
Basic | 1,476,801,177 | 1,476,144,194 | 1,474,087,060 |
Diluted | 1,476,801,177 | 1,476,144,194 | 1,474,087,060 |
Related parties [Member] | |||
Total revenues | $ 10,873,060 | $ 17,485,226 | $ 10,078,276 |
Third parties [Member] | |||
Total revenues | $ 25,582,236 | $ 71,251,323 | $ 63,122,885 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
General and administrative [Member] | |||
Share-based compensation | $ 184,445 | $ 528,889 | $ 417,419 |
Selling and marketing [Member] | |||
Share-based compensation | $ 538,897 | $ 680,124 | |
Reversal Of Allocated Share Based Compensation Expense | $ 241,150 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net loss | $ (123,239,785) | $ (161,898,979) | $ (25,293,145) |
Other comprehensive (loss)/income, net of tax of $nil: | |||
Change in cumulative foreign currency translation adjustment | (2,441,726) | 15,975,288 | (33,515,974) |
Comprehensive loss | $ (125,681,511) | $ (145,923,691) | $ (58,809,119) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other comprehensive loss, tax | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Total | Ordinary shares [Member] | Additional paid-in capital [Member] | Subscription receivable [Member] | Accumulated deficit [Member] | Accumulated other comprehensive loss [Member] | Total JMU Limited shareholders' equity [Member] | Noncontrolling interests [Member] |
Beginning Balance at Dec. 31, 2015 | $ 304,681,290 | $ 14,447 | $ 630,469,782 | $ 0 | $ (326,711,132) | $ 908,193 | $ 304,681,290 | $ 0 |
Beginning Balance (in shares) at Dec. 31, 2015 | 1,476,208,670 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share options exercised (Note 14) | $ 49,995 | 23 | 49,972 | 0 | 0 | 0 | 49,995 | 0 |
Share options exercised (Note 14), shares | 2,294,208 | |||||||
Restricted share units vested (Note 14) | $ 0 | 286 | (286) | 0 | 0 | 0 | 0 | 0 |
Restricted share units vested (Note 14) (Shares) | 28,639,900 | |||||||
Share-based compensation (Note 16) | $ 1,097,543 | 0 | 1,097,543 | 0 | 0 | 0 | 1,097,543 | 0 |
Obligation to issue ordinary shares (Note 3) | 1,377,503 | 0 | 1,377,503 | 0 | 0 | 0 | 1,377,503 | 0 |
Net loss | (25,293,145) | 0 | 0 | 0 | (25,293,145) | 0 | (25,293,145) | 0 |
Other comprehensive income (loss) | (33,515,974) | 0 | 0 | 0 | 0 | (33,515,974) | (33,515,974) | 0 |
Settlement of share options exercised with shares held by depository bank (Note 14) | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Settlement of share options exercised with shares held by depository bank (Note 14), shares | (30,934,108) | |||||||
Ending Balance at Dec. 31, 2016 | $ 248,397,212 | $ 14,756 | 632,994,514 | 0 | (352,004,277) | (32,607,781) | 248,397,212 | 0 |
Ending Balance (in shares) at Dec. 31, 2016 | 1,476,208,670 | 1,476,208,670 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share options exercised (Note 14) | $ 8,552 | $ 10 | 8,542 | 0 | 0 | 0 | 8,552 | 0 |
Share options exercised (Note 14), shares | 1,042,002 | |||||||
Share-based compensation (Note 16) | $ 1,067,786 | 0 | 1,067,786 | 0 | 0 | 0 | 1,067,786 | 0 |
Net loss | (161,898,979) | 0 | 0 | 0 | (161,898,979) | 0 | (161,898,979) | 0 |
Other comprehensive income (loss) | 15,975,288 | 0 | 0 | 0 | 0 | 15,975,288 | 15,975,288 | 0 |
Settlement of share options exercised with shares held by depository bank (Note 14) | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Settlement of share options exercised with shares held by depository bank (Note 14), shares | (1,042,002) | |||||||
Ending Balance at Dec. 31, 2017 | $ 103,549,859 | $ 14,766 | 634,070,842 | 0 | (513,903,256) | (16,632,493) | 103,549,859 | 0 |
Ending Balance (in shares) at Dec. 31, 2017 | 1,476,208,670 | 1,476,208,670 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share options exercised (Note 14) | $ 2,080 | $ 2 | 2,078 | 0 | 0 | 0 | 2,080 | 0 |
Share options exercised (Note 14), shares | 207,972 | |||||||
Share-based compensation (Note 16) | $ (56,705) | 0 | (56,705) | 0 | 0 | 0 | (56,705) | 0 |
Net loss | (123,239,785) | 0 | 0 | 0 | (123,239,785) | 0 | (123,239,785) | 0 |
Other comprehensive income (loss) | (2,441,726) | 0 | 0 | 0 | 0 | (2,441,726) | (2,441,726) | 0 |
Settlement of share options exercised with shares held by depository bank (Note 14) | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Settlement of share options exercised with shares held by depository bank (Note 14), shares | (207,972) | |||||||
Ending Balance at Dec. 31, 2018 | $ (22,186,277) | $ 14,768 | $ 634,016,215 | $ 0 | $ (637,143,041) | $ (19,074,219) | $ (22,186,277) | $ 0 |
Ending Balance (in shares) at Dec. 31, 2018 | 1,476,208,670 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Cash flows from operating activities: | |||
Net loss | $ (123,239,785) | $ (161,898,979) | $ (25,293,145) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Share-based compensation | (56,705) | 1,067,786 | 1,097,543 |
Depreciation and amortization | 1,508,862 | 8,626,844 | 8,900,192 |
Provision for doubtful accounts receivable | 293,814 | 0 | 0 |
Provision for doubtful other receivables | 281,624 | 584,956 | 0 |
Provision for doubtful amounts due from related parties | 672,680 | ||
Impairment loss | 115,178,704 | 147,018,425 | 0 |
Income tax benefits | (2,098,406) | (6,857,180) | (2,233,457) |
Customer credits earned under the loyalty program to be settled in shares | 0 | 0 | 1,377,503 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 2,753,995 | (1,482,984) | 1,936,461 |
Inventories | (79,091) | (288,361) | (142,273) |
Prepaid expenses and other current assets | 764,097 | 6,167,381 | 15,797,204 |
Amounts due from related parties | (1,452,565) | (2,730,537) | 567,545 |
Other non-current assets | 159,212 | 0 | (158,469) |
Accounts and notes payable | (3,354,430) | 1,572,143 | (1,436,785) |
Accrued expenses and other current liabilities | (2,949,494) | (906,516) | (8,612,603) |
Amounts due to related parties | 8,769,658 | (847,621) | 1,474,304 |
Other non-current liabilities | (1,483,360) | 100,895 | 899,594 |
Net cash used in operating activities | (4,331,190) | (9,873,748) | (5,826,386) |
Cash flows from investing activities: | |||
Purchase of property and equipment | (13,064) | (741,079) | (1,860,321) |
Payment for investment | 0 | 0 | (720,150) |
Net cash used in investing activities | (13,064) | (741,079) | (2,580,471) |
Cash flows from financing activities: | |||
Cash received/(Payment to) from related parties | 1,686,123 | 5,089,207 | 0 |
Proceeds from/(Repayment to) short-term bank borrowings | 0 | 7,553,366 | 0 |
Net cash provided by financing activities | 1,686,123 | 12,642,573 | 0 |
Effect of exchange rate changes | (1,897,366) | 279,538 | (140,157) |
Increase/(decrease) in cash and cash equivalents | (4,555,497) | 2,307,284 | (8,547,014) |
Cash and cash equivalents, beginning of the year | 4,912,170 | 2,604,886 | 11,151,900 |
Cash and cash equivalents, end of the year | 356,673 | 4,912,170 | 2,604,886 |
Supplement disclosure of cash flow information: | |||
Interest paid | $ 354,830 | $ 154,295 | $ 0 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES JMU Limited, formerly known as “Wowo Limited”, (the “Company”), was incorporated in Cayman Islands on July 13, 2011. The Company and its subsidiaries, variable interest entities (“VIEs”) and VIEs’ subsidiaries are primarily engaged in operating a business-to-business ("B2B") online e-commerce platform that provides integrated services to suppliers and consumers in the catering industry in the People’s Republic of China ("PRC"). On April 8, 2015, the Company completed its IPO in National Association of Securities Dealers Automated Quotation (“NASDAQ”) by offering 4 million American Depositary Shares (“ADSs”), representing 72 million ordinary shares, and received net proceeds of $35.2 million. On April 27, 2015, the Company issued an additional 220,000 ADSs, representing 3.96 million of ordinary shares to the underwriter for exercising the over-allotment option at price of $10 per ADS and received net proceeds of $2.1 million. On June 5, 2015, the Company and its wholly owned subsidiary, New Admiral Limited (“New Admiral”) entered into an agreement to acquire Join Me Group (HK) Investment Company Limited and its subsidiaries, variable interest entity (“VIE”) and VIE’s subsidiaries (Collectively, “JMU Group”) with a consideration of 741,422,780 ordinary shares of the Company and $30 million in cash. On that date, JMU Group, which operates a business-to-business ("B2B") online e-commerce platform that provides integrated services to suppliers and consumers in the catering industry, became a wholly owned subsidiary of the Company. JMU Group engages primarily in the sale of rice, flavor, bean oil, seafood, wine and some other types of generic food and beverage products through its website www.ccjoin.com . On September 9, 2015, the Company sold all of its equity interests in Wowo Group Limited, a subsidiary of the Company, together with all of its subsidiaries and consolidated VIEs and their respective subsidiaries (collectively, the “Group Buying Entities”), which were engaged in the Company’s group buying business and other non-food service-related businesses. The sale was pursuant to a definitive agreement entered into between the Company and Century Winning Limited, an exempted company with limited liability incorporated under the laws of the British Virgin Islands (the “Buyer”), in exchange for the Buyer’s payment of $1 and the assumption of $47,390,420 of net liabilities of the Group Buying Entities. On December 28, 2016, the Company changed its name from Wowo Limited to JMU Limited. As of December 31, 2018, the Company’s major subsidiaries, VIE and VIE’s subsidiaries (collectively, the “Group”) are as follows: Date of acquisition/ incorporation Place of establishment/ incorporation Percentage of legal ownership Subsidiaries: New Admiral April 27, 2015 Cayman Islands 100 % Join Me Group (HK) Investment Company Limited (“JMU Investment”) June 8, 2015 Hong Kong 100 % Join Me Group Supply Chain Management Company Limited (“JMU Supply Chain”) October 15, 2015 Hong Kong 100 % Shanghai Zhongming Supply Chain Management Co., Ltd. (“Shanghai Zhongming” or “WFOE” ) June 8, 2015 PRC 100 % VIE: Shanghai Zhongmin Supply Chain Management Co., Ltd. (“Shanghai Zhongmin” or “VIE”) June 8, 2015 PRC N/A The VIE arrangements The PRC laws and regulations currently place certain restrictions on foreign ownership of companies that engage in internet content and other restricted businesses. Specifically, foreign investors are not allowed to own more than 50% of the equity interests in any entity conducting internet content and other restricted businesses. To comply with these PRC laws and regulations, the Company conducts substantially its businesses through the VIE and VIE’s subsidiaries. To provide the Company’s control over the VIE and the rights to the expected residual returns of the VIE and VIE’s subsidiaries, Shanghai Zhongming, a wholly foreign-invested enterprise in China, or WFOE entered into a series of contractual arrangements as described below with VIE and its shareholder. Prior to the acquisition of JMU Group, JMU Group formed contractual arrangements through its wholly owned subsidiary Shanghai Zhongming with the VIE. As a result of the Company's acquisition of JMU Group, the Company through JMU's wholly owned subsidiary, Shanghai Zhongming, has (1) power to direct the activities of the VIE that most significantly affect the entity’s economic performance and (2) the right to receive economic benefits of the VIE that could be significant to the VIE. Accordingly, the Company is considered the primary beneficiary of the VIE and has consolidated the VIE’s financial results of operations, assets, and liabilities in the Company’s consolidated financial statements. The Company also believes that this ability to exercise control ensures that the VIE will continue to execute and renew the exclusive consulting and services agreements and pay service fees to the Company. The ability to charge service fees in amounts determined at the Company’s sole discretion, and by ensuring that the exclusive services agreements are executed and renewed indefinitely, the Company has the right to receive substantially all of the economic benefits from the VIE. The following is a summary of the various VIE agreements: Agreements that Transfers Economic Benefits and Risks to the Company Master Exclusive Service Agreement and Business Cooperation Agreement Pursuant to the master exclusive service agreement and business cooperation agreement, VIE, including its subsidiaries or any companies or entities under its control, agrees to engage WFOE as its provider for technical and business support services. VIE shall pay to WFOE service fees determined based on the audited consolidated net profit of VIE. WFOE shall exclusively own any intellectual property arising from the performance of the services set forth in the agreement. WFOE shall provide financial support to VIE in the form of bank loans or others forms as permitted under the PRC laws. The service agreements shall remain effective upon the written confirmation issued by WFOE to VIE and/or its shareholder 30 days before the termination. VIE or its shareholder has no right to unilaterally terminate the agreement. Subsequently, the Company entered into financial support undertaking letter with VIE and pursuant to the financial support undertaking letter, the Company is obligated and hereby undertakes to provide unlimited financial support to the VIE, to the extent permissible under the applicable PRC laws and regulations, whether or not any such operational loss is actually incurred. The Company will not request repayment of the loans or borrowings if the VIE or its shareholder does not have sufficient funds or are unable to repay. Agreements that Provide the Company with Effective Control over VIE Exclusive Option Agreement The VIE’s shareholder has entered into an exclusive option agreement with WFOE, pursuant to which WFOE has an exclusive option to purchase, or to designate other persons to purchase, to the extent permitted by applicable PRC laws, rules and regulations, all of the equity interest in VIE from the shareholder. The purchase price for the entire equity interest is to be the minimum price permitted by applicable PRC laws and administrative regulations. If there is no minimum price under PRC laws or administrative regulations, the price shall be determined by the WFOE or on a basis of the registration capital of VIE. The term of the exclusive option agreement shall remain effective upon written confirmation issued by the WFOE to VIE and its shareholder 30 days before the termination. VIE and its shareholder has no right to unilaterally terminate the agreement. Proxy and Power of Attorney Agreement The VIE’s shareholder has signed an irrevocable proxy and power of attorney agreement to appoint WFOE, or its designee, as the attorney-in-fact to act on VIE’s shareholder's behalf on all rights that the shareholder has in respect of such shareholder's equity interest in VIE conferred by relevant laws and regulations and the articles of association of VIE. The rights include but not limited to attending shareholders meeting, exercising voting rights and transferring all or a part of the equity interests of VIE held by the shareholder. The proxy and power of attorney shall remain effective upon written confirmation issued by WFOE to VIE and its shareholder 30 days before the termination. VIE and its Shareholder has no right to unilaterally terminate the agreement. Equity Interest Pledge Agreement The VIE’s shareholder has entered into an equity pledge agreement with the WFOE, under which the shareholder pledged all of the equity interests in VIE to WFOE as collateral to secure performance of all obligations under the Master Exclusive Service Agreement, Business Cooperation Agreement, Proxy and Power of Attorney Agreement and the Exclusive Option Agreement (collectively, the "Principal Agreement"). The dividends generated by the pledged equity interests shall be deposited into the account designated by the WFOE and shall be used to pay the secured indebtedness prior and in preference to any other payment during the term of the pledge. If any event of default incurred under the Principal Agreement, WFOE, as the pledgee, will be entitled to dispose of the pledged equity interests and shall be paid in priority with the proceeds recovered from the disposal. Risks in relation to the VIE structure Assessing the legal validity and compliance of these above noted arrangements are a precursor to the Company’s ability to consolidate the results of operations and financial condition of the VIE and VIE’s subsidiaries. The Company, in consultation with its PRC legal counsel, believes that:(1) the ownership structure of the Group, including its PRC subsidiary, VIE and VIE’s subsidiaries is in compliance with all existing PRC laws and regulations; (2) each of the VIE agreements amongst the WFOE, the VIE and VIE’s shareholder governed by PRC laws, are legal, valid and binding, enforceable against such parties, and will not result in any violations of PRC laws or regulations currently in effects; and (3) the Group’s PRC subsidiary, VIE and VIE’s subsidiaries have the necessary corporate power and authority to conduct its business as described in its business scope under its business licenses, which is in full force and effect, and the Group’s business operations in the PRC are in compliance with existing PRC laws and regulations. The shareholder of the VIE are also shareholders of the Company and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and if the shareholders were to reduce their interest in the Company, their interests may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms. The Company’s ability to control the VIE also depends on the power of attorney. The Company, through WFOE, has to vote on all matters requiring shareholder approval in the VIE entities. As noted above, the Company believes this power of attorney is legally enforceable but may not be as effective as direct equity ownership. In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could: revoke the Group’s business and operating licenses; require the Group to discontinue or restrict its operations; restrict the Group’s right to collect revenues; restrict or prohibit the Group to finance its business and operations in China; shut down the Group’s servers or block the Group’s website; require the Group to restructure its operations; impose additional conditions or requirements with which the Group might not be able to comply, levy fines, confiscate the Group’s income or the income of its PRC subsidiary or affiliated PRC entities; or take other regulatory or enforcement actions against the Group that could be harmful to its business. The imposition of any of these penalties could result in a material adverse effect on the Group’s ability to conduct the Group’s business. In addition, if the imposition of any of these penalties causes the Group to lose the rights to direct the activities of the VIE, VIE’s subsidiaries, or the right to receive their economic benefits, the Group would no longer be able to consolidate the VIE and VIE’s subsidiaries. The Group does not believe that any penalties imposed or actions taken by the PRC government would result in the liquidation or dissolution of the Company, WFOE, the VIE and their respective subsidiaries. The following financial statement balances and amounts of the VIE and VIE’s subsidiaries were included in the accompanying consolidated financial statements as follows after the elimination of intercompany balances and transactions among VIE and VIE’s subsidiaries within the Group: As of December 31, 2017 2018 US$ US$ Cash and cash equivalents 4,802,420 245,866 Accounts receivable, net 3,295,818 176,120 Inventories 538,660 585,760 Prepaid expenses and other current assets, net 1,881,988 1,007,406 Amounts due from related parties 3,062,797 4,038,884 Total current assets 13,581,683 6,054,036 Property and equipment, net 1,715,795 344,150 Investment 768,486 - Other non-current assets 161,723 - Total non-current assets 2,646,004 344,150 TOTAL ASSETS 16,227,687 6,398,186 Short-term bank borrowings 7,684,859 7,272,198 Accounts and notes payable 3,980,560 540,899 Accrued expenses and other current liabilities 8,345,461 5,336,699 Advance from customers 1,243,739 422,702 Amounts due to related parties 87,385 3,311,752 Total current liabilities 21,342,004 16,884,250 Other non-current liabilities 1,386,749 - Amounts due to related parties 5,685,971 6,892,316 Total non-current liabilities 7,072,720 6,892,316 TOTAL LIABILITIES 28,414,724 23,776,566 For the years ended December 31, 2016 2017 2018 US$ US$ US$ Revenues 66,288,019 80,668,230 28,978,124 Net loss (17,022,631 ) (12,419,220 ) (8,195,049 ) For the years ended December 31, 2016 2017 2018 US$ US$ US$ Net cash provided by/(used in) operating activities 2,657,916 (9,152,256 ) (6,241,888 ) Net cash used in investing activities (2,578,472 ) (741,079 ) (13,064 ) Net cash provided by financing activities - 12,642,573 1,686,123 The VIE contributed an aggregate of 90.6%, 90.9% and 79.5% of the consolidated revenues for the years ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2017 and 2018, the VIE accounted for an aggregate of 11.9% and 127.3%, respectively, of the consolidated total assets, and 87.2% and 87.4%, respectively, of the consolidated total liabilities. The assets not associated with the VIE primarily consist of certain cash and cash equivalents, certain prepaid expenses and other current assets and certain property and equipment. The recognized and unrecognized revenue-producing assets that are held by the VIE are primarily property and equipment and online platform. There are no consolidated VIE’s assets that are collateral for the VIE’s obligations and can only be used to settle the VIE’s obligations. There are no creditors (or beneficial interest holders) of the VIE that have recourse to the general credit of the Company or any of its consolidated subsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE ever need financial support, the Company’ PRC subsidiary, WOFE, shall provide financial support to VIE in the form of bank loans or other forms as permitted under PRC law. Relevant PRC laws and regulations restrict the VIE from transferring a portion of their net assets, equivalent to the balance of its statutory reserve and its share capital, to the Company in the form of loans and advances or cash dividends. Please refer to Note 21 for disclosure of restricted net assets. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2018 | |
GOING CONCERN | |
