Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 10, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | IDEANOMICS, INC. | |
Entity Central Index Key | 837,852 | |
Trading Symbol | ssc | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 102,266,066 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | ||
Current assets: | ||||
Cash | $ 16,030,248 | $ 7,208,037 | [1] | |
Restricted cash | [1] | 369,280 | ||
Accounts receivable, net | 105,534,523 | 26,962,085 | [1] | |
Licensed content | 16,958,148 | 16,958,149 | [1] | |
Inventory | 216,453 | 216,453 | [1] | |
Prepaid expenses | 1,995,538 | 2,202,728 | [1] | |
Other current assets | 3,054,573 | 2,276,096 | [1] | |
Total current assets | 143,789,483 | 56,192,828 | [1] | |
Property and equipment, net | 258,053 | 127,275 | [1] | |
Intangible assets, net | 3,124,979 | 148,874 | [1] | |
Goodwill | 1,399,646 | |||
Long term investments | 18,767,510 | 6,975,511 | [1] | |
Other non-current assets | 383,797 | |||
Total assets | 167,723,468 | 63,444,488 | [1] | |
Current liabilities: (including amounts of the consolidated VIEs without recourse to Ideanomics, Inc. See Note 3) | ||||
Accounts payable | 33,390,027 | 26,829,593 | [1] | |
Deferred revenue | 588,824 | 222,350 | [1] | |
Accrued interest due to a related party | 109,808 | 20,055 | [1] | |
Accrued salaries | 720,385 | 737,072 | [1] | |
Amount due to related parties | 71,908,057 | 434,030 | [1] | |
Other current liabilities | 1,906,147 | 801,560 | [1] | |
Convertible promissory note due to a related party | 3,074,197 | 3,000,000 | [1] | |
Total current liabilities | 111,697,445 | 32,044,660 | [1] | |
Convertible note, net of debt discount | 10,734,949 | |||
Deferred tax liabilities | 673,706 | |||
Other non-current liabilities | [1] | 384,243 | ||
Total liabilities | 123,106,100 | 32,428,903 | [1] | |
Commitments and contingencies (Note 15) | [1] | |||
Convertible redeemable preferred stock: | ||||
Series A - 7,000,000 shares issued and outstanding, liquidation and deemed liquidation preference of $3,500,000 as of September 30, 2018 and December 31, 2017, respectively | 1,261,995 | 1,261,995 | [1] | |
Equity: | ||||
Common stock - $0.001 par value; 1,500,000,000 shares authorized, 77,246,801 and 68,509,090 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 77,246 | 68,509 | [1] | |
Additional paid-in capital | 190,188,410 | 158,449,544 | [1] | |
Accumulated deficit | (145,921,262) | (126,693,022) | [1] | |
Accumulated other comprehensive loss | (239,775) | (782,074) | [1] | |
Total shareholders' equity | 44,104,619 | 31,042,957 | [1] | |
Non-controlling interest | (749,246) | (1,289,367) | [1] | |
Total equity | 43,355,373 | 29,753,590 | [2] | |
Total liabilities, convertible redeemable preferred stock and equity | $ 167,723,468 | $ 63,444,488 | [1] | |
[1] | The above consolidated balance sheets present the Shanghai Guang Ming Investment Management Limited ("Guang Ming"), acquired from Tianjin Sun Seven Stars Culture Development Co. Ltd. ("Tianjin") and Beijing Nanbei Huijin Investment Co. Ltd. on April 4 2018 as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||
[2] | The above consolidated statements of equity present Guang Ming, acquired from and Beijing Nanbei Huijin Investment Co., Ltd, on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Convertible redeemable preferred stock Series A, shares issued | 7,000,000 | 7,000,000 |
Convertible redeemable preferred stock Series A, shares outstanding | 7,000,000 | 7,000,000 |
Convertible redeemable preferred stock Series A, liquidation and deemed liquidation preference | $ 3,500,000 | $ 3,500,000 |
Common stock, par value (in dollars per share) | $ 0.001 | |
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued | 77,246,801 | 68,509,090 |
Common stock, shares outstanding | 77,246,801 | 68,509,090 |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |||
Income Statement [Abstract] | ||||||
Revenue | $ 43,707,937 | $ 30,229,255 | [1] | $ 362,628,296 | $ 106,724,866 | [1] |
Cost of revenue from third parties | 42,844,876 | 28,273,863 | [1] | 115,729,433 | 100,889,004 | [1] |
Cost of revenue from related parties | 244,110,132 | |||||
Gross profit | 863,061 | 1,955,392 | [1] | 2,788,731 | 5,835,862 | [1] |
Operating expenses: | ||||||
Selling, general and administrative expense | 4,333,259 | 3,684,749 | [1] | 16,861,425 | 8,021,825 | [1] |
Research and development expense | 667,416 | 400,040 | [1] | 1,393,025 | 400,040 | [1] |
Professional fees | 1,927,431 | 839,836 | [1] | 3,280,729 | 1,888,361 | [1] |
Depreciation and amortization | 291,512 | 36,952 | [1] | 314,737 | 294,272 | [2] |
Impairment of other intangible assets | 152,847 | [1] | 0 | 216,468 | [2] | |
Total operating expense | 7,219,618 | 5,114,424 | [1] | 21,849,916 | 10,820,966 | [1] |
Loss from operations | (6,356,557) | (3,159,032) | [1] | (19,061,185) | (4,985,104) | [1] |
Interest and other income (expense) | ||||||
Interest expense, net | (145,610) | (26,029) | [1] | (201,782) | (70,779) | [1] |
Change in fair value of warrant liabilities | 131,357 | [1] | 0 | (112,642) | [2] | |
Equity in loss of equity method investees | (13,882) | (23,632) | [1] | (44,316) | (100,468) | [2] |
Other | (925,771) | 72,120 | [1] | (558,271) | (38,480) | [1] |
Loss before income taxes | (7,441,820) | (3,005,216) | [1] | (19,865,554) | (5,307,473) | [1] |
Income tax expense (benefit) | 0 | 0 | [1] | 0 | 0 | [1] |
Net loss | (7,441,820) | (3,005,216) | [3] | (19,865,554) | (5,307,473) | [2],[3] |
Net loss attributable to non-controlling interest | 254,973 | (22,723) | [1] | 637,314 | 608,910 | [1] |
Net loss attributable to common shareholders | $ (7,186,847) | $ (3,027,939) | [1] | $ (19,228,240) | $ (4,698,563) | [1] |
Basic loss per share (in dollars per share) | $ (0.10) | $ (0.05) | [1] | $ (0.27) | $ (0.08) | [1] |
Diluted loss per share (in dollars per share) | $ (0.10) | $ (0.05) | [1] | $ (0.27) | $ (0.08) | [1] |
Weighted average shares outstanding: | ||||||
Basic (in shares) | 74,063,495 | 62,146,168 | [1] | 71,574,303 | 59,594,289 | [1] |
Diluted (in shares) | 74,063,495 | 62,146,168 | [1] | 71,574,303 | 59,594,289 | [1] |
[1] | The above consolidated statements of operation present Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co., Ltd. on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||||
[2] | The above consolidated statements of cash flows present Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co., Ltd on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||||
[3] | The above consolidated statements of comprehensive loss present the Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co. Ltd on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
UNAUDITED CONSOLIDATED STATEM_2
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | [1] | Sep. 30, 2018 | Sep. 30, 2017 | [1] | |
Statement of Comprehensive Income [Abstract] | ||||||
Net loss | $ (7,441,820) | $ (3,005,216) | $ (19,865,554) | $ (5,307,473) | [2] | |
Other comprehensive income (loss), net of nil tax Foreign currency translation adjustments | 708,140 | 57,374 | 565,315 | 760,363 | ||
Comprehensive loss | (6,733,680) | (2,947,842) | (19,300,239) | (4,547,110) | ||
Comprehensive loss attributable to non-controlling interest | 243,078 | (17,517) | 614,298 | 647,074 | ||
Comprehensive loss attributable to common shareholders | $ (6,490,602) | $ (2,965,359) | $ (18,685,941) | $ (3,900,036) | ||
[1] | The above consolidated statements of comprehensive loss present the Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co. Ltd on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||||
[2] | The above consolidated statements of cash flows present Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co., Ltd on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
UNAUDITED CONSOLIDATED STATEM_3
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | [1] | |
Cash flows from operating activities: | |||
Net loss | $ (19,865,554) | $ (5,307,473) | [2] |
Adjustments to reconcile net loss to net cash used in operating activities | |||
Share-based compensation expense | 3,372,447 | 202,501 | |
Provision for doubtful accounts | 0 | 103,040 | |
Depreciation and amortization | 314,737 | 294,272 | |
Equity in loss of equity method investees | 44,316 | 100,468 | |
Loss on disposal of assets | 0 | 683,195 | |
Change in fair value of warrant liabilities | 0 | 112,642 | |
Impairment of intangible assets | 0 | 216,468 | |
Foreign currency exchange losses | 0 | (42,891) | |
Change in assets and liabilities: | |||
Accounts receivable | (78,572,438) | (34,582,490) | |
Inventory | 0 | (159,240) | |
Licensed content | 0 | 759,698 | |
Prepaid expenses and other assets | (3,332,696) | 3,646,384 | |
Accounts payable | 6,560,434 | 29,792,542 | |
Amount due to related parties | 71,939,834 | ||
Accrued expenses, salary and other current liabilities | 1,530,544 | (867,504) | |
Deferred revenue | 366,474 | (1,139,357) | |
Net cash used in operating activities | (17,641,902) | (6,187,745) | |
Cash flows from investing activities: | |||
Acquisition of property and equipment | (167,891) | (46,260) | |
Proceeds from disposal of property and equipment | 0 | 2,450,044 | |
Disposal of subsidiaries, net of cash disposed | 0 | (8,751) | |
Cash paid for the acquisition of subsidiaries | (2,840,219) | (26,857) | |
Investment in long term investments | (2,035,190) | (250,000) | |
Net cash (used in) provided by investing activities | (5,043,300) | 2,118,176 | |
Cash flows from financing activities | |||
Proceeds from convertible note | 12,000,000 | ||
Repayment of amounts due to related parties | 0 | (682,364) | |
Proceeds from issuance of warrant and shares | 19,186,771 | 2,607,974 | |
Net cash provided by financing activities | 31,186,771 | 1,925,610 | |
Effect of exchange rate changes on cash | (48,638) | 62,078 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 8,452,931 | (2,081,881) | |
Cash, cash equivalents and restricted cash at beginning of period | 7,577,317 | 3,761,814 | |
Cash, cash equivalents and restricted cash at end of period | 16,030,248 | 1,679,933 | |
Supplemental Cash Flow Information: | |||
Cash paid for income tax | 0 | 0 | |
Cash paid for interest | 0 | 0 | |
Non-Cash Investing and Financing Activities: | |||
Exchange of Series E Preferred Stock for common stock | $ 0 | $ 7,155 | |
[1] | The above consolidated statements of cash flows present Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co., Ltd on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | ||
[2] | The above consolidated statements of comprehensive loss present the Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co. Ltd on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
UNAUDITED CONSOLIDATED STATEM_4
UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) | Series E Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Shareholders' Equity | Non- controlling Interest | Total | ||
Balance at Dec. 31, 2016 | [1] | $ 7,155 | $ 53,918 | $ 152,792,855 | $ (115,829,451) | $ (1,371,498) | $ 35,652,979 | $ (5,325,481) | $ 30,327,498 | |
Balance (in shares) at Dec. 31, 2016 | [1] | 7,154,997 | 53,918,523 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 202,501 | 202,501 | 202,501 | |||||||
Common stock issuance | $ 727 | 1,999,273 | 2,000,000 | 2,000,000 | ||||||
Common stock issuance (in shares) | 727,273 | |||||||||
Common stock issuance for RSU vested | $ 111 | (111) | ||||||||
Common stock issuance for RSU vested (in shares) | 111,465 | |||||||||
Common stock issuance for option exercised | $ 41 | 39,862 | 39,903 | 39,903 | ||||||
Common stock issuance for option exercised (in shares) | 41,131 | |||||||||
Common stock issued for warrant exercised | $ 311 | 681,916 | 682,227 | 682,227 | ||||||
Common stock issued for warrant exercised (in shares) | 311,105 | |||||||||
Common stock issued from conversion of series E preferred stock | $ (7,155) | $ 7,155 | ||||||||
Common stock issued from conversion of series E preferred stock (in shares) | (7,154,997) | 7,154,997 | ||||||||
Disposal of Zhong Hai Shi Xun | (9,887,398) | (360,521) | (220,737) | (10,468,656) | 3,947,473 | (3,947,473) | ||||
Acquisition of Guang Ming | 78,630 | 78,630 | 78,630 | |||||||
Net loss | (4,698,563) | (4,698,563) | (608,910) | (5,307,473) | [2],[3] | |||||
Foreign currency translation adjustments, net of nil tax | 787,372 | 787,372 | (27,009) | 760,363 | [3] | |||||
Balance at Sep. 30, 2017 | [1] | $ 62,263 | 145,907,528 | (120,888,535) | (804,863) | 24,276,393 | (2,013,927) | 22,262,466 | ||
Balance (in shares) at Sep. 30, 2017 | [1] | 62,264,494 | ||||||||
Balance at Dec. 31, 2017 | [4] | $ 68,509 | 158,449,544 | (126,693,022) | (782,074) | 31,042,957 | (1,289,367) | 29,753,590 | ||
Balance (in shares) at Dec. 31, 2017 | [4] | 68,509,090 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 3,372,447 | 3,372,447 | 3,372,447 | |||||||
Investment from GTD and SSS | 11,188,502 | 11,188,502 | 11,188,502 | |||||||
Common stock issuance for RSU vested | $ 1,241 | (1,241) | ||||||||
Common stock issuance for RSU vested (in shares) | 1,240,707 | |||||||||
Common stock issuance for option exercised | $ 82 | 2,550 | 2,632 | $ 2,632 | ||||||
Common stock issuance for option exercised (in shares) | 82,797 | 110,295 | ||||||||
Common stock issued for warrant exercised | $ 644 | 1,125,856 | 1,126,500 | $ 1,126,500 | ||||||
Common stock issued for warrant exercised (in shares) | 643,714 | |||||||||
Common stock issuance for acquisition of BDCG | $ 3,000 | 7,797,000 | 7,800,000 | 7,800,000 | ||||||
Common stock issuance for acquisition of BDCG ( in shares) | 3,000,000 | |||||||||
Common stock issuance for Star Thrive Group Limited | $ 3,770 | 6,869,138 | 6,872,908 | 6,872,908 | ||||||
Common stock issuance for Star Thrive Group Limited (in shares) | 3,770,493 | |||||||||
Conversion feature of convertible note | 1,384,614 | 1,384,614 | 1,384,614 | |||||||
Acquisition of Grapevine | 1,154,419 | 1,154,419 | ||||||||
Net loss | (19,228,240) | (19,228,240) | (637,314) | (19,865,554) | ||||||
Foreign currency translation adjustments, net of nil tax | 542,299 | 542,299 | 23,016 | 565,315 | ||||||
Balance at Sep. 30, 2018 | $ 77,246 | $ 190,188,410 | $ (145,921,262) | $ (239,775) | $ 44,104,619 | $ (749,246) | $ 43,355,373 | |||
Balance (in shares) at Sep. 30, 2018 | 77,246,801 | |||||||||
[1] | The above consolidated statements of equity present Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co., Ltd. on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||||||||
[2] | The above consolidated statements of cash flows present Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co., Ltd on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||||||||
[3] | The above consolidated statements of comprehensive loss present the Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co. Ltd on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||||||||
[4] | The above consolidated statements of equity present Guang Ming, acquired from and Beijing Nanbei Huijin Investment Co., Ltd, on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
Organization and Principal Acti
Organization and Principal Activities | 9 Months Ended |
Sep. 30, 2018 | |
Organization And Principal Activities [Abstract] | |
Organization and Principal Activities | 1. Organization and Principal Activities Ideanomics, Inc. (Nasdaq:IDEX), formerly known as Seven Stars Cloud Group, Inc., is a Nevada corporation that primarily operates in China (“PRC”) through its subsidiaries and consolidated variable interest entities (“VIEs”). The Company, its subsidiaries and consolidated VIEs are collectively referred to as Ideanomics (“Ideanomics”, “we”, “us”, or “the Company”). In the Company’s video on demand (“VOD”) business, the Company provides premium content and integrated value-added service solutions for the delivery of VOD and paid video programing to digital cable providers, Internet protocol television (“IPTV”) providers, over-the-top (“OTT”) streaming providers, mobile manufacturers and operators, as well as direct customers. The Company historically has offered these products under the business name “YOU On Demand” and refers to these operations as the legacy YOD business. Starting in early 2017, while continuing to support the legacy YOD business, Ideanomics began transitioning its business model to become a next generation financial technology (“fintech”) company through several acquisitions and the establishment of joint ventures, with the intention of offering financing solutions and logistics solutions, each based on the emergence of systems that utilize blockchain and artificial intelligence (“AI”) technologies. On the financing solutions side, the Company has been building capabilities both in providing business consulting services related to traditional financings, as well as in developing digital asset securitization services via AI and blockchain enabled platforms. On the logistics side, the Company has been building expertise in the traditional commodities trading business, with an initial focus on crude oil trading and consumer electronics trading, with the goal of leveraging such expertise to inform the development of an AI and blockchain enabled logistics platform. The Company refers to its YOD business as the Legacy YOD segment, and to all our other operations as the Wecast Service segment. Aside from the Legacy YOD segment, only the commodities trading component of the Company’s logistics business is operational and revenue generating. On January 30, 2017, the Company entered into a Securities Purchase Agreement (the “SVG Purchase Agreement”) with BT Capital Global Limited, a British Virgin Islands company (“BT”) and an affiliate of the Company’s Chairman, Bruno Wu, for the purchase by the Company of all of the outstanding capital stock of Sun Video Group Hong Kong Limited, a Hong Kong company (“Wecast Services”). On January 31, 2017, the Company entered into another Securities Purchase Agreement (the “Wide Angle SPA”) with BT and Sun Seven Stars Media Group Limited (“SSMGL”), a Hong Kong company and one of the Company’s largest shareholders, controlled by Mr. Wu, as guarantor, for the purchase by us of 55% of the outstanding capital stock of Wide Angle Group Limited (“Wide Angle”). Details of these two acquisitions are in Note 4. By acquiring these two entities, the Company became engaged in consumer electronics and smart supply chain management operations. In 2017, the Company entered into another Securities Purchase Agreement (the “BT SPA”) with BT, pursuant to which the issued and outstanding stock that the Company holds in one loss-generating non-core asset, was sold to BT for zero. The details of this transaction have been disclosed in Note 11. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of September 30, 2018, results of operations for the three and nine months ended September 30, 2018 and 2017, and cash flows for the nine months ended September 30, 2018 and 2017, have been made. All significant intercompany transactions and balances are eliminated on consolidation. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on March 30, 2018 (“2017 Annual Report”). In the first quarter of 2018, we adopted the following Accounting Standards Updates (ASU): ASU 2014-09, Revenue from Contracts with Customers (Topic 606); ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10) and ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash ASU 2018-02. ASU 2014-09 has no financial impact to our unaudited financial statement, and impact by ASU 2016-01 and ASU 2016-18 has been reflected in our unaudited consolidated statements of cash flow and Note 8 to this unaudited consolidated financial statements. |
Going Concern and Management's
Going Concern and Management's Plans | 9 Months Ended |
Sep. 30, 2018 | |
Going Concern And Managements Plans [Abstract] | |
Going Concern and Management's Plans | 2. Going Concern and Management’s Plans For the nine months ended September 30, 2018 and 2017, the Company incurred loss from operations of approximately $19.1 million and $5.0 million, respectively, and incurred net loss of $19.9 million and $5.3 million, respectively, and cash used in operations was approximately $17.6 million and $6.2 million, respectively. Further, the Company had accumulated deficit of approximately $145.9 million and $126.7 million as of September 30, 2018 and December 31, 2017, respectively, due to recurring losses since the inception of its business. The Company must continue to rely on proceeds from debt and equity issuances to pay for ongoing operating expenses in order to execute its business plan. In May, 2017, the Company completed a common stock financing for $2.0 million with certain investors, officers & directors and affiliates in a private placement. In October 2017, the Company completed a common stock financing with Hong Kong Guo Yuan Group Capital Holdings Limited for $10 million. In June 2018, the Company entered into a Subscription Agreement with Sun Seven Stars Investment Group Limited for $3.0 million, and the Company has received $1.1 million as of September 30, 2018 (See Note 9). In July 2018, the Company completed a common stock financing from GT Dollar Pte. Ltd for $10.0 million (See Note 9). In July 2018, the Company entered into a Share Purchase & Option Agreement with Star Thrive Group Limited for $23.0 million and the Company has received $6.9 million as of September 30, 2018 (See Note 9). In July 2018, the Company completed a convertible note financing with Advantech Capital Investment II Limited for $12.0 million(See Note 9). Although the Company may attempt to raise funds by issuing debt or equity instruments, additional financing may not be available to the Company on terms acceptable to the Company or at all or such resources may not be received in a timely manner. If the Company is unable to raise additional capital when required or on acceptable terms, the Company may be required to scale back or to discontinue certain operations, scale back or discontinue the development of new business lines, reduce headcount, sell assets, file for bankruptcy, reorganize, merge with another entity, or cease operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. If the Company is in fact unable to continue as a going concern, the shareholders may lose their entire investment in the Company. |
VIE Structure and Arrangements
VIE Structure and Arrangements | 9 Months Ended |
Sep. 30, 2018 | |
Vie Structure And Arrangements [Abstract] | |
