Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 04, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'FAB Universal Corp. | ' |
Entity Central Index Key | '0001074909 | ' |
Amendment Flag | 'false | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 20,805,860 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
CURRENT ASSETS: | ' | ' |
Cash | $98,224,505 | $99,546,530 |
Restricted cash | ' | 1,651,800 |
Accounts receivable, net | 1,543,384 | 7,554,919 |
Advances to suppliers, net | 81,500 | 81,500 |
Inventory | 76,808 | 686,067 |
Deferred tax assets, current | 2,243,210 | 2,830,200 |
Other current assets | 2,370,768 | 591,194 |
Total current assets | 104,540,175 | 112,942,210 |
Property and equipment, net | 15,575,730 | 16,574,131 |
Goodwill | 60,866,930 | 62,092,932 |
Intangible assets, net | 20,962,468 | 23,903,476 |
Deferred tax assets, non-current | 4,151,625 | 5,227,865 |
Long-term prepaid expense | 309,000 | ' |
Long-term deposits | 19,606,179 | 20,092,845 |
Total assets | 226,012,107 | 240,833,459 |
CURRENT LIABILITIES: | ' | ' |
Short-term bank loans | 4,512,999 | 6,276,842 |
Accounts payable | 2,821,245 | 3,309,610 |
Accrued expenses | 3,283,794 | 4,209,753 |
Deferred revenue, current | 14,438,504 | 15,457,102 |
Taxes payable | 402,108 | 2,608,821 |
Notes Payable | 390,159 | 1,651,801 |
Contingent liability | 1,208,839 | 1,238,850 |
Due to related parties | 121,685 | 122,596 |
Other payable | 2,431,859 | 1,976,119 |
Total current liabilities | 29,611,192 | 36,851,494 |
Long-term deposits from customers | 1,997,002 | 2,244,797 |
Deferred revenue, non-current | 17,796,833 | 25,432,654 |
Long-term bond payable | 16,117,854 | 16,518,005 |
Total liabilities | 65,522,881 | 81,046,950 |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred Stock | ' | ' |
Common stock | 20,806 | 20,806 |
Additional paid-in capital | 208,879,540 | 207,903,478 |
Accumulated other comprehensive income | 1,809,269 | 5,469,380 |
Accumulated deficit | -50,220,389 | -53,607,155 |
Total stockholders' equity | 160,489,226 | 159,786,509 |
Total liabilities and stockholders' equity | $226,012,107 | $240,833,459 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Sep. 26, 2012 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ' | ' | ' | ' |
Allowance for doubtful accounts | $14,000 | $14,000 | $14,000 | ' |
Preferred Stock, par value per share | $0.00 | $0.00 | ' | ' |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 | ' | ' |
Preferred Stock, shares issued | 290 | 290 | ' | ' |
Preferred Stock, shares outstanding | 290 | 290 | ' | ' |
Common stock, par value per share | $0.00 | $0.00 | ' | ' |
Common stock, shares authorized | 200,000,000 | 200,000,000 | ' | ' |
Common stock, shares issued | 20,805,860 | 20,805,860 | ' | ' |
Common stock, shares outstanding | 20,805,860 | 20,805,860 | ' | 10,702,309 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ' | ' | ' | ' |
Revenue | $13,857,077 | $25,857,239 | $28,601,536 | $48,493,632 |
Cost of Revenue | 5,722,898 | 14,362,500 | 12,075,113 | 28,624,131 |
Gross Profit | 8,134,179 | 11,494,739 | 16,526,423 | 19,869,501 |
OPERATING EXPENSES | ' | ' | ' | ' |
Selling expenses | 1,183,471 | 1,039,850 | 2,426,611 | 1,976,171 |
General and administrative | 3,909,905 | 2,487,458 | 6,731,327 | 5,117,790 |
Consulting fees | 80,946 | 446,460 | 707,751 | 930,592 |
Research and development | 79,061 | 73,189 | 157,043 | 140,539 |
Total Expenses | 5,253,383 | 4,046,957 | 10,022,732 | 8,165,092 |
Income from operations | 2,880,796 | 7,447,782 | 6,503,691 | 11,704,409 |
OTHER INCOME (EXPENSE): | ' | ' | ' | ' |
Interest income | 55,260 | 8,461 | 127,263 | 37,020 |
Interest (expense) | -541,429 | -327,115 | -1,107,357 | -366,265 |
Other (expense), net | -14,133 | -85,147 | -9,196 | -84,344 |
Total Other Expense, net | -500,302 | -403,801 | -989,290 | -413,589 |
Income from operations before income taxes | 2,380,494 | 7,043,981 | 5,514,401 | 11,290,820 |
Income tax expense | 1,000,310 | 1,658,842 | 2,127,635 | 2,901,684 |
Net income | 1,380,184 | 5,385,139 | 3,386,766 | 8,389,136 |
Other comprehensive income (loss) | ' | ' | ' | ' |
Foreign currency translation gain (loss) | 263,266 | 1,542,802 | -3,660,112 | 2,033,011 |
COMPREHENSIVE INCOME (LOSS) | $1,643,450 | $6,927,941 | ($273,346) | $10,422,147 |
BASIC AND DILUTED INCOME PER COMMON SHARE | $0.07 | $0.26 | $0.16 | $0.41 |
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 20,805,860 | 20,761,025 | 20,805,860 | 20,708,042 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash Flows from Operating Activities | ' | ' |
Net income | $3,386,766 | $8,389,136 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ' | ' |
Stock issued to employees and consultants | ' | 329,600 |
Non-cash compensation - options vested | 324,079 | 49,858 |
Deferred tax benefit | 1,476,901 | -1,657,406 |
Depreciation and amortization expense | 3,649,110 | 3,354,115 |
Change in assets and liabilities: | ' | ' |
Accounts receivable | 5,871,161 | -2,078,275 |
Other assets | -2,178,852 | 144,161 |
Inventory | 596,223 | -2,068,141 |
Accounts payable | -419,740 | 110,807 |
Accrued expense | -325,496 | 327,527 |
Taxes payable | -2,156,479 | 740,704 |
Deferred revenue | -7,744,231 | 14,406,939 |
Net Cash Provided by operations | 2,479,442 | 22,049,025 |
Cash Flows from Investing Activities: | ' | ' |
Purchase of property and equipment | -62,393 | -328,166 |
Purchase of copyrights | -601,019 | ' |
Payment of long-term deposits | ' | -14,391,157 |
Net Cash Used in Investing Activities | -663,412 | -14,719,323 |
Cash Flows from Financing Activities: | ' | ' |
Capital contribution to the VIE | 648,614 | ' |
Decrease in restricted cash | 1,621,534 | ' |
Proceeds from long-term bond offering | ' | 16,294,075 |
Proceeds from related party | ' | 80,154 |
Payment of customer deposits | -194,584 | ' |
Payment of loans | -1,621,534 | ' |
Proceeds from notes payable | 621,196 | 1,615,434 |
Payments of notes payable | -1,852,571 | -1,842,892 |
Net Cash Provided by (Used in) Financing Activities | -777,345 | 16,146,771 |
Effect of Exchange Rate Change on Cash | -2,360,710 | 340,544 |
Net Increase (Decrease) in Cash | -1,322,025 | 23,817,017 |
Cash at Beginning of Year | 99,546,530 | 19,671,937 |
Cash at the end of Year | 98,224,505 | 43,488,954 |
Supplemental Disclosures of Cash Flow Information | ' | ' |
Interest expense paid | 2,006,531 | 99,734 |
Income taxes paid | $2,308,940 | $3,803,188 |
ORGANIZATION_AND_BASIS_OF_PRES
ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
ORGANIZATION AND BASIS OF PRESENTATION [Abstract] | ' | ||||
ORGANIZATION AND BASIS OF PRESENTATION | ' | ||||
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION | |||||
FAB Universal Corp. ("Parent", "Company"), a Colorado corporation was organized on July 1, 1998. The Company operates in three segments, Wholesale, Retail and Digital Media Services. The Wholesale segment engages primarily in the sale of audio-visual products as well as books and magazines to retail businesses. The Retail segment conducts its business through our retail stores, selling copyright protected audio and video products, including CDs, VCDs, DVDs, books, magazines and portable electronic devices. The Digital Media Services segment licenses its multi-year programs for our FAB brand. It also includes the revenue share for advertising, and includes the services provided by our podcast hosting, content management tools and advertising services. (See Note 2) On February 27, 2007, the Company organized Wizzard Acquisition Corp., a Pennsylvania corporation, to acquire and dissolve into the operations of Webmayhem, Inc. ("Libsyn", "Libsyn Media"), a Pennsylvania corporation, in a transaction accounted for as a purchase. Libsyn is a wholly owned subsidiary of the Company. | |||||
On September 26, 2012, (the "Closing") Parent purchased all of the issued and outstanding shares of Digital Entertainment International Ltd. ("DEI"), a company incorporated under the law of the Hong Kong Special Administrative Region, in a transaction accounted for as a purchase. The accompanying consolidated financial statements include the financial statements of DEI; its wholly owned subsidiary, Beijing Dingtai Guanqun Culture Co., Ltd. ("DGC"); Beijing FAB Culture Media Co., Ltd. ("FAB Media"), which is a variable interest entity ("VIE"), and Beijing FAB Digital Entertainment Products Co., Ltd. ("FAB Digital"), a wholly owned subsidiary of FAB Media. | |||||
DEI is a holding company and conducts its business through its wholly owned subsidiary, DGC, which is a wholly foreign-owned enterprise ("WFOE") with limited liability incorporated in the PRC in March 2011. DGC has entered into a series of contractual agreements with the owners of FAB Media. . On March 10, 2014, the owners of FAB Media injected additional $653,200 (RMB 4 million) into FAB Media, which will be accounted for as additional paid-in capital in consolidation. | |||||
DEI, through its wholly owned subsidiary and its VIE, is engaged in marketing and distributing various officially licensed digital entertainment products under the "FAB" brand throughout the PRC, including but not limited to audiovisual products such as digital music files, Compact Discs, Video Compact Discs and Digital Video Disks as well as books, magazines, mobile phone accessories and cameras. DEI's products and services are primarily distributed through its flagship stores, wholesale services, proprietary "FAB" kiosks, and online virtual stores. | |||||
FAB Digital is a wholly owned subsidiary of FAB Media and specializes in the distribution of entertainment and audio visual products through its two flagship stores in Beijing as well as its online stores. Beijing Jinglvtong Travel and Science Technology Co., Ltd., which is fully owned by FAB Digital, changed to Beijing FAB Huzhong Times Technology Co., Ltd. in May 2013, and the name was changed again to Beijing FAB Interactive Culture Media Co., Ltd. ("BFICM") in December 2013. | |||||
In November 2013, three subsidiaries of DGC were incorporated in PRC with a registered capital of RMB 1 million each. These three organizations are each 100% owned by DGC and they are: Beijing FAB Vast Cosmos Technology Co. Ltd. ("BFVCT"), Beijing FAB Wide Spread Culture Development Co., Ltd. ("BFCD") and Beijing FAB Prosperous Trading Co., Ltd. ("BFPT"). In December 2013, FAB Entertainment Corp., a California Corporation, which is also fully owned by DGC, was formed. These four companies had no operations in 2013 and were formed for the purpose of developing international business. | |||||
In June 2012, a series of contractual arrangements were entered into between DGC, FAB Media and the individual shareholders of FAB Media. Such arrangements include an Exclusive Service Agreement; an Equity Pledge Agreement; a Call Option Agreement; and a Shareholders' Voting Right Proxy Agreement. | |||||
Pursuant to these agreements, DGC has the exclusive right to provide to FAB Media consulting services related to business operation and management. The key terms of these agreements include: | |||||
1) | |||||
DGC has the sole discretion to make all operating and business decisions for FAB Media on behalf of the equity owners, including business operations, policies and management, approving all matters requiring shareholder approval; | |||||
2) | |||||
FAB Media has agreed to pay all of the operating costs incurred by DGC, and transfers 100% of the income earned to DGC; DGC also has the right to determine the amount of the fees it will receive; | |||||
3) | |||||