GOING CONCERN | 2. GOING CONCERN The Group experienced a net loss of approximately $25.3 million, $161.9 million and $123.2 million for the years ended December 31, 2016, 2017 and 2018, respectively, and negative cash flows from operations of approximately $5.8 million, $9.9 million and $4.3 million for the years ended December 31, 2016, 2017 and 2018, respectively. As at 31 December 2018, the Group’s current liabilities exceeded its current asset by $ 15.7 However, management believes the Group has the ability to fulfill its financial obligations and will continue as a going concern because Ms. Xiaoxia Zhu (“Ms. Zhu”) has agreed in writing to provide adequate funds during the period when she remains as director of the Group to enable the Group to meet in full its financial The Group believes that it can realize its assets and satisfy its liabilities in the normal course of business with the financial support from Ms. Zhu. As a result, the consolidated financial statements have been prepared assuming the Group will continue as a going concern. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities as that might be necessary if the Group is unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the U.S. generally accepted accounting principles (‘‘US GAAP’’). Principle of consolidation The consolidated financial statements of the Group include the financial statements of the Company, its consolidated subsidiaries, VIE and VIE’s subsidiaries for which the Company is the primary beneficiary. All significant inter-company transactions and balances have been eliminated upon consolidation. Business combinations Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed, and any noncontrolling interest of the acquiree at the acquisition date, if any, are measured at their fair values as of that date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interests of the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Consideration transferred in a business acquisition is measured at the fair value as at the date of acquisition. Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, provision for other receivables, estimating useful lives and impairment for property and equipment and acquired intangible assets, impairment of goodwill, valuation allowance for deferred tax assets and share-based compensation. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. Foreign currency The functional and reporting currency of the Company is the United States dollar (“U.S. dollars”, “US$” or“$”). The functional currency of the Company's subsidiary, New Admiral, is U.S. dollars. The functional currency of the Company’s HK subsidiaries, JMU Investment and JMU Supply Chain, is Hong Kong dollars (“HK dollars”). The financial records of the Group’s subsidiaries, VIE and VIE’s subsidiaries located in the PRC are maintained in their local currencies, the Renminbi (“RMB”), respectively, which are also the functional currencies of these entities. Transactions denominated in currencies other than the respective entities’ functional currencies are re-measured into the functional currencies, in accordance with Accounting Standards Codification (“ASC”) 830 (“ASC 830”) Foreign Currency Matters , at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re-measured into the functional currencies at the exchange rates prevailing at the balance sheet date. All foreign exchange gains or losses are included in the consolidated statements of operations. Assets and liabilities are translated to the reporting currency at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of consolidated statements of comprehensive loss. Cash and cash equivalents Cash and cash equivalents consists of cash on hand and demand deposits placed with banks or other financial institutions which are unrestricted as to withdrawal and use and have original maturities less than three months. Accounts receivable, net of allowance Accounts receivable represents those receivables derived in the ordinary course of business, carried at net realizable value. The Group maintains an allowance for doubtful accounts for estimated losses on uncollected accounts receivable. Management considers the following factors when determining the collectability of specific accounts: creditworthiness of customers, aging of the receivables, past transaction history with customers and their current condition, changes in customer payment terms, specific facts and circumstances, and the overall economic climate in the industries the Group serves. The provision for doubtful accounts receivable for the years ended December 31, 2016, 2017 and 2018 was $nil, $nil and $293,814, respectively. Inventories Inventory is stated at the lower of cost or market. Cost of inventory is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventory to the estimated market value for slow-moving merchandise and damaged goods. The amount of written-down depends upon factors such as whether the goods are returnable to vendors, historical and forecasted consumer demand, market condition and the promotional environment. Written-down amounts are recorded in cost of goods sold in the consolidated statements of operations. No inventory provision was recognized for each of the three years ended December 31, 2018. Property and equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Computer equipment 3 years Office equipment 5 years Vehicles 4 years Leasehold improvement Over the shorter of lease term or the estimated useful lives of the assets Repair and maintenance costs are charged to expense when incurred, whereas the cost of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirement, sale and disposals of assets are recorded by removing the cost and related accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of operations. Acquired intangible assets Acquired intangible assets with finite lives are carried at cost less accumulated amortization and impairment. Amortization of finite lived intangible assets is calculated on a straight-line basis over the shorter of the contractual terms or the expected useful lives of the acquired assets. The amortization period by major intangible asset classes is as follows: Trade name/domain name 10 years Non-compete agreement 4.5 years Online platform 5 years Customer relationship 5-10 years Impairment of long-lived assets other than goodwill The Group evaluates the recoverability of its long-lived assets, including intangible assets with finite lives, whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the excess of carrying amount over the fair value of the assets. An impairment loss of $nil, $19,765,615 and $8,637,214 were recognized for the years ended December 31, 2016, 2017 and 2018, respectively. Impairment of goodwill The Group annually, or more frequently if the Group believes indicators of impairment exist, reviews the carrying value of goodwill to determine whether impairment may exist. Specifically, goodwill impairment is determined using a two-step process. The first step compares the fair value of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit’s goodwill to the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being a discounted cash flow. The Group has determined to perform the annual impairment tests on December 31 of each year. The goodwill as of December 31, 2016, 2017 and 2018 was attributable solely to the JMU business on which an impairment loss of $nil, $127,252,810 and $105,818,351 were recognized for the years ended December 31, 2016, 2017 and 2018, respectively. Investment Cost Method Investment In accordance with ASC subtopic 325-20 (“ASC 325-20”), Investments-Other: Cost Method Investments , for investments in an investee over which the Group does not have significant influence and which do not have readily determinable fair value, the Group carries the investment at cost and only adjusts for other-than-temporary declines in fair value and distributions of earnings that exceed the Group’s share of earnings since its investment. The Group regularly evaluates the impairment of the investment based on performance and financial position of the investee as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee’s cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. An impairment loss recognized in earnings is equal to the excess of the investment’s cost over its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value would then become the new cost basis of investment. Cost method accounting is also applied to investment that are not considered as “in-substance” common stock investment, and do not have readily determinable fair value. No impairment was recognized for each of the two years ended December 31, 2017. For the year ended December 31, 2018, we recognized an impairment charge of $723,139. Revenue recognition The Group recognizes revenue from the sales of rice, flavoring, oil, seafood, wine and other types of generic food and beverage products through its online platform www.ccjoin.com vendors and customers. The Group recognizes revenue when the following four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured. The Group recognizes revenue when the customers confirm the acceptance of the goods once they receive the delivered goods. The sales returns are considered and estimated when the related revenue was recognized. Revenue is recorded net of surcharges and value-added tax ("VAT") and related surcharges. The Group primarily generates revenue from online direct sales and online platform services. Online direct sales The Group primarily sells rice, flavoring, oil, seafood, wine and other products relating to catering and hotel industries through online direct sales. There is a separate channel on the Group’s online platform designated for the Group’s online direct sales and the Group records revenue from online direct sales on a gross basis as the Group acts as the principal in these arrangements: it is the primary obligor in the sales arrangements, has latitude in establishing prices and has discretion in suppliers' selection. On certain transactions, the Group also retains some of general inventory risk and physical inventory loss risk. Online platform services The Group also provides the online platform services to connect third-party sellers and purchasers for their transactions via its online marketplace. Online platform sales are made from the online stores under the third-party sellers’ names, and the Group records the related revenue on a net basis as the Group acts as the agent in these arrangements: it is not the primary obligor, does not bear inventory risk, and does not have the ability to establish the price or discretion in supplier selection. For the years ended December 31, 2016, 2017 and 2018, revenues related to the online platform services were nominal, as the Group normally does not charge any service fees to the third-party sellers and purchasers. Value-added tax VAT is calculated at 0% on the revenue from primary agricultural products, 11% or 10% on the revenue from other agricultural products and 17% or 16% on the revenue from sales of other products. The Group reports revenue net of VAT. WFOE, VIE and VIE's subsidiaries are VAT general tax payers, which are allowed to offset qualified VAT paid against their output VAT liabilities. Cost of revenue Cost of revenues primarily consists of purchased cost of the products sold related to online direct sales and payroll of the operating personnel. Advertising and promotional expenses Advertising and promotional expenses, including advertisements through various form of media and kinds of marketing and promotional activities, are included in “Selling and marketing expense” in the consolidated statements of operations and are expensed when incurred. Advertising and marketing expenses for the years ended December 31, 2016, 2017 and 2018 are $498,045, $101,232 and $137,464, respectively. Operating leases Leases where substantially all the rewards and risks of the ownership of the assets remain with the leasing companies are accounted for as operating leases. Payments made for the operating leases are charged to the consolidated statements of operations on a straight-line basis over the lease term and have been included in the operating expenses in the consolidated statements of operations. In 2016, the Group entered into a 15-year lease arrangement for its new $1,086,342, $1,386,749 and $nil, respectively. Income taxes The Group follows the liability method in accounting for income taxes in accordance to ASC topic 740 (“ASC 740”), Income Taxes . Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The Group applies the provision of ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. The Group has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the consolidated statements of operations. Loyalty program In 2016, the Group launched a customer loyalty program to certain qualified customers, who can earn customer credits from purchases if their annual spending with the Group exceeds RMB10 million. In 2017, the Group announced its revised customer loyalty program to certain qualified customers for granting customer credits only if their annual spending with the Group exceeds RMB100 million. The customers can redeem the earned credits for gift merchandise. In 2018, the Company abrogated customer loyalty program. During 2016, the Group negotiated settlement of earned loyalty credits with 13 of its customers in ordinary shares of the Company. As part of the settlement, the Group agreed to issue 4.42 million of its ordinary shares, and recognized $1,377,503 in paid-in capital and selling expenses based on the grant date fair value of the ordinary shares. The Group is not legally obligated or expected to continue the redemption of the credits for the ordinary shares in the future. Share-based payments Share-based payment awards with employees are measured based on the grant date fair value of the equity instrument issued, and recognized as compensation costs using the straight-line method over the requisite service period, which is generally the vesting period of the options, with a corresponding impact reflected in additional paid-in capital. For share-based payment awards with market conditions, such market conditions are included in the determination of the estimated grant-date fair value. In the second quarter of 2017, the Company elected to early adopt ASU No. 2016-09, Compensation Stock Compensation (Topic 718): Improvement to Employee Share based Payment Accounting , to account for forfeitures as they occur. The cumulative-effect adjustment to accumulated deficits was $nil as a result of the adoption of ASU 2016-09. A change in any of the terms or conditions of share-based payment awards is accounted for as a modification of awards. The Group measures the incremental compensation cost of a modification as the excess of the fair value of the modified awards over the fair value of the original awards immediately before its terms are modified, based on the share price and other pertinent factors at the modification date. For vested awards, the Group recognizes incremental compensation cost in the period the modification occurred. For unvested awards, the Group recognizes, over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. Net loss per share Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted loss per ordinary share reflects the potential dilution that could occur if securities were exercised or converted into ordinary shares. The Group had stock options and restricted share units, which could potentially dilute basic loss per share in the future. To calculate the number of shares for diluted loss per ordinary share, the effect of the stock options and restricted share units is computed using the treasury stock method. Potential ordinary shares in the diluted net loss per share computation are excluded in periods of losses from operations, as their effect would be anti-dilutive. Comprehensive loss Comprehensive loss is defined as the decrease in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive loss is reported in the consolidated statements of comprehensive loss, including net loss and foreign currency translation adjustments, presented net of tax. Segment reporting The Group follows ASC 280, Segment Reporting . The Company’s Chief Executive Officer or chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Group as a whole and hence, the Group has only one reportable segment. The Group operates and manages its business as a single segment through the provision of integrated services to suppliers and consumers in the catering and hotel industries. As the Group’s long-lived assets are substantially all located in the PRC and substantially all the Group’s revenues are derived from within the PRC, no geographical segments are presented. Fair value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1- inputs are based upon quoted prices for instruments traded in active markets. Level 2- inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based calculation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3- inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, cash flow models, and similar techniques. Fair value of financial instruments Financial instruments include cash and cash equivalents, short-term bank borrowings, amounts due from/to related parties, accounts receivable, accounts payable and investment. The carrying values of cash, short-term bank borrowings, amounts due from/to related parties, accounts receivable and accounts payable approximate their fair values reported in the consolidated balance sheets due to the short-term maturities. The Group determined that it is not practicable to estimate the fair value of its cost method investment as of December 31, 2018 and measures the cost method investment at fair value on a nonrecurring basis only if an impairment charge were to be recognized. Financial assets and liabilities measured at fair value on a non-recurring basis include acquired assets and liabilities and goodwill based on Level 3 inputs in connection with business acquisition. Recent accounting pronouncements As a company with less than US$1 billion in gross revenue for the last fiscal year, we qualify as an “emerging growth company” (“EGC”) pursuant to the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include a provision that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We will take advantage of the extended transition period. In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition. The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer. The new disclosure requirements will provide information about the nature, amount, timing and uncertainty of revenue and cash flows from revenue contracts with customers. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, for public business entities. The new revenue standards may be applied retrospectively to each prior period presented (full retrospective method) or retrospectively with the cumulative effect recognized as of the date of initial application (the modified retrospective method). The Group as an EGC has elected to adopt the new revenue standard as of the effective date applicable to nonissuers and will implement the new revenue standard on January 1, 2019 using the modified retrospective method. The Group has substantially completed its assessment and currently does not expect the adoption of this guidance will have significant effects on the Group’s revenue recognition practices, financial positions, results of operations or cash flows. The new standard will require the Group to provide more robust disclosures than required by previous guidance, including disclosures related to disaggregation of revenue into appropriate categories, performance obligations, and the judgments made in revenue recognition determinations. In January 2016, the FASB issued ASU No. 2016-01, to improve the recognition and measurement of financial instruments. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income and separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The guidance also eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for organizations that are not public business entities and the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, for public business entities. The Group as an EGC has elected to adopt this standard as of the effective date applicable to nonissuers and will implement the new standard on January 1, 2019 using the modified retrospective method. This accounting standards update does not have a material impact on the Group’s consolidated financial statements. In February 2016, the FASB issued ASU2016-02, Leases (Topic 842) , to increase transparency and comparability among organizations by recognizing a right-of-use asset and a lease liability for all leases with terms longer than 12 months. Leases will be classified as either operating or financing. The definition of a lease has been revised in regards to when an arrangement conveys the right to control the use of the identified asset under the arrangement which may result in changes to the classification of an arrangement as a lease. The ASU expands the disclosure requirements of lease arrangements. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, for public business entities. The Group as an EGC has elected to adopt the new lease standard as of the effective date applicable to nonissuers and will implement the new lease standard on January 1, 2020 using the modified retrospective method. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. In addition, the Group will elect the transition practical referred to as the “package of three”, that must be taken together and allows entities to (1) not reassess whether existing contracts contain leases, (2) carryforward the existing lease classification, and (3) not reassess initial direct costs associated with existing leases. The Group is in the process of evaluating the impact on its consolidated financial statements, as well as the impact of adoption on policies, practices, systems and financial statement disclosures. As of December 31, 2018, the Group has US$145,444 of future minimum operating lease commitments that are not currently recognized on its consolidated balance sheets (see note 19). In June 2016, the FASB issued ASU 2016-13, Credit Losses, Measurement of Credit Losses on Financial Instruments . This ASU provides more useful information about expected credit losses to financial statement users and changes how entities will measure credit losses on financial instruments and timing of when such losses should be recognized. This ASU is effective for annual and interim periods beginning after December 15, 2019 for the public business entities. Early adoption is permitted for all entities for annual periods beginning after December 15, 2018, and interim periods therein. The Group as an EGC has elected to adopt the new ASU as of the effective date applicable to nonissuers and will implement the new ASU on January 1, 2020 using the modified retrospective method. The updates should be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) , which amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows. This ASU requires that 1) debt extinguishment costs be classified as cash outflows for financing activities and provides additional classification guidance for the statement of cash flows, 2) the classification of cash receipts and payments that have aspects of more than one class of cash flows to be applied under generally accepted accounting principles, and 3) each separately identifiable source or use within the cash receipts and payments be classified based on their nature in financing, investing or operating activities. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017 and is applied retrospectively. Early adoption is permitted including adoption in an interim period. The Group adopted this ASU on its effective date of January 1, 2018 and did not have any material impact on its consolidated financial statements upon adoption. August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) : Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which changes certain disclosure requirements, including those related to Level 3 fair value measurements. The standard will be effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities : The amendments in this ASU are effective for public business entities with fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The amendments are also effective for private entities with fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021.All entities are required to apply the amendments in this ASU retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. Early adoption is permitted. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF RISK | 4. CONCENTRATION OF RISK Credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents. The Group places its cash and cash equivalents with financial institutions with high-credit ratings and quality. Customers accounting for 10% or more of total revenue are: For the years ended December 31, Customer 2016 2017 2018 A 20.4 % * * B * 22.6 % * C * * 16.8 % D * * 14.7 % Customers accounting for 10% or more of accounts receivable are: As of December 31, Customer 2017 2018 A 12.7 % * B 59.4 % * C * 32.7 % D * 12.2 % * Less than 10% Currency convertibility risk Substantially all of the Group’s businesses are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. Foreign currency exchange rate risk From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. For RMB against U.S. dollar, there was depreciation of approximately 6.8% and 5.7% in the year ended December 31, 2016 and 2018, respectively and appreciation 5.8% in the year end December 31, 2017. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. To the extent that the Company needs to convert U.S. dollar into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends on ordinary shares, strategic acquisitions or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company. In addition, a significant depreciation of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of the Company’s earnings or losses. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET | 5. ACCOUNTS RECEIVABLE, NET Accounts receivable and allowance for doubtful accounts consist of the following: As of December 31, 2017 2018 US$ US$ Accounts receivable 3,295,818 471,592 Less: allowance for doubtful accounts - (295,472 ) 3,295,818 176,120 As of December 31, 2017 and 2018, all accounts receivable are due from customers for online direct sales. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
PREPAYMENTS AND OTHER CURRENT ASSETS, NET | 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET Prepaid expenses and other current assets consist of the following: As of December 31, 2017 2018 US$ US$ Advance to suppliers 1,248,701 347,409 Other receivables, net of allowance for doubtful accounts of $584,956 and $751,491 at December 31, 2017 and December 31, 2018, respectively (i) 228,436 111,938 Prepaid rental expenses and other deposits 124,863 73,446 Advance to employees 118,052 187,301 Other current assets 525,736 401,401 2,245,788 1,121,495 (i) In circumstances where a supplier defaults, and where the Group is asserting a breach of contract and seeking monetary recovery of the remaining deposit from the supplier, the Group reclassifies the respective advance to suppliers to other receivables within “Prepaid expenses and other current assets” in the consolidated balance sheets. A provision for loss is recognized in operating expenses when the loss on such assets is determined to be probable and amount can be reasonably estimated. The Group provided provision of $nil, $584,956 and $166,535 for other receivables during the year ended December 31, 2016, 2017 and 2018, respectively. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following: As of December 31, 2017 2018 US$ US$ Leasehold improvement 1,533,673 - Computer equipment 814,870 625,966 Office equipment 176,160 164,957 Vehicles 129,907 122,931 Total 2,654,610 913,854 Less: accumulated depreciation (859,377 ) (507,833 ) Property and equipment, net 1,795,233 406,021 On December 21, 2018, as discussed in Note 19, the Company terminated its lease of its headquarters located in Shanghai. As a result of the termination of the lease, the Company wrote off leasehold improvements of $ 614,282 459,222 614,282 which has been included in general and administrative expenses in the accompanying Consolidated Statement of Operations for the year ended December 31, 2018 For the years ended December 31, 2016, 2017 and 2018, depreciation and amortization expense was $259,307, $267,458 and $337,643, respectively. No impairment loss was recognized for the years ended December 31, 2016, 2017 and 2018. |
ACQUIRED INTANGIBLE ASSETS, NET
ACQUIRED INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