VIE Structure and Arrangements | 3. VIE Structure and Arrangements a) Sinotop VIE structure and arrangement To comply with PRC laws and regulations that prohibit or restrict foreign ownership of companies that provides value-added telecommunication services, the Company provides its services through Sinotop Beijing. The Company has the ability to control Sinotop Beijing through a series of contractual agreements entered into among YOD WOFE, YOD Hong Kong, Sinotop Beijing and the legal shareholders of Sinotop Beijing. Prior to January 2016, the Company entered into a series of contractual agreements to give it the ability to control Sinotop Beijing with Zhang Yan, the former legal shareholder of Sinotop Beijing (the spouse of its then-CEO). In January 2016, in connection with the appointment of a new CEO and in accordance with its rights under the contractual agreements, (1) the legal ownership of Sinotop Beijing was transferred from Zhang Yan to Bing Wu, the brother of its current Chairman and Yun Zhu, the former Vice President of Beijing Sun Seven Stars Culture Development Limited (“SSS”), (2) the Company terminated the series of contractual arrangements with Zhang Yan, and (3) the Company entered into new contractual agreements with Bing Wu and Yun Zhu (collectively, the “Former Sinotop VIE Agreements”). In October 2016, in accordance with its rights under contractual agreements, (1) the legal ownership of Sinotop Beijing was transferred from Bing Wu to Mei Chen, the former CFO of the Company, (2) the Company terminated the series of contractual arrangements with Bing Wu, and (3) the Company entered into new contractual agreements with Mei Chen (collectively, the “New Sinotop VIE Agreements”). Although the Former Sinotop VIE Agreements and New Sinotop VIE Agreements resulted in changes to the legal shareholders of Sinotop Beijing, there was no change in the Company’s ability to control Sinotop Beijing or the Company’s rights to 100% of the economic benefits of Sinotop Beijing. The Company was the primary beneficiary of Sinotop Beijing prior to the signing of the Former Sinotop VIE Agreements and New Sinotop VIE Agreements and the Company remained the primary beneficiary of Sinotop Beijing after the signing of the former Sinotop VIE Agreements and the New Sinotop VIE Agreements. Accordingly, the change in legal ownership of Sinotop Beijing did not have any impact to the Company’s consolidation of Sinotop Beijing. The key terms of the New Sinotop VIE Agreements are summarized as follows: Equity Pledge Agreement Pursuant to the Equity Pledge Agreement among YOD WOFE, Sinotop Beijing, Mei Chen and Yun Zhu (collectively, the “Nominee Shareholders”), the Nominee Shareholders pledged all of their equity interests in Sinotop Beijing (the “Collateral”) to YOD WOFE as security for the performance of the obligations of Sinotop Beijing to make all the required technical service fee payments pursuant to the Technical Services Agreement and for performance of the Nominee Shareholders’ obligation under the Call Option Agreement. The terms of the Equity Pledge Agreement expire upon satisfaction of all obligations under the Technical Services Agreement and Call Option Agreement. Call Option Agreement Pursuant to the Call Option Agreement among YOD WOFE, Sinotop Beijing and the Nominee Shareholders, the Nominee Shareholders granted an exclusive option to YOD WOFE, or its designee, to purchase, at any time and from time to time, to the extent permitted under PRC law, all or any portion of the Nominee Shareholders’ equity in Sinotop Beijing. The exercise price of the option shall be determined by YOD WOFE at its sole discretion, subject to any restrictions imposed by PRC law. The term of the agreement is until all of the equity interest in Sinotop Beijing held by the Nominee Shareholders are transferred to YOD WOFE, or its designee and may not be terminated by any part to the agreement without consent of the other parties. Power of Attorney Pursuant to the Power of Attorney agreements among YOD WOFE, Sinotop Beijing and each of the respective Nominee Shareholders, each of the Nominee Shareholders granted YOD WOFE the irrevocable right, for the maximum period permitted by law, all of its voting rights as shareholders of Sinotop Beijing. The Nominee Shareholders may not transfer any of its equity interest in Sinotop Beijing to any party other than YOD WOFE. The Power of Attorney agreements may not be terminated except until all of the equity in Sinotop Beijing has been transferred to YOD WOFE or its designee. Technical Service Agreement Pursuant to the Technical Service Agreement between YOD WOFE and Sinotop Beijing, YOD WOFE has the exclusive right to provide technical service, marketing and management consulting service, financial support service and human resource support services to Sinotop Beijing, and Sinotop Beijing is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD WOFE. As compensation for providing the services, YOD WOFE is entitled to receive service fees from Sinotop Beijing equivalent to YOD WOFE’s cost plus 30% of such costs as calculated on accounting policies generally accepted in the PRC. YOD WOFE and Sinotop Beijing agree to periodically review the service fee and make adjustments as deemed appropriate. The term of the Technical Services Agreement is perpetual, and may only be terminated upon written consent of both parties. Spousal Consent Pursuant to the Spousal Consent, undersigned by the respective spouse of Nominee Shareholders (collectively, the “Spouses”), the Spouses unconditionally and irrevocably agreed to the execution of the Equity Pledge Agreement, Call Option Agreement and Power of Attorney agreement. The Spouses agreed to not make any assertions in connection with the equity interest of Sinotop Beijing and to waived consent on further amendment or termination of the Equity Pledge Agreement, Call Option Agreement and Power of Attorney agreement. The Spouses further pledge to execute all necessary documents and take all necessary actions to ensure appropriate performance under these agreements upon YOD WOFE’s request. In the event the Spouses obtain any equity interests of Sinotop Beijing which are held by the Nominee Shareholders, the Spouses agreed to be bound by the New Sinotop VIE Agreements, including the Technical Services Agreement, and comply with the obligations thereunder, including sign a series of written documents in substantially the same format and content as the New Sinotop VIE Agreements. Letter of Indemnification Pursuant to the Letter of Indemnification among YOD WOFE and Mei Chen and YOD WOFE and Yun Zhu, YOD WOFE agreed to indemnify Nominee Shareholders against any personal, tax or other liabilities incurred in connection with their role in equity transfer to the greatest extent permitted under PRC law. YOD WOFE further waived and released Nominee Shareholders from any claims arising from, or related to, their role as the legal shareholder of Sinotop Beijing, provided that their actions as a nominee shareholder are taken in good faith and are not opposed to YOD WOFE’s best interests. Conversely, the Nominee Shareholders will not be entitled to dividends or other benefits generated therefrom, or receive any compensation in connection with this arrangement. The Letter of Indemnification will remain valid until either Nominee Shareholders or YOD WOFE terminates the agreement by giving the other party hereto 60 days’ prior written notice. In addition to the New Sinotop VIE Agreements, the Management Service Agreement between Sinotop Beijing and YOD Hong Kong continued to remain in effect, the key terms of which are as follows: Management Services Agreement Pursuant to a Management Services Agreement, as of March 9, 2010, YOD Hong Kong has the exclusive right to provide to Sinotop Beijing management, financial and other services related to the operation of Sinotop Beijing’s business, and Sinotop Beijing is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD Hong Kong. As compensation for providing the services, YOD Hong Kong is entitled to receive a fee from Sinotop Beijing, upon demand, equal to 100% of the annual net profits as calculated on accounting policies generally accepted in the PRC of Sinotop Beijing during the term of the Management Services Agreement. YOD Hong Kong may also request ad hoc quarterly payments of the aggregate fee, which payments will be credited against Sinotop Beijing’s future payment obligations. The Management Services Agreement also provides YOD Hong Kong, or its designee, with a right of first refusal to acquire all or any portion of the equity of Sinotop Beijing upon any proposal by the sole shareholder of Sinotop Beijing to transfer such equity. In addition, at the sole discretion of YOD Hong Kong, Sinotop Beijing is obligated to transfer to YOD Hong Kong, or its designee, any part or all of the business, personnel, assets and operations of Sinotop Beijing which may be lawfully conducted, employed, owned or operated by YOD Hong Kong, including: (a) business opportunities presented to, or available to Sinotop Beijing may be pursued and contracted for in the name of YOD Hong Kong rather than Sinotop Beijing, and at its discretion, YOD Hong Kong may employ the resources of Sinotop Beijing to secure such opportunities; (b) any tangible or intangible property of Sinotop Beijing, any contractual rights, any personnel, and any other items or things of value held by Sinotop Beijing may be transferred to YOD Hong Kong at book value; (c) real property, personal or intangible property, personnel, services, equipment, supplies and any other items useful for the conduct of the business may be obtained by YOD Hong Kong by acquisition, lease, license or otherwise, and made available to Sinotop Beijing on terms to be determined by agreement between YOD Hong Kong and Sinotop Beijing; (d) contracts entered into in the name of Sinotop Beijing may be transferred to YOD Hong Kong, or the work under such contracts may be subcontracted, in whole or in part, to YOD Hong Kong, on terms to be determined by agreement between YOD Hong Kong and Sinotop Beijing; and (e) any changes to, or any expansion or contraction of, the business may be carried out at the sole discretion of YOD Hong Kong, and in the name of and at the expense of, YOD Hong Kong; provided, however, that none of the foregoing may cause or have the effect of terminating (without being substantially replaced under the name of YOD Hong Kong) or adversely affecting any license, permit or regulatory status of Sinotop Beijing. The term of the Management Services Agreement is 20 years, and may not be terminated by Sinotop Beijing, except with the consent of, or a material breach by, YOD Hong Kong. Pursuant to the above contractual agreements, YOD WOFE can have the assets transferred freely out of Sinotop Beijing without any restrictions. Therefore, YOD WOFE considers that there is no asset of Sinotop Beijing that can be used only to settle obligations of Sinotop Beijing, except for the registered capital of the entity amounting to RMB10.6 million (approximately $1.6 million) as of September 30, 2018. As Sinotop Beijing is incorporated as limited liability company under PRC Company Law, creditors of this entity do not have recourse to the general credit of other entities of the Company. b) Tianjin Sevenstarflix Network Technology Limited (“SSF”) VIE structure and arrangements To comply with PRC laws and regulations that prohibit or restrict foreign ownership of companies that provides value-added telecommunication services, the Company plans to also provide its services through SSF, which is applying to hold the licenses and approvals to provide digital distribution and Internet content services in the PRC. The Company has the ability to control SSF through a series of contractual agreements, as described below, entered into among YOD WOFE, YOD Hong Kong, SSF and the legal shareholders of SSF. On April 5, 2016, YOD WOFE entered into variable interest entity agreements with SSF and its nominee shareholders pursuant to the Amended Tianjin Agreement dated December 21, 2015 (see Note 12(c)) (the “SSF VIE Agreements”). Lan Yang, holder of 99% equity ownership in SSF and a party to certain of the SSF VIE Agreements, is the spouse of Bruno Zheng Wu, the Company’s Chairman. Yun Zhu, holder of 1% equity ownership in SSF and a party to certain of the SSF VIE Agreements, is the Vice President of SSS. The terms of the SSF VIE Agreements are as follows: Equity Pledge Agreement Pursuant to the Equity Pledge Agreement among YOD WOFE, Lan Yang and Yun Zhu (the “Nominee Shareholders”), dated April 5, 2016, the Nominee Shareholders pledged all of their capital contribution rights in SSF to YOD WOFE as security for the performance of the obligations of SSF to make all the required technical service fee payments pursuant to the Technical Services Agreement and for performance of the Nominee Shareholders’ obligation under the Call Option Agreement. The terms of the Equity Pledge Agreement expire upon satisfaction of all obligations under the Technical Services Agreement and Call Option Agreement. Call Option Agreement Pursuant to the Call Option Agreement among YOD WOFE, SSF and the Nominee Shareholders, dated April 5, 2016, the Nominee Shareholders granted an exclusive option to YOD WOFE, or its designee, to purchase, at any time and from time to time, to the extent permitted under PRC law, all or any portion of the Nominee Shareholders’ equity in SSF. The exercise price of the option shall be determined by YOD WOFE at its sole discretion, subject to any restrictions imposed by PRC law. The term of the agreement is until all of the equity interest in SSF held by the Nominee Shareholders is transferred to YOD WOFE, or its designee and may not be terminated by any party to the agreement without consent of the other parties. Power of Attorney Pursuant to the Power of Attorney agreements among YOD WOFE, SSF and each of the respective Nominee Shareholders, dated April 5, 2016, each of the Nominee Shareholders granted YOD WOFE the irrevocable right, for the maximum period permitted by law, to all of its voting rights as shareholders of SSF. The Nominee Shareholders may not transfer any of their equity interest in SSF to any party other than YOD WOFE. The Power of Attorney agreements may not be terminated except until all of the equity in SSF has been transferred to YOD WOFE or its designee. Technical Service Agreement Pursuant to the Technical Service Agreement, dated April 5, 2016, between YOD WOFE and SSF, YOD WOFE has the exclusive right to provide technical service, marketing and management consulting service, financial support service and human resource support services to SSF, and SSF is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD WOFE. As compensation for providing the services, YOD WOFE is entitled to receive service fees from SSF equivalent to YOD WOFE’s cost plus 20-30% of such costs as calculated on accounting policies generally accepted in the PRC. YOD WOFE and SSF agree to periodically review the service fee and make adjustments as deemed appropriate. The term of the Technical Services Agreement is perpetual, and may only be terminated upon written consent of both parties. Spousal Consent Pursuant to the Spousal Consent, dated April 5, 2016, undersigned by the respective spouse of the Nominee Shareholders (collectively, the “Spouses”), the Spouses unconditionally and irrevocably agreed to the execution of the Equity Pledge Agreement, Call Option Agreement and Power of Attorney agreement. The Spouses agreed to not make any assertions in connection with the equity interest of SSF and to waive consent on further amendment or termination of the Equity Pledge Agreement, Call Option Agreement and Power of Attorney agreement. The Spouses further pledge to execute all necessary documents and take all necessary actions to ensure appropriate performance under these agreements upon YOD WOFE’s request. In the event the Spouses obtain any equity interests of SSF which are held by the Nominee Shareholders, the Spouses agreed to be bound by the SSF VIE Agreements, including the Technical Services Agreement, and comply with the obligations thereunder, including sign a series of written documents in substantially the same format and content as the SSF VIE Agreements. Letter of Indemnification Pursuant to the Letter of Indemnification among YOD WOFE and Lan Yang and YOD WOFE and Yun Zhu, both dated as of April 5, 2016, YOD WOFE agreed to indemnify Nominee Shareholders against any personal, tax or other liabilities incurred in connection with their role in equity transfer to the greatest extent permitted under PRC law. YOD WOFE further waived and released the Nominee Shareholders from any claims arising from, or related to, their role as the legal shareholder of SSF, provided that their actions as a nominee shareholder are taken in good faith and are not opposed to YOD WOFE’s best interests. The Nominee Shareholders will not be entitled to dividends or other benefits generated therefrom, or receive any compensation in connection with this arrangement. The Letter of Indemnification will remain valid until either the Nominee Shareholders or YOD WOFE terminates the agreement by giving the other party hereto 60 days’ prior written notice. Loan Agreement Pursuant to the Loan Agreement among YOD WOFE and the Nominee Shareholders, dated April 5, 2016, YOD WOFE agrees to lend RMB 19.8 million and RMB0.2 million, respectively, to the Nominee Shareholders for the purpose of establishing SSF and for development of its business. As of September 30, 2018, RMB27.6 million ($4.2 million) and RMB nil have been lent to Lan Yang and Yun Zhu, respectively. Lan Yang has contributed all of the RMB27.6 million ($4.2 million) in the form of capital contribution. The loan can only be repaid by a transfer by the Nominee Shareholders of their equity interests in SSF to YOD WOFE or YOD WOFE’s designated persons, through (i) YOD WOFE having the right, but not the obligation to at any time purchase, or authorize a designated person to purchase, all or part of the Nominee Shareholders’ equity interests in SSF at such price as YOD WOFE shall determine (the “Transfer Price”), (ii) all monies received by the Nominee Shareholders through the payment of the Transfer Price being used solely to repay YOD WOFE for the loans, and (iii) if the Transfer Price exceeds the principal amount of the loans, the amount in excess of the principal amount of the loans being deemed as interest payable on the loans, and to be payable to YOD WOFE in cash. Otherwise, the loans shall be deemed to be interest-free. The term of the Loan Agreement is perpetual, and may only be terminated upon the Nominee Shareholders receiving repayment notice, or upon the occurrence of an event of default under the terms of the agreement. The loan extended to the Nominee Shareholders and the capital of SSF are fully eliminated in the consolidated financial statements. Management Services Agreement In addition to the SSF VIE Agreements, the Company’s subsidiary and the parent company of YOD WOFE, YOU On Demand (Asia) Limited, a company incorporated under the laws of Hong Kong (“YOD Hong Kong”) entered into a Management Services Agreement with SSF, dated as of April 6, 2016 (the “Management Services Agreement”). Pursuant to a Management Services Agreement, YOD Hong Kong has the exclusive right to provide to SSF management, financial and other services related to the operation of SSF’s business, and SSF is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD Hong Kong. As compensation for providing the services, YOD Hong Kong is entitled to receive a fee from SSF, upon demand, equal to 100% of the annual net profits as calculated on accounting policies generally accepted in the PRC of SSF during the term of the Management Services Agreement. YOD Hong Kong may also request ad hoc quarterly payments of the aggregate fee, which payments will be credited against SSF’s future payment obligations. In addition, at the sole discretion of YOD Hong Kong, SSF is obligated to transfer to YOD Hong Kong, or its designee, any part or all of the business, personnel, assets and operations of SSF which may be lawfully conducted, employed, owned or operated by YOD Hong Kong, including: (a) business opportunities presented to, or available to SSF may be pursued and contracted for in the name of YOD Hong Kong rather than SSF, and at its discretion, YOD Hong Kong may employ the resources of SSF to secure such opportunities; (b) any tangible or intangible property of SSF, any contractual rights, any personnel, and any other items or things of value held by SSF may be transferred to YOD Hong Kong at book value; (c) real property, personal or intangible property, personnel, services, equipment, supplies and any other items useful for the conduct of the business may be obtained by YOD Hong Kong by acquisition, lease, license or otherwise, and made available to SSF on terms to be determined by agreement between YOD Hong Kong and SSF; (d) contracts entered into in the name of SSF may be transferred to YOD Hong Kong, or the work under such contracts may be subcontracted, in whole or in part, to YOD Hong Kong, on terms to be determined by agreement between YOD Hong Kong and SSF; and (e) any changes to, or any expansion or contraction of, the business may be carried out in the exercise of the sole discretion of YOD Hong Kong, and in the name of and at the expense of, YOD Hong Kong; provided, however, that none of the foregoing may cause or have the effect of terminating (without being substantially replaced under the name of YOD Hong Kong) or adversely affecting any license, permit or regulatory status of SSF. The term of the Management Services Agreement is 20 years, and may not be terminated by SSF, except with the consent of, or a material breach by, YOD Hong Kong. Pursuant to the above contractual agreements, YOD WOFE can have the assets transferred freely out of SSF without any restrictions. Therefore, YOD WOFE considers that there is no asset of SSF that can be used only to settle obligation of YOD WOFE, except for the registered capital of SSF amounting to RMB50.0 million (approximately $7.5 million), among which RMB27.6 million (approximately $4.2 million) has been injected as of September 30, 2018. As SSF is incorporated as limited liability company under PRC Company Law, creditors of this entity do not have recourse to the general credit of other entities of the Company. Financial Information The following financial information of our VIEs, as applicable for the periods presented, affected the Company's consolidated financial statements. September 30, December 31, 2018 2017 ASSETS Current assets: Cash $ 1,495 3,898 Prepaid expenses 1,635 3,604 Other current assets 1,456 1,537 Intercompany receivables due from the Company's subsidiaries (i) 2,363,133 2,494,505 Total current assets 2,367,719 2,503,544 Long term investments 3,677,927 3,719,467 Total assets $ 6,045,646 6,223,011 LIABILITIES Current liabilities: Other current liabilities $ 39 41 Intercompany payables due to the Company's subsidiaries (i) 3,419,561 3,601,454 Total current liabilities 3,419,600 3,601,495 Total liabilities $ 3,419,600 3,601,495 Nine Months Ended September 30, September 30, 2018 2017 Revenue $ - 794,273 Net income (loss) $ (46,508 ) (4,293,469 ) Nine Months Ended September 30, September 30, 2018 2017 Net cash used in operating activities $ (2,403 ) (1,661,531 ) Net cash used in investing activities $ - (43,047 ) Net cash provided by financing activities (i) $ - 189,515 (i) Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.2 million to Sinotop Beijing in the nine months period ended September 30, 2017. The decrease in revenue, net income and net cash used in operating activities was mainly due to disposal of Zhong Hai Shi Xun Media in 2017. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition | 4. Acquisition (i) Acquisition of SVG and Wide Angle On January 30, 2017, the Company entered into a Securities Purchase Agreement (the “Sun Video SPA”) with BT Capital Global Limited, a British Virgin Islands company (“BT”) which is controlled by Company’s Chairman Bruno Wu, for the purchase by SSC of all of the outstanding capital stock of Sun Video Group Hong Kong Limited, a Hong Kong corporation (“SVG”), for an aggregate purchase price of $800,000 and a $50 million Promissory Note (the “SVG Note”) with the principal and interest thereon convertible into shares of the Company’s common stock at a conversion rate of $1.50 per share. BT has guaranteed that SVG will achieve certain financial goals within 12 months of the closing. Until receipt of necessary shareholder approvals, the SVG Note is not convertible into shares of our common stock, but once the necessary shareholder approval is received, the unpaid principal and interest thereon will automatically convert. Under the terms of the Sun Video SPA, BT has guaranteed that the business of SVG and its subsidiaries (the “Sun Video Business”) shall achieve revenue of $250 million and $15 million of gross profit (collectively the “Performance Guarantees”) within 12 months of the closing. If the Sun Video Business fails to meet either of the Performance Guarantees within such time, BT shall forfeit back to the Company the shares of the Company’s common stock or the SVG Note, on a pro rata basis based on the Performance Guarantee for which the Sun Video Business achieves the lowest percentage of the respective amount guaranteed. In addition, if the Sun Video Business achieves more than $50 million in cumulative net income within 3 years of closing, (the “Net Income Threshold”), the Company shall pay BT 50% of the amount of any cumulative net income above the Net Income Threshold. Profit share payments shall be made on an annual basis, in either cash or stock at the discretion of our Board of Directors. If the Board decides to make the payment in stock, the number of our shares of common stock to be awarded shall be calculated based on the market price of such shares. After the acquisition SVG, the Company changed its name to Wecast Services Group Limited, and is therefore also referred to herein as Wecast Services. On January 31, 2017, the Company entered into a Securities Purchase Agreement (the “Wide Angle SPA”) with BT and Sun Seven Stars Media Group Limited, a Hong Kong company (“SSSMGL”), one of the Company’s largest shareholders, controlled by our Chairman Bruno Wu, as guarantor, for the purchase by the Company of 55% of the outstanding capital stock of Wide Angle for the sole consideration of the Company adding Wide Angle to the Sun Video Business acquired by the Company under the SVG Purchase Agreement and thereby including 100% of the revenue and gross profit from Wide Angle in the calculation of the SVG Performance Guarantees set forth in the Sun Video SPA considering the Company has consolidated Wide Angle. As of September 30, 2018, the Company recorded the $24.3 million SVG Note as additional paid in capital, as the Company believes that the Performance Guarantees can be met within 12 months of the closing. Considering the proceeds transferred were larger than carrying amounts of the net assets received, such $24.3 million was then recognized as a reduction to the Company’s additional paid in capital. The Company has not begun accruing any reserves relating to potential Net Income Threshold earnout payments, since the Sun Video Business is currently not close to exceeding this threshold. (ii) Acquisition of BBD Digital Capital Group Ltd. On December 7, 2017, the Company entered into a Securities Purchase Agreement (the “BDCG Purchase Agreement”) with Tiger Sports Media Limited, a Hong Kong limited liability company (“Tiger”) pursuant to which the Company agreed to purchase Tiger’s 20% equity ownership in BBD Digital Capital Group Ltd. (“BDCG”), a New York corporation. The Company will purchase the 20% equity from Tiger for a total purchase price of $9.8 million (the “Transaction”), which consists of $2 million in cash and $7.8 million paid in the form of the Company’s capital stock (valued at $2.60 per share and equal to 3 million shares of the Company’s common stock). The valuation report was received post-signing of the BDCG Purchase Agreement with both parties agreeing that there is no obligation to close the Transaction until a satisfactory valuation report has been received, evaluated and approved by the Company’s Audit Committee. On April 24, 2018, the Audit Committee approved the satisfactory valuation report provided by an independent third party and closed this transaction. The Company paid the $2 million in cash upon the execution of the BDCG Purchase Agreement and issued the 3 million shares of Company common stock upon the closing of the Transaction. According to the BDCG Joint Venture Agreement, Board actions shall only be valid with more than 2/3 of the directors’ approval. As the Company is only able to assign 3 directors of the 5 in the Board, it is concluded that the Company does not have control in BDCG and should use an equity method to record the investment in BDCG. After such acquisition, the Company owns 60% of BDCG. It will be consolidated once the Company changes BDCG’s article of incorporation (or that joint venture agreement), pursuant to GAAP. (iii) Acquisition of Shanghai GuangMing On December 7, 2017, the Company entered into a Securities Purchase Agreement (the “GuangMing Purchase Agreement”) with Tianjin Sun Seven Stars Culture Development Co. Ltd, a PRC limited liability company (“Tianjin SSCD”) and Beijing Nanbei Huijin Investment Co., Ltd., a PRC limited liability company (“Beijing Nanbei”), pursuant to which the Company agreed to purchase Tianjin SSCD’s 80% equity ownership in Shanghai GuangMing Investment Management (“Shanghai GuangMing”), a PRC limited liability company, and Beijing Nanbei’s 20% equity ownership in Shanghai GuangMing. SSC will purchase the 100% equity for a total purchase price of $0.36 million (the “Transaction”). The fairness opinion report, which is delivered by Deloitte & Touche Financial Advisory Services Limited, has been received, evaluated and approved by the Company’s Audit Committee in April, 2018. (iv) Acquisition of Grapevine On July 18, 2018, the Company entered into an Agreement and Plan of Merger with GLI Acquisition Corp. (the “Merger”), a Delaware corporation and wholly owned subsidiary of the Company (the “Merger Sub”), and Grapevine Logic, Inc., a Delaware corporation (“GLI”), and Mr. Grant Deken, as the representative of the holders of capital stock of GLI, pursuant to which the Company agreed to acquire 65.65% share of GLI for an aggregate cash payment of $2.4 million to the holders of capital stock of GLI. On September 4, 2018, the Company have completed the acquisition of 65.65% share of GLT. The Company has preliminarily recorded $1.4 million of Goodwill, $2.9 million of Intangible Assets and $0.7 million of deferred tax liabilities based on the estimated fair values. The preliminary fair value estimates for the assets acquired and liabilities assumed for our acquisitions were based upon preliminary calculations and our estimates and assumptions for each of these acquisitions are subject to change as we obtain additional information for our estimates during the respective measurement periods (up to one year from the respective acquisition dates).The Company has included the financial results of GLI in our consolidated financial statements from the acquisition date. Fomalhaut Limited, a British Virgin Islands company and an affiliate of Bruno Wu, the Chairman and Co-CEO of the Company (“Fomalhaut”), was an equity holder of 34.35% in GLI (the “Fomalhaut Interest”) prior to the merger and remains so following the merger. Fomalhaut will not receive any part of the Purchase Price. Fomalhaut entered into a Stock Option Agreement, effective as of August 31, 2018 (the “Option Agreement”), with the Company pursuant to which the Company provided Fomalhaut with the option to sell the Fomalhaut Interest to the Company. The aggregate sale price for the Fomalhaut Interest is the fair market value of the Fomalhaut Interest as of the close of business on the date preceding the date upon which the right to sell the Fomalhaut Interest to the Company is exercised by Fomalhaut. If the option is exercised, the sale price for the Fomalhaut Interest is payable in a combination of 1/3 cash and 2/3 Company shares of common stock at the then market value. The exercise period for the Option Agreement terminates on August 31, 2021. (v) Acquisition of Fintalk On September 7, 2018, the Company entered into an Intellectual Property and Purchase and Assumption Agreement (the “SSIL Agreement”) with Sun Seven Star International Limited, a Hong Kong company (“SSIL”) and an affiliate of Mr. Bruno Wu, the Company’s Chairman and Co- CEO, pursuant to which SSIL sold the assets of FinTalk to the Company in exchange for $1.0 million promissory note (the “Note”) and shares of the Company’s common stock with a fair market value of $6.0 million. The Company shall repay the Note in 12 equal monthly installments commencing on October 7, 2018 at an interest rate of 2.51% per annum. The principal amount of the Note shall become due and payable in the event of a default pursuant to the Note. The transaction has not been completed as of September 30, 2018. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2018 | |
Accounts Receivable [Abstract] | |
Accounts Receivable, Net | 5. Accounts Receivable, Net Accounts receivable consists of the following: September 30, December 31, 2018 2017 Accounts receivable $ 105,538,117 26,965,731 Less: allowance for doubtful accounts (3,594 ) (3,646 ) Accounts receivable, net $ 105,534,523 26,962,085 The movement of the allowance for doubtful accounts is as follows: September 30, December 31, Balance at the beginning of the period $ (3,646 ) (2,828,796 ) Additions charged to bad debt expense - (145,512 ) Write-off of bad debt allowance 52 89,851 Disposal of Zhong Hai Shi Xun - 2,880,811 Balance at the end of the period $ (3,594 ) (3,646 ) |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 6. Property and Equipment, Net The following is a breakdown of the Company’s property and equipment: September 30, December 31, 2018 2017 Furniture and office equipment $ 312,829 308,383 Vehicle 143,249 147,922 Leasehold improvements 163,311 8,058 Total property and equipment 619,389 464,363 Less: accumulated depreciation (361,336 ) (337,088 ) Property and Equipment, net $ 258,053 127,275 The Company recorded depreciation expense of approximately $14,820 and $32,941 for the three and nine months ended September 30, 2018 and $8,341 and $209,139 for the three and nine months ended September 30, 2017, respectively. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets As of September 30, 2018 and December 31, 2017, the Company’s amortizing and indefinite lived intangible assets consisted of the following: September 30, 2018 December 31, 2017 Gross Accumulated Impairment Net Gross Accumulated Impairment Net Amortizing Intangible Assets Amount Amortization Loss Balance Amount Amortization Loss Balance Charter/ Cooperation agreements 301,495 (32,303 ) - 269,192 - - - - Intangible assets – Content (ii) 2,903,762 (241,980 ) - 2,661,782 - - - - Software and licenses 238,163 (203,663 ) - 34,500 214,210 (199,626 ) - 14,584 Patent and trademark (i) 92,965 (39,943 ) (53,022 ) - 92,965 (39,943 ) (53,022 ) - Total amortizing intangible assets $ 3,536,385 (517,889 ) (53,022 ) 2,965,474 $ 307,175 $ (239,569 ) $ (53,022 ) $ 14,584 Indefinite lived intangible assets Website name 159,505 - - 159,505 134,290 - - 134,290 Patent (i) 10,599 - (10,599 ) - 10,599 - (10,599 ) - Total intangible assets $ 3,706,489 (517,889 ) (63,621 ) 3,124,979 $ 452,064 $ (239,569 ) $ (63,621 ) $ 148,874 (i) During the second quarter of 2017, the Company determined that one of its subsidiaries in the US would not serve the core business or generate future cash flow. As no future cash flows will be generated from using the patents owned by this subsidiary, the Company estimated the fair value of those patents to be nil as of June 30, 2017. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from patents of $63,621 was recognized in 2017 to write off the entire book value of the patents. (ii) During the third quarter of 2018, the Company completed the acquisition of 65.65% share of GLT, and preliminarily recorded $1.4 million of Goodwill, $2.9 million of intangible assets and $0.7 million of deferred tax based on the estimated fair values (Note 4) The following table outlines the amortization expense for the following years: Amortization to be Years ending December 31, Recognized 2018 (3 months) $ 760,680 2019 2,076,117 2020 114,677 2021 and thereafter 14,000 Total amortization to be recognized $ 2,965,474 |
Long Term Investments
Long Term Investments | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Long Term Investments | 8. Long Term Investments Equity investments without readily determinable fair values Equity investments without readily determinable fair values as of September 30, 2018 and December 31, 2017 are as follow: September 30, December 31, Topsgame (i) $ 3,365,969 $ 3,365,969 Frequency (ii) 3,000,000 3,000,000 DBOT (iii) 250,000 250,000 Liberty (iv) 1,011,916 - Asia Times (v) 1,023,274 - Total $ 8,651,159 $ 6,615,969 In the first quarter of 2018, we adopted the ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10). Under the new ASC, entities no longer use the cost method of accounting as it was applied before, but it can elect a measurement alternative for equity investments that do not have readily determinable fair values and do not qualify for the practical expedient in ASC 820 to estimate fair value using the NAV per share. After management’s assessment of each of these three equity investments, management concluded that these three investments should be accounted for using measurement alternative. Under the alternative, the Company measures these investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer, and the Company has to make a separate election to use the alternative for each eligible investment and has to apply the alternative consistently from period to period until the investment’s fair value becomes readily determinable. ASU further requires that the Company should use prospective method for all equity investments without readily determinable fair values. (i) Investment in Topsgame On April 13, 2016, SSF entered into a Game Right Assignment Agreement with SSS for the acquisition of certain game IP rights (“Game IP Rights”) for approximately $2.7 million (RMB18 million) in cash. On April 15, 2016, SSF entered into a Capital Increase Agreement with Nanjing Tops Game Co., Ltd. (“Topsgame”) and its shareholders whereby SSF transferred the Game IP Rights acquired from SSS to Topsgame in exchange for 13% of Topsgame’s equity ownership. Topsgame is a PRC company that specializes in the independent development and operation of online, stand-alone and other games as well as the distribution of domestic and overseas games. The Company’s 13% ownership interest does not provide the Company with the right to nor does the Company have representation on the board of directors of Topsgame. The Company has recognized the cost of the investment in Topsgame, which is a private company with no readily determinable fair value, based on the acquisition cost of Game IP Rights of approximately $2.7 million and accounts for the investment by the cost method. On September 14, 2016, SSF increased its investment in Topsgame by RMB3,900,000 (approximately $584,000) and maintained its 13% equity ownership of Topsgame. The investment continued to be accounted for as equity investments without readily determinable fair values. The Company expects to sell its investment interest in Topgame and other owned IP and its investment interest in Frequency (discussed in Note 8 (ii)) to an independent third party with consideration greater than its net book value in 2018. The Company has signed a letter of intent with this third party and management believes it will close this transaction in 2018 on the basis of a valuation report provided by a qualified independent valuation firm. Accordingly, the Company did not make any impairment to either of these long-lived assets as of September 30, 2018. (ii) Investment in Frequency In April 2016, the Company and Frequency Networks Inc. (“Frequency”) entered into a Series A Preferred Stock Purchase Agreement (the “SPA”) for the purchase of 8,566,271 shares of Series A Preferred Stock, Frequency (the “Frequency Preferred Stock”) for a total purchase price of $3 million. The 8,566,271 Series A Preferred Stock represent 9% ownership and voting interest on an as converted basis and does not provide the Company with the right to nor does the Company have representation on the board of directors of Frequency. The Frequency Preferred Stock is entitled to non-cumulative dividends at the rate of $0.02548 per share per annum, declared at the discretion of Frequency’s board of directors. The Frequency Preferred Stock is also convertible into shares of Frequency common stock at the Company’s election any time after issuance on a 1:1 basis, subject to certain adjustment. Each share of Frequency Preferred Stock also has a liquidation preference of $0.42467 per share, plus any declared but unpaid dividends. The Company has recognized the cost of the investment in Frequency, which is a private company with no readily determinable fair value, at its cost of $3 million and accounts for the investment by the cost method. There were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of this investment. (iii) Investment in DBOT In August, 2017, the Company subscribed for a strategic investment of US$250,000 in the Delaware Board of Trade Holdings, Inc. (“DBOT”) to acquire 187,970 common shares. DBOT is a FINRA member firm, and filed an initial operations report on Form ATS to give notice of DBOT ATS’s operations. DBOT is powered through the blockchain technology from one of our strategic licensing partners. The Company accounts for the investment in DBOT as equity investments without readily determinable fair values, as the Company owns less than 4% of the common shares and the Company has no significant influence over DBOT. On December 18, 2017, January 12, 2018 and February 28, 2018, the Company entered into three stock purchase agreements with certain existing DBOT shareholders to acquire their owned shares of common stock of DBOT in an aggregate amount of 3,543,546 shares. To acquire those shares, the Company agreed to issue the aggregate amount of 2,267,869 shares of the Company’s common stock. The transaction closed in October 2018. Together with shares acquired in 2017, the Company owns 28% of the common shares and will account for the investment using equity method starting from October 2018. (iv) Investment in Liberty On September 7, 2018, the Company entered into a Share Purchase Agreement with Sun Seven Stars Investment Group Limited (“Sun”), an affiliate of Bruno Wu, the then Chairman and Co-CEO of the Company, pursuant to which the Company agreed to purchase from Sun and other persons for whom Sun acted as seller-representative: • an aggregate of 8,583,034 shares of common stock of Liberty Biopharma, an entity listed on the TSX venture exchange (“Liberty”), at fair market value, in consideration for Company common stock of equivalent value; and • an aggregate of 3,240,433 additional shares of Liberty, subject to the sellers receiving those shares from Liberty as award of performance shares if and when certain performance and vesting conditions set out in an agreement among Sun, Liberty and the sellers are achieved, in consideration for Company common stock of equivalent value. These Liberty shares represent 50% of performance based Liberty shares to which the sellers are entitled. In the event the performance criteria are not met, the Liberty performance shares will not be issued to the sellers and thus the purchase of these performance shares by the Company will not close. The Company shares to be issued to the sellers in consideration for the Liberty shares are valued at fair market value on the date of each closing. As of September 30, 2018 this transaction was not completed, the Company had not received any shares from Liberty, nor had the Company issued any shares to the sellers. On September 28, 2018, the Company signed the Subscription Agreement with Liberty to purchase 1,173,333 common shares for $2.0 million. The Company paid $1.0 million of the purchase price as of September 30, 2018. As of September 30, 2018, this subscription transaction has not yet closed and the Company has not received the shares from Liberty. (v) Investment in Asia Times On September 12 2018, the Company announced a 50/50 Joint Venture (JV) with Asia Times Holdings, to be named Asia Times Financial Limited. JV will be providing next generation financial information service by AI-enabled financial data analytics and end-to-end encrypted messaging system that will work alongside blockchain-based financial services. As part of the deal, the Company will take a 10% stake in Asia Times Holdings for $4.0 million cash investment and Asia Times Holdings agreed to contribute $1.0 million of the $4.0 investment to the JV. The Purchase Price is payable in 4 tranches of $1,000,000 payable on September 21, 2018, October 15, 2018, November 15, 2018 and December 15, 2018, respectively. The Company paid the first $1.0 million payment prior to September 30, 2018. No shares from Asia Times have been issued as of September 30, 2018. Equity method investments Equity method investment movement for the nine months ended on September 30, 2018 is as follow: September 30, 2018 December 31, Addition Loss on Foreign currency September 30, Wecast Internet (i) 6,044 - (1,652 ) 1 4,393 Hua Cheng (ii) 353,498 - (42,664 ) 1,124 311,958 Shandong Media (iii) - - - - - BDCG (iv) - 9,800,000 - - 9,800,000 Total $ 359,542 9,800,000 (44,316 ) 1,125 10,116,351 (i) Investment in Wecast Internet In October 2016, the Company’s subsidiary, YOU On Demand (Asia) Ltd., invested RMB1,000,000 (approximately $149,750) in Wecast Internet Limited (“Wecast Internet”) and held its 50% equity ownership. In 2017, Wecast Internet closed its 100% owned subsidiary and the Company received $35,612 from its previous capital investment, and expects to receive the remaining investment from Wecast Internet in 2018. (ii) Investment in Hua Cheng As of September 30, 2018 and December 31, 2017, the Company held 39% equity ownership in Hua Cheng, and accounted for the investment by the equity method. (iii) Investment in Shandong Media As of September 30, 2018 and December 31, 2017, the Company held 30% equity ownership in Shandong Media, and accounts for the investment by the equity method. The investment was fully impaired as of September 30, 2018 and December 31, 2017. (iv) Investment in BDCG As of September 30, 2018 and December 31, 2017, the Company held 60% and 20% equity ownership in BDCG respectively, and accounts for the investment by the equity method, as indicated in Note 4. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 9. Stockholders’ Equity On May 19, 2017, the Company entered into a subscription agreement with certain investors, including officers, directors and other affiliates of the Company, pursuant to which the Company issued and sold to such investors, in a private placement, an aggregate of 727,273 shares of the common stock of the Company, for $2.75 per share, or a total purchase price of $2.0 million. Investors in the private placement included Lan Yang, the wife of the Company’s Chairman Bruno Wu, and China Telenet Ventures Limited, an entity owned and controlled by Sean Wang, a member of the Company’s Board of Directors. As of July 18, 2017, all subscription amounts have been received by the Company. On October 23, 2017, the Company entered into a Securities Purchase Agreement with Hong Kong Guo Yuan Group Capital Holdings Limited. Pursuant to the terms of the agreement, the Company has agreed to sell and issue 5,494,505 shares of the Company’s common stock to the Hong Kong Guo Yuan Group Capital Holdings Limited for $1.82 per share, or a total purchase price of $10.0 million. On March 17, 2018, the Company entered into a subscription agreement (the “Subscription Agreement”) with GT Dollar Ptd. Ltd. (“GTD”) for a private placement (“GT Financing”) in the total amount of $40.0 million, which consists of issuance of new shares in the amount of $25.1 million and issuance of two promissory notes in the amount of $ 10.0 million and $4.9 million, respectively. The Subscription Agreement was subsequently amended and restated (the “Amended Agreement”) on June 28, 2018 to reduce the amount of such investment to $10.0 million and to terminate the two promissory notes. Pursuant to the terms of the Amended Agreement, the Company will issue and sell to GTD, an aggregate of 5,494,506 shares of the common stock of the Company, for $1.82 per share, or a total purchase price of $10.0 million. The Company has received $5.3 million in the second quarter of 2018 and the remaining $4.7 million in the third quarter of 2018. The shares have been issued on October 3, 2018. On June 21, 2018, the Company entered into a Subscription Agreement (the “Subscription Agreement”) with Sun Seven Stars Investment Group Limited, a British Virgin Islands corporation (“SSSIG”), an affiliate of Bruno Wu, the Company’s Chairman and Co- CEO, pursuant to which SSSIG purchased $3 million of Common Stock at the then market price. The Company has received $1.1 million as of September 30, 2018 and the remaining $1.9 million on November 9, 2018. No shares have been issued as of as of September 30, 2018. On July 24, 2018, the Company entered into a Share Purchase & Option Agreement (the “Purchase Agreement”) with Star Thrive Group Limited (“Star”), a British Virgin Islands corporation, pursuant to which Star will purchase 12,568,306 shares of the Company’s common stock, for $23.0 million (the “Investment”). The Investment will be made over 6 separate monthly closings between now and December 31, 2018. The Company also granted to Star a share purchase option (the “Call Option”) pursuant to which the Purchaser may, within 24 months after July 24, 2018, purchase from the Company such number of shares of common stock that would bring Star’s total ownership of the Company’s issued and outstanding shares up to 19.5% on a fully diluted basis, at a price equal to 95% of the weighted average trading price of the common stock within 3 months prior to the exercise date of the Call Option. As of September 30, 2018, the Company has received $6.9 million and 3,770,493 shares have been issued. The fair value of the call option is $8.0 million using the Black-Sholes valuation model using the following assumptions: expected terms 1.81 years; volatility 132.55%; dividend yield: zero and risk free interest rate 2.81%. |