During the term of these agreements, DGC will retain the rights to the intellectual properties if they are created by DGC; | |||||
4) | |||||
FAB Media may not enter into any other agreements with any third party to receive consulting service without the prior consent of DGC; | |||||
5) | |||||
The equity owners pledge their respective equity interests in the FAB Media as a guarantee for the payment of technical and consulting services fees under the Exclusive Service Agreement; | |||||
6) | |||||
The shareholders of FAB Media have irrecoverably and unconditionally granted DGC or its designee an exclusive option to purchase, to the extent permitted by PRC laws, all or any portion of equity interest of the FAB Media. | |||||
All these contractual agreements obligate DGC to absorb a majority of the risk of loss from FAB Media's activities and entitle DGC to receive a majority of its residual returns. In essence, DGC has gained effective control over FAB Media. Based on these contractual arrangements, the Company believes that FAB Media should be considered a variable interest entity under the Statement of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, "Consolidation". Accordingly, the accounts of this entity are consolidated with those of DGC, the primary beneficiary. | |||||
DEI is effectively controlled by the majority shareholders of FAB Media. DEI has 100% equity interest in DGC. Accordingly, DGC, and FAB Media are effectively controlled by the same majority shareholders. | |||||
Therefore, DGC and FAB Media are considered under common control. The consolidation of DGC and FAB Media into DEI has been accounted for at historical cost and prepared on the basis as if the aforementioned exclusive contractual agreements between DGC and FAB Media had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements. | |||||
Selected information of the consolidated balance sheet of FAB Media and its wholly-owned subsidiaries as of June 30, 2014 and December 31, 2013, and the consolidated results of operations for the six months ended June 30, 2014 and 2013 are summarized as follows: | |||||
June 30, | 31-Dec-13 | ||||
2014 | |||||
Cash | $ | 97,032,235 | $ | 99,077,811 | |
Accounts receivable, net | 1,313,771 | 7,227,270 | |||
Deferred tax assets, current | 2,243,210 | 2,830,200 | |||
Other current assets | 6,309,124 | 4,820,393 | |||
Total current assets | 106,898,340 | 113,955,674 | |||
Property, plant and equipment, net | 14,041,543 | 14,989,176 | |||
Intangible assets, net | 670,178 | 434,304 | |||
Deferred tax assets, non-current | 4,151,625 | 5,227,865 | |||
Long-term deposits | 19,602,597 | 20,089,263 | |||
Total assets(1) | 145,364,283 | 154,696,282 | |||
June 30, | 31-Dec-13 | ||||
2014 | |||||
Short-term bank loans | $ | 4,512,999 | $ | 6,276,842 | |
Accounts payable | 2,390,062 | 2,924,374 | |||
Accrued expenses | 3,032,717 | 4,008,363 | |||
Deferred revenue, current | 14,241,842 | 15,294,998 | |||
Other current liability | 3,630,102 | 7,491,885 | |||
Total current liabilities | 27,807,722 | 35,996,462 | |||
Long-term deposits from customers | 1,997,002 | 2,244,797 | |||
Deferred revenue, non-current | 17,796,833 | 25,432,654 | |||
Long-term bonds payable | 16,117,854 | 16,518,005 | |||
Total liabilities(1) | 63,719,411 | 80,191,918 | |||
For the six months ended June 30, 2014 | For the six months ended June 30, 2013 | ||||
Revenue | $ | 25,793,559 | $ | 46,180,732 | |
Net income | 5,630,129 | 8,889,372 | |||
(1) Total assets and liabilities of the VIE are reported net of intercompany balances that have been eliminated with the VIE consolidation |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation and consolidation - The accompanying unaudited condensed consolidated financial presented reflect the accounts of Parent, Libsyn, and DEI. All significant inter-company transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company's audited consolidated financial statements as of and for the year ended December 31, 2013 included in the Company's annual report on Form 10-K filed on June 27, 2014. | |
Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Management made assumptions and estimates for determining reserve for accounts receivable, obsolete inventory, the realization of deferred tax assets and in determining the impairment of finite life intangible assets and goodwill and accruals for income tax uncertainties and other contingencies when applicable. Actual results could differ from those estimated by management. | |
Reclassification - The financial statements for the period ended June 30, 2013 have been reclassified to conform to the headings and classifications used in the June 30, 2014 financial statements. | |
Inventory - Inventory includes books and video products and is recorded at the lower of cost or market, using the first-in, first-out ("FIFO") method. The Company estimates net realizable value based on current market value and inventory aging analyses. As of June 30, 2014 no reserve for slow-moving or obsolete inventory is considered necessary. | |
Revenue Recognition - Revenue is recognized when earned. The Company's revenue recognition policies are in compliance with FASB ASC Topic 985-605, Software - Revenue Recognition. The Company's revenue recognition policies are also in compliance with the Securities and Exchange Commission Staff Accounting Bulletin No. 101 and 104. | |
Digital media publishing services are billed on a month to month basis. The Company recognizes revenue from providing digital media publishing services when the services are provided and when collection is probable. The Company recognizes revenue from the insertion of advertisements in digital media, as the digital media with the advertisement is downloaded and collection is probable. The Company recognizes revenue from the sale of apps and premium subscriptions when sold and collection is probable. | |
In the PRC, Value Added Tax ("VAT") of 17% of the invoice amount is collected in respect of the sales of goods on behalf of tax authorities. The VAT collected is not revenue of the Company; instead, the amount is recorded as a liability on the balance sheet until such VAT is paid to the authorities. | |
The Company derives revenue from Retail sales, Wholesale, and Digital sales. Revenue from Digital sales includes advertisement revenue, membership card revenue, download revenue and licensing revenue. | |
Product revenue is recognized when title to the product has transferred to customers in accordance with the terms of the sale; the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Revenues are recorded net of applicable sales taxes. | |
Revenue from retail sales is recognized at the point-of-sale. Revenue from Wholesale is recognized at the point of delivery of the product. Download service revenue is recognized when substantially all material services or conditions relating the sales have been performed or satisfied, and the Company has no obligation to refund any payment (cash or otherwise) received. Revenue generated from Membership sales is non-refundable. Membership card revenue is amortized over the life of the membership period, membership cards with par value of RMB 100 have an expiration period of three months, and par value of RMB 200, 300, 400 and 500 have an expiration period of twelve months. Advertisement revenue is recognized over the contract period. Licensing revenue is amortized ratably over the term of the agreement which is generally five years. Deferred revenue represents unearned revenues related primarily to sales of licenses and FAB Membership cards. | |
Accounts Receivable - We evaluate the creditworthiness of our customers based on their financial information, if available, as well as information obtained from suppliers and past experiences with customers. Accounts receivable consist of trade receivables arising in the normal course of business. Any allowance established is subject to judgment and estimates made by management. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. We established an allowance for doubtful accounts of $14,000 at June 30, 2014 and 2013 | |
. | |
Stock-based Compensation - The Company accounts for options in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") ASC Topic 718, Compensation - Stock Compensation. For the six months ended June, 2014 and 2013, the Company recorded stock-based compensation expense of $324,079 and $49,858 for vesting of stock options, respectively, and stock-based compensation expense to employees and consultants of $0 and $329,600, respectively, for options that were issued and immediately exercised. | |
Functional Currency / Foreign Currency Translation - The functional currency of FAB Universal Corp is the United States Dollar (USD). The functional currency of DEI is the Renminbi ("RMB") and its reporting currency is U.S. dollars for the purpose of these financial statements. The Company's consolidated balance sheet accounts are translated into U.S. dollars at the period-end exchange rates (6.2043 RMB to $1 at June 30, 2014) and all revenue and expenses are translated into U.S. dollars at the average exchange rates prevailing during 2014 (6.1669 RMB to $1) in which these items arise. Translation gains and losses are deferred and accumulated as a component of other comprehensive income in stockholders' equity. Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are included in the statement of operations as incurred. | |
Fair Value of Financial Instruments - The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | |
• | |
Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities; | |
• | |
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |
• | |
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | |
Unless otherwise disclosed, the fair value of the Company's financial instruments including cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, current deferred revenue and notes payable approximates their recorded values due to their short-term maturities. Long-term deposits represent cash and therefore, their carrying value represents fair value. The fair value of the Company's long-term deposits, non-current deferred revenue, long-term bond payable and other liabilities has no material difference with the book values based on the calculated results. | |
Property and Equipment - Property and equipment are stated at cost less accumulated depreciation. Depreciation and amortization is calculated on the straight-line method over the estimated useful lives of the assets as set out below: | |
Estimated Useful Life | |
Electronic equipment 2-5 years | |
Office furniture and equipment 2-10 years | |
Vehicles 5 years | |
Building 48.5 years | |
Leasehold improvements Shorter of lease terms or estimated useful life | |
Goodwill and other Intangible Assets - The Company accounts for Goodwill and other intangible assets in accordance with provisions of FASB -ASC Topic 350, Intangibles--Goodwill and Other. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead are tested for impairment at least annually in accordance with the provisions of Topic 350. Impairment losses arising from this impairment test, if any, are included in operating expenses in the period of impairment. Topic 350 requires that intangible assets with finite lives be amortized over their respective estimated useful lives, and reviewed for impairment in accordance with Topic 360, criteria for recognition of an impairment of Long-Lived Assets. There was no indication of goodwill or other intangible impairment during the six months ended June 30, 2014. | |