ACQUIRED INTANGIBLE ASSETS, NET | 8. ACQUIRED INTANGIBLE ASSETS, NET Acquired intangible assets consist of the following: As of December 31, 2017 2018 US$ US$ Trade name/domain name 15,291,990 14,470,842 Non-compete agreements 9,513,676 9,002,811 Online platform 1,285,326 1,216,307 Customer relationship 26,158,110 24,753,474 Total 52,249,102 49,443,434 Less: Accumulated amortization (22,219,546 ) (22,148,435 ) Less: Accumulated impairment (19,765,615 ) (27,294,999 ) Acquired intangible assets, net 10,263,941 - The movement of acquired intangible assets for the years ended December 31, 2017 and 2018 is as follows: US$ Balance as of January 1, 2017 36,274,238 Amortization (8,359,386 ) Foreign currency translation adjustment 2,114,704 Impairment (19,765,615 ) Balance as of December 31, 2017 10,263,941 Amortization (1,171,219 ) Foreign currency translation adjustment (455,508 ) Impairment (8,637,214 ) Balance as of December 31, 2018 - The amortization expense of acquired intangible assets was $8,640,885, $8,359,386 and $1,171,219 for the years ended December 31, 2016, 2017 and 2018, respectively. Impairment loss of $nil, $19,765,615 and $8,637,214 was provided by the Group for the years ended December 31, 2016, 2017 and 2018, respectively. During the year ended December 31, 2018, the Group provided impairment loss of $5,566,496, $350,189 and $2,720,529 for Trade name/domain name, Online platform and Customer relationship, respectively, to write down the carrying amount to their fair value respectively (Note 15). |
INVESTMENT
INVESTMENT | 12 Months Ended |
Dec. 31, 2018 | |
Investments, All Other Investments [Abstract] | |
INVESTMENT | 9. INVESTMENT As of December 31, 2017 2018 US$ US$ Cost investment: Investment in Cold Chain Link (Shanghai) Internet of Things Co., Ltd. 768,486 727,220 Less: accumulated impairment - (727,220 ) 768,486 - In May 2016, the VIE entered into a share purchase agreement with Cold Chain Link (Shanghai) Internet of Things Co., Ltd., formerly known as Cold Chain Link Global (Shanghai) Logistic Co., Ltd., (“CCLG”) and CCLG’s original shareholders for acquiring a 10% equity interest for total consideration of RMB20 million ($3.0 million). As of December 31, 2018, the Group has paid RMB5 million ($727,220) and the remaining capital commitment for this investment is RMB15 million ($2,181,660) as of December 31, 2018 (Note 19). According to unaudited financial statements of CCLG, CCLG had total shareholders’ equity of $773,327 at December 31, 2018 and had net losses of $381,022 and $1,296,356 for the years ended December 31, 2018 and 2017, respectively. Accordingly, we have recognized an impairment loss of $723,139 at December 31, 2018 and reduced the carrying value of our investment to $nil. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill Disclosure [Abstract] | |
GOODWILL | 10. GOODWILL As of December 31, 2017 2018 US$ US$ Gross amount 327,895,884 327,895,884 Less: Accumulated impairment (218,955,451 ) (327,895,884 ) 108,940,433 - The changes in the goodwill balance for the years ended December 31, 2017 and 2018 are as follows: US$ Balance as of January 1, 2017 221,337,157 Foreign currency translation adjustment 14,856,086 Impairment (127,252,810 ) Balance as of December 31, 2017 108,940,433 Foreign currency translation adjustment (3,122,082 ) Impairment (105,818,351 ) Balance as of December 31, 2018 - The Group has one reporting unit and applies discounted cash flows for its impairment test as of December 31 of each year. The Group recorded an impairment loss of $ nil, $127,252,810 and $105,818,351 for the years ended December 31, 2016, 2017 and 2018, respectively. |
SHORT-TERM BANK BORROWINGS
SHORT-TERM BANK BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BANK BORROWINGS | 11. SHORT-TERM BANK BORROWINGS In July 2017, the VIE, entered into a banking facility arrangement with Bank of Dalian Shanghai Branch, pursuant to which the VIE is entitled to borrow RMB denominated loan of RMB50 million ($7.6 million, equivalently), for a one-year period from July 25, 2017 to July 24, 2018. The facility agreement was guaranteed by the Company’s shareholders, Ms. Zhu and Ms. Wang and Ms. Wang also provided her own property as collateral On April 23, 2018, Ms. Zhu Xiaoxia signed a shareholder support letter with JMU Limited, stipulating that she will unconditionally provide funds to JMU Limited to meet its operational needs within 12 months after the signing date of the letter of commitment. The Facility agreement contains provisions that require, among other things, approval from the bank on (1) reduction of ownership, divestitures, mergers, joint ventures, and reorganizations; (2) selling and renting Company assets; (3) providing of collateral to third parties; and (4) other matters that impact the bank’s claim. The bank has the right to give oversight on the use of the line. The bank has the right to perform due diligence on the line of credit. If the terms are not followed, the bank has the right to reduce the credit amount or terminate the agreement. The Facility agreement also provides that a second loan must not be taken out by the Company using collateral without the bank’s approval, that the Company periodically provide financial statements and other support to the bank, and that the Company inform the bank on significant matters pertaining to the Company such as changes in management and changes in ownership. To the date of the issuance of these financial statements, the bank has not indicated its intention to currently terminate the line or make a demand for repayment of the amount currently outstanding under the line. On August 10, 2017 and August 16, 2017, the Group drew down RMB27 million ($4.1 million) and RMB23 million ($3.5 million), respectively, with fixed interest rate of 5.66% per annum. On August 6, 2018, the Group extended the loan to August 5, 2019. As of December 31, 2018, the Group drew down RMB50 million ($7.3 million), with fixed interest rate of 5.66% per annum. Should Ms. Zhu or the new controlling shareholder of the Company be unwilling or unable to fund the repayment of the RMB50,000,000 ($7,272,198) loan under the line on August 5, 2019 at maturity, the Bank of Dalian may choose to exercise its rights under the guarantees from Ms. Zhu and Ms. Wang and the real estate collateral of Ms. Wang. From April 2018 to June 2018, Shanghai Zhongming used time deposits of RMB60 million (approximately $8.7 million), which were funded by Ms. Zhu as the collateral to guarantee loans made by Dalian Bank to Shenzhen Bangrun Commercial Factoring Co., Ltd. (hereinafter referred to as “Shenzhen Bangrun” - see Note 18 under “Amount due from related parties”), a wholly-owned subsidiary of Ms. Zhu Xiaoxia, a major shareholder of the Company. At the same time, Shenzhen Bangrun issued a counter-guarantee letter to Dalian Bank, which agreed that Shenzhen Bangrun irrevocably bears the counter- guarantee obligation for the above-mentioned guarantee of Shanghai Zhongming. On December 20, 2018, the time deposits matured and the RMB60,000,000 plus related interest income of RMB1,404,930 or an aggregate of RMB61,404,430 ($8,930,977) was transferred to Shenzhen Bangrun at Ms Zhu’s request with the permission of the Bank of Dalian. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: As of December 31, 2017 2018 Payables to third-party sellers (i) 2,991,928 358,181 Accrued payroll and welfare 2,839,109 3,189,287 Provision for loyalty program 1,549,962 1,159,551 Payables for professional fees 784,464 793,629 Other tax payable 352,629 378,951 Accrued marketing expenses 329,002 - Uncertain tax positions 258,532 461,503 Payables for rental fee 37,733 223,916 Others 148,901 351,726 9,292,260 6,916,744 (i) In connection with the online platform services, payable to third-party sellers represented the total amounts received from third-party purchasers on behalf of third-party sellers through the Group’s online platform in a period less than one week without any charges. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 13. INCOME TAXES Cayman Under the current laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. Hong Kong Under the Hong Kong tax laws, the Company’s subsidiaries in Hong Kong are subject to Hong Kong profits tax rate at 16.5%. No provision for Hong Kong profits tax was made for each of the three years ended December 31, 2018 on the basis that the Group’s Hong Kong subsidiaries did not have any assessable profits arising in or derived from Hong Kong for those years. PRC The enterprise income tax (‘‘EIT’’) law applies a uniform 25% EIT rate to both foreign invested enterprises and domestic enterprises. The EIT rate for the Group’s entities operating in the PRC is 25%. No taxable income was generated for both domestic and foreign entities of the Group during each of the three years ended December 31, 2018. Credit for income tax consists of the following: For the years ended December 31, 2016 2017 2018 US$ US$ US$ Income tax benefits: Current income tax expenses (200,040 ) (292,436 ) (279,618 ) Deferred income tax benefits 2,433,497 7,149,616 2,378,024 Total 2,233,457 6,857,180 2,098,406 The significant components of the Group’s deferred tax assets and liabilities were as follows: As of December 31, 2017 2018 US$ US$ Deferred tax assets Accruals 2,011,300 1,580,894 Net operating loss carry forwards 8,741,138 10,802,048 Valuation allowance (10,595,656 ) (12,382,942 ) Total deferred tax assets 156,782 - Deferred tax liabilities Acquired intangible assets 2,565,985 - Total deferred tax liabilities 2,565,985 - The Group considers the following factors, among other matters, when determining whether some portion or all of the deferred tax assets will more likely than not be realized: the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward years, the Group’s experience with tax attributes expiring unused and tax planning alternatives. The Group’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry forward years provided for in the tax law. The Group incurred net operating losses carry forwards of $8,744,032, $10,196,547 and $10,802,048 from the Group’s PRC entities for the years ended December 31, 2016, 2017 and 2018, respectively, which would expire on various dates through 2021 to 2023. The Group operates its business through its subsidiaries, its VIE and its subsidiaries. The Group does not file consolidated tax returns, therefore, losses from individual subsidiary, the VIE or the VIE’s subsidiaries may not be used to offset other PRC entities’ earnings within the Group. Valuation allowance is considered on each individual subsidiary, VIE and VIE’s subsidiary basis. As of December 31, 2017 and 2018, valuation allowance was $10,595,656 and $12,382,942, respectively, which was provided against deferred tax assets as it is considered more likely than not that the relevant deferred tax assets will not be realized in the foreseeable future. Reconciliation between the income taxes benefits computed by applying the PRC tax rate to loss before income taxes and the actual credit for income taxes is as follows: For the year ended December 31, 2016 2017 2018 US$ US$ US$ Net loss before provision for income taxes (27,526,602 ) (168,756,159 ) (125,338,191 ) Statutory tax rates in the PRC 25 % 25 % 25 % Income tax at statutory tax rate (6,881,651 ) (42,189,040 ) (31,334,548 ) Expenses not deductible for tax purposes: Goodwill impairment loss - 31,813,203 26,454,588 Long-term investment impairment loss - - 180,785 Entertainment expenses exceeded tax limit 21,533 11,783 11,465 Effect of income tax rate difference in other jurisdiction 633,997 102,670 481,374 Changes in unrecognized tax benefits 200,040 292,436 279,618 Changes in valuation allowance 3,792,624 3,111,768 1,828,312 Income tax benefits (2,233,457 ) (6,857,180 ) (2,098,406 ) The EIT Law includes a provision specifying that legal entities organized outside the PRC will be considered residents for Chinese income tax purposes if their place of effective management or control is within the PRC. If legal entities organized outside the PRC were considered residents for Chinese income tax purpose, they would become subject to the EIT Law on their worldwide income. This would cause any income legal entities organized outside the PRC earned to be subject to the PRC’s 25% EIT. The Implementation Rules to EIT Law provide that non-resident legal entities will be considered as PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc. reside within the PRC. Pursuant to the additional guidance released by the Chinese government on April 22, 2009 and issued bulletin on August 3, 2011 which provide more guidance on the implementation, management does not believe that the legal entities organized outside the PRC should be characterized as PRC tax residents for EIT Law purposes. Unrecognized Tax Benefits Under the EIT Law and its implementation rules which became effective on January 1, 2008, dividends generated after January 1, 2008 and payable by a foreign-invested enterprise in the PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding arrangement. The Cayman Islands, where the Company is incorporated, does not have a tax treaty with the PRC. There were no aggregate undistributed earnings of the Company’s subsidiary, VIE and VIE’s subsidiaries located in the PRC available for dividend distribution. Therefore, no deferred tax liability has been accrued for the Chinese dividend withholding taxes that might be payable upon the distribution of aggregate undistributed earnings as of December 31, 2017 and 2018. The impact of an uncertain tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. As of December 31, 2017 and 2018, the Group recorded an unrecognized tax benefit of $563,455 and $843,073, respectively, of which $304,923 and $381,570, respectively, are presented on a net basis against the deferred tax assets related to tax loss carry forward on the consolidated balance sheets (Note 12). The unrecognized tax benefit is mainly related from under reported income. The amount of unrecognized tax benefits will change in the next 12 months, pending clarification of current tax law or audit by tax authorities, however, an estimate of the range of the possible change cannot be made at this time. A roll-forward of unrecognized tax benefits is as follows: For the years ended December 31, 2017 2018 US$ US$ Balance at beginning of the year 271,019 563,455 Addition based on tax positions related to the current year 292,436 279,618 Balance at end of the year 563,455 843,073 During the years ended December 31, 2016, 2017 and 2018, the Group recorded interest accrued in relation to the unrecognized tax benefit in income tax expense of $nil, $26,785 and $27,517, respectively. Since the incorporation, the relevant tax authorities of the Group’s subsidiary, VIE and VIE’s subsidiaries located in the PRC have not conducted a tax examination. In accordance with relevant PRC tax administration laws, tax years from 2015 to 2018 of the Group’s PRC subsidiary, VIE and VIE’s subsidiaries, remain subject to tax audits as of December 31, 2018, at the tax authority’s discretion. |
ORDINARY SHARES
ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
ORDINARY SHARES | 14. ORDINARY SHARES On April 8, 2015, the Company completed its IPO on NASDAQ by offering 4,000,000 ADSs, representing 72 million ordinary shares at price of $10 per ADS. On April 27, 2015, the Company issued an additional 220,000 ADSs, representing 3.96 million of ordinary shares to the underwriter for exercising the overallotment option at price of $10 per ADS. The total proceeds from issuance of ordinary shares upon IPO are $37,294,600, after deducting the IPO related cost of $3,000,000. Upon the completion of the IPO, all of the Company's then outstanding Series A-1, Series A-2 and Series B preferred shares were automatically converted into 12,202,988, 122,029,877 and 30,507,471 ordinary shares respectively, and immediately after the completion of the IPO, the indebtedness owed to Mr. Maodong Xu ("Mr. Xu"), one of the Company's shareholder, amounting to $69.4 million was converted into 124,835,802 ordinary shares. On June 8, 2015, the Company issued 741,422,780 ordinary shares to JMU's original shareholders for the acquisition of JMU. In addition, the Company initially agreed to issue 72,000,000 ordinary shares of the Company to Mr. Xu at a purchase price of $0.5556 per share, for a total purchase price of $40,000,000. On September 7, 2015, the Company and Mr. Xu reduced the number of shares to be purchased through a supplemental agreement resulting in a final subscription amount of $15,000,000 for 27,000,000 shares. On the same date, the Company issued an additional 27,000,000 ordinary shares to Mr. Xu in relation to his additional subscription. On September 27, 2015, the Company issued and transferred 38,363,112 ordinary shares to its depositary bank representing 2,131,284 ADSs, to be issued to employees and former-employees upon the exercise of their vested share options and the registration of their vested RSUs. As of December 31, 2016, 2017 and 2018, 22,770,288, 37,462,294 and 37,670,266 ordinary shares, respectively, out of these 38,363,112 ordinary shares had been issued to employees and former-employees upon the exercise of share options and the registration of vested RSUs. Therefore, as of December 31, 2016, 2017 and 2018, 15,592,824, 900,818 and 692,846 common shares, respectively, remained for future issuance. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | 15. FAIR VALUE MEASUREMENT Measured at fair value on a recurring basis The Group had no financial assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2017 and 2018. Measured at fair value on a non-recurring basis The Group measures the acquired assets and liabilities at fair value on a nonrecurring basis as result of the business acquisition. The fair value was determined using models with significant unobservable inputs (Level 3 inputs), primarily the management projection of the future cash flow and the discount rate. The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a non-recurring basis as of December 31, 2017 and 2018: Fair value measurement at December 31, 2017 Using Balance as of Quoted Prices in Significant Other Significant Total losses US$ US$ US$ US$ US$ Description Assets: Long-lived assets (i) 12,059,174 12,059,174 19,765,615 Goodwill (ii) 108,940,433 108,940,433 127,252,810 Fair value measurement at June 30, 2018 Using Balance as of June 30, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total losses US$ US$ US$ US$ US$ Description Assets: Long-lived assets (i) 9,409,198 9,409,198 1,236,208 Goodwill (ii) 34,535,651 34,535,651 72,580,644 Fair value measurement at December 31, 2018 Using Balance as of December 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total losses US$ US$ US$ US$ US$ Description Assets: Long-lived assets (i) 406,021 406,021 7,401,006 Goodwill (ii) - - 33,237,707 Long-term investment (iii) - - 723,139 (i) Long-lived assets represent the Group’s property and equipment (Note 7), and acquired intangible assets (Note 8). The Group determined that these long-lived assets were one asset group and subject to be tested for impairment. The Group measures long-lived assets at fair value on a non-recurring basis when the carrying amount of the asset group exceeds its recoverable amount based on future projection which is consistent with its remained useful lives of the primary assets. The fair value was determined using models with significant unobservable input (Level 3 inputs) and the cash flow projections were based on past experience, actual results of operations and management best estimates about future developments as well as certain market assumptions. Impairment loss of $nil, $19,765,615 and $8,637,214 were recognized during the years ended December 31, 2016, 2017 and 2018, respectively, and included in “Impairment loss” in the Consolidated Statements of Operations. (ii) The Group measures goodwill at fair value on a non-recurring basis when it is annually evaluated or whenever events or changes in circumstances indicate that carrying amount of a reporting unit exceeds its fair value. The fair value was determined using models with significant unobservable input (Level 3 inputs) and the cash flow projections were based on past experience, actual results of operations and management best estimates about future developments as well as certain market assumptions. Goodwill impairment loss of $ nil, $127,252,810, and $105,818,351 were recognized for the years ended December 31, 2016, 2017 and 2018, respectively, and included in “Impairment loss” in the Consolidated Statements of Operations. (iii) According to unaudited financial statements of CCLG, CCLG had total shareholders’ equity of $773,327 at December 31, 2018 and had net losses of $381,022 and $1,296,356 for the years ended December 31, 2018 and 2017, respectively. Accordingly, we have recognized an impairment loss of $723,139 at December 31, 2018 and reduced the carrying value of our investment to $nil. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE BASED COMPENSATION | 16. SHARE BASED COMPENSATION 2011 Share Incentive Plan On February 1, 2011, the Board of Directors approved the Company 2011 Share Incentive Plan (‘‘2011 Plan’’). The 2011 Plan provides for the grant of options, restricted shares, and other share-based awards. The Group recognized compensation cost on the share options to employees under 2011 Plan on a straight-line basis over the requisite service period. The options granted during 2012 and 2013 vest ratably over 48 months and the options granted during 2014 vest on the first anniversary of the date of grant. On July 27, 2015, the Board of Directors approved to grant 28,841,700 Restricted Share Units ("RSUs") awards pursuant to the 2011 Plan. Each RSU represents the contingent right of the participant to receive an ordinary share. Each RSU is an agreement to issue ordinary share at the time the award vests with zero exercise price. The issued RSUs will vest 50%, and 50%, respectively, on each anniversary of the grant date. The Group recognizes share-based compensation cost on the RSUs on a straight-line basis over the 2 years from the grant date. On September 1, 2015, the Board of Directors approved that all 3,312,618 unvested options and 28,639,900 RSUs granted under the 2011 Plan became vested and exercisable as of September 1, 2015. Meanwhile, the Board of Directors also approved that all vested and accelerated vested options and RSUs shall be exercised within 2 years from the acceleration date, i.e. September 1, 2017, which was subsequently extended by another 1 year approved by the Company on June 20, 2017. On August 31, 2018, the Company approved to extend the expiration date of these Accelerated Awards by another 1 year to September 1, 2019. On July 1, 2016, under the 2011 Plan, the Board of Directors approved to grant 32,028,700 share options with exercise price of $0.20 per share to its employees and management. 