Convertible Note
Convertible Note | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Note | 10. Convertible Note On June 28, 2018, the Company entered into a Convertible Note Purchase Agreement (the “Purchase Agreement”) and a Convertible Bond (the “Bond”) with Advantech Capital Investment II Limited, an exempted company incorporated and existing under the laws of the Cayman Islands (“Advantech”), pursuant to which Advantech invested $12 million. Such investment is convertible into common stock, at a conversion price of $1.82. The Bond matures on June 28, 2021 and accrues at an 8% interest rate. the Company records $1.4 million of beneficial conversion feature (“BCF”) in the additional paid in capital. The BCF for the Bond is recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The intrinsic value is generally calculated at the commitment date as the difference between the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible. As of September 30, 2018, the carrying amount of the Bond net of the discount related to the beneficial conversion feature is $10.7 million. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 11. Fair Value Measurements Accounting standards require the categorization of financial assets and liabilities, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The various levels of the fair value hierarchy are described as follows: · Level 1 — Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access. · Level 2 — Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. · Level 3 — Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Accounting standards require the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. The Company reviews the valuation techniques used to determine if the fair value measurements are still appropriate on an annual basis, and evaluate and adjust the unobservable inputs used in the fair value measurements based on current market conditions and third party information. Common stock is valued at closing price reported on the active market on which the individual securities are traded. The carrying amount of cash, accounts receivable, notes receivable, accounts payable, accrued other expenses, other current liabilities and convertible notes as of September 30, 2018 and December 31, 2017, approximate fair value because of the short maturity of these instruments. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. Related Party Transactions (a) $3.0 Million Convertible Note On May 10, 2012, the Executive Chairman and Principal Executive Officer, Mr. Shane McMahon, made a loan to the Company in the amount of $3.0 million. In consideration for the loan, the Company issued a convertible note to Mr. McMahon in the aggregate principal amount of $3.0 million (the “Note”) at a 4% interest rate computed on the basis of a 365 day year. Upon issuance, the conversion price of the Note was equal to the price per share paid for securities by investors in the most recent financing (as of the date of conversion) of equity or equity-linked securities of the Company. On November 9, 2017, the Board of Directors approved Amendment No. 7 to $3.0 million Note, pursuant to which the maturity date of the Note was extended to December 31, 2019. The Note remains payable on demand or convertible on demand into common stock at a conversion price of $1.50. For the three and nine months ended September 30, 2018, the Company recorded interest expense of $30,247 and $89,753, respectively, related to the Note; For the three and nine months ended September 30, 2017, the Company recorded interest expense of $30,247 and $89,753, respectively, related to the Note. (b) Asset Disposal to BT On November 28, 2017, for strategic reasons, the Company and BT agreed to amend the BT SPA, in which the Company will neither sell the equity of Nanjing Tops Game Co., Ltd, and the equity of the Pantaflix joint venture to BT nor receive the previously agreed upon consideration for such sales. Instead the Company sold to BT 80% of the outstanding capital stock of Zhong Hai Shi Xun Media to streamline the operations of the Company and to eliminate the Company’s exposure to any liabilities and obligations of Zhong Hai Shi Xun Media. (c) Acquisition of GuangMing On December 7, 2017, the Company entered into a Securities Purchase Agreement with Shanghai Guang Ming Investment Management Limited, a PRC limited liability company (“Guang Ming”), Tianjin Sun Seven Stars Culture Development Co. Ltd. (“Tianjin”) and Beijing Nanbei Huijin Investment Co. Ltd. (“BNH”) The Company purchased 100% of Guang Ming’s issued and outstanding shares for a total purchase price of RMB2.4 million (approximately $363,436). Guang Ming holds a special fund management license. The acquisition will help the Company develop a fund management platform. The closing of the acquisition is conditioned upon, among other things, Guang Ming, Tianjin and BNH obtaining all of the necessary approvals from the Asset Management Association of China (“AMAC”), a self-regulatory organization that oversees and regulates fund management companies in China. In the event that AMAC does not accept the submission for change of ownership, this agreement shall be rescinded, and the Company shall receive a refund from the sellers of any portion of the purchase price previously paid within 15 days of notice from the Company. This agreement was approved by the Company’s Audit Committee. The closing of the acquisition is also subject to the receipt of a fairness opinion and valuation report satisfactory to the Company, which together conclude that the purchase price of the acquisition is fair from a financial point of view to the Company’s shareholders. The acquisition is deemed to be a related party transaction because Tianjin is an affiliate of Bruno Wu, the Company’s Chairman and Co-Chief Executive Officer. In April 2018, the fairness opinion was approved by Audit Committee, and the Company paid the consideration and closed this acquisition. (d) Crude Oil Trading During the first nine months of 2018, ten of our crude oil transactions were purchased from three entities of which our minority shareholder has significant influence upon and because this minority shareholder has significant influence on both our Singapore joint venture and these three entities/suppliers, the Company reported these ten purchases as related party transaction from accounting perspective and hence recorded this as separate related party costs in its financial statement. Associated amounts payable represents almost 58.3% of total liabilities. (e) Acquisition of Grapevine On September 4, 2018, the Company have completed the acquisition of 65.65% share of GLT (Note 4). Fomalhaut Limited, a British Virgin Islands company and an affiliate of Bruno Wu, the Chairman and Co-CEO of the Company (“Fomalhaut”), was an equity holder of 34.35% in GLI (the “Fomalhaut Interest”) prior to the merger and remains so following the merger. Fomalhaut will not receive any part of the Purchase Price. Fomalhaut entered into a Stock Option Agreement, effective as of August 31, 2018 (the “Option Agreement”), with the Company pursuant to which the Company provided Fomalhaut with the option to sell the Fomalhaut Interest to the Company. The aggregate sale price for the Fomalhaut Interest is the fair market value of the Fomalhaut Interest as of the close of business on the date preceding the date upon which the right to sell the Fomalhaut Interest to the Company is exercised by Fomalhaut. If the option is exercised, the sale price for the Fomalhaut Interest is payable in a combination of 1/3 cash and 2/3 Company shares of common stock at the then market value. The exercise period for the Option Agreement terminates on August 31, 2021. (f) Investment in Asia Times On September 12 2018, the Company announced a 50/50 Joint Venture (JV) with Asia Times Holdings, to be named Asia Times Financial Limited. to take a 10% stake in Asia Times Holdings. (Note 8). As part of the deal, the Company will take a 10% stake in Asia Times Holdings for $4.0 million cash investment and Asia Times Holdings agreed to contribute $1.0 million of the $4.0 investment to the JV. The Purchase Price is payable in 4 tranches. The Company paid the first $1.0 million payment prior to September 30, 2018. Uwe Parpart, the Company’s Chief Strategy Officer, is the Chairman of Asia Times Holdings. (g) SSSIG Investment On June 21, 2018, the Company entered into a Subscription Agreement (the “Subscription Agreement”) with Sun Seven Stars Investment Group Limited, a British Virgin Islands corporation (“SSSIG”), an affiliate of Bruno Wu, the Company’s Chairman and Chief Executive Officer, pursuant to which SSSIG purchased $3 million of Common Stock at the then market price. The Company has received $1.1 million as of September 30, 2018. No shares have been issued as of as of September 30, 2018. (h) Acquisition of Fintalk On September 7, 2018, the Company entered into an Intellectual Property and Purchase and Assumption Agreement (the “SSIL Agreement”) with Sun Seven Star International Limited, a Hong Kong company (“SSIL”) and an affiliate of Mr. Bruno Wu, the Company’s Chairman and Co- CEO, pursuant to which SSIL sold the assets of FinTalk to the Company in exchange for $1.0 million promissory note (the “Note”) and shares of the Company’s common stock with a fair market value of $6.0 million. The Company shall repay the Note in 12 equal monthly installments commencing on October 7, 2018 at an interest rate of 2.51% per annum. The principal amount of the Note shall become due and payable in the event of a default pursuant to the Note.” The transaction has not been completed as of September 30, 2018. (i) Investment in Liberty On September 7, 2018, the Company entered into a Share Purchase Agreement with Sun Seven Stars Investment Group Limited (“Sun”), an affiliate of Bruno Wu, the then Chairman and Co-CEO of the Company, pursuant to which the Company agreed to purchase from Sun and other persons for whom Sun acted as seller-representative: • an aggregate of 8,583,034 shares of common stock of Liberty Biopharma, an entity listed on the TSX venture exchange (“Liberty”), at fair market value, in consideration for Company common stock of equivalent value; and • an aggregate of 3,240,433 additional shares of Liberty, subject to the sellers receiving those shares from Liberty as award of performance shares if and when certain performance and vesting conditions set out in an agreement among Sun, Liberty and the sellers are achieved, in consideration for Company common stock of equivalent value. These Liberty shares represent 50% of performance based Liberty shares to which the sellers are entitled. In the event the performance criteria are not met, the Liberty performance shares will not be issued to the sellers and thus the purchase of these performance shares by the Company will not close. The Company shares to be issued to the sellers in consideration for the Liberty shares are valued at fair market value on the date of each closing. As of September 30, 2018 this transaction was not completed, the Company had not received any shares from Liberty, nor had the Company issued any shares to the sellers. On September 28, 2018, the Company signed the Subscription Agreement with Liberty to purchase 1,173,333 common shares for $2.0 million. The Company paid $1.0 million of the purchase price as of September 30, 2018. As of September 30, 2018, this subscription transaction has not yet closed and the Company has not received the shares from Liberty. |
Share-Based Payments
Share-Based Payments | 9 Months Ended |
Sep. 30, 2018 | |
Compensation and Retirement Disclosure [Abstract] | |
Share-Based Payments | 13. Share-Based Payments As of September 30, 2018, the Company had 1,706,431 options, 90,586 restricted shares and 60,000 warrants outstanding. The Company awards common stock and stock options to employees and directors as compensation for their services, and accounts for its stock option awards to employees and directors pursuant to the provisions of ASC 718, Stock Compensation Total share-based payments expense recorded by the Company during the three and nine months ended September 30, 2018 and September 30, 2017, respectively, is as follows: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2018 2017 2018 2017 Employees and directors share-based payments $ 11,530 $ 54,846 $ 3,372,447 $ 202,501 Effective as of December 3, 2010, the Company’s Board of Directors approved the Wecast Network, Inc. 2010 Stock Incentive Plan (“the 2010 Plan”) pursuant to which options or other similar securities may be granted. The maximum aggregate number of shares of our common stock that may be issued under the Plan is 4,000,000 shares. As of September 30, 2018, options available for issuance are 132,499 shares. (a) Stock Options Stock option activity for the nine months ended September 30, 2018 is summarized as follows: Weighted Average Remaining Aggregated Options Weighted Average Contractual Life Intrinsic Outstanding Exercise Price (Years) Value Outstanding at January 1, 2018 1,853,391 $ 3.20 2.99 0.02 Granted - - Exercised (110,295 ) 1.99 Expired (36,665 ) 1.58 Forfeited - - Outstanding at September 30, 2018 1,706,431 3.28 4.34 0.86 Vested and expected to vest as of September 30, 2018 1,706,431 3.28 4.34 0.86 Options exercisable at September 30, 2018 (vested) 1,615,598 3.36 4.09 0.80 As of September 30, 2018, approximately $110,584 of total unrecognized compensation expense related to non-vested share options is expected to be recognized over a weighted average period of approximately 1.67 years. The total fair value of shares vested during the nine months ended September 30, 2018 and 2017 was approximately $319,001 and $56,765 respectively. (b) Warrants In connection with the Company’s financings, the Warner Brother Agreement and the service agreements, the Company issued warrants to service providers to purchase common stock of the Company. The warrants issued to Warner Brother will expire on Jan 31, 2019. The warrants that were issued to SSS has been expired on March 28, 2018. As of September 30, 2018, the weighted average exercise price of the warrants was $1.75 and the weighted average remaining life was 0.59 years. The following table outlines the warrants outstanding and exercisable as of September 30, 2018 and December 31, 2017: September 30, December 31, 2018 2017 Number of Number of Warrants Warrants Exercise Expiration Warrants Outstanding Outstanding Outstanding Price Date 2014 Broker Warrants (Series E Financing) 60,000 703,714 $ 1.75 01/31/2019 2016 Warrants to SSS - 1,818,182 $ 2.75 03/28/2018 60,000 2,521,896 On September 24, 2018, the Company entered into an employment agreements with three executives. As part of their employment agreements, they are entitled to warrants for an aggregate of 8,000,000 shares at an exercise price of $5.375 per share (the “Exercise Price”), which is a 25% premium to the $4.30 per share closing market price of the Company’s common stock on September 7, 2018, the date upon which the terms of the employment agreements were mutually agreed. The grant date of the Warrants will be the first date that the Company’s common stock trades at or above the Exercise Price (the “Grant Date”) and the Warrants shall vest as follows: (i) 25% will vest 9 months following the Grant Date; (ii) 50% will vest 18 months following the Grant Date; and (iii) 25% will vest 24 months following the Grant Date. The Company has reserved 8,000,000 shares for issuance in connection with these Warrants. The Company’s shares have not traded at or above the Exercise Price and no warrants have been granted during the nine months ended September 30, 2018. No stock based compensation expense was recognized since the warrants have not been granted as of September 30, 2018. (c) Restricted Shares In January, 2017, the Company granted 35,000 restricted shares to one employee under the “2010 Plan”. The restricted shares have a vesting period of four years with the first one-fourth vesting on the first anniversary from grant date and the remaining three-fourth vesting ratably over twelve quarters. The grant date fair value of the restricted shares was $43,750. As this employee left the Company in February, no expense was recorded. In March and April, 2017, the Company granted 365,000 restricted shares to certain employees under the “2010 Plan”. The restricted shares have a vesting period of four years with the first one-fourth vesting on the first anniversary from grant date and the remaining three-fourth vesting ratably over twelve quarters. The grant date fair value of the restricted shares was $778,200. In November, 2017, the Board of Directors approved 2017 independent board compensation plan, which approved to grant 4,488 restricted shares to each of four then independent directors under the “2010 Plan.” The restricted shares were all vested immediately since commencement date. The aggregated grant date fair value of all those restricted shares was $100,000. In April and June, 2018, the Company granted 1,342,743 restricted shares to certain employees under the “2010 Plan”. 1,239,743 of the restricted shares were all vested immediately since commencement date. Rest of the shares have a vesting period of two years with the first half vesting on the first anniversary from grant date and the other half vesting on the second anniversary. The grant date fair value of the restricted shares was $3,469,532. A summary of the restricted shares is as follows: Shares Weighted-average Restricted shares outstanding at January 1, 2018 109,586 1.92 Granted 1,342,743 2.58 Forfeited (97,000 ) 2.26 Vested (1,264,743 ) 2.56 Restricted shares outstanding at September 30, 2018 90,586 2.46 |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Common Share | 14. Earnings (Loss) Per Common Share Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2018 2017 2018 2017 Net loss attributable to common stockholders $ (7,186,847 ) $ (3,027,939 ) $ (19,228,240 ) $ (4,698,563 ) Basic Basic weighted average shares outstanding 74,063,495 62,146,168 71,574,303 59,594,289 Diluted Diluted weighted average common shares outstanding 74,063,495 62,146,168 71,574,303 59,594,289 Net loss per share: Basic $ (0.10 ) ($ 0.05 ) $ (0.27 ) ($ 0.08 ) Diluted $ (0.10 ) ($ 0.05 ) $ (0.27 ) ($ 0.08 ) Basic earnings (loss) per common share attributable to shareholders is calculated by dividing the net earnings (loss) attributable to shareholders by the weighted average number of outstanding common shares during the applicable period. Diluted earnings (loss) per share is calculated by taking net earnings (loss), divided by the diluted weighted average common shares outstanding. Diluted earnings (loss) per share for the three and nine months ended September 30, 2018 and 2017 both equal to basic loss per share for respective periods because the effect of securities convertible into common shares is anti-dilutive. The following table includes the number of shares that may be dilutive potential common shares in the future. These shares were not included in the computation of diluted earnings (loss) per share because the effect was either antidilutive or the performance condition was not met. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2018 2017 2018 2017 Warrants 60,000 3,118,181 60,000 3,118,181 Options 1,797,017 2,267,095 1,797,017 2,267,095 Series A Preferred Stock 933,333 933,333 933,333 933,333 Convertible note and interest 10,227,507 35,598,447 10,227,507 35,598,447 Total 13,017,857 41,917,056 13,017,857 41,917,056 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. Income Taxes As of September 30, 2018, the Company had approximately $38.0 million of the US domestic cumulative tax loss carryforwards and approximately $33.2 million of the foreign cumulative tax loss carryforwards, which may be available to reduce future income tax liabilities in certain jurisdictions. No U.S. tax loss would be expired based on new Tax Law. These PRC tax loss carryforwards will expire beginning year 2019 to year 2023. The income tax expense for the nine months ended September 30, 2018 is close to nil because of net operating loss and deferred tax assets related to the net operating loss carryovers utilized had been offset by a valuations allowance. The Company had established a 100% valuation allowance against its net deferred tax assets due to its history of pre-tax losses and the likelihood that the deferred tax assets will not be realized. The valuation allowance increased by approximately $4.5 million during the nine months ended September 30, 2018, which consists of $3.8 million resulting from operations and $0.7 million resulting from deferred tax liabilities acquired in the Grapevine aquisition. As of September 30, 2018, there are no unrecorded tax benefits which would impact our financial position or our results of operations. |