Income Taxes - The Company is subject to the Income Tax Laws of U.S. and the PRC. The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The components of deferred tax assets are individually classified as current and non-current based on their characteristics. | |
ASC 740-10-25 prescribes a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There is no material uncertain tax position as of June 30, 2014 and 2013, respectively (See note 12 - Capital Stock and note 15- Contingencies). |
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | ' | ||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||||||||
NOTE 3 - GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||||||||
Goodwill consists of: | |||||||||||||||||
June 30, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Digital Entertainment International - DEI | $ | 49,382,679 | $ | 50,608,681 | |||||||||||||
Webmayhem Inc.(Libsyn) | 11,484,251 | 11,484,251 | |||||||||||||||
Total Goodwill | $ | 60,866,930 | $ | 62,092,932 | |||||||||||||
The following is a summary of goodwill: | |||||||||||||||||
For the six Months Ended June 30, | For the Year Ended December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Goodwill at beginning of period | $ | 62,092,932 | $ | 60,652,957 | |||||||||||||
Effect of exchange rate | -1,226,002 | 1,439,975 | |||||||||||||||
Goodwill at end of period | $ | 60,866,930 | $ | 62,092,932 | |||||||||||||
Other intangible assets - Other intangible assets consist of customer relationships, intellectual property, trade name, copyright protected content and non-compete, which were obtained through the acquisition of DEI. Management considers these intangible assets to have finite-lives except trade name. These assets are being amortized on a straight-line basis over their estimated useful lives. | |||||||||||||||||
As of June 30, 2014, | |||||||||||||||||
Preliminary | Weighted Average | Accumulated | Currency Translation Adjustment | Net Carrying | |||||||||||||
Fair Value | Useful Life | Amortization | Amount | ||||||||||||||
(in Years) | |||||||||||||||||
Customer Relationships | $ 8,900,000 | 3 | $ 5,331,987 | $172,833 | $ 3,740,846 | ||||||||||||
Intellectual Property | 4,300,000 | 3 | 2,576,128 | 83,503 | 1,807,375 | ||||||||||||
Trade name | 13,876,000 | (a) | (a) | 222,086 | 14,098,086 | ||||||||||||
Non-compete | 1,885,200 | 2 | 1,694,134 | 39,829 | 230,895 | ||||||||||||
Copyright | 1,488,073 | (b) | 402,807 | - | 1,085,266 | ||||||||||||
Total | $ 30,449,273 | $ 10,005,056 | $ 518,251 | $ 20,962,468 | |||||||||||||
(a) | |||||||||||||||||
The FAB trade name has been determined to have an indefinite life. | |||||||||||||||||
(b) | |||||||||||||||||
The copyrights useful lives are from 1 year to 10 years. | |||||||||||||||||
The estimated future amortization expenses related to other intangible assets other than trade name as of June 30, 2014 are as follows: | |||||||||||||||||
For twelve months ending June 30, | |||||||||||||||||
2014 | $ 5,177,106 | ||||||||||||||||
2015 | 1,469,619 | ||||||||||||||||
2016 | 117,201 | ||||||||||||||||
Thereafter | 100,456 | ||||||||||||||||
Total | $ 6,864,382 |
ACCOUNTS_RECEIVABLE
ACCOUNTS RECEIVABLE | 6 Months Ended | |||
Jun. 30, 2014 | ||||
ACCOUNTS RECEIVABLE [Abstract] | ' | |||
ACCOUNTS RECEIVABLE | ' | |||
NOTE 4 - ACCOUNTS RECEIVABLE | ||||
Accounts receivable as of June 30, 2014 and December 31, 2013 consist of the following: | ||||
June 30, | December 31, | |||
2014 | 2013 | |||
Accounts receivable | $ 1,557,384 | $ 7,568,919 | ||
Allowance for doubtful accounts | -14,000 | -14,000 | ||
Accounts receivable, net | $ 1,543,384 | $ 7,554,919 | ||
Currently, the Company grants credit to customers with well-established credit history with terms from net 30 days to twelve months while the Company generally requests other customers to pay either in advance or upon delivery. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended | |||
Jun. 30, 2014 | ||||
PROPERTY AND EQUIPMENT [Abstract] | ' | |||
PROPERTY AND EQUIPMENT | ' | |||
NOTE 5 - PROPERTY AND EQUIPMENT | ||||
Property and equipment and related accumulated depreciation are as follows: | ||||
June 30, | December 31, | |||
2014 | 2013 | |||
Electronic equipment | $ 1,633,371 | $ 1,726,239 | ||
Office furniture and equipment | 59,579 | 62,248 | ||
Vehicles | 363,960 | 372,996 | ||
Building | 14,060,138 | 14,072,796 | ||
Leasehold improvements | 3,712,232 | 3,804,395 | ||
19,829,280 | 20,038,674 | |||
Less: Accumulated depreciation | -4,253,550 | -3,464,543 | ||
Total property and equipment, net | $ 15,575,730 | $ 16,574,131 | ||
Depreciation expense for the three months ended June 30, 2014 and 2013 was $ 447,192 and $326,619, respectively. Depreciation expense for the six months ended June 30, 2014 and 2013 was $839,064 and $641,204, respectively. |
LONGTERM_DEPOSITS
LONG-TERM DEPOSITS | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
LONG-TERM DEPOSITS [Abstract] | ' | ||||
LONG-TERM DEPOSITS | ' | ||||
NOTE 6 - LONG-TERM DEPOSITS | |||||
Long term deposits consist of following: | |||||
June 30, | December 31, | ||||
2014 | 2013 | ||||
Prepayments for setting up flagship stores | $ | 3,223,571 | $ | 3,303,601 | |
Anti-piracy sales guarantee deposits | 3,223,571 | 3,303,601 | |||
Building Deposit | 12,894,283 | 13,214,404 | |||
Rent deposits | 264,754 | 271,239 | |||
Total Long-Term Deposits | $ | 19,606,179 | $ | 20,092,845 | |
Long term deposits include anti-piracy sales guarantee deposits made to product licensors by FAB Media, rent deposits made to landlords, prepayment for real estate purchase and prepaid payment which made to commission agents. The deposits for no-piracy sales guaranties are fully refundable when FAB Media decides to terminate the license agreements with the licensors to sell their products. The rent deposits are also fully refundable at the end of the lease term. The prepaid payments are used for new FAB flagship stores opening in other locations and real estate purchasing. On January 7, 2014, the Board of Directors decided not to purchase the Longyuan building. We are currently in negotiations with the owner of the building as to the amount of the compensation to be paid per the terms of the agreement of Intent for Property Transfer. |
SHORTTERM_LOANS
SHORT-TERM LOANS | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
SHORT-TERM LOANS [Abstract] | ' | ||||
SHORT-TERM LOANS | ' | ||||
NOTE 7 - SHORT-TERM LOANS | |||||
Short-term bank loans consist of: | |||||
June 30, | December 31, | ||||
2014 | 2013 | ||||
Bank of Communication | $ | - | $ | 1,651,800 | |
Minsheng Bank | 1,289,428 | 1,321,440 | |||
Nanjing Bank | 1,611,786 | 1,651,801 | |||
China Dalian Bank | 1,611,785 | 1,651,801 | |||
Total Short-Term Loans | $ | 4,512,999 | $ | 6,276,842 | |
Short-term bank loans are primarily used for working capital needs. On March 25, 2013, FAB Digital entered into a new loan agreement with Bank of Communications ("BCM") for a one-year term loan due March 28, 2014 in amount of RMB 10,000,000 (approximately $1.6 million). The interest of the loan is 7.8%, which is a variable interest rate based on the one year benchmark rate of the actual loan payment day plus 30 basis points. In connection with the loan agreement, FAB Digital entered into a cooperation agreement with Beijing Caizhirongda Investment Management Co. LTD ("BCIM"), the loan was guaranteed by BCIM. The loan was fully repaid on April 2, 2014, and was not renewed as of June 30, 2014. | |||||
On December 12, 2013, FAB Digital entered into a new loan agreement with China Nanjing Bank for a one-year term loan due December 12, 2014 in amount of RMB 10,000,000 (approximately $1.6 million). The loan has a fixed interest rate of 7.80%. Based on the relevant guarantee agreement, the loan was guaranteed and collateralized by the property owned by Company's major shareholder. | |||||
On June 30, 2013, FAB Digital entered into a new loan agreement with Bank of Dalian Corp.Ltd. ("DLBC") for a one-year term loan due to June 30,2014 in the amount of RMB 10,000,000 (approximately $1.6 million). The interest rate of the loan is approximately 8.10%, which is a variable interest rate based on the one year benchmark rates of similar loans published by the People's Bank of China. | |||||
On December 26, 2013, FAB Digital entered into a new loan agreement with China Minsheng Bank for a one-year term loan due December 26, 2014 in amount of RMB 8,000,000 (approximately $1.3 million). The loan has a fixed interest rate of 7.80%. Based on the relevant guarantee agreement, the loan was guaranteed by Company's major shareholder. |
LONG_TERM_BOND_PAYABLE
LONG TERM BOND PAYABLE | 6 Months Ended |
Jun. 30, 2014 | |
LONG TERM BOND PAYABLE [Abstract] | ' |
LONG TERM BOND PAYABLE | ' |
NOTE 8 - LONG TERM BOND PAYABLE | |
On April 25, 2013, FAB Digital received the proceeds from a bond offering in the amount of RMB 97,000,000 (Approximately $15.8 million), net of the underwriter's fee of RMB 3,000,000. The bond matures in three years and bears simple interest at the rate of 11% per annum with an option to adjust the interest rate at the end of the second year. The bonds are puttable by the holders at the end of the second year. The bonds are secured by a pledge of shares in a company that does business with the Company, a certain real estate asset owned by a third party and are guaranteed by the Company's Chairman. Interest is paid annually on the anniversary of the bond. The bond is due in full upon maturity on April 25, 2016. On April 18, 2014, interest totaling RMB 11,000,000 (Approximately $1.8 million) was paid. |
STATUTORY_RESERVE
STATUTORY RESERVE | 6 Months Ended |
Jun. 30, 2014 | |
STATUTORY RESERVE [Abstract] | ' |
STATUTORY RESERVE | ' |
NOTE 9 - STATUTORY RESERVE | |
The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (the "PRC GAAP"). Appropriation to the statutory surplus reserve should be at least 10% of the after-tax net income. Such appropriation may cease if the balance of the fund is equal to 50% of the entities' registered capital or shareholders' equity. The Company has reserved $131,825 at both June 30, 2014 and 2013 since the amount has reached the statutory limit of 50% of the registered capital. |
RELATED_PARTIES
RELATED PARTIES | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
RELATED PARTIES [Abstract] | ' | ||||
RELATED PARTIES | ' | ||||
NOTE 10 - RELATED PARTIES | |||||
The table below sets forth the related parties and their affiliation with the Company: | |||||
Related Parties | Affiliation with the Company | ||||
Guangdong Endless Culture Co., Ltd.(GEC) | Affiliated Company controlled by the chairman and major shareholder | ||||
Zhang Hongcheng | Chairman and major stockholder | ||||
Amounts due to related parties are as follows: | |||||
30-Jun | 31-Dec | ||||
2014 | 2013 | ||||
Zhang Hongcheng | $ 121,685 | $ 122,596 | |||
Total due to related parties | $ 121,685 | $ 122,596 | |||
Mr. Zhang Hongcheng paid certain professional fees on behalf of FAB Media for the quarter ended September 30, 2012. Mr. Zhang Hongcheng also loaned $85,000 to DEI for investment purposes on March 1, 2013. | |||||
FAB Media has five business locations, one of which is subleased from GEC. In addition, GEC entered into a lease agreement with Xidan Joy City on behalf of FAB Media for a term of eight-years from April 2008 to March 2016. | |||||
Subsequently, FAB Media entered into a sublease agreement with GEC. The average monthly rent expense is $50,507. FAB Media paid the rental and promotion expense to Xidan Joy City directly. |