40%, 30% and 30% of the shares subject to the options shall vest on the second, third and fourth anniversary of the vesting commencement date, respectively, provided that the optionee continues to be a service provider to the Group. On July 1, 2016, the Board of Directors also approved to grant 10,430,000 RSUs awards pursuant to the 2011 Plan. Each RSU represents the contingent right of the participant to receive an ordinary share. Each RSU is an agreement to issue ordinary shares at the time the award vests with zero exercise price. The issued RSUs will vest 100% when the following two conditions are both met: a) on and after the first anniversary of the grant date and b) the market price of the Company’s ADS is not less than $7 per ADS. As the second condition was not met, nil RSU was vested as of December 31, 2018. The Group recognizes share-based compensation cost on the RSUs over the 12 months from the grant date. (a) Restricted Shares Award Granted to Employees The following table summarizes the Company’s restricted shares award issued under the 2011 Plan for the year ended December 31, 2018: Outstanding RSUs Number of RSUs Weighted average grant date fair value (US$) Unvested as of January 1, 2018 8,780,000 0.133 Granted - Forfeited (1,400,000 ) 0.133 Unvested as of December 31, 2018 7,380,000 0.133 Expect to vest as of December 31, 2018 7,380,000 0.133 (b) Options Granted to Employees The following table summarizes the Company’s employee share options under 2011 Plan for the year ended December 31, 2018: Options Number of Share options Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual life Aggregate Intrinsic value US$ US$ (Years) US$ Outstanding as of January 1, 2018 52,718,520 0.14 0.20 4.38 793,918 Granted - - - - - Forfeited and expired (8,744,400 ) 0.20 0.09 - - Exercised (207,972 ) 0.01 0.10 - - Outstanding as of December 31, 2018 43,766,148 0.13 0.22 3.20 17,903 Vested and expect to vest as of December 31, 2018 43,766,148 0.13 0.22 3.20 17,903 Exercisable as of December 31, 2018 27,517,848 0.09 0.28 0.67 17,903 Share-based compensation of $1,097,543 and $1,067,786 were charged to operating expenses for the years ended December 31, 2016 and 2017 under 2011 Plan, respectively. Share-based compensation of $56,705 was credited to operating expenses for the year ended December 31, 2018 under the 2011 Plan. 2,028,700 10,430,000 Accordingly, during the year ended December 31, 2018, the credit to operating expenses of $ 56,705 494,542 56,705 437,837 On September 1, 2015, the Board of Directors approved that all 3,312,618 unvested options and 28,639,900 RSUs granted under 2011 Plan became vested and exercisable (“Accelerated Awards”) as of September 1, 2015. This was accounted for as a modification. The share-based compensation of $7,503,976 from this modification was a one-time charge to operating expenses of discontinued operations for the year ended December 31, 2015. As all batches of options and RSUs outstanding as of September 1, 2015 were immediately vested on that date, the actual forfeiture rates were trued up, which resulted a reversal of $327,376 share-based compensation in discontinued operations for the year ended December 31, 2015. On June 20, 2017, the Company approved to extend the expiration date of these Accelerated Awards by another 1 year to September 1, 2018, which was accounted for as a modification. The share-based compensation of $32,491 from this modification was a one-time charge to operating expenses for the year ended December 31, 2017. On August 31, 2018, the Company approved to extend the expiration date of these Accelerated Awards by another 1 year to September 1, 2019. T he aggregated intrinsic value of stock options o utstanding and exercisable as of December 31, 2017 and 2018 was calculated based on the closing price of the Company’s ordinary shares, $1.02 per ADS (equivalent to $0.06 per ordinary share) and $0.7 per ADS ($0.004 per ordinary share) at December 31, 2017 and 2018, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2016, 2017 and 2018 was $618,971, $52,536 and $832, respectively. As of December 31, 2018, the unrecognized share-based compensation related to RSUs issued to employees was $nil; the unrecognized share-based compensation related to share options were $786,251 and expected to be recognized following the straight-line method over the remaining weighted-average period of 1.5 years as of December 31, 2018. The fair value of the options granted/modified was estimated on the date of grant/modification with the assistance of an independent third-party appraiser, and was determined using binomial model with the following assumptions: September 1, July 1, June 20, 2015 2016 2017 Expected volatility (1) 60.3 65.1 % 54.8 % 41.0 % Risk-free interest rate (2) 0.47 0.88 % 1.46 % 1.25 % Expected dividend yield (3) nil nil nil Exercise price (4) $ 0.01 0.20 $ 0.20 $ 0.01 0.20 Fair value of the underlying ordinary shares (5) $ 0.38 $ 0.20 $ 0.12 (1) Volatility The volatility of the underlying ordinary shares during the life of the options was estimated based on average historical volatility of comparable companies for the period before the valuation date with lengths equal to the life of the options. (2) Risk-free rate Risk free rate is estimated based on yield to maturity of PRC international government bonds with maturity term close to the life of the options. (3) Dividend yield The dividend yield was estimated by the Group based on its expected dividend policy over the life of the options. (4) Exercise price The exercise price of the options was determined by the Group’s Board of Directors. (5) Fair value of underlying ordinary shares The estimated fair value of the ordinary shares underlying the options as of the respective valuation dates was determined based on a contemporaneous valuation. When estimating the fair value of the ordinary shares on the valuation dates, management has considered a number of factors, including the result of a third-party appraisal and equity transactions of the Group, while taking into account standard valuation methods and the achievement of certain events. The fair value of the ordinary shares in connection with the option grants on the valuation dates was determined with the assistance of an independent third-party appraiser. After the Company listed on NASDAQ in April 2015, the closing market price of the ordinary shares of the Company as of the grant/modification date was used as the fair value of the ordinary shares on that date. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | 17. NET LOSS PER SHARE The calculation of the net loss per share is as follows: For the years ended December 31, 2016 2017 2018 Numerator: Net loss attributable to the Company (25,293,145 ) (161,898,979 ) (123,239,785 ) Net loss attributable to ordinary shareholders for computing basic net loss per ordinary shares (25,293,145 ) (161,898,979 ) (123,239,785 ) Denominator: Weighted average ordinary shares outstanding used in computing basic net loss per ordinary shares 1,474,087,060 1,476,144,194 1,476,801,177 Weighted average ordinary shares outstanding used in computing diluted net loss per ordinary shares 1,474,087,060 1,476,144,194 1,476,801,177 Net loss per ordinary share Basic (0.02 ) (0.11 ) (0.08 ) Diluted (0.02 ) (0.11 ) (0.08 ) Weighted average shares used in calculating net loss per ordinary share Basic 1,474,087,060 1,476,144,194 1,476,801,177 Diluted 1,474,087,060 1,476,144,194 1,476,801,177 For the years ended December 31, 2016, 2017 and 2018, 35,190,467, 22,195,156 and 24,145,294 ordinary shares resulting from the assumed exercise of share options were excluded as their effect was anti-dilutive for the continuing operations of the Group, respectively. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY BALANCES AND TRANSACTIONS | 18. RELATED PARTY BALANCES AND TRANSACTIONS (CONTINUED) Nature of the relationships with related parties: Name Relationship with the Company Ms. Zhu Shareholder Ms. Wang Shareholder Chung So Si Fong Dessert Limited Controlled by Ms. Zhu and Ms. Wang Cong Shao (Macao) Star Dessert Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Hong Kong Sunward Fishery Restaurant Management Co., Ltd. Controlled by Ms. Zhu Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Nanjing Xinzijin Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Ningbo dongqian lake tourist resort Xiyue leisure tourism Co., Ltd. Controlled by Ms. Zhu Ningbo Jiangbei Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Ningbo Tianyi Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Ningbo Yinzhou Sunward Logistics Co., Ltd. Controlled by Ms. Zhu Shanghai Congshao Dessert Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Shanghai Congshao Restaurant Management Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Shanghai Putuo Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Shanghai Zhonghengkuaijian Brand Management Co., Ltd. Controlled by Ms. Zhu Shanghai Zhongmin Investment Development Group Co., Ltd. Controlled by Ms. Zhu Shanghai Zhongmin Investment Management Co., Ltd Controlled by Ms. Zhu Shanghai Nuopin Company Management Co., Ltd. Controlled by Ms. Zhu Shanghai Shipin Company Management Co., Ltd. Controlled by Ms. Zhu Shanghai Zhongxiao Brand Management Co., Ltd. Controlled by Ms. Zhu Shanghai Zhongyou Information Technology Co., Ltd. Controlled by Ms. Zhu Shenzhen Bangrun Commercial factoring Co., Ltd Controlled by Ms. Zhu Shenzhen Congshao Restaurant Management Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Tianjin Congshao Restaurant Management Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Wuhan Congshao Restaurant Management Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Zhejiang Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Zhejiang Zhonggangjumei Supply Chain Management Co., Ltd. Controlled by Ms. Zhu Shanghai Jiangbo Business Consulting Co., Ltd. Controlled by Ms. Zhu Shanghai MIN Hongshi Trading Co., Ltd. Controlled by Ms. Wang Shanghai MIN Zunshi Trading Co., Ltd. Controlled by Ms. Wang Shanghai Xiao Nan Guo Hai Zhi Yuan Controlled by Ms. Wang Shanghai Xiao Nan Guo Restaurant Co., Ltd. Controlled by Ms. Wang Shenzhen Xiao Nan Guo Restaurant Management Co., Ltd. Controlled by Ms. Wang WM Ming Hotel Co., Ltd. Controlled by Ms. Wang Xiao Nan Guo (Group) Co., Ltd. Controlled by Ms. Wang Xiao Nan Guo Holdings Limited Controlled by Ms. Wang CCLG A company under the significant influence of the Company (a) As of December 31, 2017 and 2018, the following balances were due from/ to the related parties: Current assets As of December 31, Amount due from related parties 2017 2018 US$ US$ Zhejiang Sunward Fishery Restaurant Co., Ltd. 1,589,780 - (i) Shanghai Congshao Dessert Co., Ltd. 373,704 812,352 (i) Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co., Ltd. Legal Proceedings 261,399 - (i) Shanghai Congshao Restaurant Management Co., Ltd. 154,276 85,235 (i) Shanghai Zhonghengkuaijian Brand Management Co., Ltd. 136,392 195,739 (i) Shenzhen Bangrun Commercial factoring Co., Ltd. 117,615 - (i) Shanghai Zhongxiao Brand Management Co., Ltd. 113,018 162,356 (i) Nanjing Xinzijin Sunward Fishery Restaurant Co., Ltd. 110,753 - (i) Zhejiang Zhonggangjumei Supply Chain Management Co., Ltd. 59,610 - (i) Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. 32,823 6,331 (i) Shanghai Zhongyou Information Technology Co., Ltd. 32,309 48,244 (i) Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. 32,266 35,410 (i) Shanghai Putuo Sunward Fishery Restaurant Co., Ltd. 24,974 9,722 (i) CCLG 17,467 30,573 (i) Tianjin Congshao Restaurant Management Co., Ltd. 3,036 - (i) Ningbo Tianyi Sunward Fishery Restaurant Co., Ltd. 1,648 - (i) Shenzhen Congshao Restaurant Management Co., Ltd. 1,517 1,636 (i) Wuhan Congshao Restaurant Management Co., Ltd. 210 1,658 (i) Shanghai Zhongmin Investment Development Group Co., Ltd. - 909,025 (ii) Ningbo Yinzhou Sunward Logistics Co., Ltd. - 80,213 (i) Shanghai Nuopin Company Management Co., Ltd. - 123 Shanghai Shipin Company Management Co., Ltd. - 92 Total 3,062,797 2,378,709 (i) The amounts represent the receivables due from related parties relating to the online direct sales and online platform services. (ii) The amount represents the payable due from related parties relating to the daily operations. Current liabilities As of December 31, Amount due to related parties 2017 2018 US$ US$ Ms. Zhu 385,123 844,384 (iv) Ms. Wang - 395,832 (iv) WM Ming Hotel Co., Ltd. 89,938 945,082 (iii) Chung So Si Fong Dessert Limited 84,054 493,973 (iii) Ningbo dongqian lake tourist resort Xiyue leisure tourism Co., Ltd. 38,424 - (iii) Shanghai MIN Zunshi Trading Co., Ltd. 3,483 3,647 (iii) Ningbo Yinzhou Sunward Logistics Co., Ltd. 1,649 - (iii) Cong Shao (Macao) Star Dessert Co., Ltd 1,212 - (iii) Shanghai MIN Hongshi Trading Co., Ltd. - 1,514,246 (iv) Xiao Nan Guo (Group) Co., Ltd. - - (iv) Shanghai Xiao Nan Guo Restaurant Co., Ltd. - 436,332 (iv) Shanghai Zhongmin Investment Management Co., Ltd - 407,243 (iv) Hong Kong Sunward Fishery Restaurant Management Co., Ltd. - 88,768 (iii) Zhejiang Sunward Fishery Restaurant Co., Ltd. - 5,084 (iii) Tianjin Congshao Restaurant Management Co., Ltd. - 118 (iii) Total 603,883 5,134,709 (iii) The amounts represent the payables due to related parties relating to online direct sales and online platform services. (iv) The amount represents the payable due to related parties relating to the daily operations. Non-current liabilities As of December 31, Amount due to related parties 2017 2018 US$ US$ Ms. Zhu 5,685,971 5,704,257 (v) Shanghai Jiangbo Business Consulting Co., Ltd. - 1,188,059 (vi) Total 5,685,971 6,892,316 (v) The amount represents the balance due to related parties relating to the loan borrowed from Ms. Zhu and maturity date on December 31, 2020. For the year ended December 31, 2018, interest expense incurred on loan from Ms. Zhu was $ 374,273 (vi) The amount represents the balance due to related parties relating to the loan borrowed from Shanghai Jiangbo Business Consulting Co., Ltd., and maturity date on December 31, 2020. (b) Details of related party transactions occurred during the years ended December 31, 2016, 2017 and 2018 were as follows: Revenue from For the years ended December 31, 2016 2017 2018 US$ US$ US$ Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co., Ltd. 2,296,225 8,571,389 2,677,619 (vii) Xiao Nan Guo Holdings Limited 6,056,439 6,108,606 5,344,005 (vii) Chung So Si Fong Dessert Limited 388,618 1,391,080 1,687,608 (vii) Hong Kong Sunward Fishery Restaurant Management Co., Ltd. 460,132 471,129 324,373 (vii) Shanghai Congshao Dessert Co., Ltd. 172,521 357,017 - (vii) Shanghai Congshao Restaurant Management Co., Ltd. 160,701 189,617 276,085 (vii) Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. 26,149 118,413 169,032 (vii) Nanjing Xinzijin Sunward Fishery Restaurant Co., Ltd. 82,155 60,536 - (vii) Cong Shao (Macao) Star Dessert Co., Ltd. - 58,159 5,508 (vii) Zhejiang Zhonggangjumei Supply Chain Management Co., Ltd. 296,727 51,484 - (vii) Shanghai Putuo Sunward Fishery Restaurant Co., Ltd. 21,631 45,468 20,449 (vii) Tianjin Congshao Restaurant Management Co., Ltd. 676 28,345 - (vii) Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. 15,692 15,063 - (vii) WM Ming Hotel 37,631 11,737 232,757 (vii) Shenzhen Congshao Restaurant Management Co., Ltd. 865 5,135 - (vii) Ningbo Jiangbei Sunward Fishery Restaurant Co., Ltd. - 1,428 - (vii) Wuhan Congshao Restaurant Management Co., Ltd. - 620 - (vii) Shenzhen Xiao Nan Guo Restaurant Management Co., Ltd. 5,392 - - (vii) Ningbo Yinzhou Sunward Logistics Co., Ltd. 56,722 - 47,119 (vii) Zhejiang Sunward Fishery Restaurant Co., Ltd. - - 78,422 (vii) CCLG - - 7,878 (vii) Shanghai Zhongyou Information Technology Co., Ltd. - - 1,664 (vii) Shanghai Zhongxiao Brand Management Co., Ltd. - - 442 (vii) Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. - - 99 (vii) Total 10,078,276 17,485,226 10,873,060 (vii) The amounts represent the revenue generated from the Group’s online direct sales. Rental expense to For the years ended December 31, 2016 2017 2018 US$ US$ US$ Xiao Nan Guo (Group) Co., Ltd. 218,212 - 399,380 (viii) Total 218,212 - 399,380 (viii) The amount represents the rental expense paid for the Group’s office. Services fee charged by For the years ended December 31, 2016 2017 2018 US$ US$ US$ CCLG 169,741 164,215 295,314 (ix) Total 169,741 164,215 295,314 (ix) The amount represents the logistics fee charged by the related party for the Group’s online direct sales. Loan borrowed from For the years ended December 31, 2016 2017 2018 US$ US$ US$ Ms. Zhu - 5,685,971 498,064 (x) Shanghai Jiangbo Business Consulting Co., Ltd. - - 1,188,059 (xi) Xiao Nan Guo (Group) Co., Ltd. 6,024,096 - - (xii) Total 6,024,096 5,685,971 1,686,123 (x) The (xi) The (xii) The amount represents the interest-free loan borrowed by the Group from related party, which has been repaid by the Group in 2016. (c) In July 2017, the VIE, entered into a banking facility agreement with Bank of Dalian Shanghai Branch, pursuant to which the VIE is entitled to borrow RMB denominated loan of RMB50 million ($7.6 million). On August 6, 2018, the Group extended the loan to August 5, 2019. The Company’s shareholders, Ms. Zhu and Ms. Wang provided guarantees for the VIE’s facility and Ms. Wang also provided her own property as collateral. (Note 11) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 19. COMMITMENTS AND CONTINGENCIES Capital Commitments The Group’s capital commitments primarily relate to commitments in connection with the investment in CCLG. Total capital commitments contracted but not yet reflected in the financial statements amounted to $2.3 million and $2.2 million as of December 31, 2017 and 2018, respectively. Operating lease commitments The Group leases certain office premises under non-cancellable leases. The lease for the Company’s former headquarters located in Shanghai was terminated by the Company on December 21, 2018. The lease which commenced in July 2015 and was due to expire in July 2030, provided for increases in the basic monthly rent ranging from RMB1.90 per square meter per day in 2015 to RMB3.10 per square meter per day in 2025. As of the December 21, 2018 lease termination date, there was approximately RMB31,000,000 (approximately $4,500,000) of remaining lease payments due under the lease. If the Company terminates the lease without the permission of the lessor, the original lease as amended provides for the Company’s payment of the breach of contract liability for the purpose of mitigating the lessor’s loss on early termination by the Company. While the Company counsel believes that the Company is in default of the breach of contract provision under the lease, it is Counsel’s opinion that the Company’s responsibility is limited to the extent of the Company’s security deposit of RMB795,763 ($115,739) and courts would provide relief from any amounts in excess of that. To the date of issuance of these financial statements, the Company as lessee has not had contact with the lessor and has determined that the space terminated by it has been re-leased to a new tenant by the lessor. Accordingly, the Company wrote off this deposit as of December 21, 2018 and recognised an expense of the same amount during the year ended December 31, 2018. The two leases for the Company’s new headquarters located in Shanghai commenced on November 1, 2018 and expire on April 30, 2019 and December 31, 2020. The lease expiring April 2019 provided for monthly rent of RMB 70,000 10,300 30,000 4,400 Rental expense/(credit) under operating leases for the years ended December 31, 2016, 2017 and 2018 were $2,243,907, $1,223,390 and ($ 769,824 1,312,284 The future aggregate minimum lease payments under non-cancelable operating lease agreements (represented by the two leases for the new Shanghai headquarters) were as follows: Years ending December 31, US$ 2019 93,084 2020 52,360 Total 145,444 Rent expense for the year ended December 31, 2018 includes $24,936 related to the two leases for the new Shanghai headquarters. |
MAINLAND CHINA CONTRIBUTION PLA
MAINLAND CHINA CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
MAINLAND CHINA CONTRIBUTION PLAN | 20. MAINLAND CHINA CONTRIBUTION PLAN Full time PRC employees of the Group are eligible to participate in a government-mandated multi- employer defined contribution plan under which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to these employees. The PRC labor regulations require the Group to accrue for these benefits based on a percentage of each employee’s income. Total provisions for employee benefits were $1,297,485, $1,656,561 and $1,053,575 for the years ended December 31, 2016, 2017 and 2018, respectively, reported as a component of operating expenses when incurred. |
STATUTORY RESERVES AND RESTRICT
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Restrictions for Consolidated and Unconsolidated Subsidiaries [Abstract] | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 21. STATUTORY RESERVES AND RESTRICTED NET ASSETS In accordance with the Regulations on Enterprises with Foreign Investment of China and their articles of association, the Group’s subsidiaries, VIE and VIE’s subsidiaries located in the PRC, being foreign invested enterprises established in the PRC, are required to provide for certain statutory reserves. These statutory reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund or discretionary reserve fund, and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires a minimum annual appropriation of 10% of after-tax profit (as determined under accounting principles generally accepted in China at each year-end); the other fund appropriations are at the subsidiaries’ or the affiliated PRC entities’ discretion. These statutory reserve funds can only be used for specific purposes of enterprise expansion, staff bonus and welfare, and are not distributable as cash dividends except in the event of liquidation of our subsidiaries, our affiliated PRC entities and their respective subsidiaries. The Group’s subsidiary, VIE and VIE’s subsidiaries are required to allocate at least 10% of their after-tax profits to the general reserve until such reserve has reached 50% of their respective registered capital. As of December 31, 2017 and 2018, none of the Group’s PRC subsidiary, VIE and VIE’s subsidiaries has a general reserve that reached 50% of their registered capital threshold and therefore they will continue to allocate at least 10% of their after tax profits to the general reserve fund. Appropriations to the enterprise expansion reserve and the staff welfare and bonus reserve are to be made at the discretion of the Board of Directors of each of the Group’s subsidiaries. The appropriation to these reserves by the Group’s PRC subsidiary, VIE and VIE’s subsidiaries were all $nil for the years ended December 31, 2016, 2017 and 2018. As a result of these PRC laws and regulations and the requirement that distributions by the PRC entities can only be paid out of distributable profits computed in accordance with the PRC GAAP, the PRC entities are restricted from transferring a portion of their net assets to the Group. Amounts restricted include paid-in capital and the statutory reserves of the Group’s PRC subsidiary, VIE and VIE’s subsidiaries. The aggregate amounts of capital and statutory reserves restricted which represented the amount of net assets of the relevant subsidiary, VIE and VIE’s subsidiaries in the Group not available for distribution were $28,213,892 and $28,213,892 as of December 31, 2017 and 2018, respectively, including $1,614,140 and $1,614,140 of net restricted assets recorded under VIE and VIE’s subsidiaries in the Group. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 22. SUBSEQUENT EVENTS Legal Proceedings On January 11, 2019, Shanghai MIN Hongshi Trading Co., Ltd., or Shanghai Hongshi, filed a claim with the Shanghai Yangpu People’s Court, or the Shanghai Yangpu Court, against Zhongmin, alleging that Zhongmin had failed to repay a loan of RMB10 million ($1,454,440 at December 31, 2018) due to Shanghai Hongshi. On January 14, 2019, the Shanghai Yangpu Court issued a civil ruling paper of property preservation, which ordered the freezing of RMB 10 On February 1, 2019, WM Ming Hotel Co., Ltd., or WM Ming, filed a claim with the Shanghai Yangpu Court against Zhongmin, alleging that Zhongmin failed to repay a loan of RMB 6 million ($872,664 at December 31, 2018) due to WM Ming. At December 31, 2018, current liabilities include an amount due to WM Ming representing loans from that entity of $945,082 within “Amount Due to Related Parties” (see Note 18). The legal representative of Shanghai Hongshi and WM Ming is Ms. Huimin Wang, who is also our director. Although we are attempting to negotiate with the relevant parties, uncertainties exist as to whether we are obligated to pay the two loans mentioned in the preceding two paragraphs. Should the Company lose in litigation and be required to repay the amounts owed to the Ms. Wang controlled entities aggregating RMB16,000,000 ($2,327,104) and should Ms. Zhu or the new controlling shareholder of the Company be unwilling or unable to fund this liability, it is highly unlikely that the Company will be able to collect the $676,476 that is owed the Company from revenue from the sale of products to Shanghai Xiao Nan Guo Hai Zhi Yuan Restraurant Management Co., Ltd., another entity controlled by Ms. Wang, included in Amounts Due From Related Parties at December 31, 2018. Accordingly, as of December 31, 2018 and for the year ended December 31, 2018, the Company has provided an allowance for doubtful account of $676,415 to reserve for this loss. Acquisition of Unicorn Investment Limited On May 21, 2019, JMU acquired Unicorn Investment Limited (“Unicorn”) in exchange for 632,660,858 newly issued ordinary shares of JMU. Unicorn is a developer of asset transaction platform products based on blockchain technologies. The former shareholder of Unicorn and the seller in the acquisition, Mr. Haohan Xu, is a principal shareholder of the Company. Mr. Xu held 25.7% of all the issued and outstanding shares of the Company immediately prior to the closing of the acquisition, and holds approximately 48.0% of all the issued and outstanding shares of the Company immediately after the closing of the acquisition. According to unaudited financial statements of Unicorn provided the Company pursuant to the Share Purchase Agreement dated May 21, 2019, the unaudited assets of Unicorn, which are subject to change based upon a completion of an audit, were approximately $1,309,000 at March 31, 2019, consisting principally of crypto-currency coins, and the unaudited stockholders’ equity was approximately $1,056,000. In addition, prior to the date of the acquisition, Unicorn had unaudited revenues of approximately $960,000 for the year ended December 31, 2018 and approximately $90,000 for the three months ended March 31, 2019 and had unaudited net income (loss) of approximately $641,000 for the year ended December 31, 2018 and approximately ($103,000) for the three months ended March 31, 2019. The Share Purchase Agreement provides for a right of rescission for a period of up to one year by either party under certain conditions. In connection with our acquisition of Unicorn, we entered into a registration rights agreement with Mr. Xu. Upon receipt of a written request from the holders of 10% of the registrable securities then outstanding requesting us effect a registration under the Securities Act covering all or part of the shares held by them, we shall, as soon as it is practicable, but in no event later than ninety days after receipt of such written request, file with the SEC, and use our reasonable best effort to cause to be declared effective, a registration statement, or a shelf registration statement. However, we shall not be obligated to effect any such registration if the aggregate price (net of any underwriters’ discounts or commissions) of the sale of shares relating to such registration is less than $5,000,000. If, at any time, we file a registration statement with the SEC, holders of registration rights under this agreement will be entitled, subject to certain exceptions, to exercise “piggyback” registration rights requiring us to include in any such registration that number of shares held by them, subject to certain prescribed limitation provided in the registration rights agreement. We may, on a limited number of occasions, and in certain prescribed circumstances, delay the filing or effectiveness of any registration statement required to be filed pursuant to the registration rights agreement. Financial Support from Company Chief Executive Officer From January 1, 2019 to April 30, 2019, the Company received loans from its chief executive officer Ms. Zhu and entities controlled by Ms. Zhu totaling RMB7,290,000 (approximately $1,060,000). |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the U.S. generally accepted accounting principles (‘‘US GAAP’’). |