Contingencies and Commitments
Contingencies and Commitments | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | 16. Contingencies and Commitments (a) Operating Lease Commitment The Company is committed to paying leased property costs related to our offices as follows: Leased Property Years ending December 31, Costs 2018(3 months) 274,640 2019 515,016 2020 167,712 Thereafter - Total $ 957,368 (b) Lawsuits and Legal Proceedings From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. As of September 30, 2018, there are no such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. |
Concentration, Credit and Other
Concentration, Credit and Other Risks | 9 Months Ended |
Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentration, Credit and Other Risks | 17. Concentration, Credit and Other Risks (a) PRC Regulations The PRC market in which the Company operates poses certain macro-economic and regulatory risks and uncertainties. These uncertainties extend to the ability of the Company to conduct wireless telecommunication services through contractual arrangements in the PRC since the industry remains highly regulated. The Company conducts legacy YOD business through Zhong Hai Media, which the Company controls as a result of a series of contractual arrangements entered among YOD WOFE, Sinotop Beijing as the parent company of Zhong Hai Media, SSF and the respective legal shareholders of Sinotop Beijing and SSF. The Company believes that these contractual arrangements are in compliance with PRC law and are legally enforceable. If Sinotop Beijing, SSF or their respective legal shareholders fail to perform the obligations under the contractual arrangements or any dispute relating to these contracts remains unresolved, YOD WOFE or YOD HK can enforce its rights under the VIE contracts through PRC law and courts. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements. In particular, the interpretation and enforcement of these laws, rules and regulations involve uncertainties. If YOD WOFE had direct ownership of Sinotop Beijing and SSF, it would be able to exercise its rights as a shareholder to effect changes in the board of directors of Sinotop Beijing or SSF, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations. However, under the current contractual arrangements, the Company relies on Sinotop Beijing, SSF and their respective legal shareholders to perform their contractual obligations to exercise effective control. The Company also gives no assurance that PRC government authorities will not take a view in the future that is contrary to the opinion of the Company. If the current ownership structure of the Company and its contractual arrangements with the VIEs and their equity holders were found to be in violation of any existing or future PRC laws or regulations, the Company's ability to conduct its business could be affected and the Company may be required to restructure its ownership structure and operations in the PRC to comply with the changes in the PRC laws which may result in deconsolidation of the VIEs. In addition, the telecommunications, information and media industries remain highly regulated. Restrictions are currently in place and are unclear with respect to which segments of these industries foreign owned entities, like YOD WOFE, may operate. The PRC government may issue from time to time new laws or new interpretations on existing laws to regulate areas such as telecommunications, information and media, some of which are not published on a timely basis or may have retroactive effect. For example, there is substantial uncertainty regarding the Draft Foreign Investment Law, including, among others, what the actual content of the law will be as well as the adoption and effective date of the final form of the law. Administrative and court proceedings in China may also be protracted, resulting in substantial costs and diversion of resources and management attention. While such uncertainty exists, the Company cannot assure that the new laws, when it is adopted and becomes effective, and potential related administrative proceedings will not have a material and adverse effect on the Company's ability to control the affiliated entities through the contractual arrangements. Regulatory risk also encompasses the interpretation by the tax authorities of current tax laws, and the Company’s legal structure and scope of operations in the PRC, which could be subject to further restrictions resulting in limitations on the Company’s ability to conduct business in the PRC. (b) Major Customers Legacy YOD business The Company has agreements with distribution partners, including digital cable operators, IPTV operators, OTT streaming operators and mobile smartphone manufacturers and operator. A distribution partner that individually generates more than 10% of the Company’s revenue is considered a major customer. On October 8, 2016, the Company signed an agreement to form a partnership with Zhejiang Yanhua ("Yanhua Agreement"), where Yanhua will act as the exclusive distribution operator (within the territory of the People's Republic of China) of WCST's licensed library of major studio films. According to the Yanhua Agreement, the existing legacy Hollywood studio paid contents as well as other IP contents specified in the agreement, along with the corresponding authorized rights letter that WCST is entitled to, will be turned over to Yanhua as a whole package, which was agreed to be priced at RMB13.0 million. In addition to the above-mentioned minimal guarantee fee of RMB13.0 million specified, there is a provision in the Yanhua Agreement which states that once the revenue recognized from the existing contents transferred from WCST to Yanhua reaches the amount of RMB13.0 million, the revenue above RMB13.0 million will be shared with WCST from the date when this revenue threshold is reached based on certain revenue-sharing mechanism stipulated in the Yanhua Agreement. According to the Yanhua Agreement, the total price of the Existing Contents to be transferred is RMB13.0 million. The payment is agreed to be paid in two installments, the first half of RMB6.5 million was received on December 30, 2016. The remaining RMB6.5 million will be paid under the scenario that the license content fees due to Studios for the existing legacy Hollywood paid contents will be settled. Due to the fact that the second installment will depend upon some future events and is contingent in nature, the Company deems this portion of the fee is not fixed or determinable and therefore, this portion of the revenue did not meet the revenue recognition criteria to be recognized accordingly. In terms of the additional revenue-sharing fee over the above-mentioned RMB13.0 million fee specified, considering that this part of arrangement fee is not fixed or determinable at the time point as of September 30, 2018, it has not met the criteria for revenue recognition, management will recognize it once it becomes determinable and meet the other revenue recognition criteria in the future. Pursuant to the Yanhua Agreement, RMB6.5 million was recognized as revenue in 2017 based on the relative fair value of licensed content delivered to Yanhua. Wecast Services The holdings and businesses from Company’s two acquisitions in January 2017(Note 4) now reside under “Wecast Services”, our wholly-owned subsidiary Wecast Services Group Limited. Wecast Services is currently primarily engaged with consumer electronics e-commerce and crude oil supply chain management operations. The Company has been engaged in the crude oil supply chain business since October 2017. For the nine months ended September 30, 2017, one customer individually accounted for more than 10% of the Company’s revenue. Two customers individually accounted for more than 10% of the Company’s net accounts receivables as of September 30, 2017, respectively. For the nine months ended September, 2018, one customer individually accounted for more than 10% of the Company’s revenue. One customer individually accounted for more than 10% of the Company’s net accounts receivables as of September 30, 2018. (c) Major Suppliers Legacy YOD business The Company relies on agreements with studio content partners to acquire video contents. A content partner that accounts for more than 10% of the Company’s cost of revenues is considered a major supplier. Since January 1, 2017, only the content that was acquired from SSS in the amount of $17.7 million were still recorded as licensed content assets and amortized into cost of sales based on revenue and gross profit margin estimates. For the nine months ended September 30, 2017, $0.8 million was recorded in cost of sales and $0.8 million was recorded as revenue. No further revenue nor cost of sales was recorded since March 31, 2017. Wecast Services The Company relies on agreements with consumer electronics manufacturers and crude oil suppliers. For the nine months ended September 30, 2017, three suppliers individually accounted for more than 10% of the Company’s cost of revenues. Three suppliers individually accounted for more than 10% of the Company’s accounts payable as of September 30, 2017. For the nine months ended September 30, 2018, two suppliers individually accounted for more than 10% of the Company’s cost of revenues. Two supplier individually accounted for more than 10% of the Company’s accounts payable and amount due to related parties as of September 30, 2018. (d) Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk primarily consist of cash and accounts receivable. As of September 30, 2018 and December 31, 2017, the Company’s cash was held by financial institutions (located in the PRC, Hong Kong , the United States and Singapore) that management believes have acceptable credit. Accounts receivable are typically unsecured and are mainly derived from revenues from Wecast Services. The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Company performs on its distribution partners and its ongoing monitoring of outstanding balances. (e) Foreign Currency Risks A portion of the Company’s operating transactions are denominated in RMB and a portion of the Company’s assets and liabilities is denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB is subject to changes in the PRC’s government policies and to international economic and political developments. In the PRC, certain foreign exchange transactions are required by laws to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances by us in currencies other than RMB in China must be processed through PBOC or other China foreign exchange regulatory bodies that require certain supporting documentation in order to complete the remittance. Cash consists of cash on hand and demand deposits at banks, which are unrestricted as to withdrawal. Time deposits, which mature within one year as of the balance sheet date, represent interest-bearing certificates of deposit with an initial term of greater than three months when purchased. Time deposits which mature over one year as of the balance sheet date are included in non-current assets. Cash and time deposits maintained at banks consist of the following: September 30, December 31, 2018 2017 RMB denominated bank deposits with financial institutions in the PRC $ 961,428 684,115 US dollar denominated bank deposits with financial institutions in the PRC $ 328,021 628,481 HKD denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 35,695 17,508 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 11,310,538 1,505,271 US dollar denominated bank deposits with financial institutions in Singapore (“Singapore”) 884,060 1,033,769 US dollar denominated bank deposits with financial institutions in The United States of America (“USA”) $ 1,934,395 3,698,704 As of September 30, 2018 and December 31, 2017, deposits of $nil and $398,243 were insured, respectively. To limit exposure to credit risk relating to bank deposits, the Company primarily places bank deposits only with large financial institutions in the PRC, HK SAR, USA, Singapore and Cayman with acceptable credit ratings. |
Defined Contribution Plan
Defined Contribution Plan | 9 Months Ended |
Sep. 30, 2018 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |
Defined Contribution Plan | 18. Defined Contribution Plan For our U.S. employees, during 2011, the Company began sponsoring a 401(k) defined contribution plan ("401(k) Plan") that provides for a 100% employer matching contribution of the first 3% and a 50% employer matching contribution of each additional percent contributed by an employee up to 5% of each employee’s pay. Employees become fully vested in employer matching contributions after six months of employment. Company 401(k) matching contributions were approximately $487 and $3,242 for the three and nine months ended September 30, 2018 respectively and $3,980 and $6,526 for the three and nine months ended September 30, 2017 respectively. Full time employees in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Company to make contributions based on certain percentages of the employees’ basic salaries. Other than such contributions, there is no further obligation under these plans. The total contribution for such PRC employee benefits was $607,872 and $274,049 for the nine months ended September 30, 2018 and 2017, respectively. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | 19. Segment Reporting The Company’s chief operating decision maker has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. In fiscal year 2016, the Company operated and reported its performance in one segment. However, starting from fiscal year 2017, since Company has acquired Wecast Services Limited and Wide Angle Group Limited in January 2017 (see note 4), the Company has operated two segments including Legacy YOD segment and Wecast Service segment. Therefore, there are two reportable segments for the nine months ended September 30, 2018. The two reportable segments are: (i) Legacy YOD (ii) Wecast Service Segment disclosures are on a performance basis consistent with internal management reporting. The Company does not allocate expenses below segment gross profit since these segments share the same executive team, office space, occupancy expenses, information technology infrastructures, human resources and finance department. The following tables summarized the Company’s revenue and cost generated from different segments. Nine Months Ended September 30, September 30, 2018 2017 NET SALES TO EXTERNAL CUSTOMERS -Legacy YOD $ - $ 794,273 -Wecast Service 362,628,296 105,930,593 Net sales 362,628,296 106,724,866 GROSS PROFIT -Legacy YOD - 31,662 -Wecast Service 2,788,731 5,804,200 Gross profit 2,788,731 5,835,862 September 30, December 31, 2018 2017 TOTAL ASSETS -Legacy YOD $ 27,034,157 27,141,163 -Wecast Service 51,254,046 30,084,607 -Unallocated assets 94,617,524 11,270,378 -Intersegment elimination (5,182,259 ) (5,051,660 ) Total 167,723,468 63,444,488 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 20. Subsequent Events As of November 14, 2018, the Company’s material subsequent events described below. Business Name Change On October 17, 2018, following approval from the Company’s shareholders received by written consent on August 28, 2018 and as disclosed in an information statement mailed to the Company’s stockholders on or about September 11, 2018, the Company filed a certificate of amendment to articles of incorporation with the Secretary of State of the State of Nevada changing the Company’s name from Seven Stars Cloud Group, Inc. to Ideanomics, Inc. Global Headquarters for Technology and Innovation in Connecticut On October 10, 2018, the Company purchased a 58-acre former University of Connecticut campus in West Hartford from the State of Connecticut and in connection for $5.2 million. The Company also obtained a surety bond in favor of the University of Connecticut and the State of Connecticut in connection with the Company’s environmental remediation obligations. In order to obtain the surety bond the Company was required to post $3.6 million in cash collateral with the bonding company. Ideanomics plans to transform the property into a world-renowned technology campus named Fintech Village. The planned $283 million-plus investment will focus on being a leading technology and innovation facility for developing new and leading edge Fintech solutions utilizing artificial intelligence, deep learning, IoT, and blockchain. In connection with the acquisition, the Company also entered into an Assistance Agreement by and between the State of Connecticut, acting by the Department of Economic and Community Development (the “Assistance Agreement"), pursuant to which the State of Connecticut may provide up to $10 million of financial assistance (the “Funding”) which in such case shall be evidenced by a promissory note, provided, however, that the aggregate principal of the funding shall not exceed 50% of the cost of the project. The Company will provide security for its obligation to repay the Funding to the State of Connecticut in the form of a first position mortgage. The Company agrees that in exchange for the Funding it will provide a minimum number of jobs at a minimum annual amount of compensation by December 31, 2021. Failure of the Company to do so will subject it to certain cash penalties for each employee below the minimum employment threshold. If the Company meets the employment obligations it is eligible for forgiveness of up to $10.0 million of the Funding. The Company will agree to certain covenants with respect to the Funding and such Funding may become immediately due and payable upon the occurrence of certain standard events of default. Joint Venture with TPJ Ltd. On October 9 2018, the Company announced that it has entered into a joint venture agreement with TPJ Ltd, to create Ideanomics Resources LTD, a company organized under the laws of England and Wales and based in London. The joint venture will initially focus its efforts in Africa and Middle East, where it has significant long-term relationships and unlock value in the commodities and energy sectors by leveraging and utilizing the Ideanomics Platform-as-a-Service (“PaaS”) solutions. The Company will own 75% equity interest of Ideanomics Resources. |
VIE Structure and Arrangements
VIE Structure and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Vie Structure And Arrangements [Abstract] | |
Schedule of consolidated financial statements | September 30, December 31, 2018 2017 ASSETS Current assets: Cash $ 1,495 3,898 Prepaid expenses 1,635 3,604 Other current assets 1,456 1,537 Intercompany receivables due from the Company's subsidiaries (i) 2,363,133 2,494,505 Total current assets 2,367,719 2,503,544 Long term investments 3,677,927 3,719,467 Total assets $ 6,045,646 6,223,011 LIABILITIES Current liabilities: Other current liabilities $ 39 41 Intercompany payables due to the Company's subsidiaries (i) 3,419,561 3,601,454 Total current liabilities 3,419,600 3,601,495 Total liabilities $ 3,419,600 3,601,495 Nine Months Ended September 30, September 30, 2018 2017 Revenue $ - 794,273 Net income (loss) $ (46,508 ) (4,293,469 ) Nine Months Ended September 30, September 30, 2018 2017 Net cash used in operating activities $ (2,403 ) (1,661,531 ) Net cash used in investing activities $ - (43,047 ) Net cash provided by financing activities (i) $ - 189,515 (i) Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.2 million to Sinotop Beijing in the nine months period ended September 30, 2017. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounts Receivable [Abstract] | |
Schedule of accounts receivable | September 30, December 31, 2018 2017 Accounts receivable $ 105,538,117 26,965,731 Less: allowance for doubtful accounts (3,594 ) (3,646 ) Accounts receivable, net $ 105,534,523 26,962,085 |
Schedule of movement in allowance for doubtful accounts receivable | September 30, December 31, Balance at the beginning of the period $ (3,646 ) (2,828,796 ) Additions charged to bad debt expense - (145,512 ) Write-off of bad debt allowance 52 89,851 Disposal of Zhong Hai Shi Xun - 2,880,811 Balance at the end of the period $ (3,594 ) (3,646 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | September 30, December 31, 2018 2017 Furniture and office equipment $ 312,829 308,383 Vehicle 143,249 147,922 Leasehold improvements 163,311 8,058 Total property and equipment 619,389 464,363 Less: accumulated depreciation (361,336 ) (337,088 ) Property and Equipment, net $ 258,053 127,275 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of amortizing and indefinite lived intangible assets | September 30, 2018 December 31, 2017 Gross Accumulated Impairment Net Gross Accumulated Impairment Net Amortizing Intangible Assets Amount Amortization Loss Balance Amount Amortization Loss Balance Charter/ Cooperation agreements 301,495 (32,303 ) - 269,192 - - - - Intangible assets – Content (ii) 2,903,762 (241,980 ) - 2,661,782 - - - - Software and licenses 238,163 (203,663 ) - 34,500 214,210 (199,626 ) - 14,584 Patent and trademark (i) 92,965 (39,943 ) (53,022 ) - 92,965 (39,943 ) (53,022 ) - Total amortizing intangible assets $ 3,536,385 (517,889 ) (53,022 ) 2,965,474 $ 307,175 $ (239,569 ) $ (53,022 ) $ 14,584 Indefinite lived intangible assets Website name 159,505 - - 159,505 134,290 - - 134,290 Patent (i) 10,599 - (10,599 ) - 10,599 - (10,599 ) - Total intangible assets $ 3,706,489 (517,889 ) (63,621 ) 3,124,979 $ 452,064 $ (239,569 ) $ (63,621 ) $ 148,874 (i) During the second quarter of 2017, the Company determined that one of its subsidiaries in the US would not serve the core business or generate future cash flow. As no future cash flows will be generated from using the patents owned by this subsidiary, the Company estimated the fair value of those patents to be nil as of June 30, 2017. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from patents of $63,621 was recognized in 2017 to write off the entire book value of the patents. (ii) During the third quarter of 2018, the Company completed the acquisition of 65.65% share of GLT, and preliminarily recorded $1.4 million of Goodwill, $2.9 million of intangible assets and $0.7 million of deferred tax based on the estimated fair values (Note 4) |
Schedule of amortization expense for the next three years and thereafter | Amortization to be Years ending December 31, Recognized 2018 (3 months) $ 760,680 2019 2,076,117 2020 114,677 2021 and thereafter 14,000 Total amortization to be recognized $ 2,965,474 |