INCOME_TAXES
INCOME TAXES | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
INCOME TAXES [Abstract] | ' | ||||
INCOME TAXES | ' | ||||
NOTE 11 - INCOME TAXES | |||||
The Company is subject to income taxes on an entity basis on income arising in or derived from U.S. as well as the People's Republic of China ("PRC") in which each entity is domiciled. | |||||
DEI was incorporated in Hong Kong in November 2010, and has not earned any income that was derived in Hong Kong since inception and therefore was not subject to Hong Kong income tax. | |||||
Certain subsidiaries of the Company were organized under the laws of the PRC which are subject to Enterprise Income Tax ("EIT") on the taxable income as reported in their respective statutory financial statements adjusted in accordance with the Enterprise Income Tax Law. Pursuant to the PRC Income Tax Laws, DGC, FAB Digital, BFICM, BFWSCD, BFPT and BFVCT are subject to EIT at a statutory rate of 25%. | |||||
FAB Media was qualified as a High and New Technology Enterprise in Beijing High-Tech Zone in December 24, 2010, and is entitled to a preferential tax rate of 15% through December 2015. | |||||
DEI files income tax returns with both the National Tax Bureau and the Local Tax Bureaus in the PRC. All tax returns of DEI since inception are subject to tax examination by tax authorities. | |||||
DEI recognized deferred tax assets in the amount of $6,394,835 as of June 30, 2014. Deferred tax assets represent temporary differences arising primarily from deferred revenue and the allowance for doubtful accounts. The components of deferred tax assets are as follows: | |||||
June 30, | December 31, | ||||
2014 | 2013 | ||||
Current deferred tax assets | |||||
Deferred revenue | $ | 2,243,210 | $ | 2,830,200 | |
Valuation allowance | - | - | |||
Net current deferred tax assets | $ | 2,243,210 | $ | 2,830,200 | |
Non-current deferred assets | |||||
Deferred revenue | $ | 4,151,625 | $ | 5,227,865 | |
Valuation allowance | - | - | |||
Net non-current deferred tax assets | $ | 4,151,625 | $ | 5,227,865 | |
Income tax expense (benefit) consists of: | |||||
For the Six Months Ended | |||||
June 30, | June 30, | ||||
2014 | 2013 | ||||
Current income tax expense | $ | 650,734 | $ | 4,559,090 | |
Deferred income tax benefit | 1,476,901 | -1,657,406 | |||
Total net income tax expense | $ | 2,127,635 | $ | 2,901,684 | |
Taxes payable consist of the following: | |||||
June 30, | December 31, | ||||
2014 | 2013 | ||||
Value added tax payable | $ | - | $ | 365,558 | |
Income tax payable | 291,684 | 1,988,083 | |||
Business tax payable | -6,432 | -6,592 | |||
Other | 116,856 | 261,772 | |||
Total taxes payable | $ | 402,108 | $ | 2,608,821 | |
FAB Universal is incorporated in the U.S. and incurred a net operating loss for income tax purposes. As of June 30, 2014, the estimated net operating loss carryforwards for U.S. income tax purposes amounted to $52,000,000 which may be available to reduce future years' taxable income. These carryforwards will expire, if not utilized by 2033. Management believes that the realization of the benefits arising from this loss appears to be uncertain due to the Company's continuing losses for U.S. income tax purposes. Accordingly, the Company has provided a 100% valuation allowance at June 30, 2014. The net change in the valuation allowance for the six months ended June 30, 2014 and 2013 was an increase of approximately $0 and $48,000, respectively. Management reviews this valuation allowance periodically and makes adjustments as necessary. |
CAPITAL_STOCK
CAPITAL STOCK | 6 Months Ended |
Jun. 30, 2014 | |
CAPITAL STOCK [Abstract] | ' |
CAPITAL STOCK | ' |
NOTE 12 - CAPITAL STOCK | |
Preferred Stock - The Company has authorized 10,000,000 shares of preferred stock, $.001 par value. As of June 30, 2014, the Company had 290 Series B Preferred shares issued and outstanding. | |
On September 26, 2012, at the Closing of the DEI acquisition, the Company issued, as additional consideration 290 "unregistered" and "restricted" shares of its Series B Convertible Preferred Stock. | |
The Preferred Stock has no dividend rights or voting rights or the right to receive any assets of the Company upon liquidation, dissolution or winding up. The Preferred Stock will be convertible into shares of the Company's common stock in three tranches upon the occurrence of certain conversion events (see note 15 - Contingencies). | |
Upon the occurrence of each conversion event, the three tranches of Preferred Stock will be convertible into a number of shares of common stock that will bring the overall equity position in the Company of the holders of the Initial Company Shares, the Preferred Stock and the common stock issuable upon conversion of the Preferred Stock, on a fully diluted basis as of the date of Closing, to 70%, 74% and 78%, respectively. Based on a total of 10,702,309 fully-diluted outstanding common shares as of the Closing date, 14,689,444 common shares will be issuable upon conversion of the first tranche of Preferred Stock; 5,488,364 common shares upon conversion of the second tranche; and 7,484,132 common shares upon conversion of the third tranche. | |
Common Stock - The Company has authorized 200,000,000 shares of common stock, $.001 par value. As of June 30, 2014, the Company had 20,805,860 common shares issued and outstanding. | |
On May 21, 2013, the Company issued 80,000 common shares valued at $164,800 to consultants for services rendered. | |
On January 25, 2013, the Company issued 257,000 common shares valued at $529,080 to consultant for services rendered. |
STOCK_OPTIONS_AND_WARRANTS
STOCK OPTIONS AND WARRANTS | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
STOCK OPTIONS AND WARRANTS [Abstract] | ' | |||||||
STOCK OPTIONS AND WARRANTS | ' | |||||||
NOTE 13 - STOCK OPTIONS AND WARRANTS | ||||||||
At June 30, 2014, the Company had 99,060 warrants outstanding to purchase common stock of the Company at $5.16 per share held by Iroquois Master Fund Ltd. | ||||||||
Under the terms of the warrant held by Iroquois Master Fund Ltd., if it is deemed that another person acquires more than 50% of the outstanding shares of Common Stock of the Company, a Fundamental Transaction, the holder of the warrant is entitle to receive the shares of stock originally represented by the warrant upon subsequent exercise of the warrant and any additional consideration, the "Alternate Consideration". | ||||||||
Alternatively, at the Holder's option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, the Company may purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction. | ||||||||
The Company has multiple Stock Options plans. Under the plans, the Board is empowered to grant stock options to employees and officers of the Company. The following table shows the total number of shares of common stock available under each plan, the number of options exercised during 2014 and the options that remain available under each plan. | ||||||||
Plan | Total | Options Granted | Options Exercised | Remaining | ||||
Name | Available | During 2014 | During 2014 | Available | ||||
2013 Plan | 3,000,000 | - | - | 3,000,000 | ||||
2012 Plan | 3,000,000 | - | - | 1,788,667 | ||||
2010 Plan | 166,667 | - | - | - | ||||
2009 Plan | 166,667 | - | - | - | ||||
2008 Plan | 16,667 | - | - | 28 | ||||
2008 Key Employee Plan | 33,334 | - | - | 260 | ||||
2007 Plan | 16,667 | - | - | 12 | ||||
2007 Key Employee Plan | 16,667 | - | - | - | ||||
2006 Key Employee Plan | 11,459 | - | - | - | ||||
Total | 6,428,128 | - | - | 4,788,967 | ||||
There were no options grants during the six months of 2014. | ||||||||
A summary of the status of options granted at June 30, 2014, and changes during the six months then ended are as follows: | ||||||||
For the Six Months Ended June 30, 2014 | ||||||||
Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||
Outstanding at beginning of year | 250,000 | $ | 3.52 | 10.5 years | $ | - | ||
Granted | - | - | - | - | ||||
Exercised | - | - | - | - | ||||
Forfeited | - | - | - | - | ||||
Expired | - | - | - | - | ||||
Outstanding at end of year | 250,000 | 3.52 | 10.0 years | - | ||||
Vested and expected to vest in the future | - | - | - | - | ||||
Exercisable at end of year | - | - | - | - | ||||
Weighted average fair value of options granted | 250,000 | $ | 3.52 | 10.0 years | $ | - | ||
There have been no option grants during the first six months of 2014. The Company had no non-vested options at the beginning of the year. At June 30, 2014 the Company had 250,000 vested options that remain unexercised at an exercise price of $3.52. | ||||||||
During the six months ended June 30, 2014 and 2013, the Company recorded $324,079 and $49,858 of non-cash compensation expense related to the vested stock options issued to employees. | ||||||||
For the six months June 30, 2014 and 2013, the Company recorded non-cash compensation cost of $0 for vested and exercised options issued to management, board members, employees and consultants. |
INCOME_PER_COMMON_SHARE
INCOME PER COMMON SHARE | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
INCOM PER COMMON SHARE [Abstract] | ' | ||||||||
INCOME PER COMMON SHARE | ' | ||||||||
NOTE 14 - INCOME PER COMMON SHARE | |||||||||
The following data show the amounts used in computing loss per share and the weighted average number of shares of common stock outstanding for the periods presented: | |||||||||
For the Three Months | For the Six Months | ||||||||
Ended June 30, | Ended June 30, | ||||||||
2014 | 2013 | 2014 | 2013 | ||||||
Restated | Restated | ||||||||
Net income from operations | $ | 1,380,184 | $ | 5,385,139 | $ | 3,386,766 | $ | 8,389,136 | |
Net income available to common shareholders (numerator) | $ | 1,380,184 | $ | 5,385,139 | $ | 3,386,766 | $ | 8,389,136 | |
Weighted average number of common shares outstanding during the period used in basic and diluted loss per share (denominator) | 20,805,860 | 20,761,025 | 20,805,860 | 20,708,042 | |||||
At June 30, 2014, the Company had 99,060 warrants outstanding to purchase common stock of the Company at $5.16 per share, and 250,000 stock options to purchase common stock of the Company at $3.52 per share, which were not included in the earnings per share computation as they were anti-dilutive. | |||||||||
At June 30, 2013, the Company had 99,060 warrants outstanding to purchase common stock of the Company at $5.16 per share, which were not included in the earnings per share computation as they were anti-dilutive. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | ||
Jun. 30, 2014 | |||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ||
COMMITMENTS AND CONTINGENCIES | ' | ||
NOTE 15 - COMMITMENTS AND CONTINGENCIES | |||
Contingent Consideration for the Acquisition of DEI As further discussed in Notes 1 and 12, the Initial Company Shares are subject to the terms of the Voting Agreement, which assigns to the Company's Board of Directors the right to vote all of the Initial Company Shares until the following milestones are achieved for a | |||
(i) if DEI and the VIE Entity successfully complete all of the Corporate Governance Objectives for two (2) consecutive and complete reporting quarters after the Closing, the Company's Board of Directors will release the voting rights to 50% of the Initial Company Shares held by the designees at such time. (The voting rights were released on 50% of the Initial Company shares.) | |||