Principle of consolidation | Principle of consolidation The consolidated financial statements of the Group include the financial statements of the Company, its consolidated subsidiaries, VIE and VIE’s subsidiaries for which the Company is the primary beneficiary. All significant inter-company transactions and balances have been eliminated upon consolidation. |
Business combinations | Business combinations Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed, and any noncontrolling interest of the acquiree at the acquisition date, if any, are measured at their fair values as of that date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interests of the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Consideration transferred in a business acquisition is measured at the fair value as at the date of acquisition. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, provision for other receivables, estimating useful lives and impairment for property and equipment and acquired intangible assets, impairment of goodwill, valuation allowance for deferred tax assets and share-based compensation. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. |
Foreign currency | Foreign currency The functional and reporting currency of the Company is the United States dollar (“U.S. dollars”, “US$” or“$”). The functional currency of the Company's subsidiary, New Admiral, is U.S. dollars. The functional currency of the Company’s HK subsidiaries, JMU Investment and JMU Supply Chain, is Hong Kong dollars (“HK dollars”). The financial records of the Group’s subsidiaries, VIE and VIE’s subsidiaries located in the PRC are maintained in their local currencies, the Renminbi (“RMB”), respectively, which are also the functional currencies of these entities. Transactions denominated in currencies other than the respective entities’ functional currencies are re-measured into the functional currencies, in accordance with Accounting Standards Codification (“ASC”) 830 (“ASC 830”) Foreign Currency Matters , at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re-measured into the functional currencies at the exchange rates prevailing at the balance sheet date. All foreign exchange gains or losses are included in the consolidated statements of operations. Assets and liabilities are translated to the reporting currency at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of consolidated statements of comprehensive loss. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consists of cash on hand and demand deposits placed with banks or other financial institutions which are unrestricted as to withdrawal and use and have original maturities less than three months. |
Accounts receivable, net of allowance | Accounts receivable, net of allowance Accounts receivable represents those receivables derived in the ordinary course of business, carried at net realizable value. The Group maintains an allowance for doubtful accounts for estimated losses on uncollected accounts receivable. Management considers the following factors when determining the collectability of specific accounts: creditworthiness of customers, aging of the receivables, past transaction history with customers and their current condition, changes in customer payment terms, specific facts and circumstances, and the overall economic climate in the industries the Group serves. The provision for doubtful accounts receivable for the years ended December 31, 2016, 2017 and 2018 was $nil, $nil and $293,814, respectively. |
Inventories | Inventories Inventory is stated at the lower of cost or market. Cost of inventory is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventory to the estimated market value for slow-moving merchandise and damaged goods. The amount of written-down depends upon factors such as whether the goods are returnable to vendors, historical and forecasted consumer demand, market condition and the promotional environment. Written-down amounts are recorded in cost of goods sold in the consolidated statements of operations. No inventory provision was recognized for each of the three years ended December 31, 2018. |
Property and equipment | Property and equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Computer equipment 3 years Office equipment 5 years Vehicles 4 years Leasehold improvement Over the shorter of lease term or the estimated useful lives of the assets Repair and maintenance costs are charged to expense when incurred, whereas the cost of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirement, sale and disposals of assets are recorded by removing the cost and related accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of operations. |
Acquired intangible assets | Acquired intangible assets Acquired intangible assets with finite lives are carried at cost less accumulated amortization and impairment. Amortization of finite lived intangible assets is calculated on a straight-line basis over the shorter of the contractual terms or the expected useful lives of the acquired assets. The amortization period by major intangible asset classes is as follows: Trade name/domain name 10 years Non-compete agreement 4.5 years Online platform 5 years Customer relationship 5-10 years |
Impairment of long-lived assets other than goodwill | Impairment of long-lived assets other than goodwill The Group evaluates the recoverability of its long-lived assets, including intangible assets with finite lives, whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the excess of carrying amount over the fair value of the assets. An impairment loss of $nil, $19,765,615 and $8,637,214 were recognized for the years ended December 31, 2016, 2017 and 2018, respectively. |
Impairment of goodwill | Impairment of goodwill The Group annually, or more frequently if the Group believes indicators of impairment exist, reviews the carrying value of goodwill to determine whether impairment may exist. Specifically, goodwill impairment is determined using a two-step process. The first step compares the fair value of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit’s goodwill to the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being a discounted cash flow. The Group has determined to perform the annual impairment tests on December 31 of each year. The goodwill as of December 31, 2016, 2017 and 2018 was attributable solely to the JMU business on which an impairment loss of $nil, $127,252,810 and $105,818,351 were recognized for the years ended December 31, 2016, 2017 and 2018, respectively. |
Investments | Investment Cost Method Investment In accordance with ASC subtopic 325-20 (“ASC 325-20”), Investments-Other: Cost Method Investments , for investments in an investee over which the Group does not have significant influence and which do not have readily determinable fair value, the Group carries the investment at cost and only adjusts for other-than-temporary declines in fair value and distributions of earnings that exceed the Group’s share of earnings since its investment. The Group regularly evaluates the impairment of the investment based on performance and financial position of the investee as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee’s cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. An impairment loss recognized in earnings is equal to the excess of the investment’s cost over its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value would then become the new cost basis of investment. Cost method accounting is also applied to investment that are not considered as “in-substance” common stock investment, and do not have readily determinable fair value. No impairment was recognized for each of the two years ended December 31, 2017. For the year ended December 31, 2018, we recognized an impairment charge of $723,139. |
Revenue recognition | Revenue recognition The Group recognizes revenue from the sales of rice, flavoring, oil, seafood, wine and other types of generic food and beverage products through its online platform www.ccjoin.com vendors and customers. The Group recognizes revenue when the following four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured. The Group recognizes revenue when the customers confirm the acceptance of the goods once they receive the delivered goods. The sales returns are considered and estimated when the related revenue was recognized. Revenue is recorded net of surcharges and value-added tax ("VAT") and related surcharges. The Group primarily generates revenue from online direct sales and online platform services. Online direct sales The Group primarily sells rice, flavoring, oil, seafood, wine and other products relating to catering and hotel industries through online direct sales. There is a separate channel on the Group’s online platform designated for the Group’s online direct sales and the Group records revenue from online direct sales on a gross basis as the Group acts as the principal in these arrangements: it is the primary obligor in the sales arrangements, has latitude in establishing prices and has discretion in suppliers' selection. On certain transactions, the Group also retains some of general inventory risk and physical inventory loss risk. Online platform services The Group also provides the online platform services to connect third-party sellers and purchasers for their transactions via its online marketplace. Online platform sales are made from the online stores under the third-party sellers’ names, and the Group records the related revenue on a net basis as the Group acts as the agent in these arrangements: it is not the primary obligor, does not bear inventory risk, and does not have the ability to establish the price or discretion in supplier selection. For the years ended December 31, 2016, 2017 and 2018, revenues related to the online platform services were nominal, as the Group normally does not charge any service fees to the third-party sellers and purchasers. |
Value-added tax | Value-added tax VAT is calculated at 0% on the revenue from primary agricultural products, 11% or 10% on the revenue from other agricultural products and 17% or 16% on the revenue from sales of other products. The Group reports revenue net of VAT. WFOE, VIE and VIE's subsidiaries are VAT general tax payers, which are allowed to offset qualified VAT paid against their output VAT liabilities. |
Cost of revenue | Cost of revenue Cost of revenues primarily consists of purchased cost of the products sold related to online direct sales and payroll of the operating personnel. |
Advertising and promotional expenses | Advertising and promotional expenses Advertising and promotional expenses, including advertisements through various form of media and kinds of marketing and promotional activities, are included in “Selling and marketing expense” in the consolidated statements of operations and are expensed when incurred. Advertising and marketing expenses for the years ended December 31, 2016, 2017 and 2018 are $498,045, $101,232 and $137,464, respectively. |
Operating leases | Operating leases Leases where substantially all the rewards and risks of the ownership of the assets remain with the leasing companies are accounted for as operating leases. Payments made for the operating leases are charged to the consolidated statements of operations on a straight-line basis over the lease term and have been included in the operating expenses in the consolidated statements of operations. In 2016, the Group entered into a 15-year lease arrangement for its new $1,086,342, $1,386,749 and $nil, respectively. |
Income taxes | Income taxes The Group follows the liability method in accounting for income taxes in accordance to ASC topic 740 (“ASC 740”), Income Taxes . Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The Group applies the provision of ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. The Group has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the consolidated statements of operations. |
Loyalty program | Loyalty program In 2016, the Group launched a customer loyalty program to certain qualified customers, who can earn customer credits from purchases if their annual spending with the Group exceeds RMB10 million. In 2017, the Group announced its revised customer loyalty program to certain qualified customers for granting customer credits only if their annual spending with the Group exceeds RMB100 million. The customers can redeem the earned credits for gift merchandise. In 2018, the Company abrogated customer loyalty program. During 2016, the Group negotiated settlement of earned loyalty credits with 13 of its customers in ordinary shares of the Company. As part of the settlement, the Group agreed to issue 4.42 million of its ordinary shares, and recognized $1,377,503 in paid-in capital and selling expenses based on the grant date fair value of the ordinary shares. The Group is not legally obligated or expected to continue the redemption of the credits for the ordinary shares in the future. |
Share-based payments | Share-based payments Share-based payment awards with employees are measured based on the grant date fair value of the equity instrument issued, and recognized as compensation costs using the straight-line method over the requisite service period, which is generally the vesting period of the options, with a corresponding impact reflected in additional paid-in capital. For share-based payment awards with market conditions, such market conditions are included in the determination of the estimated grant-date fair value. In the second quarter of 2017, the Company elected to early adopt ASU No. 2016-09, Compensation Stock Compensation (Topic 718): Improvement to Employee Share based Payment Accounting , to account for forfeitures as they occur. The cumulative-effect adjustment to accumulated deficits was $nil as a result of the adoption of ASU 2016-09. A change in any of the terms or conditions of share-based payment awards is accounted for as a modification of awards. The Group measures the incremental compensation cost of a modification as the excess of the fair value of the modified awards over the fair value of the original awards immediately before its terms are modified, based on the share price and other pertinent factors at the modification date. For vested awards, the Group recognizes incremental compensation cost in the period the modification occurred. For unvested awards, the Group recognizes, over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. |
Net loss per share | Net loss per share Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted loss per ordinary share reflects the potential dilution that could occur if securities were exercised or converted into ordinary shares. The Group had stock options and restricted share units, which could potentially dilute basic loss per share in the future. To calculate the number of shares for diluted loss per ordinary share, the effect of the stock options and restricted share units is computed using the treasury stock method. Potential ordinary shares in the diluted net loss per share computation are excluded in periods of losses from operations, as their effect would be anti-dilutive. |
Comprehensive loss | Comprehensive loss Comprehensive loss is defined as the decrease in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive loss is reported in the consolidated statements of comprehensive loss, including net loss and foreign currency translation adjustments, presented net of tax. |
Segment reporting | Segment reporting The Group follows ASC 280, Segment Reporting . The Company’s Chief Executive Officer or chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Group as a whole and hence, the Group has only one reportable segment. The Group operates and manages its business as a single segment through the provision of integrated services to suppliers and consumers in the catering and hotel industries. As the Group’s long-lived assets are substantially all located in the PRC and substantially all the Group’s revenues are derived from within the PRC, no geographical segments are presented. |
Fair value | Fair value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1- inputs are based upon quoted prices for instruments traded in active markets. Level 2- inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based calculation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3- inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, cash flow models, and similar techniques. |
Fair value of financial instruments | Fair value of financial instruments Financial instruments include cash and cash equivalents, short-term bank borrowings, amounts due from/to related parties, accounts receivable, accounts payable and investment. The carrying values of cash, short-term bank borrowings, amounts due from/to related parties, accounts receivable and accounts payable approximate their fair values reported in the consolidated balance sheets due to the short-term maturities. The Group determined that it is not practicable to estimate the fair value of its cost method investment as of December 31, 2018 and measures the cost method investment at fair value on a nonrecurring basis only if an impairment charge were to be recognized. Financial assets and liabilities measured at fair value on a non-recurring basis include acquired assets and liabilities and goodwill based on Level 3 inputs in connection with business acquisition. |
Recently accounting pronouncements | Recent accounting pronouncements As a company with less than US$1 billion in gross revenue for the last fiscal year, we qualify as an “emerging growth company” (“EGC”) pursuant to the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include a provision that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We will take advantage of the extended transition period. In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition. The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer. The new disclosure requirements will provide information about the nature, amount, timing and uncertainty of revenue and cash flows from revenue contracts with customers. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, for public business entities. The new revenue standards may be applied retrospectively to each prior period presented (full retrospective method) or retrospectively with the cumulative effect recognized as of the date of initial application (the modified retrospective method). The Group as an EGC has elected to adopt the new revenue standard as of the effective date applicable to nonissuers and will implement the new revenue standard on January 1, 2019 using the modified retrospective method. The Group has substantially completed its assessment and currently does not expect the adoption of this guidance will have significant effects on the Group’s revenue recognition practices, financial positions, results of operations or cash flows. The new standard will require the Group to provide more robust disclosures than required by previous guidance, including disclosures related to disaggregation of revenue into appropriate categories, performance obligations, and the judgments made in revenue recognition determinations. In January 2016, the FASB issued ASU No. 2016-01, to improve the recognition and measurement of financial instruments. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income and separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The guidance also eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for organizations that are not public business entities and the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, for public business entities. The Group as an EGC has elected to adopt this standard as of the effective date applicable to nonissuers and will implement the new standard on January 1, 2019 using the modified retrospective method. This accounting standards update does not have a material impact on the Group’s consolidated financial statements. In February 2016, the FASB issued ASU2016-02, Leases (Topic 842) , to increase transparency and comparability among organizations by recognizing a right-of-use asset and a lease liability for all leases with terms longer than 12 months. Leases will be classified as either operating or financing. The definition of a lease has been revised in regards to when an arrangement conveys the right to control the use of the identified asset under the arrangement which may result in changes to the classification of an arrangement as a lease. The ASU expands the disclosure requirements of lease arrangements. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, for public business entities. The Group as an EGC has elected to adopt the new lease standard as of the effective date applicable to nonissuers and will implement the new lease standard on January 1, 2020 using the modified retrospective method. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. In addition, the Group will elect the transition practical referred to as the “package of three”, that must be taken together and allows entities to (1) not reassess whether existing contracts contain leases, (2) carryforward the existing lease classification, and (3) not reassess initial direct costs associated with existing leases. The Group is in the process of evaluating the impact on its consolidated financial statements, as well as the impact of adoption on policies, practices, systems and financial statement disclosures. As of December 31, 2018, the Group has US$145,444 of future minimum operating lease commitments that are not currently recognized on its consolidated balance sheets (see note 19). In June 2016, the FASB issued ASU 2016-13, Credit Losses, Measurement of Credit Losses on Financial Instruments . This ASU provides more useful information about expected credit losses to financial statement users and changes how entities will measure credit losses on financial instruments and timing of when such losses should be recognized. This ASU is effective for annual and interim periods beginning after December 15, 2019 for the public business entities. Early adoption is permitted for all entities for annual periods beginning after December 15, 2018, and interim periods therein. The Group as an EGC has elected to adopt the new ASU as of the effective date applicable to nonissuers and will implement the new ASU on January 1, 2020 using the modified retrospective method. The updates should be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) , which amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows. This ASU requires that 1) debt extinguishment costs be classified as cash outflows for financing activities and provides additional classification guidance for the statement of cash flows, 2) the classification of cash receipts and payments that have aspects of more than one class of cash flows to be applied under generally accepted accounting principles, and 3) each separately identifiable source or use within the cash receipts and payments be classified based on their nature in financing, investing or operating activities. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017 and is applied retrospectively. Early adoption is permitted including adoption in an interim period. The Group adopted this ASU on its effective date of January 1, 2018 and did not have any material impact on its consolidated financial statements upon adoption. August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) : Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which changes certain disclosure requirements, including those related to Level 3 fair value measurements. The standard will be effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities : The amendments in this ASU are effective for public business entities with fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The amendments are also effective for private entities with fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021.All entities are required to apply the amendments in this ASU retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. Early adoption is permitted. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of the Group's subsidiaries, VIEs and VIEs' subsidiaries | As of December 31, 2018, the Company’s major subsidiaries, VIE and VIE’s subsidiaries (collectively, the “Group”) are as follows: Date of acquisition/ incorporation Place of establishment/ incorporation Percentage of legal ownership Subsidiaries: New Admiral April 27, 2015 Cayman Islands 100 % Join Me Group (HK) Investment Company Limited (“JMU Investment”) June 8, 2015 Hong Kong 100 % Join Me Group Supply Chain Management Company Limited (“JMU Supply Chain”) October 15, 2015 Hong Kong 100 % Shanghai Zhongming Supply Chain Management Co., Ltd. (“Shanghai Zhongming” or “WFOE” ) June 8, 2015 PRC 100 % VIE: Shanghai Zhongmin Supply Chain Management Co., Ltd. (“Shanghai Zhongmin” or “VIE”) June 8, 2015 PRC N/A |