Long Term Investments (Tables)
Long Term Investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of cost method investments | September 30, December 31, Topsgame (i) $ 3,365,969 $ 3,365,969 Frequency (ii) 3,000,000 3,000,000 DBOT (iii) 250,000 250,000 Liberty (iv) 1,011,916 - Asia Times (v) 1,023,274 - Total $ 8,651,159 $ 6,615,969 (i) Investment in Topsgame On April 13, 2016, SSF entered into a Game Right Assignment Agreement with SSS for the acquisition of certain game IP rights (“Game IP Rights”) for approximately $2.7 million (RMB18 million) in cash. On April 15, 2016, SSF entered into a Capital Increase Agreement with Nanjing Tops Game Co., Ltd. (“Topsgame”) and its shareholders whereby SSF transferred the Game IP Rights acquired from SSS to Topsgame in exchange for 13% of Topsgame’s equity ownership. Topsgame is a PRC company that specializes in the independent development and operation of online, stand-alone and other games as well as the distribution of domestic and overseas games. The Company’s 13% ownership interest does not provide the Company with the right to nor does the Company have representation on the board of directors of Topsgame. The Company has recognized the cost of the investment in Topsgame, which is a private company with no readily determinable fair value, based on the acquisition cost of Game IP Rights of approximately $2.7 million and accounts for the investment by the cost method. On September 14, 2016, SSF increased its investment in Topsgame by RMB3,900,000 (approximately $584,000) and maintained its 13% equity ownership of Topsgame. The investment continued to be accounted for as equity investments without readily determinable fair values. The Company expects to sell its investment interest in Topgame and other owned IP and its investment interest in Frequency (discussed in Note 8 (ii)) to an independent third party with consideration greater than its net book value in 2018. The Company has signed a letter of intent with this third party and management believes it will close this transaction in 2018 on the basis of a valuation report provided by a qualified independent valuation firm. Accordingly, the Company did not make any impairment to either of these long-lived assets as of September 30, 2018. (ii) Investment in Frequency In April 2016, the Company and Frequency Networks Inc. (“Frequency”) entered into a Series A Preferred Stock Purchase Agreement (the “SPA”) for the purchase of 8,566,271 shares of Series A Preferred Stock, Frequency (the “Frequency Preferred Stock”) for a total purchase price of $3 million. The 8,566,271 Series A Preferred Stock represent 9% ownership and voting interest on an as converted basis and does not provide the Company with the right to nor does the Company have representation on the board of directors of Frequency. The Frequency Preferred Stock is entitled to non-cumulative dividends at the rate of $0.02548 per share per annum, declared at the discretion of Frequency’s board of directors. The Frequency Preferred Stock is also convertible into shares of Frequency common stock at the Company’s election any time after issuance on a 1:1 basis, subject to certain adjustment. Each share of Frequency Preferred Stock also has a liquidation preference of $0.42467 per share, plus any declared but unpaid dividends. The Company has recognized the cost of the investment in Frequency, which is a private company with no readily determinable fair value, at its cost of $3 million and accounts for the investment by the cost method. There were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of this investment. (iii) Investment in DBOT In August, 2017, the Company subscribed for a strategic investment of US$250,000 in the Delaware Board of Trade Holdings, Inc. (“DBOT”) to acquire 187,970 common shares. DBOT is a FINRA member firm, and and filed an initial operations report on Form ATS to give notice of DBOT ATS’s operations. The Company accounts for the investment in DBOT as equity investments without readily determinable fair values, as the Company owns less than 4% of the common shares and the Company has no significant influence over DBOT. On December 18, 2017, January 12, 2018 and February 28, 2018, the Company entered into three stock purchase agreements with certain existing DBOT shareholders to acquire their owned shares of common stock of DBOT in an aggregate amount of 3,543,546 shares. To acquire those shares, the Company agreed to issue the aggregate amount of 2,267,869 shares of the Company’s common stock. The transaction closed in October 2018. Together with shares acquired in 2017, the Company owns 28% of the common shares and will account for the investment using equity method starting from October 2018. (iv) Investment in Liberty On September 7, 2018, the Company entered into a Share Purchase Agreement (the “Sun Agreement”) with Sun Seven Stars Investment Group Limited (“Sun”), an affiliate of Bruno Wu, the Chairman and Co-CEO of the Company, pursuant to which the Company agreed to exchange at fair market value Company common stock in exchange for shares of Liberty Biopharma, an entity listed on the TSX venture exchange (“Liberty”) as follows: (i) Liberty common stock valued at $15.5 million in exchange for Company common stock of equivalent value and (ii) 50% of the shares of Liberty, also at fair market value of the Company common stock, which are owned by Sun and which represent a potential award of performance shares to Sun through the right to receive Liberty common stock subject to the fulfillment of certain performance and vesting conditions set out in an agreement among Sun, Liberty and related entities.” On September 28, 2018, the Company signed the Subscription Agreement with Liberty Biopharma Inc. to agree to take up 1,173,333 common shares for $2.0 million. The Company has paid $1.0 million as of September 30, 2018. Share exchange has not completed and no shares have been issued as of September 30, 2018. (v) Investment in Asia Times On September 12 2018, the Company announced a 50/50 Joint Venture (JV) with Asia Times Holdings, to be named Asia Times Financial Limited. JV will be providing next generation financial information service by AI-enabled financial data analytics and end-to-end encrypted messaging system that will work alongside blockchain-based financial services. As part of the deal, the Company will take a 10% stake in Asia Times Holdings for $4.0 million cash investment and Asia Times Holdings agreed to contribute $1.0 million of the $4.0 investment to the JV. The Purchase Price is payable in 4 tranches of $1,000,000 payable on September 21, 2018, October 15, 2018, November 15, 2018 and December 15, 2018, respectively. The Company paid the first $1.0 million payment prior to September 30, 2018.No shares have been issued as of September 30, 2018. JV has not been set up as of September 30, 2018. |
Schedule of long term investment under equity method | September 30, 2018 December 31, Addition Loss on Foreign currency September Wecast Internet (i) 6,044 - (1,652 ) 1 4,393 Hua Cheng (ii) 353,498 - (42,664 ) 1,124 311,958 Shandong Media (iii) - - - - - BDCG (iv) - 9,800,000 - - 9,800,000 Total $ 359,542 9,800,000 (44,316 ) 1,125 10,116,351 (i) Investment in Wecast Internet In October 2016, the Company’s subsidiary, YOU On Demand (Asia) Ltd., invested RMB1,000,000 (approximately $149,750) in Wecast Internet Limited (“Wecast Internet”) and held its 50% equity ownership. In 2017, Wecast Internet closed its 100% owned subsidiary and the Company received $35,612 from its previous capital investment, and expects to receive the remaining investment from Wecast Internet in 2018. (ii) Investment in Hua Cheng As of September 30, 2018 and December 31, 2017, the Company held 39% equity ownership in Hua Cheng, and accounted for the investment by the equity method. (iii) Investment in Shandong Media As of September 30, 2018 and December 31, 2017, the Company held 30% equity ownership in Shandong Media, and accounts for the investment by the equity method. The investment was fully impaired as of September 30, 2018 and December 31, 2017. (iv) Investment in BDCG As of September 30, 2018 and December 31, 2017, the Company held 60% and 20% equity ownership in BDCG respectively, and accounts for the investment by the equity method, as indicated in Note 4. |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of share-based payments expense | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2018 2017 2018 2017 Employees and directors share-based payments $ 11,530 $ 54,846 $ 3,372,447 $ 202,501 |
Schedule of stock option activity | Weighted Average Remaining Aggregated Options Weighted Average Contractual Life Intrinsic Outstanding Exercise Price (Years) Value Outstanding at January 1, 2018 1,853,391 $ 3.20 2.99 0.02 Granted - - Exercised (110,295 ) 1.99 Expired (36,665 ) 1.58 Forfeited - - Outstanding at September 30, 2018 1,706,431 3.28 4.34 0.86 Vested and expected to vest as of September 30, 2018 1,706,431 3.28 4.34 0.86 Options exercisable at September 30, 2018 (vested) 1,615,598 3.36 4.09 0.80 |
Schedule of warrants outstanding and exercisable | September 30, December 31, 2018 2017 Number of Number of Warrants Warrants Exercise Expiration Warrants Outstanding Outstanding Outstanding Price Date 2014 Broker Warrants (Series E Financing) 60,000 703,714 $ 1.75 01/31/2019 2016 Warrants to SSS - 1,818,182 $ 2.75 03/28/2018 60,000 2,521,896 |
Schedule of restricted shares | Shares Weighted-average Restricted shares outstanding at January 1, 2018 109,586 1.92 Granted 1,342,743 2.58 Forfeited (97,000 ) 2.26 Vested (1,264,743 ) 2.56 Restricted shares outstanding at September 30, 2018 90,586 2.46 |
Earnings (Loss) Per Common Sh_2
Earnings (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of number of securities convertible into common shares | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2018 2017 2018 2017 Net loss attributable to common stockholders $ (7,186,847 ) $ (3,027,939 ) $ (19,228,240 ) $ (4,698,563 ) Basic Basic weighted average shares outstanding 74,063,495 62,146,168 71,574,303 59,594,289 Diluted Diluted weighted average common shares outstanding 74,063,495 62,146,168 71,574,303 59,594,289 Net loss per share: Basic $ (0.10 ) ($ 0.05 ) $ (0.27 ) ($ 0.08 ) Diluted $ (0.10 ) ($ 0.05 ) $ (0.27 ) ($ 0.08 ) |
Schedule of authorized but unissued common stock for possible future issuance | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2018 2017 2018 2017 Warrants 60,000 3,118,181 60,000 3,118,181 Options 1,797,017 2,267,095 1,797,017 2,267,095 Series A Preferred Stock 933,333 933,333 933,333 933,333 Convertible note and interest 10,227,507 35,598,447 10,227,507 35,598,447 Total 13,017,857 41,917,056 13,017,857 41,917,056 |
Contingencies and Commitments (
Contingencies and Commitments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of operating lease commitment | Leased Property Years ending December 31, Costs 2018(3 months) 274,640 2019 515,016 2020 167,712 Thereafter - Total $ 957,368 |
Concentration, Credit and Oth_2
Concentration, Credit and Other Risks (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedule of demand deposits | September 30, December 31, 2018 2017 RMB denominated bank deposits with financial institutions in the PRC $ 961,428 684,115 US dollar denominated bank deposits with financial institutions in the PRC $ 328,021 628,481 HKD denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 35,695 17,508 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 11,310,538 1,505,271 US dollar denominated bank deposits with financial institutions in Singapore (“Singapore”) 884,060 1,033,769 US dollar denominated bank deposits with financial institutions in The United States of America (“USA”) $ 1,934,395 3,698,704 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Company's revenue and cost generated from different revenue streams | Nine Months Ended September 30, September 30, 2018 2017 NET SALES TO EXTERNAL CUSTOMERS -Legacy YOD $ - $ 794,273 -Wecast Service 362,628,296 105,930,593 Net sales 362,628,296 106,724,866 GROSS PROFIT -Legacy YOD - 31,662 -Wecast Service 2,788,731 5,804,200 Gross profit 2,788,731 5,835,862 September 30, December 31, 2018 2017 TOTAL ASSETS -Legacy YOD $ 27,034,157 27,141,163 -Wecast Service 51,254,046 30,084,607 -Unallocated assets 94,617,524 11,270,378 -Intersegment elimination (5,182,259 ) (5,051,660 ) Total 167,723,468 63,444,488 |
Organization and Principal Ac_2
Organization and Principal Activities (Detail Textuals) | Jan. 31, 2017 |
Organization And Principal Activities [Abstract] | |
Percentage of outstanding capital stock of Wide Angle Group Limited purchased | 55.00% |
Going Concern and Managements P
Going Concern and Managements Plans (Detail Textuals) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | [4] | |||
Going Concern And Managements Plans [Abstract] | ||||||||
Loss from operations | $ (6,356,557) | $ (3,159,032) | [1] | $ (19,061,185) | $ (4,985,104) | [1] | ||
Net loss | (7,441,820) | $ (3,005,216) | [2] | (19,865,554) | (5,307,473) | [2],[3] | ||
Cash used in operations | (17,641,902) | $ (6,187,745) | [3] | |||||
Accumulated deficit | $ (145,921,262) | $ (145,921,262) | $ (126,693,022) | |||||
[1] | The above consolidated statements of operation present Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co., Ltd. on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||||||
[2] | The above consolidated statements of comprehensive loss present the Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co. Ltd on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||||||
[3] | The above consolidated statements of cash flows present Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co., Ltd on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||||||
[4] | The above consolidated balance sheets present the Shanghai Guang Ming Investment Management Limited ("Guang Ming"), acquired from Tianjin Sun Seven Stars Culture Development Co. Ltd. ("Tianjin") and Beijing Nanbei Huijin Investment Co. Ltd. on April 4 2018 as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
Going Concern and Managements_2
Going Concern and Managements Plans (Detail Textuals 1) - USD ($) | 1 Months Ended | 9 Months Ended | |||||||||
Sep. 21, 2018 | Jul. 31, 2018 | Jun. 30, 2018 | Jun. 28, 2018 | Jun. 21, 2018 | Mar. 17, 2018 | Oct. 31, 2017 | May 31, 2017 | May 19, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Going Concern And Managements Plans [Line Items] | |||||||||||
Common stock financing | $ 3,000,000 | $ 2,000,000 | |||||||||
Total amount received | $ 6,900,000 | ||||||||||
Subscription Agreement | Sun Seven Stars Investment Group Limited | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Common stock financing | $ 3,000,000 | ||||||||||
Total amount received | 1,100,000 | ||||||||||
Subscription Agreement | Sun Seven Stars Investment Group Limited | Bruno Wu | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Common stock financing | $ 3,000,000 | ||||||||||
Total amount received | $ 1,100,000 | ||||||||||
Common Stock Purchase Agreement | Hong Kong Guo Yuan Group Capital Holdings Limited | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Common stock financing | $ 10,000,000 | ||||||||||
Common Stock Purchase Agreement | Advantech Capital Investment II Limited | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Common stock financing | $ 12,000,000 | ||||||||||
Common Stock Purchase Agreement | Subscription Agreement | GT Dollar Pte. Ltd | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Common stock financing | $ 10,000,000 | ||||||||||
Total amount received | $ 10,000,000 | $ 40,000,000 | |||||||||
Common Stock Purchase Agreement | Investors, officers & directors and affiliates | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Common stock financing | $ 2,000,000 | $ 2,000,000 | |||||||||
Share Purchase & Option Agreement | Star Thrive Group Limited ("Star") | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Total amount received | $ 23,000,000 |
VIE Structure and Arrangement_2
VIE Structure and Arrangements (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | ||
Current assets: | ||||
Prepaid expenses | $ 1,995,538 | $ 2,202,728 | [1] | |
Other current assets | 3,054,573 | 2,276,096 | [1] | |
Total current assets | 143,789,483 | 56,192,828 | [1] | |
Long term investments | 18,767,510 | 6,975,511 | [1] | |
Total assets | 167,723,468 | 63,444,488 | [1] | |
Current liabilities: | ||||
Other current liabilities | 1,906,147 | 801,560 | [1] | |
Total current liabilities | 111,697,445 | 32,044,660 | [1] | |
Total liabilities | 123,106,100 | 32,428,903 | [1] | |
VIE | ||||
Current assets: | ||||
Cash | 1,495 | 3,898 | ||
Prepaid expenses | 1,635 | 3,604 | ||
Other current assets | 1,456 | 1,537 | ||
Intercompany receivables due from the Company's subsidiaries | [2] | 2,363,133 | 2,494,505 | |
Total current assets | 2,367,719 | 2,503,544 | ||
Long term investments | 3,677,927 | 3,719,467 | ||
Total assets | 6,045,646 | 6,223,011 | ||
Current liabilities: | ||||
Other current liabilities | 39 | 41 | ||
Intercompany payables due to the Company's subsidiaries | [2] | 3,419,561 | 3,601,454 | |
Total current liabilities | 3,419,600 | 3,601,495 | ||
Total liabilities | $ 3,419,600 | $ 3,601,495 | ||
[1] | The above consolidated balance sheets present the Shanghai Guang Ming Investment Management Limited ("Guang Ming"), acquired from Tianjin Sun Seven Stars Culture Development Co. Ltd. ("Tianjin") and Beijing Nanbei Huijin Investment Co. Ltd. on April 4 2018 as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||
[2] | Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.2 million to Sinotop Beijing in the nine months period ended September 30, 2017. |
VIE Structure and Arrangement_3
VIE Structure and Arrangements (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | [1] | Sep. 30, 2018 | Sep. 30, 2017 | ||
Variable Interest Entity [Line Items] | ||||||
Revenue | $ 43,707,937 | $ 30,229,255 | $ 362,628,296 | $ 106,724,866 | [1] | |
Net income (loss) | $ (7,186,847) | $ (3,027,939) | (19,228,240) | (4,698,563) | [1] | |
VIE | ||||||
Variable Interest Entity [Line Items] | ||||||
Revenue | 0 | 794,273 | ||||
Net income (loss) | $ (46,508) | $ (4,293,469) | ||||
[1] | The above consolidated statements of operation present Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co., Ltd. on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
VIE Structure and Arrangement_4
VIE Structure and Arrangements (Details 2) - VIE - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Variable Interest Entity [Line Items] | |||
Net cash used in operating activities | $ (2,403) | $ (1,661,531) | |
Net cash used in investing activities | 0 | (43,047) | |
Net cash provided by financing activities | [1] | $ 0 | $ 189,515 |
[1] | Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.2 million to Sinotop Beijing in the nine months period ended September 30, 2017. |
VIE Structure and Arrangement_5
VIE Structure and Arrangements (Detail Textuals) ¥ in Millions, $ in Millions | Apr. 05, 2016CNY (¥) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018CNY (¥) | Apr. 06, 2016 | Jan. 31, 2016USD ($) | Jan. 31, 2016CNY (¥) |
YOD WFOE | Loan Agreement | |||||||
Variable Interest Entity [Line Items] | |||||||
Loans payable | ¥ 19.8 | ||||||
Nominee Shareholders | Loan Agreement | |||||||
Variable Interest Entity [Line Items] | |||||||
Loans payable | ¥ 0.2 | ||||||
Sinotop Beijing | |||||||
Variable Interest Entity [Line Items] | |||||||
Capital injection to Sinotop Beijing | $ | $ 0.2 | ||||||
Sinotop Beijing | Contractual agreements | |||||||
Variable Interest Entity [Line Items] | |||||||
Percentage of service fee received | 100.00% | 100.00% | |||||
Sinotop Beijing | YOD WFOE | Contractual agreements | |||||||
Variable Interest Entity [Line Items] | |||||||
Registered capital | $ 1.6 | ¥ 10.6 | |||||
Sinotop Beijing | YOD WFOE | Technical service agreement | |||||||
Variable Interest Entity [Line Items] | |||||||
Percentage of service fee received | 30.00% | ||||||
Sinotop Beijing | YOD Hong Kong | Management services agreement | |||||||
Variable Interest Entity [Line Items] | |||||||
Percentage of service fee received | 100.00% | 100.00% | |||||
Term of agreement | 20 years | ||||||
SSF | Lan Yang | |||||||
Variable Interest Entity [Line Items] | |||||||
Percentage of variable interest entity | 99.00% | ||||||
SSF | Lan Yang | Loan Agreement | |||||||
Variable Interest Entity [Line Items] | |||||||
Loans payable | $ 4.2 | ¥ 27.6 | |||||
Registered capital | 4.2 | 27.6 | |||||
SSF | Yun Zhu | |||||||
Variable Interest Entity [Line Items] | |||||||
Percentage of variable interest entity | 1.00% | ||||||
SSF | YOD WFOE | Contractual agreements | |||||||
Variable Interest Entity [Line Items] | |||||||
Registered capital | $ 4.2 | ¥ 27.6 | $ 7.5 | ¥ 50 | |||
SSF | YOD Hong Kong | Management services agreement | |||||||
Variable Interest Entity [Line Items] | |||||||
Percentage of service fee received | 100.00% | ||||||
SSF | Minimum | YOD WFOE | Technical service agreement | |||||||
Variable Interest Entity [Line Items] | |||||||
Percentage of service fee received | 20.00% | ||||||
SSF | Maximum | YOD WFOE | Technical service agreement | |||||||
Variable Interest Entity [Line Items] | |||||||
Percentage of service fee received | 30.00% |
Acquisition (Detail Textuals)
Acquisition (Detail Textuals) - USD ($) | 1 Months Ended | ||
Jan. 30, 2017 | Sep. 30, 2018 | Jan. 31, 2017 | |
Business Acquisition [Line Items] | |||
Percentage of ownership of shares to be purchase | 55.00% | ||
Reduction to additional paid in capital due to SVG note | $ 24,300,000 | ||
Sun Video Group HK Limited | BT Capital Global Limited | |||
Business Acquisition [Line Items] | |||
Cash consideration for exchange | $ 800,000 | ||
Principal amount of Promissory Note (SVG Note) | $ 50,000,000 | ||
Conversion price | $ 1.50 | ||
Expected revenue to generate | $ 250,000,000 | ||
Expected profit performance guarantee | 15,000,000 | ||
Cumulative threshold limit of net income achieve within 3 years | $ 50,000,000 | ||
Percentage of cumulative net income payment | 50.00% | ||
Wide Angle Group Limited | BT Capital Global Limited | |||
Business Acquisition [Line Items] | |||
Percentage of ownership of shares to be purchase | 55.00% |
Acquisition (Detail Textuals 1)
Acquisition (Detail Textuals 1) - Tiger Sports Media Limited - Securities Purchase Agreement $ / shares in Units, shares in Millions, $ in Millions | Dec. 07, 2017USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Percentage of ownership interest acquired | 20.00% |
Total purchase price paid | $ 9.8 |
Cash paid to acquire entity | 2 |
Value of capital stock issued | $ 7.8 |
Share price of capital stock issued | $ / shares | $ 2.60 |
Number of common stock issued | shares | 3 |
Cash refund to entity, if closing conditions not satisfied | $ 2 |
Business acquisition ownership percentage | 60.00% |
Acquisition (Detail Textuals 2)
Acquisition (Detail Textuals 2) - GuangMing Purchase Agreement $ in Thousands | Dec. 07, 2017USD ($) |
Business Acquisition [Line Items] | |
Percentage of ownership interest acquired | 100.00% |
Total purchase price paid | $ 360 |
Tianjin Sun Seven Stars Culture Development Co. Ltd | |
Business Acquisition [Line Items] | |