(ii) upon successful completion of all of the Corporate Governance Objectives for six (6) consecutive and complete reporting quarters after the Closing, the Company's Board of Directors will release the voting rights to another 25% of the Initial Company Shares and; (The voting rights were not released on 25% of the Initial Company shares.) | |||
(iii) upon the successful completion of all of the Corporate Governance Objectives for eight (8) consecutive and complete reporting quarters after the Closing, the Company's Board of Directors will release the voting rights to the remaining Initial Company Shares. (The voting rights were not released on the remaining Initial Company shares.) | |||
Fifty percent of the Initial Company Shares (the "Lock-up Shares") are also subject to the terms of a Lock-up Agreement by which UEG's designees have agreed not to transfer, sell, hypothecate or gift such Lock-up Shares for a period of 12 months following the Closing date. | |||
In addition, during the first 24 months after the Closing, DEI and each of its permitted transferees or designees will have piggyback registration rights with respect to all Initial Company Shares that are not then subject to the restrictions of the Lock-up Agreement or the Voting Agreement, and all Company shares that have been issued upon conversion of Preferred Stock to cause such shares to be included in (i) any registration statement that the Company files with the Securities and Exchange Commission to register under the Securities Act of 1933, as amended, common shares held by any person who was a stockholder of the Company at the time of Closing (or any transferee thereof); or (ii) any other registration statement filed by the Company so long as a majority of the Company's Board of Directors has made a good faith determination that such piggyback registration will not significantly prejudice the Company's ability to raise capital. | |||
Contingencies: | |||
As additional consideration for the acquisition, the Company issued 290 shares of Series B Convertible Preferred Stock. The Company further agreed to convert these shares of Preferred Stock into additional shares of common stock upon DEI achieving corporate government requirement and financial results. | |||
The Preferred Stock will be convertible into shares of the Company's common stock in three (3) tranches upon the occurrence of the following conversion events: | |||
(i) upon the successful completion of certain Corporate Governance Objectives for the four (4) consecutive and complete reporting quarters of the Company immediately following the Closing, the designees shall have the right to convert the first tranche of 210 shares of Preferred Stock into 14,689,444 shares of the Company's common stock; | |||
(ii) upon the successful completion of: (a) all of the Corporate Governance Objectives for the four (4) consecutive and complete reporting quarters of the Company immediately following the Closing; and (b) a Revenue Objective requiring DEI to attain sales revenues of at least US$60,000,000 and net income of US$12,000,000 for fiscal year 2011, UEG's designees shall have the right to convert the second tranche of 40 shares of Preferred Stock into 5,488,364 shares of the Company's common stock. Only the revenue and net income objectives were met. | |||
(iii) upon the successful completion of (a) all of the Corporate Governance Objectives for the six (6) consecutive and complete reporting quarters of the Company immediately following the Closing; and (b) a Revenue Objective requiring that DEI attain sales revenues of at least US$70,000,000 and net income of US$14,000,000 for fiscal year 2012, UEG's designees shall have the right to convert the third tranche of 40 shares of Preferred Stock into 7,484,132 shares of the Company's common stock. Only the revenue and net income objectives were met. | |||
Pending lawsuits | |||
In November and December 2013, three putative class action lawsuits were filed in the federal court for the Southern District of New York against FAB Universal Corp., its CEO and its CFO. The actions are: Simmons v. Spencer et al. (1:13-cv-08216-RWS. filed 11/18/13), Stubblefield v. Fab Universal Corp. et al. (1:13-cv-08499-RWS, filed 11/27/13), and Cox v. Fab Universal Corp. et al. (1:13-cv-08716-RWS, filed 12/09/13). According to the complaints, defendants made false and/or misleading statements and failed to disclose material adverse facts about FAB's business, operations, prospects and performance. Plaintiffs allege that defendants overstated the number of kiosks that FAB had deployed. FAB's kiosks are "inundated with pirated digital entertainment content," and the company's Chinese subsidiary issued RMB 100 million ($16.4 million) worth of bonds to Chinese investors that are not reflected in the Company's publicly disclosed financial statements. Based on the foregoing, plaintiffs assert causes of action for violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Plaintiffs seek unspecified compensatory damages, recessionary damages, fees and costs. | |||
In February 2014, two derivative actions were filed in the federal court for the Southern District of New York against its CEO, CFO and board of directors. The suits are Thorbjonsen v. Spencer et al. (1:14-cv-00687-UA, filed 02/03/14) and Rowekamp v. Spencer et al. (1:14-cv-01114-RWS, filed 02/21/14). Plaintiffs in the derivative action claim, on behalf of FAB Universal that Defendants breached their fiduciary duties of loyalty, due care, good faith, independence, candor and full disclosure to shareholders; misappropriated material, non-public information of FAB Universal, and violated of Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated there under. | |||
In 2009, West Chang'an Avenue Development Co., Ltd ("landlord") filed a lawsuit against FAB Media for unpaid rent and other payments due the landlord. The court ruled in favor of the plaintiff, and with this ruling the two parties reached a settlement, which included the implementation of the Lease Agreement commencing January 1, 2010. The ruling was that FAB pay rent in arrears, penalty and property fees totaling RMB 2 million ($0.32million USD). The landlord then filed a claim against the Company for rent in arrears. | |||
The Company appealed the decision, and the result was the court overturned the decision and remanded the case. However, after a retrial, the court ruled in favor of the plaintiff, and the company had to vacate the leased space, pay off the rent, property fees and penalty, totaling about RMB 5.9 million ($0.95 million USD). | |||
The case went through second trial, and the retrial procedure did not change the verdict. Payment plus interest on the debt of period, the amount payable rose to RMB 7 million ($1.1 million USD). On May 23, 2014, the court ruled in favor of the plaintiff and the judgment for rent in arrears and penalty is RMB $7.5 million ($1.2 million USD). The judgment has been in force, and has entered into the implementation procedure. The Company has to fulfill the payment in an amount of approximately RMB $7.5 million ($1.2 million USD). | |||
Commitments under leases: | |||
Future minimum annual rental payments due are as follows: | |||
Rental | |||
Twelve months ending June 30, | Commitments | ||
2015 | $ 1,507,625 | ||
2016 | 1,362,124 | ||
2017 | 818,844 | ||
2018 | 316,524 | ||
2019 | 111,684 | ||
Thereafter | - | ||
Total | $ 4,116,801 |
SEGMENT_REPORTING
SEGMENT REPORTING | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
SEGMENT REPORTING [Abstract] | ' | ||||||||||||||||
SEGMENT REPORTING | ' | ||||||||||||||||
NOTE 16 - SEGMENT REPORTING | |||||||||||||||||
ASC 280, "Segment Reporting", establishes standards for reporting information about operating segments on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments. | |||||||||||||||||
The Company is engaged in distribution of digital entertainment products and services. The Company's chief operating decision maker ("CODM") has been identified as the CEO who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the group. Based on management's assessment, the Company has determined that it has three operating segments as of June 30, 2014 which are wholesale, retail and Digital Media. | |||||||||||||||||
The following table presents summary information by segment for the six months ended June 30, 2014 and 2013, respectively (in thousands): | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Wholesale | Retail | Digital | Total | Wholesale | Retail | Digital | Total | ||||||||||
Restated | Restated | ||||||||||||||||
Revenue | $ | 10,306 | $ | 1,725 | $ | 16,571 | $ | 28,602 | $ | 27,750 | $ | 4,298 | $ | 16,446 | $ | 48,494 | |
Cost of revenue | $ | 8,438 | $ | 1,229 | $ | 2,408 | $ | 12,075 | $ | 21,999 | $ | 3,146 | $ | 3,479 | $ | 28,624 | |
Gross Profit | $ | 1,868 | $ | 496 | $ | 14,163 | $ | 16,527 | $ | 5,751 | $ | 1,152 | $ | 12,967 | $ | 19,870 | |
Total assets | $ | 69,115 | $ | 46,457 | $ | 110,440 | $ | 226,012 | $ | 51,754 | $ | 33,451 | $ | 125,684 | $ | 210,889 | |
Depreciation and amortization | $ | 395 | $ | 265 | $ | 2,989 | $ | 3,649 | $ | 128 | $ | 440 | $ | 2,786 | $ | 3,354 | |
The following table presents summary information by segment for the three months ended June 30, 2014 and 2013, respectively (in thousands): | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Wholesale | Retail | Digital | Total | Wholesale | Retail | Digital | Total | ||||||||||
Revenue | $ | 4,420 | $ | 991 | $ | 8,446 | $ | 13,857 | $ | 13,991 | $ | 2,272 | $ | 9,594 | $ | 25,857 | |
Cost of revenue | $ | 3,620 | $ | 682 | $ | 1,421 | $ | 5,723 | $ | 10,810 | $ | 1,669 | $ | 1,884 | $ | 14,363 | |
Gross Profit | $ | 800 | $ | 309 | $ | 7,025 | $ | 8,134 | $ | 3,181 | $ | 603 | $ | 7,710 | $ | 11,494 | |
Depreciation and amortization | $ | 211 | $ | 142 | $ | 1,492 | $ | 1,845 | $ | 68 | $ | 222 | $ | 1,415 | $ | 1,705 |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2014 | |
SUBSEQUENT EVENTS [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 17 - SUBSEQUENT EVENTS | |
Management has evaluated subsequent events through August 14, 2014, the date which the consolidated financial statements were available to be issued. All subsequent events requiring recognition as of June 30, 2014 have been incorporated into these consolidated financial statements, and besides the disclosures herein, there are no additional subsequent events that require disclosure in accordance with FASB ASC Topic 855, "Subsequent Events". |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' |
Basis of presentation and consolidation | ' |
Basis of presentation and consolidation - The accompanying unaudited condensed consolidated financial presented reflect the accounts of Parent, Libsyn, and DEI. All significant inter-company transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company's audited consolidated financial statements as of and for the year ended December 31, 2013 included in the Company's annual report on Form 10-K filed on June 27, 2014. | |
Accounting Estimates | ' |
Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Management made assumptions and estimates for determining reserve for accounts receivable, obsolete inventory, the realization of deferred tax assets and in determining the impairment of finite life intangible assets and goodwill and accruals for income tax uncertainties and other contingencies when applicable. Actual results could differ from those estimated by management. | |
Reclassification | ' |
Reclassification - The financial statements for the period ended June 30, 2013 have been reclassified to conform to the headings and classifications used in the June 30, 2014 financial statements. | |