Schedule of the financial statement balances and amounts of the VIEs and VIEs' subsidiaries | The following financial statement balances and amounts of the VIE and VIE’s subsidiaries were included in the accompanying consolidated financial statements as follows after the elimination of intercompany balances and transactions among VIE and VIE’s subsidiaries within the Group: As of December 31, 2017 2018 US$ US$ Cash and cash equivalents 4,802,420 245,866 Accounts receivable, net 3,295,818 176,120 Inventories 538,660 585,760 Prepaid expenses and other current assets, net 1,881,988 1,007,406 Amounts due from related parties 3,062,797 4,038,884 Total current assets 13,581,683 6,054,036 Property and equipment, net 1,715,795 344,150 Investment 768,486 - Other non-current assets 161,723 - Total non-current assets 2,646,004 344,150 TOTAL ASSETS 16,227,687 6,398,186 Short-term bank borrowings 7,684,859 7,272,198 Accounts and notes payable 3,980,560 540,899 Accrued expenses and other current liabilities 8,345,461 5,336,699 Advance from customers 1,243,739 422,702 Amounts due to related parties 87,385 3,311,752 Total current liabilities 21,342,004 16,884,250 Other non-current liabilities 1,386,749 - Amounts due to related parties 5,685,971 6,892,316 Total non-current liabilities 7,072,720 6,892,316 TOTAL LIABILITIES 28,414,724 23,776,566 For the years ended December 31, 2016 2017 2018 US$ US$ US$ Revenues 66,288,019 80,668,230 28,978,124 Net loss (17,022,631 ) (12,419,220 ) (8,195,049 ) For the years ended December 31, 2016 2017 2018 US$ US$ US$ Net cash provided by/(used in) operating activities 2,657,916 (9,152,256 ) (6,241,888 ) Net cash used in investing activities (2,578,472 ) (741,079 ) (13,064 ) Net cash provided by financing activities - 12,642,573 1,686,123 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of property, plant and equipment, useful life | Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Computer equipment 3 years Office equipment 5 years Vehicles 4 years Leasehold improvement Over the shorter of lease term or the estimated useful lives of the assets |
Schedule of intangible assets, useful life | The amortization period by major intangible asset classes is as follows: Trade name/domain name 10 years Non-compete agreement 4.5 years Online platform 5 years Customer relationship 5-10 years |
CONCENTRATION OF RISK (Tables)
CONCENTRATION OF RISK (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedule of concentration of credit risk | Customers accounting for 10% or more of total revenue are: For the years ended December 31, Customer 2016 2017 2018 A 20.4 % * * B * 22.6 % * C * * 16.8 % D * * 14.7 % Customers accounting for 10% or more of accounts receivable are: As of December 31, Customer 2017 2018 A 12.7 % * B 59.4 % * C * 32.7 % D * 12.2 % * Less than 10% |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts receivable and allowance for doubtful accounts consist of the following: As of December 31, 2017 2018 US$ US$ Accounts receivable 3,295,818 471,592 Less: allowance for doubtful accounts - (295,472 ) 3,295,818 176,120 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of prepayments and other current assets | Prepaid expenses and other current assets consist of the following: As of December 31, 2017 2018 US$ US$ Advance to suppliers 1,248,701 347,409 Other receivables, net of allowance for doubtful accounts of $584,956 and $751,491 at December 31, 2017 and December 31, 2018, respectively (i) 228,436 111,938 Prepaid rental expenses and other deposits 124,863 73,446 Advance to employees 118,052 187,301 Other current assets 525,736 401,401 2,245,788 1,121,495 (i) In circumstances where a supplier defaults, and where the Group is asserting a breach of contract and seeking monetary recovery of the remaining deposit from the supplier, the Group reclassifies the respective advance to suppliers to other receivables within “Prepaid expenses and other current assets” in the consolidated balance sheets. A provision for loss is recognized in operating expenses when the loss on such assets is determined to be probable and amount can be reasonably estimated. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Property and equipment consist of the following: As of December 31, 2017 2018 US$ US$ Leasehold improvement 1,533,673 - Computer equipment 814,870 625,966 Office equipment 176,160 164,957 Vehicles 129,907 122,931 Total 2,654,610 913,854 Less: accumulated depreciation (859,377 ) (507,833 ) Property and equipment, net 1,795,233 406,021 |
ACQUIRED INTANGIBLE ASSETS, N_2
ACQUIRED INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of acquired intangible assets | Acquired intangible assets consist of the following: As of December 31, 2017 2018 US$ US$ Trade name/domain name 15,291,990 14,470,842 Non-compete agreements 9,513,676 9,002,811 Online platform 1,285,326 1,216,307 Customer relationship 26,158,110 24,753,474 Total 52,249,102 49,443,434 Less: Accumulated amortization (22,219,546 ) (22,148,435 ) Less: Accumulated impairment (19,765,615 ) (27,294,999 ) Acquired intangible assets, net 10,263,941 - The movement of acquired intangible assets for the years ended December 31, 2017 and 2018 is as follows: US$ Balance as of January 1, 2017 36,274,238 Amortization (8,359,386 ) Foreign currency translation adjustment 2,114,704 Impairment (19,765,615 ) Balance as of December 31, 2017 10,263,941 Amortization (1,171,219 ) Foreign currency translation adjustment (455,508 ) Impairment (8,637,214 ) Balance as of December 31, 2018 - |
INVESTMENT (Tables)
INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, All Other Investments [Abstract] | |
Schedule of Cost Method Investments | As of December 31, 2017 2018 US$ US$ Cost investment: Investment in Cold Chain Link (Shanghai) Internet of Things Co., Ltd. 768,486 727,220 Less: accumulated impairment - (727,220 ) 768,486 - |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill Disclosure [Abstract] | |
Schedule of Goodwill | As of December 31, 2017 2018 US$ US$ Gross amount 327,895,884 327,895,884 Less: Accumulated impairment (218,955,451 ) (327,895,884 ) 108,940,433 - |
Schedule Of Changes In Goodwill | US$ Balance as of January 1, 2017 221,337,157 Foreign currency translation adjustment 14,856,086 Impairment (127,252,810 ) Balance as of December 31, 2017 108,940,433 Foreign currency translation adjustment (3,122,082 ) Impairment (105,818,351 ) Balance as of December 31, 2018 - |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | As of December 31, 2017 2018 Payables to third-party sellers (i) 2,991,928 358,181 Accrued payroll and welfare 2,839,109 3,189,287 Provision for loyalty program 1,549,962 1,159,551 Payables for professional fees 784,464 793,629 Other tax payable 352,629 378,951 Accrued marketing expenses 329,002 - Uncertain tax positions 258,532 461,503 Payables for rental fee 37,733 223,916 Others 148,901 351,726 9,292,260 6,916,744 (i) In connection with the online platform services, payable to third-party sellers represented the total amounts received from third-party purchasers on behalf of third-party sellers through the Group’s online platform in a period less than one week without any charges. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of credit for income tax | For the years ended December 31, 2016 2017 2018 US$ US$ US$ Income tax benefits: Current income tax expenses (200,040 ) (292,436 ) (279,618 ) Deferred income tax benefits 2,433,497 7,149,616 2,378,024 Total 2,233,457 6,857,180 2,098,406 |
Schedule of significant components of the deferred tax assets and liabilities | As of December 31, 2017 2018 US$ US$ Deferred tax assets Accruals 2,011,300 1,580,894 Net operating loss carry forwards 8,741,138 10,802,048 Valuation allowance (10,595,656 ) (12,382,942 ) Total deferred tax assets 156,782 - Deferred tax liabilities Acquired intangible assets 2,565,985 - Total deferred tax liabilities 2,565,985 - |
Schedule of reconciliation between the income taxes benefit computed by applying the PRC tax rate to loss before income taxes and the actual provision (credit) of income taxes | For the year ended December 31, 2016 2017 2018 US$ US$ US$ Net loss before provision for income taxes (27,526,602 ) (168,756,159 ) (125,338,191 ) Statutory tax rates in the PRC 25 % 25 % 25 % Income tax at statutory tax rate (6,881,651 ) (42,189,040 ) (31,334,548 ) Expenses not deductible for tax purposes: Goodwill impairment loss - 31,813,203 26,454,588 Long-term investment impairment loss - - 180,785 Entertainment expenses exceeded tax limit 21,533 11,783 11,465 Effect of income tax rate difference in other jurisdiction 633,997 102,670 481,374 Changes in unrecognized tax benefits 200,040 292,436 279,618 Changes in valuation allowance 3,792,624 3,111,768 1,828,312 Income tax benefits (2,233,457 ) (6,857,180 ) (2,098,406 ) |
Schedule of Unrecognized Tax Benefits Roll Forward | For the years ended December 31, 2017 2018 US$ US$ Balance at beginning of the year 271,019 563,455 Addition based on tax positions related to the current year 292,436 279,618 Balance at end of the year 563,455 843,073 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Nonrecurring | The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a non-recurring basis as of December 31, 2017 and 2018: Fair value measurement at December 31, 2017 Using Balance as of Quoted Prices in Significant Other Significant Total losses US$ US$ US$ US$ US$ Description Assets: Long-lived assets (i) 12,059,174 12,059,174 19,765,615 Goodwill (ii) 108,940,433 108,940,433 127,252,810 Fair value measurement at June 30, 2018 Using Balance as of June 30, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total losses US$ US$ US$ US$ US$ Description Assets: Long-lived assets (i) 9,409,198 9,409,198 1,236,208 Goodwill (ii) 34,535,651 34,535,651 72,580,644 Fair value measurement at December 31, 2018 Using Balance as of December 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total losses US$ US$ US$ US$ US$ Description Assets: Long-lived assets (i) 406,021 406,021 7,401,006 Goodwill (ii) - - 33,237,707 Long-term investment (iii) - - 723,139 (i) Long-lived assets represent the Group’s property and equipment (Note 7), and acquired intangible assets (Note 8). The Group determined that these long-lived assets were one asset group and subject to be tested for impairment. The Group measures long-lived assets at fair value on a non-recurring basis when the carrying amount of the asset group exceeds its recoverable amount based on future projection which is consistent with its remained useful lives of the primary assets. The fair value was determined using models with significant unobservable input (Level 3 inputs) and the cash flow projections were based on past experience, actual results of operations and management best estimates about future developments as well as certain market assumptions. Impairment loss of $nil, $ 19,765,615 8,637,214 (ii) The Group measures goodwill at fair value on a non-recurring basis when it is annually evaluated or whenever events or changes in circumstances indicate that carrying amount of a reporting unit exceeds its fair value. The fair value was determined using models with significant unobservable input (Level 3 inputs) and the cash flow projections were based on past experience, actual results of operations and management best estimates about future developments as well as certain market assumptions. Goodwill impairment loss of $ nil, $127,252,810, and $105,818,351 were recognized for the years ended December 31, 2016, 2017 and 2018, respectively, and included in “Impairment loss” in the Consolidated Statements of Operations. (iii) According to unaudited financial statements of CCLG, CCLG had total shareholders’ equity of $ 773,327 381,022 1,296,356 723,139 |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Outstanding RSUs | Outstanding RSUs Number of RSUs Weighted average grant date fair value (US$) Unvested as of January 1, 2018 8,780,000 0.133 Granted - Forfeited (1,400,000 ) 0.133 Unvested as of December 31, 2018 7,380,000 0.133 Expect to vest as of December 31, 2018 7,380,000 0.133 |
Summary of information regarding share options granted | Options Number of Share options Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual life Aggregate Intrinsic value US$ US$ (Years) US$ Outstanding as of January 1, 2018 52,718,520 0.14 0.20 4.38 793,918 Granted - - - - - Forfeited and expired (8,744,400 ) 0.20 0.09 - - Exercised (207,972 ) 0.01 0.10 - - Outstanding as of December 31, 2018 43,766,148 0.13 0.22 3.20 17,903 Vested and expect to vest as of December 31, 2018 43,766,148 0.13 0.22 3.20 17,903 Exercisable as of December 31, 2018 27,517,848 0.09 0.28 0.67 17,903 |
Schedule of fair value assumptions | September 1, July 1, June 20, 2015 2016 2017 Expected volatility (1) 60.3 65.1 % 54.8 % 41.0 % Risk-free interest rate (2) 0.47 0.88 % 1.46 % 1.25 % Expected dividend yield (3) nil nil nil Exercise price (4) $ 0.01 0.20 $ 0.20 $ 0.01 0.20 Fair value of the underlying ordinary shares (5) $ 0.38 $ 0.20 $ 0.12 (1) Volatility The volatility of the underlying ordinary shares during the life of the options was estimated based on average historical volatility of comparable companies for the period before the valuation date with lengths equal to the life of the options. (2) Risk-free rate Risk free rate is estimated based on yield to maturity of PRC international government bonds with maturity term close to the life of the options. (3) Dividend yield The dividend yield was estimated by the Group based on its expected dividend policy over the life of the options. (4) Exercise price The exercise price of the options was determined by the Group’s Board of Directors. (5) Fair value of underlying ordinary shares The estimated fair value of the ordinary shares underlying the options as of the respective valuation dates was determined based on a contemporaneous valuation. When estimating the fair value of the ordinary shares on the valuation dates, management has considered a number of factors, including the result of a third-party appraisal and equity transactions of the Group, while taking into account standard valuation methods and the achievement of certain events. The fair value of the ordinary shares in connection with the option grants on the valuation dates was determined with the assistance of an independent third-party appraiser. After the Company listed on NASDAQ in April 2015, the closing market price of the ordinary shares of the Company as of the grant/modification date was used as the fair value of the ordinary shares on that date. |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of net loss per share, basic and diluted | For the years ended December 31, 2016 2017 2018 Numerator: Net loss attributable to the Company (25,293,145 ) (161,898,979 ) (123,239,785 ) Net loss attributable to ordinary shareholders for computing basic net loss per ordinary shares (25,293,145 ) (161,898,979 ) (123,239,785 ) Denominator: Weighted average ordinary shares outstanding used in computing basic net loss per ordinary shares 1,474,087,060 1,476,144,194 1,476,801,177 Weighted average ordinary shares outstanding used in computing diluted net loss per ordinary shares 1,474,087,060 1,476,144,194 1,476,801,177 Net loss per ordinary share Basic (0.02 ) (0.11 ) (0.08 ) Diluted (0.02 ) (0.11 ) (0.08 ) Weighted average shares used in calculating net loss per ordinary share Basic 1,474,087,060 1,476,144,194 1,476,801,177 Diluted 1,474,087,060 1,476,144,194 1,476,801,177 |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of nature of the relationships with related parties | Nature of the relationships with related parties: Name Relationship with the Company Ms. Zhu Shareholder Ms. Wang Shareholder Chung So Si Fong Dessert Limited Controlled by Ms. Zhu and Ms. Wang Cong Shao (Macao) Star Dessert Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Hong Kong Sunward Fishery Restaurant Management Co., Ltd. Controlled by Ms. Zhu Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Nanjing Xinzijin Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Ningbo dongqian lake tourist resort Xiyue leisure tourism Co., Ltd. Controlled by Ms. Zhu Ningbo Jiangbei Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Ningbo Tianyi Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Ningbo Yinzhou Sunward Logistics Co., Ltd. Controlled by Ms. Zhu Shanghai Congshao Dessert Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Shanghai Congshao Restaurant Management Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Shanghai Putuo Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Shanghai Zhonghengkuaijian Brand Management Co., Ltd. Controlled by Ms. Zhu Shanghai Zhongmin Investment Development Group Co., Ltd. Controlled by Ms. Zhu Shanghai Zhongmin Investment Management Co., Ltd Controlled by Ms. Zhu Shanghai Nuopin Company Management Co., Ltd. Controlled by Ms. Zhu Shanghai Shipin Company Management Co., Ltd. Controlled by Ms. Zhu Shanghai Zhongxiao Brand Management Co., Ltd. Controlled by Ms. Zhu Shanghai Zhongyou Information Technology Co., Ltd. Controlled by Ms. Zhu Shenzhen Bangrun Commercial factoring Co., Ltd Controlled by Ms. Zhu Shenzhen Congshao Restaurant Management Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Tianjin Congshao Restaurant Management Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Wuhan Congshao Restaurant Management Co., Ltd. Controlled by Ms. Zhu and Ms. Wang Zhejiang Sunward Fishery Restaurant Co., Ltd. Controlled by Ms. Zhu Zhejiang Zhonggangjumei Supply Chain Management Co., Ltd. Controlled by Ms. Zhu Shanghai Jiangbo Business Consulting Co., Ltd. Controlled by Ms. Zhu Shanghai MIN Hongshi Trading Co., Ltd. Controlled by Ms. Wang Shanghai MIN Zunshi Trading Co., Ltd. Controlled by Ms. Wang Shanghai Xiao Nan Guo Hai Zhi Yuan Controlled by Ms. Wang Shanghai Xiao Nan Guo Restaurant Co., Ltd. Controlled by Ms. Wang Shenzhen Xiao Nan Guo Restaurant Management Co., Ltd. Controlled by Ms. Wang WM Ming Hotel Co., Ltd. Controlled by Ms. Wang Xiao Nan Guo (Group) Co., Ltd. Controlled by Ms. Wang Xiao Nan Guo Holdings Limited Controlled by Ms. Wang CCLG A company under the significant influence of the Company |
Schedule of balances due from/to the related parties | Current assets As of December 31, Amount due from related parties 2017 2018 US$ US$ Zhejiang Sunward Fishery Restaurant Co., Ltd. 1,589,780 - (i) Shanghai Congshao Dessert Co., Ltd. 373,704 812,352 (i) Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co., Ltd. Legal Proceedings 261,399 - (i) Shanghai Congshao Restaurant Management Co., Ltd. 154,276 85,235 (i) Shanghai Zhonghengkuaijian Brand Management Co., Ltd. 136,392 195,739 (i) Shenzhen Bangrun Commercial factoring Co., Ltd. 117,615 - (i) Shanghai Zhongxiao Brand Management Co., Ltd. 113,018 162,356 (i) Nanjing Xinzijin Sunward Fishery Restaurant Co., Ltd. 110,753 - (i) Zhejiang Zhonggangjumei Supply Chain Management Co., Ltd. 59,610 - (i) Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. 32,823 6,331 (i) Shanghai Zhongyou Information Technology Co., Ltd. 32,309 48,244 (i) Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. 32,266 35,410 (i) Shanghai Putuo Sunward Fishery Restaurant Co., Ltd. 24,974 9,722 (i) CCLG 17,467 30,573 (i) Tianjin Congshao Restaurant Management Co., Ltd. 3,036 - (i) Ningbo Tianyi Sunward Fishery Restaurant Co., Ltd. 1,648 - (i) Shenzhen Congshao Restaurant Management Co., Ltd. 1,517 1,636 (i) Wuhan Congshao Restaurant Management Co., Ltd. 210 1,658 (i) Shanghai Zhongmin Investment Development Group Co., Ltd. - 909,025 (ii) Ningbo Yinzhou Sunward Logistics Co., Ltd. - 80,213 (i) Shanghai Nuopin Company Management Co., Ltd. - 123 Shanghai Shipin Company Management Co., Ltd. - 92 Total 3,062,797 2,378,709 (i) The amounts represent the receivables due from related parties relating to the online direct sales and online platform services. (ii) The amount represents the payable due from related parties relating to the daily operations. Current liabilities As of December 31, Amount due to related parties 2017 2018 US$ US$ Ms. Zhu 385,123 844,384 (iv) Ms. Wang - 395,832 (iv) WM Ming Hotel Co., Ltd. 89,938 945,082 (iii) Chung So Si Fong Dessert Limited 84,054 493,973 (iii) Ningbo dongqian lake tourist resort Xiyue leisure tourism Co., Ltd. 38,424 - (iii) Shanghai MIN Zunshi Trading Co., Ltd. 3,483 3,647 (iii) Ningbo Yinzhou Sunward Logistics Co., Ltd. 1,649 - (iii) Cong Shao (Macao) Star Dessert Co., Ltd 1,212 - (iii) Shanghai MIN Hongshi Trading Co., Ltd. - 1,514,246 (iv) Xiao Nan Guo (Group) Co., Ltd. - - (iv) Shanghai Xiao Nan Guo Restaurant Co., Ltd. - 436,332 (iv) Shanghai Zhongmin Investment Management Co., Ltd - 407,243 (iv) Hong Kong Sunward Fishery Restaurant Management Co., Ltd. - 88,768 (iii) Zhejiang Sunward Fishery Restaurant Co., Ltd. - 5,084 (iii) Tianjin Congshao Restaurant Management Co., Ltd. - 118 (iii) Total 603,883 5,134,709 (iii) The amounts represent the payables due to related parties relating to online direct sales and online platform services. (iv) The amount represents the payable due to related parties relating to the daily operations. Non-current liabilities As of December 31, Amount due to related parties 2017 2018 US$ US$ Ms. Zhu 5,685,971 5,704,257 (v) Shanghai Jiangbo Business Consulting Co., Ltd. - 1,188,059 (vi) Total 5,685,971 6,892,316 (v) The amount represents the balance due to related parties relating to the loan borrowed from Ms. Zhu and maturity date on December 31, 2020. For the year ended December 31, 2018, interest expense incurred on loan from Ms. Zhu was $ 374,273 (vi) The amount represents the balance due to related parties relating to the loan borrowed from Shanghai Jiangbo Business Consulting Co., Ltd., and maturity date on December 31, 2020. (b) Details of related party transactions occurred during the years ended December 31, 2016, 2017 and 2018 were as follows: Revenue from For the years ended December 31, 2016 2017 2018 US$ US$ US$ Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co., Ltd. 2,296,225 8,571,389 2,677,619 (vii) Xiao Nan Guo Holdings Limited 6,056,439 6,108,606 5,344,005 (vii) Chung So Si Fong Dessert Limited 388,618 1,391,080 1,687,608 (vii) Hong Kong Sunward Fishery Restaurant Management Co., Ltd. 460,132 471,129 324,373 (vii) Shanghai Congshao Dessert Co., Ltd. 172,521 357,017 - (vii) Shanghai Congshao Restaurant Management Co., Ltd. 160,701 189,617 276,085 (vii) Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. 26,149 118,413 169,032 (vii) Nanjing Xinzijin Sunward Fishery Restaurant Co., Ltd. 82,155 60,536 - (vii) Cong Shao (Macao) Star Dessert Co., Ltd. - 58,159 5,508 (vii) Zhejiang Zhonggangjumei Supply Chain Management Co., Ltd. 296,727 51,484 - (vii) Shanghai Putuo Sunward Fishery Restaurant Co., Ltd. 21,631 45,468 20,449 (vii) Tianjin Congshao Restaurant Management Co., Ltd. 676 28,345 - (vii) Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. 15,692 15,063 - (vii) WM Ming Hotel 37,631 11,737 232,757 (vii) Shenzhen Congshao Restaurant Management Co., Ltd. 865 5,135 - (vii) Ningbo Jiangbei Sunward Fishery Restaurant Co., Ltd. - 1,428 - (vii) Wuhan Congshao Restaurant Management Co., Ltd. - 620 - (vii) Shenzhen Xiao Nan Guo Restaurant Management Co., Ltd. 5,392 - - (vii) Ningbo Yinzhou Sunward Logistics Co., Ltd. 56,722 - 47,119 (vii) Zhejiang Sunward Fishery Restaurant Co., Ltd. - - 78,422 (vii) CCLG - - 7,878 (vii) Shanghai Zhongyou Information Technology Co., Ltd. - - 1,664 (vii) Shanghai Zhongxiao Brand Management Co., Ltd. - - 442 (vii) Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. - - 99 (vii) Total 10,078,276 17,485,226 10,873,060 (vii) The amounts represent the revenue generated from the Group’s online direct sales. |
Schedule of related party transactions | Rental expense to For the years ended December 31, 2016 2017 2018 US$ US$ US$ Xiao Nan Guo (Group) Co., Ltd. 218,212 - 399,380 (viii) Total 218,212 - 399,380 (viii) The amount represents the rental expense paid for the Group’s office. Services fee charged by For the years ended December 31, 2016 2017 2018 US$ US$ US$ CCLG 169,741 164,215 295,314 (ix) Total 169,741 164,215 295,314 (ix) The amount represents the logistics fee charged by the related party for the Group’s online direct sales. Loan borrowed from For the years ended December 31, 2016 2017 2018 US$ US$ US$ Ms. Zhu - 5,685,971 498,064 (x) Shanghai Jiangbo Business Consulting Co., Ltd. - - 1,188,059 (xi) Xiao Nan Guo (Group) Co., Ltd. 6,024,096 - - (xii) Total 6,024,096 5,685,971 1,686,123 (x) The (xi) The (xii) The amount represents the interest-free loan borrowed by the Group from related party, which has been repaid by the Group in 2016. (c) In July 2017, the VIE, entered into a banking facility agreement with Bank of Dalian Shanghai Branch, pursuant to which the VIE is entitled to borrow RMB denominated loan of RMB50 million ($7.6 million). On August 6, 2018, the Group extended the loan to August 5, 2019. The Company’s shareholders, Ms. Zhu and Ms. Wang provided guarantees for the VIE’s facility and Ms. Wang also provided her own property as collateral. (Note 11) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
The schedule of the future minimum lease payments under non-cancelable operating lease agreements | The future aggregate minimum lease payments under non-cancelable operating lease agreements (represented by the two leases for the new Shanghai headquarters) were as follows: Years ending December 31, US$ 2019 93,084 2020 52,360 Total 145,444 |
ORGANIZATION AND PRINCIPAL AC_3
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) | 12 Months Ended |
Dec. 31, 2017 | |
New Admiral Limited [Member] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Apr. 27, 2015 |
Variable Interest Entity, Qualitative or Quantitative Information, Place of Establishment | Cayman Islands |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 100.00% |
JMU Investment [Member] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jun. 8, 2015 |
Variable Interest Entity, Qualitative or Quantitative Information, Place of Establishment | Hong Kong |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 100.00% |
JMU Supply Chain [Member] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Oct. 15, 2015 |
Variable Interest Entity, Qualitative or Quantitative Information, Place of Establishment | Hong Kong |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 100.00% |
Shanghai Zhongming [Member] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jun. 8, 2015 |