Percentage of ownership interest acquired | 80.00% |
Beijing Nanbei Huijin Investment Co. Ltd | |
Business Acquisition [Line Items] | |
Percentage of ownership interest acquired | 20.00% |
Acquisition (Detail Textuals 3)
Acquisition (Detail Textuals 3) | Oct. 07, 2018Installments | Sep. 04, 2018USD ($) | Aug. 31, 2018 | Sep. 30, 2018USD ($) | Sep. 07, 2018USD ($) |
Business Acquisition [Line Items] | |||||
Goodwill | $ 1,399,646 | ||||
Proportion of sale price for Fomalhaut Interest payable in cash on exercise of options | 0.33 | ||||
Proportion of sale price Fomalhaut Interest payable in common shares on exercise of options | 0.67 | ||||
Grapevine Logic, Inc | |||||
Business Acquisition [Line Items] | |||||
Payments to Acquire Businesses, Gross | $ 2,400,000 | ||||
Percentage of ownership interest acquired | 65.65% | ||||
Goodwill | $ 1,400,000 | ||||
Intangible assets acquired | 2,900,000 | ||||
Deferred tax assets acquired | $ 700,000 | ||||
Grapevine Logic, Inc | Bruno Wu | |||||
Business Acquisition [Line Items] | |||||
Percentage of non voting stock by equity holder | 34.35% | ||||
Fintalk | Bruno Wu | Purchase and Assumption Agreement (the "SSIL Agreement") | Sun Seven Stars Investment Group Limited | |||||
Business Acquisition [Line Items] | |||||
Amount of exchange of promissory note | $ 1,000,000 | ||||
Common stock fair market value | $ 6,000,000 | ||||
Subsequent Event | Fintalk | Bruno Wu | Purchase and Assumption Agreement (the "SSIL Agreement") | Sun Seven Stars Investment Group Limited | |||||
Business Acquisition [Line Items] | |||||
Interest rate | 2.51% | ||||
Number of installments | Installments | 12 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | |
Accounts Receivable [Abstract] | |||
Accounts receivable, gross: | $ 105,538,117 | $ 26,965,731 | |
Less: allowance for doubtful accounts | (3,594) | (3,646) | |
Accounts receivable, net | $ 105,534,523 | $ 26,962,085 | [1] |
[1] | The above consolidated balance sheets present the Shanghai Guang Ming Investment Management Limited ("Guang Ming"), acquired from Tianjin Sun Seven Stars Culture Development Co. Ltd. ("Tianjin") and Beijing Nanbei Huijin Investment Co. Ltd. on April 4 2018 as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
Accounts Receivable (Details 1)
Accounts Receivable (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at the beginning of the period | $ (3,646) | $ (2,828,796) |
Additions charged to bad debt expense | 0 | (145,512) |
Write-off of bad debt allowance | 52 | 89,851 |
Disposal of Zhong Hai Shi Xun | 2,880,811 | |
Balance at the end of the period | $ (3,594) | $ (3,646) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 619,389 | $ 464,363 | |
Less: accumulated depreciation | (361,336) | (337,088) | |
Property and Equipment, net | 258,053 | 127,275 | [1] |
Furniture and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 312,829 | 308,383 | |
Vehicle | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 143,249 | 147,922 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 163,311 | $ 8,058 | |
[1] | The above consolidated balance sheets present the Shanghai Guang Ming Investment Management Limited ("Guang Ming"), acquired from Tianjin Sun Seven Stars Culture Development Co. Ltd. ("Tianjin") and Beijing Nanbei Huijin Investment Co. Ltd. on April 4 2018 as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
Property and Equipment (Detail
Property and Equipment (Detail Textuals) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 14,820 | $ 8,341 | $ 32,941 | $ 209,139 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | ||
Intangible Assets [Line Items] | ||||
Total amortizing intangible assets, Gross carrying amount | $ 3,536,385 | $ 307,175 | ||
Total amortizing intangible assets, Accumulated amortization | (517,889) | (239,569) | ||
Total amortizing intangible assets, Impairment loss | (53,022) | (53,022) | ||
Total amortizing intangible assets, Net balance | 2,965,474 | 14,584 | ||
Total intangible assets, Gross carrying amount | 3,706,489 | 452,064 | ||
Total intangible assets, Accumulated amortization | (517,889) | (239,569) | ||
Total intangible assets, Impairment loss | (63,621) | (63,621) | ||
Total intangible assets, Net balance | 3,124,979 | 148,874 | [1] | |
Website name | ||||
Intangible Assets [Line Items] | ||||
Indefinite Lived Intangible Assets, Gross carrying amount | 159,505 | 134,290 | ||
Indefinite lived intangible assets accumulated amortization | 0 | 0 | ||
Indefinite Lived Intangible Assets, Accumulated Impairment Loss | 0 | 0 | ||
Indefinite lived intangible assets, Net Balance | 159,505 | 134,290 | ||
Patent | ||||
Intangible Assets [Line Items] | ||||
Indefinite Lived Intangible Assets, Gross carrying amount | [2] | 10,599 | 10,599 | |
Indefinite lived intangible assets accumulated amortization | [2] | 0 | 0 | |
Indefinite Lived Intangible Assets, Accumulated Impairment Loss | [2] | (10,599) | (10,599) | |
Indefinite lived intangible assets, Net Balance | [2] | 0 | 0 | |
Charter/ Cooperation agreements | ||||
Intangible Assets [Line Items] | ||||
Total amortizing intangible assets, Gross carrying amount | 301,495 | 0 | ||
Total amortizing intangible assets, Accumulated amortization | (32,303) | 0 | ||
Total amortizing intangible assets, Impairment loss | 0 | 0 | ||
Total amortizing intangible assets, Net balance | 269,192 | 0 | ||
Intangible assets - Content | ||||
Intangible Assets [Line Items] | ||||
Total amortizing intangible assets, Gross carrying amount | [3] | 2,903,762 | 0 | |
Total amortizing intangible assets, Accumulated amortization | [3] | (241,980) | 0 | |
Total amortizing intangible assets, Impairment loss | [3] | 0 | 0 | |
Total amortizing intangible assets, Net balance | [3] | 2,661,782 | 0 | |
Software and licenses | ||||
Intangible Assets [Line Items] | ||||
Total amortizing intangible assets, Gross carrying amount | 238,163 | 214,210 | ||
Total amortizing intangible assets, Accumulated amortization | (203,663) | (199,626) | ||
Total amortizing intangible assets, Impairment loss | 0 | 0 | ||
Total amortizing intangible assets, Net balance | 34,500 | 14,584 | ||
Patent And trademark | ||||
Intangible Assets [Line Items] | ||||
Total amortizing intangible assets, Gross carrying amount | [2] | 92,965 | 92,965 | |
Total amortizing intangible assets, Accumulated amortization | [2] | (39,943) | (39,943) | |
Total amortizing intangible assets, Impairment loss | [2] | (53,022) | (53,022) | |
Total amortizing intangible assets, Net balance | [2] | $ 0 | $ 0 | |
[1] | The above consolidated balance sheets present the Shanghai Guang Ming Investment Management Limited ("Guang Ming"), acquired from Tianjin Sun Seven Stars Culture Development Co. Ltd. ("Tianjin") and Beijing Nanbei Huijin Investment Co. Ltd. on April 4 2018 as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). | |||
[2] | During the second quarter of 2017, the Company determined that one of its subsidiaries in the US would not serve the core business or generate future cash flow. As no future cash flows will be generated from using the patents owned by this subsidiary, the Company estimated the fair value of those patents to be nil as of June 30, 2017. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from patents of $63,621 was recognized in 2017 to write off the entire book value of the patents. | |||
[3] | During the third quarter of 2018, the Company completed the acquisition of 65.65% share of GLT, and preliminarily recorded $1.4 million of Goodwill, $2.9 million of intangible assets and $0.7 million of deferred tax based on the estimated fair values (Note 4) |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2018 (3 months) | $ 760,680 | |
2,019 | 2,076,117 | |
2,020 | 114,677 | |
2021 and thereafter | 14,000 | |
Total amortization to be recognized | $ 2,965,474 | $ 14,584 |
Intangible Assets (Detail Textu
Intangible Assets (Detail Textuals) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2018 | |
GLT | Securities Purchase Agreement | ||
Intangible Assets [Line Items] | ||
Percentage of ownership interest acquired | 65.65% | |
Preliminarily Recorded Goodwill | $ 1,400,000 | |
Preliminarily Recorded Intangible Assets | 2,900,000 | |
Preliminarily Recorded Deferred Tax | $ 700,000 | |
Patent | ||
Intangible Assets [Line Items] | ||
Impairment loss recognized from intangible assets | $ 63,621 |
Long-term Investments (Details)
Long-term Investments (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Equity investments without readily determinable fair values | $ 8,651,159 | $ 6,615,969 | |
Topsgame | |||
Debt Instrument [Line Items] | |||
Equity investments without readily determinable fair values | [1] | 3,365,969 | 3,365,969 |
Frequency | |||
Debt Instrument [Line Items] | |||
Equity investments without readily determinable fair values | [2] | 3,000,000 | 3,000,000 |
DBOT | |||
Debt Instrument [Line Items] | |||
Equity investments without readily determinable fair values | [3] | 250,000 | 250,000 |
Liberty | |||
Debt Instrument [Line Items] | |||
Equity investments without readily determinable fair values | [4] | 1,011,916 | 0 |
Asia Times | |||
Debt Instrument [Line Items] | |||
Equity investments without readily determinable fair values | [5] | $ 1,023,274 | $ 0 |
[1] | On April 13, 2016, SSF entered into a Game Right Assignment Agreement with SSS for the acquisition of certain game IP rights ("Game IP Rights") for approximately $2.7 million (RMB18 million) in cash. On April 15, 2016, SSF entered into a Capital Increase Agreement with Nanjing Tops Game Co., Ltd. ("Topsgame") and its shareholders whereby SSF transferred the Game IP Rights acquired from SSS to Topsgame in exchange for 13% of Topsgame's equity ownership. Topsgame is a PRC company that specializes in the independent development and operation of online, stand-alone and other games as well as the distribution of domestic and overseas games. The Company's 13% ownership interest does not provide the Company with the right to nor does the Company have representation on the board of directors of Topsgame. The Company has recognized the cost of the investment in Topsgame, which is a private company with no readily determinable fair value, based on the acquisition cost of Game IP Rights of approximately $2.7 million and accounts for the investment by the cost method. On September 14, 2016, SSF increased its investment in Topsgame by RMB3,900,000 (approximately $584,000) and maintained its 13% equity ownership of Topsgame. The investment continued to be accounted for as equity investments without readily determinable fair values. The Company expects to sell its investment interest in Topgame and other owned IP and its investement interest in Frequency (discussed in Note 8 (ii)) to an independent third party with consideration greater than its net book value in 2018. The Company has signed a letter of intent with this third party and management believes it will close this transaction in 2018 on the basis of a valuation report provided by a qualified independent valuation firm. Accordingly, the Company did not make any impairment to either of these long-lived assets as of September 30, 2018. | ||
[2] | In April 2016, the Company and Frequency Networks Inc. ("Frequency") entered into a Series A Preferred Stock Purchase Agreement (the "SPA") for the purchase of 8,566,271 shares of Series A Preferred Stock, Frequency (the "Frequency Preferred Stock") for a total purchase price of $3 million. The 8,566,271 Series A Preferred Stock represent 9% ownership and voting interest on an as converted basis and does not provide the Company with the right to nor does the Company have representation on the board of directors of Frequency. The Frequency Preferred Stock is entitled to non-cumulative dividends at the rate of $0.02548 per share per annum, declared at the discretion of Frequency's board of directors. The Frequency Preferred Stock is also convertible into shares of Frequency common stock at the Company's election any time after issuance on a 1:1 basis, subject to certain adjustment. Each share of Frequency Preferred Stock also has a liquidation preference of $0.42467 per share, plus any declared but unpaid dividends. The Company has recognized the cost of the investment in Frequency, which is a private company with no readily determinable fair value, at its cost of $3 million and accounts for the investment by the cost method. There were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of this investment. | ||
[3] | In August, 2017, the Company subscribed for a strategic investment of US$250,000 in the Delaware Board of Trade Holdings, Inc. ("DBOT") to acquire 187,970 common shares. DBOT is a FINRA member firm, and and filed an initial operations report on Form ATS to give notice of DBOT ATS's operations. The Company accounts for the investment in DBOT as equity investments without readily determinable fair values, as the Company owns less than 4% of the common shares and the Company has no significant influence over DBOT. On December 18, 2017, January 12, 2018 and February 28, 2018, the Company entered into three stock purchase agreements with certain existing DBOT shareholders to acquire their owned shares of common stock of DBOT in an aggregate amount of 3,543,546 shares. To acquire those shares, the Company agreed to issue the aggregate amount of 2,267,869 shares of the Company's common stock. The transaction closed in October 2018. Together with shares acquired in 2017, the Company owns 28% of the common shares and will account for the investment using equity method starting from October 2018. | ||
[4] | On September 7, 2018, the Company entered into a Share Purchase Agreement (the "Sun Agreement") with Sun Seven Stars Investment Group Limited ("Sun"), an affiliate of Bruno Wu, the Chairman and Co-CEO of the Company, pursuant to which the Company agreed to exchange at fair market value Company common stock in exchange for shares of Liberty Biopharma, an entity listed on the TSX venture exchange ("Liberty") as follows: (i) Liberty common stock valued at $15.5 million in exchange for Company common stock of equivalent value and (ii) 50% of the shares of Liberty, also at fair market value of the Company common stock, which are owned by Sun and which represent a potential award of performance shares to Sun through the right to receive Liberty common stock subject to the fulfillment of certain performance and vesting conditions set out in an agreement among Sun, Liberty and related entities." On September 28, 2018, the Company signed the Subscription Agreement with Liberty Biopharma Inc. to agree to take up 1,173,333 common shares for $2.0 million. The Company has paid $1.0 million as of September 30, 2018. Share exchange has not completed and no shares have been issued as of September 30, 2018. | ||
[5] | On September 12 2018, the Company announced a 50/50 Joint Venture (JV) with Asia Times Holdings, to be named Asia Times Financial Limited. JV will be providing next generation financial information service by AI-enabled financial data analytics and end-to-end encrypted messaging system that will work alongside blockchain-based financial services. As part of the deal, the Company will take a 10% stake in Asia Times Holdings for $4.0 million cash investment and Asia Times Holdings agreed to contribute $1.0 million of the $4.0 investment to the JV. The Purchase Price is payable in 4 tranches of $1,000,000 payable on September 21, 2018, October 15, 2018, November 15, 2018 and December 15, 2018, respectively. The Company paid the first $1.0 million payment prior to September 30, 2018.No shares have been issued as of September 30, 2018. JV has not been set up as of September 30, 2018. |
Long-term Investments (Details
Long-term Investments (Details 1) | 9 Months Ended | |
Sep. 30, 2018USD ($) | ||
Schedule Of Equity Method Investment [Roll Forward] | ||
Beginning balance | $ 359,542 | |
Equity Method Investment Addition | 9,800,000 | |
Gain/(Loss) on investment | (44,316) | |
Foreign currency translation adjustments | 1,125 | |
Ending balance | 10,116,351 | |
Wecast Internet | ||
Schedule Of Equity Method Investment [Roll Forward] | ||
Beginning balance | 6,044 | [1] |
Equity Method Investment Addition | 0 | [1] |
Gain/(Loss) on investment | (1,652) | [1] |
Foreign currency translation adjustments | 1 | [1] |
Ending balance | 4,393 | [1] |
Hua Cheng | ||
Schedule Of Equity Method Investment [Roll Forward] | ||
Beginning balance | 353,498 | [2] |
Equity Method Investment Addition | 0 | [2] |
Gain/(Loss) on investment | (42,664) | [2] |
Foreign currency translation adjustments | 1,124 | [2] |
Ending balance | 311,958 | [2] |
Shandong Media | ||
Schedule Of Equity Method Investment [Roll Forward] | ||
Beginning balance | 0 | [3] |
Equity Method Investment Addition | 0 | [3] |
Gain/(Loss) on investment | 0 | [3] |
Foreign currency translation adjustments | 0 | [3] |
Ending balance | 0 | [3] |
BDCG | ||
Schedule Of Equity Method Investment [Roll Forward] | ||
Beginning balance | 0 | [4] |
Equity Method Investment Addition | 9,800,000 | [4] |
Gain/(Loss) on investment | 0 | [4] |
Foreign currency translation adjustments | 0 | [4] |
Ending balance | $ 9,800,000 | [4] |
[1] | In October 2016, the Company's subsidiary, YOU On Demand (Asia) Ltd., invested RMB1,000,000 (approximately $149,750) in Wecast Internet Limited ("Wecast Internet") and held its 50% equity ownership. In 2017, Wecast Internet closed its 100% owned subsidiary and the Company received $35,612 from its previous capital investment, and expects to receive the remaining investment from Wecast Internet in 2018. | |
[2] | As of September 30, 2018 and December 31, 2017, the Company held 39% equity ownership in Hua Cheng, and accounted for the investment by the equity method. | |
[3] | As of September 30, 2018 and December 31, 2017, the Company held 30% equity ownership in Shandong Media, and accounts for the investment by the equity method. The investment was fully impaired as of September 30, 2018 and December 31, 2017. | |
[4] | As of September 30, 2018 and December 31, 2017, the Company held 60% and 20% equity ownership in BDCG respectively, and accounts for the investment by the equity method, as indicated in Note 4. |
Long-term Investments (Detail T
Long-term Investments (Detail Textuals) | Sep. 07, 2018USD ($)shares | Sep. 21, 2018USD ($)tranche | Aug. 31, 2017USD ($)shares | Oct. 31, 2016USD ($) | Oct. 31, 2016CNY (¥) | Apr. 30, 2016USD ($)$ / sharesshares | Feb. 28, 2018shares | Sep. 30, 2018USD ($)shares | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Sep. 14, 2016USD ($) | Sep. 14, 2016CNY (¥) | Sep. 12, 2018USD ($) | Apr. 15, 2016 | Apr. 13, 2016USD ($) | Apr. 13, 2016CNY (¥) | |
Debt Instrument [Line Items] | |||||||||||||||||
Value of shares issued | $ 3,000,000 | $ 2,000,000 | |||||||||||||||
Long term investments | $ 18,767,510 | $ 6,975,511 | [1] | ||||||||||||||
Shandong Media | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Percentage of equity ownership | 30.00% | 30.00% | |||||||||||||||
Hua Cheng | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Percentage of equity ownership | 39.00% | 39.00% | |||||||||||||||
Wecast Internet Limited ("Wecast Internet") | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Percentage of equity ownership | 50.00% | 50.00% | |||||||||||||||
Increase in investment | $ 149,750 | ¥ 1,000,000 | $ 35,612 | ||||||||||||||
Percentage of closed investment ownership | 100.00% | ||||||||||||||||
BDCG | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Percentage of equity ownership | 60.00% | 20.00% | |||||||||||||||
Topsgame | SSF | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Percentage of equity ownership | 13.00% | 13.00% | |||||||||||||||
Increase in investment | $ 584,000 | ¥ 3,900,000 | |||||||||||||||
DBOT | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of shares issued | shares | 187,970 | ||||||||||||||||
Long term investments | $ 250,000 | ||||||||||||||||
DBOT | Maximum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Percentage of equity ownership | 4.00% | ||||||||||||||||
Liberty | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of shares issued | shares | 8,583,034 | ||||||||||||||||
Number of shares listed on exchange | shares | 8,583,034 | ||||||||||||||||
Asia Times | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Percentage of equity ownership | 10.00% | ||||||||||||||||
Long term investments | $ 4,000,000 | ||||||||||||||||
Advance payment made | $ 1,000,000 | ||||||||||||||||
Number of tranches in which purchase price of of $1,000,000 payable | tranche | 4 | ||||||||||||||||
Asia Times | 50/50 Joint Venture (JV) | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long term investments | $ 1,000,000 | ||||||||||||||||
IP rights ("Game IP Rights") | SSS | SSF | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Acquisition of game IP rights in cash | $ 2,700,000 | ¥ 18,000,000 | |||||||||||||||
Capital Increase Agreement | Topsgame | SSF | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Percentage of equity ownership | 13.00% | ||||||||||||||||
Series A Preferred Stock Purchase Agreement | Frequency | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of shares acquired | shares | 8,566,271 | ||||||||||||||||
Purchase price of stock acquired | $ 3,000,000 | ||||||||||||||||
Percentage of equity ownership | 9.00% | ||||||||||||||||
Preferred stock non-cumulative dividends rate per share | $ / shares | $ 0.02548 | ||||||||||||||||
Preferred stock convertible into common stock basis | 1:1 | ||||||||||||||||
Preferred stock liquidation preference per share | $ / shares | $ 0.42467 | ||||||||||||||||
Stock Purchase Agreement | DBOT | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of shares issued | shares | 2,267,869 | ||||||||||||||||
Number of owned common stock acquired from shareholders | shares | 3,543,546 | ||||||||||||||||
Percentage of equity ownership | 28.00% | ||||||||||||||||
Sun Agreement | Liberty | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of shares issued | shares | 1,173,333 | ||||||||||||||||
Value of shares issued | $ 2,000,000 | ||||||||||||||||
Percentage of equity ownership | 50.00% | ||||||||||||||||
Long term investments | $ 15,500,000 | ||||||||||||||||
Advance payment made | $ 1,000,000 | ||||||||||||||||
[1] | The above consolidated balance sheets present the Shanghai Guang Ming Investment Management Limited ("Guang Ming"), acquired from Tianjin Sun Seven Stars Culture Development Co. Ltd. ("Tianjin") and Beijing Nanbei Huijin Investment Co. Ltd. on April 4 2018 as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
Stockholders Equity (Detail Tex
Stockholders Equity (Detail Textuals) | 1 Months Ended | 9 Months Ended | ||||||||
Sep. 21, 2018USD ($) | Jun. 28, 2018USD ($)shares | Mar. 17, 2018USD ($) | Oct. 31, 2017USD ($) | Oct. 23, 2017USD ($)$ / sharesshares | May 31, 2017USD ($) | May 19, 2017USD ($)$ / sharesshares | Sep. 30, 2018USD ($)PromissoryNote$ / shares | Sep. 30, 2017USD ($) | Sep. 24, 2018$ / shares | |
Stockholders Equity [Line Items] | ||||||||||
Exercise price of warrants | $ / shares | $ 1.75 | $ 5.375 | ||||||||
Total price | $ 6,900,000 | |||||||||
Value of shares issued | $ 3,000,000 | $ 2,000,000 | ||||||||
Number of promissory note | PromissoryNote | 2 | |||||||||