Inventory | ' |
Inventory - Inventory includes books and video products and is recorded at the lower of cost or market, using the first-in, first-out ("FIFO") method. The Company estimates net realizable value based on current market value and inventory aging analyses. As of June 30, 2014 no reserve for slow-moving or obsolete inventory is considered necessary. | |
Revenue Recognition | ' |
Revenue Recognition - Revenue is recognized when earned. The Company's revenue recognition policies are in compliance with FASB ASC Topic 985-605, Software - Revenue Recognition. The Company's revenue recognition policies are also in compliance with the Securities and Exchange Commission Staff Accounting Bulletin No. 101 and 104. | |
Digital media publishing services are billed on a month to month basis. The Company recognizes revenue from providing digital media publishing services when the services are provided and when collection is probable. The Company recognizes revenue from the insertion of advertisements in digital media, as the digital media with the advertisement is downloaded and collection is probable. The Company recognizes revenue from the sale of apps and premium subscriptions when sold and collection is probable. | |
In the PRC, Value Added Tax ("VAT") of 17% of the invoice amount is collected in respect of the sales of goods on behalf of tax authorities. The VAT collected is not revenue of the Company; instead, the amount is recorded as a liability on the balance sheet until such VAT is paid to the authorities. | |
The Company derives revenue from Retail sales, Wholesale, and Digital sales. Revenue from Digital sales includes advertisement revenue, membership card revenue, download revenue and licensing revenue. | |
Product revenue is recognized when title to the product has transferred to customers in accordance with the terms of the sale; the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Revenues are recorded net of applicable sales taxes. | |
Revenue from retail sales is recognized at the point-of-sale. Revenue from Wholesale is recognized at the point of delivery of the product. Download service revenue is recognized when substantially all material services or conditions relating the sales have been performed or satisfied, and the Company has no obligation to refund any payment (cash or otherwise) received. Revenue generated from Membership sales is non-refundable. Membership card revenue is amortized over the life of the membership period, membership cards with par value of RMB 100 have an expiration period of three months, and par value of RMB 200, 300, 400 and 500 have an expiration period of twelve months. Advertisement revenue is recognized over the contract period. Licensing revenue is amortized ratably over the term of the agreement which is generally five years. Deferred revenue represents unearned revenues related primarily to sales of licenses and FAB Membership cards. | |
Accounts Receivable | ' |
Accounts Receivable - We evaluate the creditworthiness of our customers based on their financial information, if available, as well as information obtained from suppliers and past experiences with customers. Accounts receivable consist of trade receivables arising in the normal course of business. Any allowance established is subject to judgment and estimates made by management. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. We established an allowance for doubtful accounts of $14,000 at June 30, 2014 and 2013 | |
Stock-based Compensation | ' |
Stock-based Compensation - The Company accounts for options in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") ASC Topic 718, Compensation - Stock Compensation. For the six months ended June, 2014 and 2013, the Company recorded stock-based compensation expense of $324,079 and $49,858 for vesting of stock options, respectively, and stock-based compensation expense to employees and consultants of $0 and $329,600, respectively, for options that were issued and immediately exercised. | |
Functional Currency / Foreign Currency Translation | ' |
Functional Currency / Foreign Currency Translation - The functional currency of FAB Universal Corp is the United States Dollar (USD). The functional currency of DEI is the Renminbi ("RMB") and its reporting currency is U.S. dollars for the purpose of these financial statements. The Company's consolidated balance sheet accounts are translated into U.S. dollars at the period-end exchange rates (6.2043 RMB to $1 at June 30, 2014) and all revenue and expenses are translated into U.S. dollars at the average exchange rates prevailing during 2014 (6.1669 RMB to $1) in which these items arise. Translation gains and losses are deferred and accumulated as a component of other comprehensive income in stockholders' equity. Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are included in the statement of operations as incurred. | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments - The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | |
• | |
Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities; | |
• | |
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |
• | |
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | |
Unless otherwise disclosed, the fair value of the Company's financial instruments including cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, current deferred revenue and notes payable approximates their recorded values due to their short-term maturities. Long-term deposits represent cash and therefore, their carrying value represents fair value. The fair value of the Company's long-term deposits, non-current deferred revenue, long-term bond payable and other liabilities has no material difference with the book values based on the calculated results. | |
Property and Equipment | ' |
Property and Equipment - Property and equipment are stated at cost less accumulated depreciation. Depreciation and amortization is calculated on the straight-line method over the estimated useful lives of the assets as set out below: | |
Estimated Useful Life | |
Electronic equipment 2-5 years | |
Office furniture and equipment 2-10 years | |
Vehicles 5 years | |
Building 48.5 years | |
Leasehold improvements Shorter of lease terms or estimated useful life | |
Goodwill and Other Intangible Assets | ' |
Goodwill and other Intangible Assets - The Company accounts for Goodwill and other intangible assets in accordance with provisions of FASB -ASC Topic 350, Intangibles--Goodwill and Other. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead are tested for impairment at least annually in accordance with the provisions of Topic 350. Impairment losses arising from this impairment test, if any, are included in operating expenses in the period of impairment. Topic 350 requires that intangible assets with finite lives be amortized over their respective estimated useful lives, and reviewed for impairment in accordance with Topic 360, criteria for recognition of an impairment of Long-Lived Assets. There was no indication of goodwill or other intangible impairment during the six months ended June 30, 2014. | |
Income Taxes | ' |
Income Taxes - The Company is subject to the Income Tax Laws of U.S. and the PRC. The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The components of deferred tax assets are individually classified as current and non-current based on their characteristics. | |
ASC 740-10-25 prescribes a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There is no material uncertain tax position as of June 30, 2014 and 2013, respectively (See note 12 - Capital Stock and note 15- Contingencies). |
ORGANIZATION_AND_BASIS_OF_PRES1
ORGANIZATION AND BASIS OF PRESENTATION (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
ORGANIZATION AND BASIS OF PRESENTATION [Abstract] | ' | ||||
Condensed Consolidated Balance Sheet | ' | ||||
June 30, | 31-Dec-13 | ||||
2014 | |||||
Cash | $ | 97,032,235 | $ | 99,077,811 | |
Accounts receivable, net | 1,313,771 | 7,227,270 | |||
Deferred tax assets, current | 2,243,210 | 2,830,200 | |||
Other current assets | 6,309,124 | 4,820,393 | |||
Total current assets | 106,898,340 | 113,955,674 | |||
Property, plant and equipment, net | 14,041,543 | 14,989,176 | |||
Intangible assets, net | 670,178 | 434,304 | |||
Deferred tax assets, non-current | 4,151,625 | 5,227,865 | |||
Long-term deposits | 19,602,597 | 20,089,263 | |||
Total assets(1) | 145,364,283 | 154,696,282 | |||
June 30, | 31-Dec-13 | ||||
2014 | |||||
Short-term bank loans | $ | 4,512,999 | $ | 6,276,842 | |
Accounts payable | 2,390,062 | 2,924,374 | |||
Accrued expenses | 3,032,717 | 4,008,363 | |||
Deferred revenue, current | 14,241,842 | 15,294,998 | |||
Other current liability | 3,630,102 | 7,491,885 | |||
Total current liabilities | 27,807,722 | 35,996,462 | |||
Long-term deposits from customers | 1,997,002 | 2,244,797 | |||
Deferred revenue, non-current | 17,796,833 | 25,432,654 | |||
Long-term bonds payable | 16,117,854 | 16,518,005 | |||
Total liabilities(1) | 63,719,411 | 80,191,918 | |||
(1) Total assets and liabilities of the VIE are reported net of intercompany balances that have been eliminated with the VIE consolidation | |||||
Condensed Consolidated Results of Operations | ' | ||||
For the six months ended June 30, 2014 | For the six months ended June 30, 2013 | ||||
Revenue | $ | 25,793,559 | $ | 46,180,732 | |
Net income | 5,630,129 | 8,889,372 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' |
Schedule of Estimated Useful Lives of Property And Equipment | ' |
Estimated Useful Life | |
Electronic equipment 2-5 years | |
Office furniture and equipment 2-10 years | |
Vehicles 5 years | |
Building 48.5 years | |
Leasehold improvements Shorter of lease terms or estimated useful life |
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | ' | ||||||||||||||||
Schedule of Goodwill by Entity | ' | ||||||||||||||||
June 30, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Digital Entertainment International - DEI | $ | 49,382,679 | $ | 50,608,681 | |||||||||||||
Webmayhem Inc.(Libsyn) | 11,484,251 | 11,484,251 | |||||||||||||||
Total Goodwill | $ | 60,866,930 | $ | 62,092,932 | |||||||||||||
Summary of Goodwill | ' | ||||||||||||||||
For the six Months Ended June 30, | For the Year Ended December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Goodwill at beginning of period | $ | 62,092,932 | $ | 60,652,957 | |||||||||||||
Effect of exchange rate | -1,226,002 | 1,439,975 | |||||||||||||||
Goodwill at end of period | $ | 60,866,930 | $ | 62,092,932 | |||||||||||||
Summary of Intangible Assets | ' | ||||||||||||||||
Preliminary | Weighted Average | Accumulated | Currency Translation Adjustment | Net Carrying | |||||||||||||
Fair Value | Useful Life | Amortization | Amount | ||||||||||||||
(in Years) | |||||||||||||||||
Customer Relationships | $ 8,900,000 | 3 | $ 5,331,987 | $172,833 | $ 3,740,846 | ||||||||||||
Intellectual Property | 4,300,000 | 3 | 2,576,128 | 83,503 | 1,807,375 | ||||||||||||
Trade name | 13,876,000 | (a) | (a) | 222,086 | 14,098,086 | ||||||||||||
Non-compete | 1,885,200 | 2 | 1,694,134 | 39,829 | 230,895 | ||||||||||||
Copyright | 1,488,073 | (b) | 402,807 | - | 1,085,266 | ||||||||||||
Total | $ 30,449,273 | $ 10,005,056 | $ 518,251 | $ 20,962,468 | |||||||||||||
(a) | |||||||||||||||||
The FAB trade name has been determined to have an indefinite life. | |||||||||||||||||
(b) | |||||||||||||||||
The copyrights useful lives are from 1 year to 10 years. | |||||||||||||||||