Variable Interest Entity, Qualitative or Quantitative Information, Place of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 100.00% |
Shanghai Zhongmin [Member] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jun. 8, 2015 |
Variable Interest Entity, Qualitative or Quantitative Information, Place of Establishment | PRC |
ORGANIZATION AND PRINCIPAL AC_4
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details 1) | Sep. 09, 2015USD ($) | Jun. 08, 2015shares | Jun. 05, 2015USD ($)shares | Apr. 27, 2015USD ($)$ / sharesshares | Apr. 08, 2015USD ($)$ / sharesshares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2015USD ($) |
Organization Consolidation And V I E Arrangements [Line Items] | ||||||||||
Maximum foreign ownership in equity interest of PRC internet businesses (as a percent) | 50.00% | |||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | ||||||||||
Cash and cash equivalents | $ 356,673 | $ 4,912,170 | $ 2,604,886 | $ 11,151,900 | ||||||
Accounts receivable, net | 176,120 | 3,295,818 | ||||||||
Inventories | 585,760 | 538,660 | ||||||||
Prepaid expenses and other current assets, net | 1,121,495 | 2,245,788 | ||||||||
Amounts due from related parties | 2,378,709 | 3,062,797 | ||||||||
Total current assets | 4,618,757 | 14,055,233 | ||||||||
Property and equipment, net | 406,021 | 1,795,233 | ||||||||
Investment | 0 | 768,486 | ||||||||
Other non-current assets | 0 | 161,723 | ||||||||
Total non-current assets | 406,021 | 122,086,598 | ||||||||
TOTAL ASSETS | 5,024,778 | 136,141,831 | ||||||||
Short-term bank borrowings | 7,272,198 | 7,684,859 | ¥ 50,000,000 | |||||||
Accounts and notes payable | 542,732 | 3,980,826 | ||||||||
Accrued expenses and other current liabilities | 6,916,744 | 9,292,260 | ||||||||
Advance from customers | 422,816 | 1,243,739 | ||||||||
Amounts due to related parties | 5,134,709 | 603,883 | ||||||||
Total current liabilities | 20,289,199 | 22,805,567 | ||||||||
Other non-current liabilities | 29,540 | 1,534,449 | ||||||||
Amounts due to related parties | 6,892,316 | 5,685,971 | ||||||||
Total non-current liabilities | 6,921,856 | 9,786,405 | ||||||||
TOTAL LIABILITIES | 27,211,055 | 32,591,972 | ||||||||
Revenues | 36,455,296 | 88,736,549 | 73,201,161 | |||||||
Net loss | (123,239,785) | (161,898,979) | (25,293,145) | |||||||
Net cash provided by/(used in) operating activities | (4,331,190) | (9,873,748) | (5,826,386) | |||||||
Net cash provided by financing activities | 1,686,123 | 12,642,573 | 0 | |||||||
Century Winning Limited [Member] | Wowo Group Limited [Member] | ||||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | ||||||||||
Payment received from sale of equity interest of a subsidiary | $ 1 | |||||||||
Payment by Buyer for net liabilities | $ 47,390,420 | |||||||||
Ordinary shares [Member] | ||||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | ||||||||||
Net loss | 0 | $ 0 | 0 | |||||||
Ordinary shares issued for consideration | shares | 741,422,780 | |||||||||
Ordinary shares [Member] | IPO [Member] | ||||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | ||||||||||
Shares issued | shares | 72,000,000 | |||||||||
Ordinary shares [Member] | Over-allotment option [Member] | ||||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | ||||||||||
Shares issued | shares | 3,960,000 | |||||||||
ADS [Member] | IPO [Member] | ||||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | ||||||||||
Shares issued | shares | 4,000,000 | |||||||||
Net proceeds received | $ 35,200,000 | |||||||||
Price per share | $ / shares | $ 10 | $ 10 | ||||||||
ADS [Member] | Over-allotment option [Member] | ||||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | ||||||||||
Shares issued | shares | 220,000 | |||||||||
Net proceeds received | $ 2,100,000 | |||||||||
Price per share | $ / shares | $ 10 | |||||||||
VIEs [Member] | ||||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | ||||||||||
Cash and cash equivalents | 245,866 | $ 4,802,420 | ||||||||
Accounts receivable, net | 176,120 | 3,295,818 | ||||||||
Inventories | 585,760 | 538,660 | ||||||||
Prepaid expenses and other current assets, net | 1,007,406 | 1,881,988 | ||||||||
Amounts due from related parties | 4,038,884 | 3,062,797 | ||||||||
Total current assets | 6,054,036 | 13,581,683 | ||||||||
Property and equipment, net | 344,150 | 1,715,795 | ||||||||
Investment | 0 | 768,486 | ||||||||
Other non-current assets | 0 | 161,723 | ||||||||
Total non-current assets | 344,150 | 2,646,004 | ||||||||
TOTAL ASSETS | 6,398,186 | 16,227,687 | ||||||||
Short-term bank borrowings | 7,272,198 | 7,684,859 | ||||||||
Accounts and notes payable | 540,899 | 3,980,560 | ||||||||
Accrued expenses and other current liabilities | 5,336,699 | 8,345,461 | ||||||||
Advance from customers | 422,702 | 1,243,739 | ||||||||
Amounts due to related parties | 3,311,752 | 87,385 | ||||||||
Total current liabilities | 16,884,250 | 21,342,004 | ||||||||
Other non-current liabilities | 0 | 1,386,749 | ||||||||
Amounts due to related parties | 6,892,316 | 5,685,971 | ||||||||
Total non-current liabilities | 6,892,316 | 7,072,720 | ||||||||
TOTAL LIABILITIES | 23,776,566 | 28,414,724 | ||||||||
Revenues | 28,978,124 | 80,668,230 | 66,288,019 | |||||||
Net loss | (8,195,049) | (12,419,220) | (17,022,631) | |||||||
Net cash provided by/(used in) operating activities | (6,241,888) | (9,152,256) | 2,657,916 | |||||||
Net cash used in investing activities | (13,064) | (741,079) | (2,578,472) | |||||||
Net cash provided by financing activities | $ 1,686,123 | $ 12,642,573 | $ 0 | |||||||
Percentage contributed to consolidated revenues | 79.50% | 90.90% | 90.60% | |||||||
Percentage contributed to consolidated total assets | 127.30% | 11.90% | 127.30% | |||||||
Percentage contributed to consolidated total liabilities | 87.40% | 87.20% | 87.40% | |||||||
JMU HK [Member] | ||||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | ||||||||||
Ordinary shares issued for consideration | shares | 741,422,780 | |||||||||
Cash consideration | $ 30,000,000 |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net loss | $ (123,239,785) | $ (161,898,979) | $ (25,293,145) |
Negative cash flows from operations | (4,331,190) | (9,873,748) | $ (5,826,386) |
Working Capital Deficiency | (15,700,000) | ||
Stockholders' Equity Attributable to Parent | $ (22,186,277) | $ 103,549,859 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Trade name/domain name [Member] | |
Acquired intangible assets | |
Amortization years | 10 years |
Non-compete agreement [Member] | |
Acquired intangible assets | |
Amortization years | 4 years 6 months |
Online platform [Member] | |
Acquired intangible assets | |
Amortization years | 5 years |
Minimum [Member] | Customer relationship [Member] | |
Acquired intangible assets | |
Amortization years | 5 years |
Maximum [Member] | Customer relationship [Member] | |
Acquired intangible assets | |
Amortization years | 10 years |
Computer and equipment [Member] | |
Property and equipment, net [Line Items] | |
Estimated useful lives | 3 years |
Office equipment [Member] | |
Property and equipment, net [Line Items] | |
Estimated useful lives | 5 years |
Leasehold improvements [Member] | |
Property and equipment, net [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | Over the shorter of lease term or the estimated useful lives of the assets |
Vehicles [Member] | |
Property and equipment, net [Line Items] | |
Estimated useful lives | 4 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) shares in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration of credit risk [Line Items] | ||||
Value Added Tax Rate On Revenue From Primary Agricultural Products | 0.00% | |||
Marketing and Advertising Expense | $ 101,232 | |||
Other Liabilities, Noncurrent | $ 29,540 | 1,534,449 | ||
Operating Leases, Term | 15 years | |||
Customer Loyalty Program Liability, Description | In 2016, the Group launched a customer loyalty program to certain qualified customers, who can earn customer credits from purchases if their annual spending with the Group exceeds RMB10 million. | |||
Customer Loyalty Program, Shares To Be Issued | 4,420 | |||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | $ 1,377,503 | |||
Impairment of Intangible Assets (Excluding Goodwill) | $ 1,236,208 | $ 8,637,214 | 19,765,615 | 0 |
Goodwill, Impairment Loss | $ 72,580,644 | $ 115,178,704 | 147,018,425 | 0 |
Loyalty Program Description | In 2017, the Group announced its revised customer loyalty program to certain qualified customers for granting customer credits only if their annual spending with the Group exceeds RMB100 million. | |||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | $ 0 | |||
Description Of Emerging Growth Company | As a company with less than US$1 billion in gross revenue for the last fiscal year, we qualify as an “emerging growth company” (“EGC”) pursuant to the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).​​​​​​​ | |||
Operating Leases, Future Minimum Payments Due | $ 145,444 | |||
Provision for Doubtful Accounts | 293,814 | 0 | 0 | |
Cost-method Investments, Other than Temporary Impairment | $ 723,139 | |||
Maximum [Member] | ||||
Concentration of credit risk [Line Items] | ||||
Value Added Tax Rate On Revenue From Sale Of Other Products | 17.00% | |||
Value Added Tax Rate On Revenue From Sale Of Agriculture Products | 11.00% | |||
Minimum [Member] | ||||
Concentration of credit risk [Line Items] | ||||
Value Added Tax Rate On Revenue From Sale Of Other Products | 16.00% | |||
Value Added Tax Rate On Revenue From Sale Of Agriculture Products | 10.00% | |||
Additional Paid-in Capital [Member] | ||||
Concentration of credit risk [Line Items] | ||||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | 1,377,503 | |||
Variable Interest Entity (VIE) or Potential VIE, Information Unavailability [Member] | ||||
Concentration of credit risk [Line Items] | ||||
Other Liabilities, Noncurrent | $ 1,386,749 | 1,086,342 | ||
Selling and Marketing Expense [Member] | ||||
Concentration of credit risk [Line Items] | ||||
Marketing and Advertising Expense | $ 137,464 | $ 498,045 |
CONCENTRATION OF RISK (Details)
CONCENTRATION OF RISK (Details) | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Customer A [Member] | Sales Revenue, Net [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | [1] | [1] | 20.40% | |||
Customer A [Member] | Accounts Receivable [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | [1] | 12.70% | ||||
Customer B [Member] | Sales Revenue, Net [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | [1] | 22.60% | [1] | |||
Customer B [Member] | Accounts Receivable [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | [1] | 59.40% | ||||
Customer C [Member] | Sales Revenue, Net [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | 16.80% | [1] | [1] | |||
Customer C [Member] | Accounts Receivable [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | 32.70% | [1] | ||||
Customer D [Member] | Sales Revenue, Net [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | 14.70% | [1] | [1] | |||
Customer D [Member] | Accounts Receivable [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration Risk, Percentage | 12.20% | [1] | ||||
[1] | Less than 10% |
CONCENTRATION OF RISK (Details
CONCENTRATION OF RISK (Details 1) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Percentage Of Fluctuations in Foreign Exchange rate | 5.70% | 5.80% | 6.80% |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
ACCOUNTS RECEIVABLE, NET [Line Items] | ||
Accounts receivable | $ 471,592 | $ 3,295,818 |
Less: allowance for doubtful accounts | (295,472) | 0 |
Accounts Receivable, Net, Current | $ 176,120 | $ 3,295,818 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Advance to suppliers | $ 347,409 | $ 1,248,701 | ||
Other receivables, net of allowance for doubtful accounts of $584,956 and $751,491 at December 31, 2017 and December 31, 2018, respectively | [1] | 111,938 | 228,436 | |
Prepaid rental expenses and other deposits | 73,446 | 124,863 | ||
Advance to employees | 187,301 | 118,052 | ||
Other current assets | 401,401 | 525,736 | ||
Prepaid expenses and other current assets | 1,121,495 | 2,245,788 | ||
Increase (Decrease) in Other Receivables | (281,624) | (584,956) | $ 0 | |
Allowance for Doubtful Other Receivables, Current | $ 751,491 | $ 584,956 | ||
[1] | In circumstances where a supplier defaults, and where the Group is asserting a breach of contract and seeking monetary recovery of the remaining deposit from the supplier, the Group reclassifies the respective advance to suppliers to other receivables within “Prepaid expenses and other current assets” in the consolidated balance sheets. A provision for loss is recognized in operating expenses when the loss on such assets is determined to be probable and amount can be reasonably estimated. |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Dec. 21, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||||
Property plant and equipment, gross | $ 913,854 | $ 2,654,610 | ||
Less: accumulated depreciation | (507,833) | (859,377) | ||
Property and equipment, net | 406,021 | 1,795,233 | ||
Depreciation of expenses | 337,643 | 267,458 | $ 259,307 | |
Leasehold improvement [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property plant and equipment, gross | 0 | 1,533,673 | ||
Less: accumulated depreciation | $ (459,222) | |||
Property, Plant and Equipment, Disposals | 614,282 | |||
Gain (Loss) on Disposition of Property Plant Equipment | $ 614,282 | |||
Computer equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property plant and equipment, gross | 625,966 | 814,870 | ||
Office equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property plant and equipment, gross | 164,957 | 176,160 | ||
Vehicles [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property plant and equipment, gross | $ 122,931 | $ 129,907 |
ACQUIRED INTANGIBLE ASSETS, N_3
ACQUIRED INTANGIBLE ASSETS, NET (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Gross | $ 49,443,434 | $ 52,249,102 |
Less: Accumulated amortization | (22,148,435) | (22,219,546) |
Less: Accumulated impairment | (27,294,999) | (19,765,615) |
Acquired intangible assets, net | 0 | 10,263,941 |
Trade name/domain name | ||
Finite-Lived Intangible Assets, Gross | 14,470,842 | 15,291,990 |
Non-compete agreements [Member] | ||
Finite-Lived Intangible Assets, Gross | 9,002,811 | 9,513,676 |
Online platform | ||
Finite-Lived Intangible Assets, Gross | 1,216,307 | 1,285,326 |
Customer relationship | ||
Finite-Lived Intangible Assets, Gross | $ 24,753,474 | $ 26,158,110 |
ACQUIRED INTANGIBLE ASSETS, N_4
ACQUIRED INTANGIBLE ASSETS, NET (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Balance at Beginning | $ 10,263,941 | $ 36,274,238 | |
Amortization | (1,171,219) | (8,359,386) | $ (8,359,386) |
Foreign currency translation adjustment | (455,508) | 2,114,704 | |
Impairment | (8,637,214) | (19,765,615) | 0 |
Balance at End | 0 | $ 10,263,941 | $ 36,274,238 |
Non-compete agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment | 350,189 | ||
Customer relationship [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment | 2,720,529 | ||
Trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment | $ 5,566,496 |
INVESTMENT (Details)
INVESTMENT (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | ||||
Aug. 16, 2017USD ($) | May 31, 2016USD ($) | May 31, 2016CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018CNY (¥) | |
INVESTMENTS [Line Items] | ||||||
Investment in Cold Chain Link (Shanghai) Internet of Things Co., Ltd. | $ 727,220 | $ 768,486 | ||||
Less: accumulated impairment | (727,220) | 0 | ||||
Cost Method Investments | 0 | 768,486 | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 10.00% | 10.00% | ||||
Investment Company, Financial Commitment to Investee, Future Amount | 2,181,660 | ¥ 15 | ||||
Cost-method Investments, Other than Temporary Impairment | 723,139 | |||||
Cost Method Investments | 0 | 768,486 | ||||
CCLG [Member] | ||||||
INVESTMENTS [Line Items] | ||||||
Investment in Cold Chain Link (Shanghai) Internet of Things Co., Ltd. | 727,220 | ¥ 5 | ||||
Cost Method Investments | 0 | |||||
Business Combination, Consideration Transferred | $ 3,000,000 | ¥ 20 | ||||
Equity Method Investment, Amount Sold | $ 5,000,000 | |||||
Equity Method Investment, Summarized Financial Information, Equity Excluding Noncontrolling Interests | 773,327 | |||||
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | 381,022 | $ 1,296,356 | ||||
Cost-method Investments, Other than Temporary Impairment | 723,139 | |||||
Cost Method Investments | $ 0 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Gross amount | $ 327,895,884 | $ 327,895,884 | |
Less: Accumulated impairment | (327,895,884) | (218,955,451) | |
Goodwill | $ 0 | $ 108,940,433 | $ 221,337,157 |
GOODWILL (Details 1)
GOODWILL (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill | ||||
Beginning Balance | $ 108,940,433 | $ 108,940,433 | $ 221,337,157 | |
Foreign currency translation adjustment | (3,122,082) | 14,856,086 | ||
Impairment | $ 72,580,644 | 115,178,704 | 147,018,425 | $ 0 |
Ending Balance | $ 0 | $ 108,940,433 | $ 221,337,157 |
SHORT-TERM BANK BORROWINGS (Det
SHORT-TERM BANK BORROWINGS (Details) | Dec. 20, 2018CNY (¥) | Aug. 10, 2017USD ($) | Aug. 10, 2017CNY (¥) | Aug. 16, 2017USD ($) | Aug. 16, 2017CNY (¥) | Jul. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018CNY (¥) | Dec. 20, 2018USD ($) | Dec. 20, 2018CNY (¥) | Jun. 30, 2018USD ($) | Jun. 30, 2018CNY (¥) | Jul. 31, 2017CNY (¥) |
Proceeds from Bank Debt | $ 4,100,000 | ¥ 27,000,000 | $ 3,500,000 | ¥ 23,000,000 | $ 0 | ¥ 50,000,000 | $ 7,553,366 | $ 0 | ||||||||
Short-term Debt, Percentage Bearing Fixed Interest Rate | 5.66% | 5.66% | ||||||||||||||
Other Short-term Borrowings | $ 7,272,198 | 7,684,859 | ¥ 50,000,000 | |||||||||||||
Time Deposit Excluding Interest Component | ¥ 60,000,000 | |||||||||||||||
Interest Income, Deposits with Financial Institutions | ¥ 1,404,930 | |||||||||||||||
Time Deposits, at Carrying Value | $ 8,930,977 | ¥ 61,404,430 | ||||||||||||||
Time Deposits [Member] | ||||||||||||||||
Debt Instrument, Collateral Amount | $ 8,700,000 | ¥ 60,000,000 | ||||||||||||||
Variable Interest Entity, Primary Beneficiary [Member] | ||||||||||||||||
Debt Instrument, Face Amount | $ 7,600,000 | ¥ 50,000,000 | ||||||||||||||
Debt Instrument, Maturity Date Range, Start | Jul. 25, 2017 | |||||||||||||||
Debt Instrument, Maturity Date Range, End | Jul. 24, 2018 | |||||||||||||||
Other Short-term Borrowings | $ | $ 7,272,198 | $ 7,684,859 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | |
Payables to third-party sellers | [1] | $ 358,181 | $ 2,991,928 |
Accrued payroll and welfare | 3,189,287 | 2,839,109 | |
Provision for loyalty program | 1,159,551 | 1,549,962 | |
Payables for professional fees | 793,629 | 784,464 | |
Other taxes payable | 378,951 | 352,629 | |
Accrued marketing expenses | 0 | 329,002 | |
Uncertain tax positions | 461,503 | 258,532 | |
Payables for rental fee | 223,916 | 37,733 | |
Others | 351,726 | 148,901 | |
Total accrued expenses and other current liabilities | $ 6,916,744 | $ 9,292,260 | |
[1] | In connection with the online platform services, payable to third-party sellers represented the total amounts received from third-party purchasers on behalf of third-party sellers through the Group’s online platform in a period less than one week without any charges. |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Line Items] | ||||||
Income tax rate (as a percent) | 25.00% | 25.00% | 25.00% | |||
Income tax benefits: | ||||||
Current income tax expenses | $ (279,618) | $ (292,436) | $ (200,040) | |||
Deferred income tax benefits | 2,378,024 | 7,149,616 | 2,433,497 | |||
Total | 2,098,406 | 6,857,180 | 2,233,457 | |||
Current: | ||||||
Accruals | $ 1,580,894 | $ 2,011,300 | ||||
Valuation allowance | (12,382,942) | (10,595,656) | ||||
Non-current: | ||||||
Net operating loss carry forwards | 10,802,048 | 8,741,138 | ||||
Total deferred tax assets | 0 | 156,782 | ||||
Deferred tax liabilities | ||||||
Acquired intangible assets | 0 | 2,565,985 | ||||
Total deferred tax liabilities | 0 | 2,565,985 | ||||
Net operating losses carry forwards | 10,802,048 | 10,196,547 | $ 8,744,032 | |||
Reconciliation between the income taxes benefit computed by applying the PRC tax rate to loss before income taxes and the actual credit for income taxes [Abstract] | ||||||
Net loss before provision for income taxes | $ (125,338,191) | $ (168,756,159) | $ (27,526,602) | |||
Statutory tax rates in the PRC | 25.00% | 25.00% | 25.00% | |||
Income tax at statutory tax rate | $ (31,334,548) | $ (42,189,040) | $ (6,881,651) | |||
Expenses not deductible for tax purposes: | ||||||
Goodwill impairment loss | 26,454,588 | 31,813,203 | 0 | |||
Long-term investment impairment loss | 180,785 | 0 | 0 | |||
Entertainment expenses exceeded tax limit | 11,465 | 11,783 | 21,533 | |||
Effect of income tax rate difference in other jurisdiction | 481,374 | 102,670 | 633,997 | |||
Changes in unrecognized tax benefits | 279,618 | 292,436 | 200,040 | |||
Changes in valuation allowance | 1,828,312 | 3,111,768 | 3,792,624 | |||
Income tax benefits | (2,098,406) | (6,857,180) | (2,233,457) | |||
Roll-forward of Unrecognized Tax Benefits | ||||||
Balance at beginning of the year | 563,455 | 271,019 | ||||
Addition based on tax positions related to the current year | 279,618 | 292,436 | ||||
Balance at end of the year | 843,073 | 563,455 | 271,019 | |||
Unrecognized Tax Benefits | $ 563,455 | $ 271,019 | $ 271,019 | 843,073 | 563,455 | 271,019 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 381,570 | 304,923 | ||||
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | 27,517 | 26,785 | $ 0 | |||
Deferred Tax Assets, Valuation Allowance | $ 12,382,942 | $ 10,595,656 | ||||
HONG KONG | ||||||
Roll-forward of Unrecognized Tax Benefits | ||||||
Effective Income Tax Rate Reconciliation, Percent | 16.50% | |||||
State Administration of Taxation, China [Member] | ||||||
Income Tax Disclosure [Line Items] | ||||||
Income tax rate (as a percent) | 25.00% | |||||
Reconciliation between the income taxes benefit computed by applying the PRC tax rate to loss before income taxes and the actual credit for income taxes [Abstract] | ||||||
Statutory tax rates in the PRC | 25.00% |
ORDINARY SHARES (Details)
ORDINARY SHARES (Details) - USD ($) | Sep. 27, 2015 | Sep. 07, 2015 | Jun. 08, 2015 | Apr. 27, 2015 | Apr. 08, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
ORDINARY SHARES [Line Items] | |||||||||
Ordinary shares issued upon the exercise of their share options | 207,972 | 1,042,002 | 2,294,208 | ||||||
Employees and former employees [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Common shares remain for future issuance | 692,846 | 900,818 | 15,592,824 | ||||||
Mr. Xu [Member] | JMU [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Ordinary shares issued for consideration | 72,000,000 | ||||||||
Purchase price (in dollars per share) | $ 0.5556 | ||||||||
Total purchase price | $ 40,000,000 | ||||||||
Shares issued pursuant to supplemental agreement | $ 15,000,000 | ||||||||
Stock Issued During Period, Shares, Other | 27,000,000 | ||||||||
Ordinary shares [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Total proceeds from issuance of ordinary shares upon IPO, after deducting the IPO related cost | $ 37,294,600 | ||||||||
IPO related cost | 3,000,000 | ||||||||
Amount of Mr. Xu's indebtness converted into ordinary shares | $ 69,400,000 | ||||||||
Ordinary shares issued upon conversion of Mr. Xu's debt | 124,835,802 | ||||||||
Ordinary shares issued for consideration | 741,422,780 | ||||||||
Stock Issued During Period, Shares, Other | 27,000,000 | ||||||||
Ordinary shares [Member] | Employees and former employees [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Shares issued and transferred to depositary bank | 38,363,112 | 38,363,112 | |||||||
Ordinary shares [Member] | JMU [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Shares issued | 72,000,000 | ||||||||
Ordinary shares issued upon the exercise of their share options | 37,670,266 | 37,462,294 | 22,770,288 | ||||||
Ordinary shares [Member] | IPO [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Shares issued | 72,000,000 | ||||||||
Ordinary shares [Member] | Over-allotment option [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Shares issued | 3,960,000 | ||||||||
ADS [Member] | Employees and former employees [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Shares issued and transferred to depositary bank | 2,131,284 | ||||||||
ADS [Member] | IPO [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Shares issued | 4,000,000 | ||||||||
Price per share | $ 10 | $ 10 | |||||||
ADS [Member] | Over-allotment option [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Shares issued | 220,000 | ||||||||
Price per share | $ 10 | ||||||||
Series A-1 Preferred Shares [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Ordinary shares issued upon automatic conversion of preferred shares, upon the completion of the IPO | 12,202,988 | ||||||||
Series A-2 Preferred Shares [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Ordinary shares issued upon automatic conversion of preferred shares, upon the completion of the IPO | 122,029,877 | ||||||||
Series B Preferred Shares [Member] | |||||||||
ORDINARY SHARES [Line Items] | |||||||||
Ordinary shares issued upon automatic conversion of preferred shares, upon the completion of the IPO | 30,507,471 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Assets and liabilities measured and recorded at fair value on a recurring and non-recurring basis [Line Items] | ||||
Intangible Assets, Net (Excluding Goodwill) | $ 0 | $ 10,263,941 | ||
Goodwill | 0 | 108,940,433 | $ 221,337,157 | |
Impairment loss of intangible assets | $ 1,236,208 | 8,637,214 | 19,765,615 | 0 |
Goodwill, Impairment Loss | 72,580,644 | 115,178,704 | 147,018,425 | $ 0 |