Investors, officers & directors and affiliates | Private placement | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Number of common stock issued | shares | 727,273 | |||||||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 2.75 | |||||||||
Value of shares issued | $ 2,000,000 | $ 2,000,000 | ||||||||
Hong Kong Guo Yuan Group Capital Holdings Limited | Securities Purchase Agreement | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Number of common stock issued | shares | 5,494,505 | |||||||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 1.82 | |||||||||
Value of shares issued | $ 10,000,000 | |||||||||
Hong Kong Guo Yuan Group Capital Holdings Limited | Private placement | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Value of shares issued | $ 10,000,000 | |||||||||
Gt Dollar Ptd Ltd | Private placement | Subscription Agreement | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Total price | $ 10,000,000 | $ 40,000,000 | ||||||||
Value of shares issued | 25,100,000 | |||||||||
Number of shares issued | shares | 5,494,506 | |||||||||
Gt Dollar Ptd Ltd | Private placement | Subscription Agreement | Promissory note one | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Issuance of promissory note | 10,000,000 | |||||||||
Gt Dollar Ptd Ltd | Private placement | Subscription Agreement | Promissory note two | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Issuance of promissory note | $ 4,900,000 |
Stockholders Equity (Detail T_2
Stockholders Equity (Detail Textuals 1) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 28, 2018 | Mar. 17, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Stockholders Equity [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||
Total price | $ 6.9 | |||||
Subscription Agreement | Gt Dollar Ptd Ltd | Private placement | ||||||
Stockholders Equity [Line Items] | ||||||
Number of shares issued | 5,494,506 | |||||
Total price | $ 10 | $ 40 | ||||
Purchase price partly received | $ 5.3 | |||||
Remaining amount received | $ 4.7 |
Stockholders' Equity (Detail Te
Stockholders' Equity (Detail Textuals 2) - USD ($) | Nov. 09, 2018 | Sep. 21, 2018 | Jul. 31, 2018 | Jul. 24, 2018 | Jun. 30, 2018 | Jun. 28, 2018 | Jun. 21, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Stockholders Equity [Line Items] | ||||||||||
Common stock financing | $ 3,000,000 | $ 2,000,000 | ||||||||
Total amount received | $ 6,900,000 | |||||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||||||
Fair value of call option | $ 56,765 | |||||||||
Advantech Capital Investment II Limited | Common Stock Purchase Agreement | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Common stock financing | $ 12,000,000 | |||||||||
Star Thrive Group Limited ("Star") | Share Purchase & Option Agreement | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Total amount received | $ 23,000,000 | |||||||||
Number of share purchased | 12,568,306 | |||||||||
Number of shares issued | 3,770,493 | |||||||||
Amount of shares issued | $ 23,000,000 | $ 6,900,000 | ||||||||
Call option description | the Purchaser may, within 24 months after July 24, 2018, purchase from the Company such number of shares of Common Stock that would bring Star's total ownership of the Company's issued and outstanding shares up to 19.5% on a fully diluted basis, at a price equal to 95% of the weighted average trading price of the Common Stock within 3 months prior to the exercise date of the Call Option. | |||||||||
Fair value of call option | $ 8,000,000 | |||||||||
Expected term | 1 year 9 months 22 days | |||||||||
Volatility rate | 132.55% | |||||||||
Risk free interest rate | 2.81% | |||||||||
Dividend yield | 0.00% | |||||||||
Sun Seven Stars Investment Group Limited | Subscription Agreement | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Common stock financing | $ 3,000,000 | |||||||||
Total amount received | $ 1,100,000 | |||||||||
Purchase price partly received | 1,100,000 | |||||||||
Sun Seven Stars Investment Group Limited | Bruno Wu | Subscription Agreement | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Common stock financing | $ 3,000,000 | |||||||||
Total amount received | $ 1,100,000 | |||||||||
Sun Seven Stars Investment Group Limited | Bruno Wu | Subscription Agreement | Subsequent Event | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Remaining amount received | $ 1,900,000 |
Convertible Note (Detail Textua
Convertible Note (Detail Textuals) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Sep. 21, 2018 | Jun. 28, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | |
Debt Instrument [Line Items] | ||||
Common stock financing | $ 3,000,000 | $ 2,000,000 | ||
Advantech Capital Investment II Limited | Common Stock Purchase Agreement | ||||
Debt Instrument [Line Items] | ||||
Common stock financing | $ 12,000,000 | |||
Conversion price | $ 1.82 | |||
Interest rate | 8.00% | |||
Amount of beneficial conversion feature | $ 1,400,000 | |||
Maturity date of the note | Jun. 28, 2021 | |||
Amount of discount on beneficial conversion feature | $ 10,700,000 |
Related Party Transactions (Det
Related Party Transactions (Detail Textuals) - USD ($) | Sep. 04, 2018 | Nov. 09, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | [1] | May 10, 2012 |
Related Party Transaction [Line Items] | |||||||||
Amount due to related parties | $ 71,908,057 | $ 71,908,057 | $ 434,030 | ||||||
Interest expenses related to note | $ 30,247 | $ 30,247 | $ 89,753 | $ 89,753 | |||||
Grapevine Logic, Inc | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of ownership interest acquired | 65.65% | ||||||||
Mr. Shane McMahon | $3.0 Million Convertible Note | |||||||||
Related Party Transaction [Line Items] | |||||||||
Amount due to related parties | $ 3,000,000 | ||||||||
Principal amount of convertible note | $ 3,000,000 | ||||||||
Interest rate of convertible note | 4.00% | ||||||||
Conversion price | $ 1.50 | ||||||||
Maturity date of the note | Dec. 31, 2019 | ||||||||
Bruno Wu | Grapevine Logic, Inc | |||||||||
Related Party Transaction [Line Items] | |||||||||
Percentage of non voting stock by equity holder | 34.35% | ||||||||
[1] | The above consolidated balance sheets present the Shanghai Guang Ming Investment Management Limited ("Guang Ming"), acquired from Tianjin Sun Seven Stars Culture Development Co. Ltd. ("Tianjin") and Beijing Nanbei Huijin Investment Co. Ltd. on April 4 2018 as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
Related Party Transactions (D_2
Related Party Transactions (Detail Textuals 1) ¥ in Millions | Dec. 07, 2017USD ($) | Sep. 30, 2018USD ($)Crude_oil_transactionEntity | Sep. 12, 2018USD ($) | Dec. 31, 2017USD ($) | [1] | Dec. 07, 2017CNY (¥) | Nov. 28, 2017 |
Related Party Transaction [Line Items] | |||||||
Number of crude oil transaction purchased | Crude_oil_transaction | 10 | ||||||
Number of entities | Entity | 3 | ||||||
Percentage of related party cost of total liabilities | 58.30% | ||||||
Long term investments | $ 18,767,510 | $ 6,975,511 | |||||
Asia Times | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of equity ownership | 10.00% | ||||||
Long term investments | $ 4,000,000 | ||||||
Advance payment made | $ 1,000,000 | ||||||
Zhong Hai Shi Xun Media | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of equity ownership | 80.00% | ||||||
50/50 Joint Venture (JV) | Asia Times | |||||||
Related Party Transaction [Line Items] | |||||||
Long term investments | $ 1,000,000 | ||||||
Securities Purchase Agreement | Shanghai Guang Ming | |||||||
Related Party Transaction [Line Items] | |||||||
Limited liability percentage | 100.00% | ||||||
Transaction costs for business acquisition | $ 363,436 | ¥ 2.4 | |||||
Notice period for cash refund to entity | 15 days | ||||||
[1] | The above consolidated balance sheets present the Shanghai Guang Ming Investment Management Limited ("Guang Ming"), acquired from Tianjin Sun Seven Stars Culture Development Co. Ltd. ("Tianjin") and Beijing Nanbei Huijin Investment Co. Ltd. on April 4 2018 as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
Related Party Transactions (D_3
Related Party Transactions (Detail Textuals 2) | Oct. 07, 2018Installments | Sep. 07, 2018USD ($) | Sep. 28, 2018USD ($)shares | Sep. 21, 2018USD ($) | Sep. 17, 2018shares | Jun. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) |
Related Party Transaction [Line Items] | ||||||||
Common stock financing | $ 3,000,000 | $ 2,000,000 | ||||||
Total amount received | $ 6,900,000 | |||||||
Amount received on share issued | 7,800,000 | |||||||
Liberty Biopharma | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shares issued | shares | 3,240,433 | |||||||
Number of shares listed on exchange | shares | 8,583,034 | |||||||
Subscription Agreement | Sun Seven Stars Investment Group Limited | ||||||||
Related Party Transaction [Line Items] | ||||||||
Common stock financing | $ 3,000,000 | |||||||
Total amount received | $ 1,100,000 | |||||||
Subscription Agreement | Liberty Biopharma | ||||||||
Related Party Transaction [Line Items] | ||||||||
Amount received on share issued | $ 2,000,000 | |||||||
Number of shares issued | shares | 1,173,333 | |||||||
Payments for common stock | $ 1,000,000 | |||||||
Bruno Wu | Share Purchase & Option Agreement | Liberty Biopharma | ||||||||
Related Party Transaction [Line Items] | ||||||||
Common stock financing | $ 15,500,000 | |||||||
Percentage of ownership interest acquired | 50.00% | |||||||
Fintalk | Bruno Wu | Purchase and Assumption Agreement (the "SSIL Agreement") | Sun Seven Stars Investment Group Limited | ||||||||
Related Party Transaction [Line Items] | ||||||||
Amount of exchange of promissory note | $ 1,000,000 | |||||||
Common stock fair market value | $ 6,000,000 | |||||||
Fintalk | Bruno Wu | Purchase and Assumption Agreement (the "SSIL Agreement") | Sun Seven Stars Investment Group Limited | Subsequent Event [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest rate | 2.51% | |||||||
Number of installments | Installments | 12 |
Share-Based Payments (Details)
Share-Based Payments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | ||||
Employees and directors share-based payments | $ 11,530 | $ 54,846 | $ 3,372,447 | $ 202,501 |
Share-Based Payments (Details 1
Share-Based Payments (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Options Outstanding | ||
Outstanding at January 1, 2018 | 1,853,391 | |
Granted | 0 | |
Exercised | (110,295) | |
Expired | (36,665) | |
Forfeited | 0 | |
Outstanding at September 30, 2018 | 1,706,431 | 1,853,391 |
Vested and expected to vest as of September 30, 2018 | 1,706,431 | |
Options exercisable at September 30, 2018 (vested) | 1,615,598 | |
Weighted Average Exercise Price | ||
Outstanding at January 1, 2018 | $ 3.2 | |
Granted | 0 | |
Exercised | 1.99 | |
Expired | 1.58 | |
Forfeited | 0 | |
Outstanding at September 30, 2018 | 3.28 | $ 3.2 |
Vested and expected to vest as of September 30, 2018 | 3.28 | |
Options exercisable at September 30, 2018 (vested) | $ 3.36 | |
Weighted Average Remaining Contractual Life (Years) | ||
Outstanding at September 30, 2018 | 4 years 4 months 2 days | 2 years 11 months 27 days |
Vested and expected to vest as of September 30, 2018 | 4 years 4 months 2 days | |
Options exercisable at September 30, 2018 (vested) | 4 years 1 month 2 days | |
Aggregated Intrinsic Value | ||
Outstanding at September 30, 2018 | $ 0.86 | $ 0.02 |
Vested and expected to vest as of September 30, 2018 | 0.86 | |
Options exercisable at September 30, 2018 (vested) | $ 0.80 |
Share-Based Payments (Details 2
Share-Based Payments (Details 2) - $ / shares | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 24, 2018 | Dec. 31, 2017 | |
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 60,000 | 8,000,000 | 2,521,896 |
Exercise Price | $ 1.75 | $ 5.375 | |
2014 Broker Warrants (Series E Financing) | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 60,000 | 703,714 | |
Exercise Price | $ 1.75 | ||
Expiration Date | Jan. 31, 2019 | ||
2016 Warrants to SSS | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 0 | 1,818,182 | |
Exercise Price | $ 2.75 | ||
Expiration Date | Mar. 28, 2018 |
Share-Based Payments (Detail Te
Share-Based Payments (Detail Textuals) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Sep. 24, 2018$ / sharesshares | Nov. 30, 2017USD ($)Directorshares | Jan. 31, 2017USD ($)Employeeshares | Apr. 30, 2017USD ($)shares | Jun. 30, 2018USD ($)shares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($) | Dec. 31, 2017shares | Dec. 03, 2010shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Options outstanding to purchase shares of common stock | 1,706,431 | 1,853,391 | |||||||
Unrecognized compensation expense related to non-vested share options | $ | $ 110,584 | ||||||||
Weighted average period for recognition related to non-vested share options | 1 year 8 months 1 day | ||||||||
Total fair value of vested shares | $ | $ 319,001 | $ 56,765 | |||||||
Number of warrants outstanding | 8,000,000 | 60,000 | 2,521,896 | ||||||
Weighted average exercise price of warrants | $ / shares | $ 5.375 | $ 1.75 | |||||||
Weighted average remaining life of warrants | 7 months 2 days | ||||||||
Percentage of premium on exercise price | 25.00% | ||||||||
Description of warrant key executives | 25% will vest 9 months following the vesting trigger date; (ii) 50% will vest 18 months following the vesting trigger date; and (iii) 25% will vest 24 months following the vesting trigger date. | ||||||||
Closing market price | $ / shares | $ 4.30 | ||||||||
Restricted Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of restricted shares to purchase shares of common stock | 90,586 | 109,586 | |||||||
Restricted shares granted | 1,342,743 | ||||||||
Restricted shares vested | 1,264,743 | ||||||||
2010 Stock Incentive Plan ("the Plan") | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized for issuance | 4,000,000 | ||||||||
Number of options available for issuance | 132,499 | ||||||||
2010 Stock Incentive Plan ("the Plan") | Restricted Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted shares granted | 35,000 | 365,000 | 1,342,743 | ||||||
Restricted shares vested | 1,239,743 | ||||||||
Number of employees | Employee | 1 | ||||||||
Restricted shares, vesting period | 4 years | 4 years | 2 years | ||||||
Amount of grant date fair value of the restricted shares | $ | $ 43,750 | $ 778,200 | $ 3,469,532 | ||||||
2010 Stock Incentive Plan ("the Plan") | Board of Directors | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted shares granted | 4,488 | ||||||||
Number of directors | Director | 4 | ||||||||
Amount of grant date fair value of the restricted shares | $ | $ 100,000 |
Earnings (Loss) Per Common Sh_3
Earnings (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | [1] | Sep. 30, 2018 | Sep. 30, 2017 | [1] | |
Earnings Per Share [Abstract] | ||||||
Net loss attributable to common stockholders | $ (7,186,847) | $ (3,027,939) | $ (19,228,240) | $ (4,698,563) | ||
Basic | ||||||
Basic weighted average shares outstanding | 74,063,495 | 62,146,168 | 71,574,303 | 59,594,289 | ||
Diluted | ||||||
Diluted weighted average common shares outstanding | 74,063,495 | 62,146,168 | 71,574,303 | 59,594,289 | ||
Net loss per share: | ||||||
Basic | $ (0.10) | $ (0.05) | $ (0.27) | $ (0.08) | ||
Diluted | $ (0.10) | $ (0.05) | $ (0.27) | $ (0.08) | ||
[1] | The above consolidated statements of operation present Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co., Ltd. on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
Earnings (Loss) Per Common Sh_4
Earnings (Loss) Per Common Share (Details 1) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 13,017,857 | 41,917,056 | 13,017,857 | 41,917,056 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 60,000 | 3,118,181 | 60,000 | 3,118,181 |
Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 1,797,017 | 2,267,095 | 1,797,017 | 2,267,095 |
Series A Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 933,333 | 933,333 | 933,333 | 933,333 |
Convertible note and interest | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 10,227,507 | 35,598,447 | 10,227,507 | 35,598,447 |
Income Taxes (Detail Textuals)
Income Taxes (Detail Textuals) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Deferred tax assets valuation allowance, percentage | 100.00% |
Valuation allowance increased | $ 4,500,000 |
Results of Operations, Revenue, Other | 3,800,000 |
Deferred tax liabilities | 673,706 |
U.S. domestic | |
Operating Loss Carryforwards [Line Items] | |
Cumulative tax loss carryforwards | 38,000,000 |
Foreign | |
Operating Loss Carryforwards [Line Items] | |
Cumulative tax loss carryforwards | $ 33,200,000 |
Contingencies and Commitments_2
Contingencies and Commitments (Details) | Sep. 30, 2018USD ($) |
Years ending December 31, | |
2018(3 months) | $ 274,640 |
2,019 | 515,016 |
2,020 | 167,712 |
Thereafter | 0 |
Total | $ 957,368 |
Concentration, Credit and Oth_3
Concentration, Credit and Other Risks (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
RMB denominated bank deposits | PRC | ||
Concentration Risk [Line Items] | ||
Bank deposits with financial institutions | $ 961,428 | $ 684,115 |
US dollar denominated bank deposits | PRC | ||
Concentration Risk [Line Items] | ||
Bank deposits with financial institutions | 328,021 | 628,481 |
US dollar denominated bank deposits | Hong Kong Special Administrative Region (HK SAR) | ||
Concentration Risk [Line Items] | ||
Bank deposits with financial institutions | 11,310,538 | 1,505,271 |
US dollar denominated bank deposits | Singapore | ||
Concentration Risk [Line Items] | ||
Bank deposits with financial institutions | 884,060 | 1,033,769 |
US dollar denominated bank deposits | The United States of America (USA) | ||
Concentration Risk [Line Items] | ||
Bank deposits with financial institutions | 1,934,395 | 3,698,704 |
HKD denominated bank deposits | Hong Kong Special Administrative Region (HK SAR) | ||
Concentration Risk [Line Items] | ||
Bank deposits with financial institutions | $ 35,695 | $ 17,508 |
Concentration, Credit and Oth_4
Concentration, Credit and Other Risks (Detail Textuals) - Major Customers ¥ in Millions | Oct. 08, 2016CNY (¥) | Dec. 31, 2016CNY (¥) | Sep. 30, 2018Customer | Sep. 30, 2017Customer |
Legacy YOD | Yanhua Agreement | ||||
Concentration Risk [Line Items] | ||||
Minimal guarantee fee | ¥ 13 | |||
Total price of the existing agreement to be transferred | 13 | |||
First installments of agreement | ¥ 6.5 | |||
Second installments of agreement to be paid in three months from the date when the first installment | 6.5 | |||
Amount recognized as revenue of the first installment | ¥ 6.5 | |||
Wecast Services | Revenue | ||||
Concentration Risk [Line Items] | ||||
Number of customers | Customer | 1 | 1 | ||
Description of percentage of revenue for major customer | more than 10 | more than 10 | ||
Wecast Services | Accounts receivables | ||||
Concentration Risk [Line Items] | ||||
Number of customers | Customer | 1 | 2 | ||
Description of percentage of revenue for major customer | more than 10 | more than 10 |
Concentration, Credit and Oth_5
Concentration, Credit and Other Risks (Detail Textuals 1) | 1 Months Ended | 9 Months Ended | ||
Jan. 30, 2017USD ($) | Sep. 30, 2018USD ($)Supplier | Sep. 30, 2017USD ($)Supplier | Dec. 31, 2017USD ($) | |
Concentration Risk [Line Items] | ||||
Insured deposit | $ 398,243 | |||
Legacy YOD | Licensed Content Commitment | ||||
Concentration Risk [Line Items] | ||||
Cost of sales | $ 17,700,000 | $ 800,000 | ||
Revenues | $ 800,000 | |||
Major Suppliers | Wecast Services | Cost of revenues | ||||
Concentration Risk [Line Items] | ||||
Number of suppliers | Supplier | 2 | 3 | ||
Description of percentage of revenue for major supplier | more than 10 | more than 10 | ||
Major Suppliers | Wecast Services | Accounts payable | ||||
Concentration Risk [Line Items] | ||||
Number of suppliers | Supplier | 2 | 3 | ||
Description of percentage of revenue for major supplier | more than 10 | more than 10 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Detail Textuals) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Employer matching contribution, percent | 100.00% | |||
Employer matching contribution, description | 401(k) defined contribution plan ("401(k) Plan") that provides for a 100% employer matching contribution of the first 3% and a 50% employer matching contribution of each additional percent contributed by an employee up to 5% of each employee's pay. Employees become fully vested in employer matching contributions after six months of employment. | |||
Employer matching contribution, amount | $ 487 | $ 3,980 | $ 3,242 | $ 6,526 |
PRC | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employer matching contribution, amount | $ 607,872 | $ 274,049 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | [1] | Sep. 30, 2018 | Sep. 30, 2017 | ||
NET SALES TO EXTERNAL CUSTOMERS | ||||||
Net sales | $ 43,707,937 | $ 30,229,255 | $ 362,628,296 | $ 106,724,866 | [1] | |
GROSS PROFIT | ||||||
Gross profit | $ 863,061 | $ 1,955,392 | 2,788,731 | 5,835,862 | [1] | |
Legacy YOD | ||||||
NET SALES TO EXTERNAL CUSTOMERS | ||||||
Net sales | 0 | 794,273 | ||||
GROSS PROFIT | ||||||
Gross profit | 0 | 31,662 | ||||
Wecast Services | ||||||
NET SALES TO EXTERNAL CUSTOMERS | ||||||
Net sales | 362,628,296 | 105,930,593 | ||||
GROSS PROFIT | ||||||
Gross profit | $ 2,788,731 | $ 5,804,200 | ||||
[1] | The above consolidated statements of operation present Guang Ming, acquired from Tianjin and Beijing Nanbei Huijin Investment Co., Ltd. on April 4, 2018, as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
Segment Reporting (Details 1)
Segment Reporting (Details 1) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | |
TOTAL ASSETS | |||
Total | $ 167,723,468 | $ 63,444,488 | [1] |
Unallocated assets | |||
TOTAL ASSETS | |||
Total | 94,617,524 | 11,270,378 | |
Intersegment elimination | |||
TOTAL ASSETS | |||
Total | (5,182,259) | 5,051,660 | |
Legacy YOD | |||
TOTAL ASSETS | |||
Total | 27,034,157 | 27,141,163 | |
Wecast Services | |||
TOTAL ASSETS | |||
Total | $ 51,254,046 | $ 30,084,607 | |
[1] | The above consolidated balance sheets present the Shanghai Guang Ming Investment Management Limited ("Guang Ming"), acquired from Tianjin Sun Seven Stars Culture Development Co. Ltd. ("Tianjin") and Beijing Nanbei Huijin Investment Co. Ltd. on April 4 2018 as if it had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 4 "Acquisition"). |
Segment Reporting (Detail Textu
Segment Reporting (Detail Textuals) | 9 Months Ended |
Sep. 30, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Subsequent Event (Detail Textua
Subsequent Event (Detail Textuals) - Subsequent Event $ in Millions | Oct. 10, 2018USD ($) |
Subsequent Event [Line Items] | |
Name of the site | University of Connecticut |
Purchase price | $ 5.2 |
Cash collateral expense | 3.6 |
Investments | $ 283 |
Subsequent Event (Detail Text_2
Subsequent Event (Detail Textuals 1) - Subsequent Event - USD ($) $ in Millions | Oct. 10, 2018 | Oct. 09, 2018 |
Joint venture agreement | TPJ Ltd | ||
Subsequent Event [Line Items] | ||
Percentage of ownership in joint venture | 75.00% | |
Chain Valley, in Connecticut | Promissory note | Assistance Agreement (the "Assistance Agreement") | ||
Subsequent Event [Line Items] | ||
Total purchase price in asset acquisition | $ 10 | |
Maximum percentage of project cost as aggregate principal of funding | 50.00% | |
Forgiveness of promissory note after meet conditions | $ 10 |