Schedule of Future Amortization Expenses Related to Other Intangible Assets | ' | ||||||||||||||||
For twelve months ending June 30, | |||||||||||||||||
2014 | $ 5,177,106 | ||||||||||||||||
2015 | 1,469,619 | ||||||||||||||||
2016 | 117,201 | ||||||||||||||||
Thereafter | 100,456 | ||||||||||||||||
Total | $ 6,864,382 |
ACCOUNTS_RECEIVABLE_Tables
ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended | |||
Jun. 30, 2014 | ||||
ACCOUNTS RECEIVABLE [Abstract] | ' | |||
Schedule of Accounts Receivable | ' | |||
June 30, | December 31, | |||
2014 | 2013 | |||
Accounts receivable | $ 1,557,384 | $ 7,568,919 | ||
Allowance for doubtful accounts | -14,000 | -14,000 | ||
Accounts receivable, net | $ 1,543,384 | $ 7,554,919 |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended | |||
Jun. 30, 2014 | ||||
PROPERTY AND EQUIPMENT [Abstract] | ' | |||
Schedule of Property and Equipment | ' | |||
June 30, | December 31, | |||
2014 | 2013 | |||
Electronic equipment | $ 1,633,371 | $ 1,726,239 | ||
Office furniture and equipment | 59,579 | 62,248 | ||
Vehicles | 363,960 | 372,996 | ||
Building | 14,060,138 | 14,072,796 | ||
Leasehold improvements | 3,712,232 | 3,804,395 | ||
19,829,280 | 20,038,674 | |||
Less: Accumulated depreciation | -4,253,550 | -3,464,543 | ||
Total property and equipment, net | $ 15,575,730 | $ 16,574,131 |
LONGTERM_DEPOSITS_Tables
LONG-TERM DEPOSITS (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
LONG-TERM DEPOSITS [Abstract] | ' | ||||
Schedule of Long-Term Deposits | ' | ||||
June 30, | December 31, | ||||
2014 | 2013 | ||||
Prepayments for setting up flagship stores | $ | 3,223,571 | $ | 3,303,601 | |
Anti-piracy sales guarantee deposits | 3,223,571 | 3,303,601 | |||
Building Deposit | 12,894,283 | 13,214,404 | |||
Rent deposits | 264,754 | 271,239 | |||
Total Long-Term Deposits | $ | 19,606,179 | $ | 20,092,845 |
SHORTTERM_LOANS_Tables
SHORT-TERM LOANS (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
SHORT-TERM LOANS [Abstract] | ' | ||||
Schedule of Short-term Loans | ' | ||||
June 30, | December 31, | ||||
2014 | 2013 | ||||
Bank of Communication | $ | - | $ | 1,651,800 | |
Minsheng Bank | 1,289,428 | 1,321,440 | |||
Nanjing Bank | 1,611,786 | 1,651,801 | |||
China Dalian Bank | 1,611,785 | 1,651,801 | |||
Total Short-Term Loans | $ | 4,512,999 | $ | 6,276,842 |
RELATED_PARTIES_Tables
RELATED PARTIES (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
RELATED PARTIES [Abstract] | ' | ||||
Schedule of Related Party Transactions | ' | ||||
30-Jun | 31-Dec | ||||
2014 | 2013 | ||||
Zhang Hongcheng | $ 121,685 | $ 122,596 | |||
Total due to related parties | $ 121,685 | $ 122,596 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) (DEI [Member]) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
DEI [Member] | ' | ||||
Income Taxes [Line Items] | ' | ||||
Schedule of Deferred Tax Assets and Liabilities | ' | ||||
June 30, | December 31, | ||||
2014 | 2013 | ||||
Current deferred tax assets | |||||
Deferred revenue | $ | 2,243,210 | $ | 2,830,200 | |
Valuation allowance | - | - | |||
Net current deferred tax assets | $ | 2,243,210 | $ | 2,830,200 | |
Non-current deferred assets | |||||
Deferred revenue | $ | 4,151,625 | $ | 5,227,865 | |
Valuation allowance | - | - | |||
Net non-current deferred tax assets | $ | 4,151,625 | $ | 5,227,865 | |
Schedule of Taxes Payable | ' | ||||
June 30, | December 31, | ||||
2014 | 2013 | ||||
Value added tax payable | $ | - | $ | 365,558 | |
Income tax payable | 291,684 | 1,988,083 | |||
Business tax payable | -6,432 | -6,592 | |||
Other | 116,856 | 261,772 | |||
Total taxes payable | $ | 402,108 | $ | 2,608,821 | |
Schedule of Income Tax Expense | ' | ||||
For the Six Months Ended | |||||
June 30, | June 30, | ||||
2014 | 2013 | ||||
Current income tax expense | $ | 650,734 | $ | 4,559,090 | |
Deferred income tax benefit | 1,476,901 | -1,657,406 | |||
Total net income tax expense | $ | 2,127,635 | $ | 2,901,684 |
STOCK_OPTIONS_AND_WARRANTS_Tab
STOCK OPTIONS AND WARRANTS (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
STOCK OPTIONS AND WARRANTS [Abstract] | ' | |||||||
Schedule of Stock Option Plans | ' | |||||||
Plan | Total | Options Granted | Options Exercised | Remaining | ||||
Name | Available | During 2014 | During 2014 | Available | ||||
2013 Plan | 3,000,000 | - | - | 3,000,000 | ||||
2012 Plan | 3,000,000 | - | - | 1,788,667 | ||||
2010 Plan | 166,667 | - | - | - | ||||
2009 Plan | 166,667 | - | - | - | ||||
2008 Plan | 16,667 | - | - | 28 | ||||
2008 Key Employee Plan | 33,334 | - | - | 260 | ||||
2007 Plan | 16,667 | - | - | 12 | ||||
2007 Key Employee Plan | 16,667 | - | - | - | ||||
2006 Key Employee Plan | 11,459 | - | - | - | ||||
Total | 6,428,128 | - | - | 4,788,967 | ||||
Schedule of Stock Option Activity | ' | |||||||
For the Six Months Ended June 30, 2014 | ||||||||
Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||
Outstanding at beginning of year | 250,000 | $ | 3.52 | 10.5 years | $ | - | ||
Granted | - | - | - | - | ||||
Exercised | - | - | - | - | ||||
Forfeited | - | - | - | - | ||||
Expired | - | - | - | - | ||||
Outstanding at end of year | 250,000 | 3.52 | 10.0 years | - | ||||
Vested and expected to vest in the future | - | - | - | - | ||||
Exercisable at end of year | - | - | - | - | ||||
Weighted average fair value of options granted | 250,000 | $ | 3.52 | 10.0 years | $ | - |
INCOME_PER_COMMON_SHARE_Tables
INCOME PER COMMON SHARE (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
INCOM PER COMMON SHARE [Abstract] | ' | ||||||||
Schedule of Earnings Per Share | ' | ||||||||
For the Three Months | For the Six Months | ||||||||
Ended June 30, | Ended June 30, | ||||||||
2014 | 2013 | 2014 | 2013 | ||||||
Restated | Restated | ||||||||
Net income from operations | $ | 1,380,184 | $ | 5,385,139 | $ | 3,386,766 | $ | 8,389,136 | |
Net income available to common shareholders (numerator) | $ | 1,380,184 | $ | 5,385,139 | $ | 3,386,766 | $ | 8,389,136 | |
Weighted average number of common shares outstanding during the period used in basic and diluted loss per share (denominator) | 20,805,860 | 20,761,025 | 20,805,860 | 20,708,042 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended | ||
Jun. 30, 2014 | |||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ||
Schedule of Future Minimum Rental Payments | ' | ||
Future minimum annual rental payments due are as follows: | |||
Rental | |||
Twelve months ending June 30, | Commitments | ||
2015 | $ 1,507,625 | ||
2016 | 1,362,124 | ||
2017 | 818,844 | ||
2018 | 316,524 | ||
2019 | 111,684 | ||
Thereafter | - | ||
Total | $ 4,116,801 |
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
SEGMENT REPORTING [Abstract] | ' | ||||||||||||||||
Schedule of Operations by Reporting Segment | ' | ||||||||||||||||
The following table presents summary information by segment for the six months ended June 30, 2014 and 2013, respectively (in thousands): | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Wholesale | Retail | Digital | Total | Wholesale | Retail | Digital | Total | ||||||||||
Restated | Restated | ||||||||||||||||
Revenue | $ | 10,306 | $ | 1,725 | $ | 16,571 | $ | 28,602 | $ | 27,750 | $ | 4,298 | $ | 16,446 | $ | 48,494 | |
Cost of revenue | $ | 8,438 | $ | 1,229 | $ | 2,408 | $ | 12,075 | $ | 21,999 | $ | 3,146 | $ | 3,479 | $ | 28,624 | |
Gross Profit | $ | 1,868 | $ | 496 | $ | 14,163 | $ | 16,527 | $ | 5,751 | $ | 1,152 | $ | 12,967 | $ | 19,870 | |
Total assets | $ | 69,115 | $ | 46,457 | $ | 110,440 | $ | 226,012 | $ | 51,754 | $ | 33,451 | $ | 125,684 | $ | 210,889 | |
Depreciation and amortization | $ | 395 | $ | 265 | $ | 2,989 | $ | 3,649 | $ | 128 | $ | 440 | $ | 2,786 | $ | 3,354 | |
The following table presents summary information by segment for the three months ended June 30, 2014 and 2013, respectively (in thousands): | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Wholesale | Retail | Digital | Total | Wholesale | Retail | Digital | Total | ||||||||||
Revenue | $ | 4,420 | $ | 991 | $ | 8,446 | $ | 13,857 | $ | 13,991 | $ | 2,272 | $ | 9,594 | $ | 25,857 | |
Cost of revenue | $ | 3,620 | $ | 682 | $ | 1,421 | $ | 5,723 | $ | 10,810 | $ | 1,669 | $ | 1,884 | $ | 14,363 | |
Gross Profit | $ | 800 | $ | 309 | $ | 7,025 | $ | 8,134 | $ | 3,181 | $ | 603 | $ | 7,710 | $ | 11,494 | |
Depreciation and amortization | $ | 211 | $ | 142 | $ | 1,492 | $ | 1,845 | $ | 68 | $ | 222 | $ | 1,415 | $ | 1,705 |
ORGANIZATION_AND_BASIS_OF_PRES2
ORGANIZATION AND BASIS OF PRESENTATION (Narrative) (Details) | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | |
USD ($) | USD ($) | FAB Media [Member] | FAB Media [Member] | |
USD ($) | CNY | |||
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Capital contribution to the VIE | $648,614 | ' | $653,200 | 4,000,000 |
ORGANIZATION_AND_BASIS_OF_PRES3
ORGANIZATION AND BASIS OF PRESENTATION (Consolidated Balance Sheet of FAB Media) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | ||
Variable Interest Entity [Line Items] | ' | ' | ' | ' | ||
Cash and Restricted cash | $98,224,505 | $99,546,530 | $43,488,954 | $19,671,937 | ||
Accounts receivable, net | 1,543,384 | 7,554,919 | ' | ' | ||
Deferred tax assets, current | 2,243,210 | 2,830,200 | ' | ' | ||
Other current assets | 2,370,768 | 591,194 | ' | ' | ||
Total current assets | 104,540,175 | 112,942,210 | ' | ' | ||
Property and equipment, net | 15,575,730 | 16,574,131 | ' | ' | ||
Intangible assets, net | 20,962,468 | 23,903,476 | ' | ' | ||
Deferred tax assets, non-current | 4,151,625 | 5,227,865 | ' | ' | ||
Long-term deposits | 19,606,179 | 20,092,845 | ' | ' | ||
Total assets | 226,012,107 | 240,833,459 | 210,889,000 | ' | ||
Short-term bank loans | 4,512,999 | 6,276,842 | ' | ' | ||
Accounts payable | 2,821,245 | 3,309,610 | ' | ' | ||
Accrued expenses | 3,283,794 | 4,209,753 | ' | ' | ||
Deferred revenue, current | 14,438,504 | 15,457,102 | ' | ' | ||
Total current liabilities | 29,611,192 | 36,851,494 | ' | ' | ||
Long-term deposits from customers | 1,997,002 | 2,244,797 | ' | ' | ||
Deferred revenue, non-current | 17,796,833 | 25,432,654 | ' | ' | ||
Long-term bond payable | 16,117,854 | 16,518,005 | ' | ' | ||
Total liabilities | 65,522,881 | 81,046,950 | ' | ' | ||
FAB Media [Member] | ' | ' | ' | ' | ||
Variable Interest Entity [Line Items] | ' | ' | ' | ' | ||
Cash and Restricted cash | 97,032,235 | 99,077,811 | ' | ' | ||
Accounts receivable, net | 1,313,771 | 7,227,270 | ' | ' | ||
Deferred tax assets, current | 2,243,210 | 2,830,200 | ' | ' | ||
Other current assets | 6,309,124 | 4,820,393 | ' | ' | ||
Total current assets | 106,898,340 | 113,955,674 | ' | ' | ||
Property and equipment, net | 14,041,543 | 14,989,176 | ' | ' | ||
Intangible assets, net | 670,178 | 434,304 | ' | ' | ||
Deferred tax assets, non-current | 4,151,625 | 5,227,865 | ' | ' | ||
Long-term deposits | 19,602,597 | 20,089,263 | ' | ' | ||
Total assets | 145,364,283 | [1] | 154,696,282 | [1] | ' | ' |
Short-term bank loans | 4,512,999 | 6,276,842 | ' | ' | ||
Accounts payable | 2,390,062 | 2,924,374 | ' | ' | ||
Accrued expenses | 3,032,717 | 4,008,363 | ' | ' | ||
Deferred revenue, current | 14,241,842 | 15,294,998 | ' | ' | ||
Other current liability | 3,630,102 | 7,491,885 | ' | ' | ||
Total current liabilities | 27,807,722 | 35,996,462 | ' | ' | ||
Long-term deposits from customers | 1,997,002 | 2,244,797 | ' | ' | ||
Deferred revenue, non-current | 17,796,833 | 25,432,654 | ' | ' | ||
Long-term bond payable | 16,117,854 | 16,518,005 | ' | ' | ||
Total liabilities | $63,719,411 | [1] | $80,191,918 | [1] | ' | ' |