Long-term investment | 0 | 768,486 | ||
Cost-method Investments, Other than Temporary Impairment | 723,139 | |||
Cost Method Investments | 0 | 768,486 | ||
CCLG [Member] | ||||
Assets and liabilities measured and recorded at fair value on a recurring and non-recurring basis [Line Items] | ||||
Equity Method Investment, Summarized Financial Information, Equity Excluding Noncontrolling Interests | 773,327 | |||
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | 381,022 | 1,296,356 | ||
Cost-method Investments, Other than Temporary Impairment | 723,139 | |||
Cost Method Investments | 0 | |||
Fair Value, Inputs, Level 3 [Member] | ||||
Assets and liabilities measured and recorded at fair value on a recurring and non-recurring basis [Line Items] | ||||
Intangible Assets, Net (Excluding Goodwill) | 9,409,198 | 406,021 | 12,059,174 | |
Goodwill | $ 34,535,651 | 0 | $ 108,940,433 | |
Long-term investment | $ 0 |
SHARE BASED COMPENSATION (Detai
SHARE BASED COMPENSATION (Details) - USD ($) | Jun. 20, 2017 | Jul. 01, 2016 | Sep. 01, 2015 | Jul. 27, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Weighted average grant date fair value | |||||||
Granted | |||||||
Share-based Compensation Arrangement by Share-based Payment Award,Vesting Period Description | another 1 year to September 1, 2018 | ||||||
Share-based Compensation | $ 32,491 | $ (56,705) | $ 1,067,786 | $ 1,097,543 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | The issued RSUs will vest 100% when the following two conditions are both met: a) on and after the first anniversary of the grant date and b) the market price of the Company’s ADS is not less than $7 per ADS. | ||||||
2011 Plan [Member] | |||||||
Number of RSUs | |||||||
Granted | 10,430,000 | ||||||
Expect to vest as of December 31, 2016 | 43,766,148 | ||||||
Weighted average grant date fair value | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 43,766,148 | 52,718,520 | |||||
2011 Plan [Member] | Options [Member] | |||||||
Weighted average grant date fair value | |||||||
Unvested options | 32,028,700 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 0.20 | ||||||
2011 Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
SHARE-BASED COMPENSATION [Line Item] | |||||||
Recognition period | 2 years | ||||||
Number of RSUs | |||||||
Outstanding at beginning of year | 8,780,000 | ||||||
Granted | 28,841,700 | 0 | |||||
Forfeited | (1,400,000) | ||||||
Vested | 28,639,900 | ||||||
Vested and expect to vest | 7,380,000 | 8,780,000 | |||||
Expect to vest as of December 31, 2016 | 7,380,000 | ||||||
Weighted average grant date fair value | |||||||
Outstanding at beginning of year | $ 0.133 | ||||||
Forfeited | 0.133 | ||||||
Outstanding at end of year | 0.133 | $ 0.133 | |||||
Expect to vest as of December 31, 2016 | $ 0.133 | ||||||
Unvested options | 10,430,000 | ||||||
2011 Plan [Member] | First tranche [Member] | |||||||
SHARE-BASED COMPENSATION [Line Item] | |||||||
Vesting percentage | 40.00% | ||||||
Weighted average grant date fair value | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 40.00% | ||||||
2011 Plan [Member] | Second tranche [Member] | |||||||
SHARE-BASED COMPENSATION [Line Item] | |||||||
Vesting percentage | 30.00% | ||||||
Weighted average grant date fair value | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 30.00% | ||||||
2011 Plan [Member] | Second tranche [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
SHARE-BASED COMPENSATION [Line Item] | |||||||
Vesting percentage | 50.00% | ||||||
Weighted average grant date fair value | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | ||||||
2011 Plan [Member] | Third tranche [Member] | |||||||
SHARE-BASED COMPENSATION [Line Item] | |||||||
Vesting percentage | 30.00% | ||||||
Weighted average grant date fair value | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 30.00% |
SHARE BASED COMPENSATION (Det_2
SHARE BASED COMPENSATION (Details 1) - USD ($) | Jun. 20, 2017 | Jul. 01, 2016 | Sep. 01, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of share options | ||||||||
Exercised | (207,972) | (1,042,002) | (2,294,208) | |||||
Other disclosures | ||||||||
Unvested options | 3,312,618 | |||||||
Fair value assumptions | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 832 | $ 52,536 | $ 618,971 | |||||
Closing Price Per Share of American Depositary Shares | $ 0.7 | $ 1.02 | ||||||
Closing Price Per Share of Ordinary Shares | $ 0.004 | $ 0.06 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Other Increases (Decreases) in Period | 56,705 | |||||||
Terminated Employee [Member] | ||||||||
Number of share options | ||||||||
Granted | 494,542 | |||||||
Not Terminated Employee [Member] | ||||||||
Number of share options | ||||||||
Granted | 437,837 | |||||||
2011 Plan [Member] | ||||||||
Number of share options | ||||||||
Outstanding at beginning of year | 52,718,520 | |||||||
Granted | 32,028,700 | 0 | ||||||
Forfeited and expired | (8,744,400) | |||||||
Exercised | (207,972) | |||||||
Outstanding at end of year | 43,766,148 | 52,718,520 | ||||||
Vested and expect to vest at end of year | 43,766,148 | |||||||
Exercisable at end of year | 27,517,848 | |||||||
Weighted average exercise price | ||||||||
Outstanding at beginning of year | $ 0.14 | |||||||
Granted | $ 0 | |||||||
Forfeited and expired | 0.20 | |||||||
Exercised | 0.01 | |||||||
Outstanding at end of year | 0.13 | $ 0.14 | ||||||
Vested and expect to vest at end of year | 0.13 | |||||||
Exercisable at end of year | 0.09 | |||||||
Weighted average grant date fair value | ||||||||
Outstanding at beginning of year | $ 0.20 | |||||||
Granted | 0 | |||||||
Forfeited and expired | 0.09 | |||||||
Exercised | 0.10 | |||||||
Outstanding at end of year | 0.22 | $ 0.20 | ||||||
Vested and expect to vest at end of year | 0.22 | |||||||
Exercisable at end of year | $ 0.28 | |||||||
Weighted average remaining contractual life | ||||||||
Outstanding at end of year | 3 years 2 months 12 days | 4 years 4 months 17 days | ||||||
Vested and expect to vest at end of year | 3 years 2 months 12 days | |||||||
Exercisable at end of year | 8 months 1 day | |||||||
Aggregate intrinsic value | ||||||||
Outstanding | $ 17,903 | $ 793,918 | ||||||
Vested and expect to vest at end of year | 17,903 | |||||||
Exercisable | 17,903 | |||||||
Other disclosures | ||||||||
Share-based compensation due to modification | $ 7,503,976 | |||||||
Fair value assumptions | ||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 327,376 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 10,430,000 | |||||||
2011 Plan [Member] | Options [Member] | ||||||||
Number of share options | ||||||||
Outstanding at end of year | 0.20 | |||||||
Fair value assumptions | ||||||||
Expected volatility | [1] | 41.00% | 54.80% | |||||
Risk-free interest rate | [2] | 1.25% | 1.46% | |||||
Exercise price | [3] | $ 0.20 | ||||||
Fair value of the underlying ordinary shares | [4] | $ 0.12 | $ 0.20 | $ 0.38 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 786,251 | |||||||
2011 Plan [Member] | Options [Member] | Minimum [Member] | ||||||||
Fair value assumptions | ||||||||
Expected volatility | [1] | 60.30% | ||||||
Risk-free interest rate | [2] | 0.47% | ||||||
Exercise price | [3] | 0.01 | $ 0.01 | |||||
2011 Plan [Member] | Options [Member] | Maximum [Member] | ||||||||
Fair value assumptions | ||||||||
Expected volatility | [1] | 65.10% | ||||||
Risk-free interest rate | [2] | 0.88% | ||||||
Exercise price | [3] | $ 0.20 | $ 0.20 | |||||
[1] | The volatility of the underlying ordinary shares during the life of the options was estimated based on average historical volatility of comparable companies for the period before the valuation date with lengths equal to the life of the options. | |||||||
[2] | Risk free rate is estimated based on yield to maturity of PRC international government bonds with maturity term close to the life of the options. | |||||||
[3] | The exercise price of the options was determined by the Group’s Board of Directors. | |||||||
[4] | The estimated fair value of the ordinary shares underlying the options as of the respective valuation dates was determined based on a contemporaneous valuation. When estimating the fair value of the ordinary shares on the valuation dates, management has considered a number of factors, including the result of a third-party appraisal and equity transactions of the Group, while taking into account standard valuation methods and the achievement of certain events. The fair value of the ordinary shares in connection with the option grants on the valuation dates was determined with the assistance of an independent third-party appraiser. |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||
Net loss attributable to the Company | $ (123,239,785) | $ (161,898,979) | $ (25,293,145) |
Net loss attributable to ordinary shareholders for computing basic net loss per ordinary shares | $ (123,239,785) | $ (161,898,979) | $ (25,293,145) |
Denominator: | |||
Weighted average ordinary shares outstanding used in computing basic net loss per ordinary shares | 1,476,801,177 | 1,476,144,194 | 1,474,087,060 |
Weighted average ordinary shares outstanding used in computing diluted net loss per ordinary shares | 1,476,801,177 | 1,476,144,194 | 1,474,087,060 |
Net loss per ordinary shares | |||
Basic | $ (0.08) | $ (0.11) | $ (0.02) |
Diluted | $ (0.08) | $ (0.11) | $ (0.02) |
Weighted average shares used in calculating net loss per ordinary share | |||
Basic | 1,476,801,177 | 1,476,144,194 | 1,474,087,060 |
Diluted | 1,476,801,177 | 1,476,144,194 | 1,474,087,060 |
Options [Member] | Discontinued operations [Member] | |||
Weighted average shares used in calculating net loss per ordinary share | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 24,145,294 | 22,195,156 | 35,190,467 |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS - (Details) | 4 Months Ended | 12 Months Ended | ||||||||
Apr. 30, 2019USD ($) | Apr. 30, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018CNY (¥) | |||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | $ 2,378,709 | $ 3,062,797 | ||||||||
Amounts due to related parties | 5,134,709 | 603,883 | ||||||||
Rental expense to related parties | 399,380 | 0 | $ 218,212 | |||||||
Revenue from related parties | 10,873,060 | 17,485,226 | 10,078,276 | |||||||
Proceeds from Related Party Debt | 1,686,123 | 5,685,971 | 6,024,096 | |||||||
Due to Related Parties, Noncurrent | 6,892,316 | 5,685,971 | ||||||||
Provision for Doubtful Accounts | 293,814 | 0 | 0 | |||||||
Service Fee [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Rental expense to related parties | 295,314 | 164,215 | 169,741 | |||||||
Hong Kong Sunward Fishery Restaurant Management Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due to related parties | [1] | 88,768 | 0 | |||||||
Revenue from related parties | [2] | 324,373 | 471,129 | 460,132 | ||||||
Nanjing Xinzijin Sunward Fishery Restaurant Co., Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 0 | 110,753 | |||||||
Revenue from related parties | [2] | 0 | 60,536 | 82,155 | ||||||
Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 6,331 | 32,823 | |||||||
Revenue from related parties | [2] | 169,032 | 118,413 | 26,149 | ||||||
Nanjing Yongji Sunward Fishery Restaurant Co., Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 35,410 | 32,266 | |||||||
Revenue from related parties | [2] | 0 | 15,063 | 15,692 | ||||||
Ningbo Yinzhou Sunward Logistics Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 80,213 | 0 | |||||||
Amounts due to related parties | [1] | 0 | 1,649 | |||||||
Revenue from related parties | [2] | 47,119 | 0 | 56,722 | ||||||
Zhejiang Sunward Fishery Restaurant Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 0 | 1,589,780 | |||||||
Amounts due to related parties | [1] | 5,084 | 0 | |||||||
Revenue from related parties | [2] | 78,422 | 0 | 0 | ||||||
Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co.,Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 261,399 | ||||||||
Amounts due to related parties | [4] | 436,332 | 0 | |||||||
Revenue from related parties | [2] | 2,677,619 | 8,571,389 | 2,296,225 | ||||||
WM Ming Hotel Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due to related parties | [1] | 945,082 | 89,938 | |||||||
Revenue from related parties | [2] | 232,757 | 11,737 | 37,631 | ||||||
Shanghai MIN Hongshi Trading Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due to related parties | [4] | 1,514,246 | 0 | |||||||
Shanghai Congshao Restaurant Management Co., Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 85,235 | 154,276 | |||||||
Revenue from related parties | [2] | 276,085 | 189,617 | 160,701 | ||||||
Shanghai Putuo Sunward Restaurant Co., Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 9,722 | 24,974 | |||||||
Revenue from related parties | [2] | 20,449 | 45,468 | 21,631 | ||||||
CCLG [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 30,573 | 17,467 | |||||||
Revenue from related parties | [2] | 7,878 | 0 | 0 | ||||||
CCLG [Member] | Service Fee [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Rental expense to related parties | [5] | 295,314 | 164,215 | 169,741 | ||||||
Zhejiang Zhonggangjumei Supply Chain Management Co., Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 0 | 59,610 | |||||||
Revenue from related parties | [2] | 0 | 51,484 | 296,727 | ||||||
Shanghai Congshao Dessert Co., Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 812,352 | 373,704 | |||||||
Revenue from related parties | [2] | 0 | 357,017 | 172,521 | ||||||
Tianjin Congshao Restaurant Management Co., Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 0 | 3,036 | |||||||
Amounts due to related parties | [1] | 118 | 0 | |||||||
Revenue from related parties | [2] | 0 | 28,345 | 676 | ||||||
Shenzhen Congshao Restaurant Management Co., Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 1,636 | 1,517 | |||||||
Revenue from related parties | [2] | 0 | 5,135 | 865 | ||||||
Wuhan Congshao Restaurant Management Co., Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 1,658 | 210 | |||||||
Revenue from related parties | [2] | 0 | 620 | 0 | ||||||
Chung So Si Fong Dessert Limited [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due to related parties | [1] | 493,973 | 84,054 | |||||||
Revenue from related parties | [2] | 1,687,608 | 1,391,080 | 388,618 | ||||||
Xiao Nan Guo Holdings Limited [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Rental expense to related parties | [6] | 399,380 | 0 | 218,212 | ||||||
Revenue from related parties | [2] | 5,344,005 | 6,108,606 | 6,056,439 | ||||||
Shenzhen Xiao Nan Guo Restaurant Management Co., Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Revenue from related parties | [2] | 0 | 0 | 5,392 | ||||||
Xiao Nan Guo Group Co., Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due to related parties | [4] | 0 | 0 | |||||||
Proceeds from Related Party Debt | [7] | 0 | 0 | 6,024,096 | ||||||
Shanghai Zhongxiao Brand Management Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 162,356 | 113,018 | |||||||
Revenue from related parties | [2] | 442 | 0 | 0 | ||||||
Shanghai Zhonghengkuaijian Brand Management Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 195,739 | 136,392 | |||||||
Shenzhen Bangrun Commercial factoring Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 0 | 117,615 | |||||||
Shanghai Zhongyou Information Technology Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 48,244 | 32,309 | |||||||
Revenue from related parties | [2] | 1,664 | 0 | 0 | ||||||
Ningbo Tianyi Sunward Fishery Restaurant Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [3] | 0 | 1,648 | |||||||
Ms. Zhu [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due to related parties | [4] | 844,384 | 385,123 | |||||||
Proceeds from Related Party Debt | $ 1,060,000 | ¥ 7,290,000 | 498,064 | [8] | 5,685,971 | [8] | 0 | [8] | ||
Due to Related Parties, Noncurrent | [9] | 5,704,257 | 5,685,971 | |||||||
Debt Instrument, Face Amount | 374,273 | |||||||||
Ningbo dongqian lake tourist resort Xiyue leisure tourism Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due to related parties | [1] | 0 | 38,424 | |||||||
Cong Shao Macao Star Dessert Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due to related parties | [1] | 0 | 1,212 | |||||||
Revenue from related parties | [2] | 5,508 | 58,159 | 0 | ||||||
Ningbo Jiangbei Sunward Fishery Restaurant Co., Ltd. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Revenue from related parties | [2] | 0 | 1,428 | 0 | ||||||
Shanghai Zhongmin Investment Development Group Co Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | [10] | 909,025 | 0 | |||||||
Shanghai Nuopin Company Management Co Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | 123 | 0 | ||||||||
Shanghai Shipin Company Management Co Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties | 92 | 0 | ||||||||
Ms Wang [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due to related parties | [4] | 395,832 | 0 | |||||||
Due to Related Parties, Noncurrent | 2,327,104 | ¥ 16,000,000 | ||||||||
Shanghai Zhongmin Investment Management Co Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due to related parties | [4] | 407,243 | 0 | |||||||
Shanghai MIN Zunshi Trading Co Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due to related parties | [1] | 3,647 | 3,483 | |||||||
Shanghai Jiangbo Business Consulting Co Ltd [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Proceeds from Related Party Debt | [11] | 1,188,059 | 0 | 0 | ||||||
Due to Related Parties, Noncurrent | [12] | $ 1,188,059 | 0 | |||||||
Debt Instrument, Maturity Date | Jul. 1, 2020 | |||||||||
Nanjing Yongji Sunward Fishery Restaurant Co Ltd 1 [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Revenue from related parties | [2] | $ 99 | $ 0 | $ 0 | ||||||
[1] | The amounts represent the payables due to related parties relating to online direct sales and online platform services. | |||||||||
[2] | The amounts represent the revenue generated from the Group’s online direct sales. | |||||||||
[3] | The amounts represent the receivables due from related parties relating to the online direct sales and online platform services. | |||||||||
[4] | The amount represents the payable due to related parties relating to the daily operations. | |||||||||
[5] | The amount represents the logistics fee charged by the related party for the Group’s online direct sales. | |||||||||
[6] | The amount represents the rental expense paid for the Group’s office. | |||||||||
[7] | The amount represents the interest-free loan borrowed by the Group from related party, which has been repaid by the Group in 2016. | |||||||||
[8] | The amount represents the loan borrowed from Ms. Zhu and maturity date on December 31, 2020. | |||||||||
[9] | The amount represents the balance due to related parties relating to the loan borrowed from Ms. Zhu and maturity date on December 31, 2020. For the year ended December 31, 2018, interest expense incurred on loan from Ms. Zhu was $374,273. | |||||||||
[10] | The amount represents the payable due from related parties relating to the daily operations. | |||||||||
[11] | The amount represents the loan borrowed from Shanghai Jiangbo Business Consulting Co., Ltd. and maturity date on December 31, 2020. | |||||||||
[12] | The amount represents the balance due to related parties relating to the loan borrowed from Shanghai Jiangbo Business Consulting Co., Ltd., and maturity date on December 31, 2020. |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Nov. 01, 2018USD ($) | Nov. 01, 2018CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018CNY (¥) | Jul. 01, 2015m² |
Commitments and Contingencies Disclosure [Abstract] | |||||||
Rental expense under operating leases | $ 769,824 | $ 1,223,390 | $ 2,243,907 | ||||
Rent Liability Reduction Adjustment | 1,312,284 | ||||||
Operating Leases, Future Minimum Payments, Due Thereafter | 4,500,000 | ¥ 31,000,000 | |||||
Security Deposit | 115,739 | ¥ 795,763 | |||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity | |||||||
2019 | 93,084 | ||||||
2020 | 52,360 | ||||||
Total | 145,444 | ||||||
Capital Commitment | 2,200,000 | $ 2,300,000 | |||||
Former Headquarters [Member] | |||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||
Rental expense under operating leases | 568,111 | ||||||
Shanghai Headquarters [Member] | |||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||
Rental expense under operating leases | $ 24,936 | ||||||
April 2019 Lease Expire [Member] | |||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||
Rental expense under operating leases | $ 10,300 | ¥ 70,000 | |||||
December 2020 Lease Expire [Member] | |||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||
Rental expense under operating leases | $ 4,400 | ¥ 30,000 | |||||
Previously Reported [Member] | |||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||
Rent Per Square Meter | m² | 1.90 | ||||||
Restatement Adjustment [Member] | |||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||
Rent Per Square Meter | m² | 3.10 |
MAINLAND CHINA CONTRIBUTION P_2
MAINLAND CHINA CONTRIBUTION PLAN (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating expense [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Total provisions for employee benefits | $ 1,053,575 | $ 1,656,561 | $ 1,297,485 |
STATUTORY RESERVES AND RESTRI_2
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS [Line Item] | ||
Required minimum percentage of annual appropriations to general reserve fund | 10.00% | |
Statutory threshold percentage of the reserve fund to the registered capital of the respective company, above which the appropriation is not required | 50.00% | |
Restricted net assets | $ 28,213,892 | $ 28,213,892 |
VIEs [Member] | ||
STATUTORY RESERVES AND RESTRICTED NET ASSETS [Line Item] | ||
Restricted net assets | $ 1,614,140 | $ 1,614,140 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||||||||||
May 21, 2019shares | Mar. 31, 2019USD ($) | Apr. 30, 2019USD ($) | Apr. 30, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Feb. 01, 2019USD ($) | Feb. 01, 2019CNY (¥) | Jan. 31, 2019USD ($) | Jan. 31, 2019CNY (¥) | Jan. 14, 2019USD ($) | Jan. 11, 2019USD ($) | Jan. 11, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2015USD ($) | |||||
Cash and Cash Equivalents, at Carrying Value | $ 356,673 | $ 4,912,170 | $ 2,604,886 | $ 11,151,900 | ||||||||||||||||
Due to Related Parties, Noncurrent | 6,892,316 | 5,685,971 | ||||||||||||||||||
Proceeds from Related Party Debt | 1,686,123 | 5,685,971 | 6,024,096 | |||||||||||||||||
Due from Related Parties, Current | 2,378,709 | 3,062,797 | ||||||||||||||||||
Unicorn Investment Limited [Member] | ||||||||||||||||||||
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period | 960,000 | |||||||||||||||||||
Business Acquisition Income Loss Reported By Acquired Entity For Last Annual Period | $ 641,000 | |||||||||||||||||||
Percentage Of Registrable Securities Holders Requesting Effect a Registration Under the Act | 10.00% | |||||||||||||||||||
Unicorn Investment Limited [Member] | Maximum [Member] | ||||||||||||||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 5,000,000 | |||||||||||||||||||
Unicorn Investment Limited [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 632,660,858 | |||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | $ 1,309,000 | |||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | 1,056,000 | |||||||||||||||||||
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period | 90,000 | |||||||||||||||||||
Business Acquisition Income Loss Reported By Acquired Entity For Last Annual Period | $ 103,000 | |||||||||||||||||||
Unicorn Investment Limited [Member] | Subsequent Event [Member] | Pre Acquisition [Member] | ||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 25.70% | |||||||||||||||||||
Unicorn Investment Limited [Member] | Subsequent Event [Member] | Post Acquisition [Member] | ||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 48.00% | |||||||||||||||||||
Zhongmin [Member] | ||||||||||||||||||||
Amounts Of Deposits Or Equivalent Property Ordered To Freeze | $ 10,000,000 | |||||||||||||||||||
Cash and Cash Equivalents, at Carrying Value | 52,515 | ¥ 361,070 | ||||||||||||||||||
Zhongmin [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Due From Related party Amounts Failed To Repay | $ 872,664 | ¥ 6,000,000 | $ 1,454,440 | ¥ 10,000,000 | ||||||||||||||||
Amounts Of Cash Frozen For Failure In Repayment Of Loan | $ 69,286 | ¥ 476,376 | ||||||||||||||||||
WM Ming [Member] | ||||||||||||||||||||
Due to Related Parties, Noncurrent | 945,082 | |||||||||||||||||||
Shanghai Hongshi [Member] | ||||||||||||||||||||
Due to Related Parties, Noncurrent | 1,514,246 | |||||||||||||||||||
Ms. Zhu [Member] | ||||||||||||||||||||
Due to Related Parties, Noncurrent | [1] | 5,704,257 | 5,685,971 | |||||||||||||||||
Proceeds from Related Party Debt | $ 1,060,000 | ¥ 7,290,000 | 498,064 | [2] | 5,685,971 | [2] | $ 0 | [2] | ||||||||||||
Ms Wang [Member] | ||||||||||||||||||||
Due to Related Parties, Noncurrent | 2,327,104 | ¥ 16,000,000 | ||||||||||||||||||
Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co. Ltd [Member] | ||||||||||||||||||||
Due from Related Parties, Current | [3] | $ 261,399 | ||||||||||||||||||
Allowance for Doubtful Accounts Receivable | $ 676,415 | |||||||||||||||||||
[1] | The amount represents the balance due to related parties relating to the loan borrowed from Ms. Zhu and maturity date on December 31, 2020. For the year ended December 31, 2018, interest expense incurred on loan from Ms. Zhu was $374,273. | |||||||||||||||||||
[2] | The amount represents the loan borrowed from Ms. Zhu and maturity date on December 31, 2020. | |||||||||||||||||||
[3] | The amounts represent the receivables due from related parties relating to the online direct sales and online platform services. |