[1] | Total assets and liabilities of the VIE are reported net of intercompany balances that have been eliminated with the VIE consolidation |
ORGANIZATION_AND_BASIS_OF_PRES4
ORGANIZATION AND BASIS OF PRESENTATION (Consolidated Results of Operations for FAB Media) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Revenue | $13,857,077 | $25,857,239 | $28,601,536 | $48,493,632 |
Net income | 1,380,184 | 5,385,139 | 3,386,766 | 8,389,136 |
FAB Media [Member] | ' | ' | ' | ' |
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Revenue | ' | ' | 25,793,559 | 46,190,732 |
Net income | ' | ' | $5,630,129 | $8,889,372 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
USD ($) | CNY | USD ($) | USD ($) | Electronic equipment [Member] | Electronic equipment [Member] | Office furniture and equipment [Member] | Office furniture and equipment [Member] | Vehicles [Member] | Building [Member] | Leasehold improvements [Member] | |
Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Inventory reserve | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value added tax rate, PRC invoices | 17.00% | 17.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for doubtful accounts | 14,000 | ' | 14,000 | 14,000 | ' | ' | ' | ' | ' | ' | ' |
RMB exchange rate to USD | ' | 6.2043 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
RMB exchange rate to USD, average | ' | 6.1669 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued to employees and consultants | ' | ' | 329,600 | ' | ' | ' | ' | ' | ' | ' | ' |
Non-cash compensation - options vested | $324,079 | ' | $49,858 | ' | ' | ' | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated useful life | ' | ' | ' | ' | '2 years | '5 years | '2 years | '10 years | '5 years | '48 years 6 months | ' |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Goodwill) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Line Items] | ' | ' | ' |
Goodwill | $60,866,930 | $62,092,932 | $60,652,957 |
DEI [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Goodwill | 49,382,679 | 50,608,681 | ' |
Webmayhem Inc. [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Goodwill | $11,484,251 | $11,484,251 | ' |
GOODWILL_AND_OTHER_INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Summary of Goodwill) (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | ' | ' |
Goodwill at beginning of period | $62,092,932 | $60,652,957 |
Foreign currency translation gain | -1,226,002 | 1,439,975 |
Goodwill at end of period | $60,866,930 | $62,092,932 |
GOODWILL_AND_OTHER_INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Summary of Intangible Assets) (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | ' | ' |
Preliminary fair value | $30,449,273 | ' |
Currency translation adjustment | 518,251 | ' |
Net carrying amount | 20,962,468 | 23,903,476 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Accumulated amortization | 10,005,056 | ' |
Net carrying amount | 6,864,382 | ' |
Trade name [Member] | ' | ' |
Indefinite-lived Intangible Assets [Line Items] | ' | ' |
Preliminary fair value | 13,876,000 | ' |
Currency translation adjustment | 222,086 | ' |
Preliminary fair value | 13,876,000 | ' |
Customer Relationships [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Preliminary fair value | 8,900,000 | ' |
Accumulated amortization | 5,331,987 | ' |
Currency translation adjustment | 172,833 | ' |
Net carrying amount | 3,740,846 | ' |
Weighted average useful life | '3 years | ' |
Intellectual Property [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Preliminary fair value | 4,300,000 | ' |
Accumulated amortization | 2,576,128 | ' |
Currency translation adjustment | 83,503 | ' |
Net carrying amount | 1,807,375 | ' |
Weighted average useful life | '3 years | ' |
Copyrights [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Preliminary fair value | 1,488,073 | ' |
Accumulated amortization | 402,807 | ' |
Currency translation adjustment | ' | ' |
Net carrying amount | 1,085,266 | ' |
Copyrights [Member] | Minimum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted average useful life | '1 year | ' |
Copyrights [Member] | Maximum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted average useful life | '10 years | ' |
Non-compete [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Preliminary fair value | 1,885,200 | ' |
Accumulated amortization | 1,694,134 | ' |
Currency translation adjustment | 39,829 | ' |
Net carrying amount | $230,895 | ' |
Weighted average useful life | '2 years | ' |
GOODWILL_AND_OTHER_INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Future Amortization Expenses) (Details) (USD $) | Jun. 30, 2014 |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | ' |
2015 | $5,177,106 |
2016 | 1,469,619 |
2017 | 117,201 |
Thereafter | 100,456 |
Total | $6,864,382 |
ACCOUNTS_RECEIVABLE_Details
ACCOUNTS RECEIVABLE (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 |
ACCOUNTS RECEIVABLE [Abstract] | ' | ' | ' |
Accounts receivable | $1,557,384 | $7,568,919 | ' |
Allowance for doubtful accounts | -14,000 | -14,000 | -14,000 |
Accounts receivable, net | $1,543,384 | $7,554,919 | ' |
PROPERY_AND_EQUIPMENT_Details
PROPERY AND EQUIPMENT (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
PROPERTY AND EQUIPMENT [Abstract] | ' | ' | ' | ' | ' |
Depreciation expense | $447,192 | $326,619 | $839,064 | $641,204 | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Property and equipment | 19,829,280 | ' | 19,829,280 | ' | 20,038,674 |
Less: Accumulated depreciation | -4,253,550 | ' | -4,253,550 | ' | -3,464,543 |
Total property and equipment, net | 15,575,730 | ' | 15,575,730 | ' | 16,574,131 |
Electronic equipment [Member] | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Property and equipment | 1,633,371 | ' | 1,633,371 | ' | 1,726,239 |
Office furniture and equipment [Member] | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Property and equipment | 59,579 | ' | 59,579 | ' | 62,248 |
Vehicles [Member] | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Property and equipment | 363,960 | ' | 363,960 | ' | 372,996 |
Building [Member] | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Property and equipment | 14,060,138 | ' | 14,060,138 | ' | 14,072,796 |
Leasehold improvements [Member] | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Property and equipment | $3,712,232 | ' | $3,712,232 | ' | $3,804,395 |
LONGTERM_DEPOSITS_Details
LONG-TERM DEPOSITS (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
LONG-TERM DEPOSITS [Abstract] | ' | ' |
Prepayments for setting up flagship stores | $3,223,571 | $3,303,601 |
Anti-piracy sales guarantee deposits | 3,223,571 | 3,303,601 |
Building deposit | 12,894,283 | 13,214,404 |
Rent deposits | 264,754 | 271,239 |
Total long-term deposits | $19,606,179 | $20,092,845 |
SHORTTERM_LOANS_Details
SHORT-TERM LOANS (Details) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
USD ($) | USD ($) | Bank of Communications [Member] | Bank of Communications [Member] | Bank of Communications [Member] | Minsheng Bank [Member] | Minsheng Bank [Member] | Minsheng Bank [Member] | Nanjing Bank [Member] | Nanjing Bank [Member] | Nanjing Bank [Member] | China Dalian Bank [Member] | China Dalian Bank [Member] | China Dalian Bank [Member] | |
USD ($) | CNY | USD ($) | USD ($) | CNY | USD ($) | USD ($) | CNY | USD ($) | USD ($) | CNY | USD ($) | |||
Short-term Debt [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short-term loans | $4,512,999 | $6,276,842 | ' | ' | $1,651,800 | $1,289,428 | ' | $1,321,440 | $1,611,786 | ' | $1,651,801 | $1,611,785 | ' | $1,651,801 |
Issuance date | ' | ' | 25-Mar-13 | 25-Mar-13 | ' | 26-Dec-13 | 26-Dec-13 | ' | 12-Dec-13 | 12-Dec-13 | ' | 30-Jun-13 | 30-Jun-13 | ' |
Face amount | ' | ' | $1,600,000 | 10,000,000 | ' | $1,300,000 | 8,000,000 | ' | $1,600,000 | 10,000,000 | ' | $1,600,000 | 10,000,000 | ' |
Term | ' | ' | '1 year | '1 year | ' | '1 year | '1 year | ' | '1 year | '1 year | ' | '1 year | '1 year | ' |
Maturity date | ' | ' | 28-Mar-14 | 28-Mar-14 | ' | 26-Dec-14 | 26-Dec-14 | ' | ' | ' | ' | 30-Jun-14 | 30-Jun-14 | ' |
Basis spread | ' | ' | 0.30% | 0.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable interest rate | ' | ' | 7.80% | 7.80% | ' | ' | ' | ' | ' | ' | ' | 8.10% | 8.10% | ' |
Interest rate | ' | ' | ' | ' | ' | 7.80% | 7.80% | ' | 7.80% | 7.80% | ' | ' | ' | ' |
LONG_TERM_BOND_PAYABLE_Details
LONG TERM BOND PAYABLE (Details) | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | |
USD ($) | USD ($) | Bond payable [Member] | Bond payable [Member] | |
USD ($) | CNY | |||
Debt Instrument [Line Items] | ' | ' | ' | ' |
Issuance date | ' | ' | 25-Apr-13 | 25-Apr-13 |
Net proceeds from long-term bond offering | ' | ' | $15,800,000 | 97,000,000 |
Debt issuance costs | ' | ' | ' | 3,000,000 |
Term | ' | ' | '3 years | '3 years |
Maturity date | ' | ' | 25-Apr-16 | 25-Apr-16 |
Interest rate | ' | ' | 11.00% | 11.00% |
Interest paid | $2,006,531 | $99,734 | $1,800,000 | 11,000,000 |
STATUTORY_RESERVE_Details
STATUTORY RESERVE (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
STATUTORY RESERVE [Abstract] | ' | ' |
Statutory surplus reserve | $131,825 | $131,825 |
RELATED_PARTIES_Narrative_Deta
RELATED PARTIES (Narrative) (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2014 | |
Zhang Hongcheng [Member] | Guangdong Endless Culture Co., Ltd. [Member] | |
Related Party Transaction [Line Items] | ' | ' |
Amount of transaction | $85,000 | ' |
Lease term | ' | '8 years |
Monthly rent expense | ' | $50,507 |
RELATED_PARTIES_Schedule_of_Am
RELATED PARTIES (Schedule of Amounts Due to Related Parties) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | ' | ' |
Due to related parties | $121,685 | $122,596 |
Zhang Hongcheng [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to related parties | $122,596 | $122,596 |
INCOME_TAXES_Narrative_Details
INCOME TAXES (Narrative) (Details) (U.S. Operations [Member], USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
U.S. Operations [Member] | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' |
Operating loss carryforwards | $52,000,000 | ' |
Expiration | 31-Dec-33 | ' |
Change in valuation allowance | $0 | $48,000 |
INCOME_TAXES_Schedule_of_Defer
INCOME TAXES (Schedule of Deferred Tax Assets) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Income Taxes [Line Items] | ' | ' |
Total current deferred tax assets | $2,243,210 | $2,830,200 |
Total long-term deferred tax assets | 4,151,625 | 5,227,865 |
DEI [Member] | ' | ' |
Income Taxes [Line Items] | ' | ' |
Current deferred tax assets | 2,243,210 | 2,830,200 |
Valuation allowance | ' | ' |
Total current deferred tax assets | 2,243,210 | 2,830,200 |
Non-current deferred assets | 4,151,625 | 5,227,865 |
Valuation allowance | ' | ' |
Total long-term deferred tax assets | 4,151,625 | 5,227,865 |
Deferred tax assets | $6,394,835 | ' |
INCOME_TAXES_Schedule_of_Incom
INCOME TAXES (Schedule of Income Tax Expense (Benefit)) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Income Taxes [Line Items] | ' | ' | ' | ' |
Deferred tax benefit | ' | ' | $1,476,901 | ($1,657,406) |
Total net income tax expense | 1,000,310 | 1,658,842 | 2,127,635 | 2,901,684 |
DEI [Member] | ' | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' | ' |
Current income tax expense | ' | ' | 650,734 | 4,559,090 |
Deferred tax benefit | ' | ' | 1,476,901 | -1,657,406 |
Total net income tax expense | ' | ' | $2,127,635 | $2,901,684 |
INCOME_TAXES_Schedule_of_Taxes
INCOME TAXES (Schedule of Taxes Payable) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Income Taxes [Line Items] | ' | ' |
Total taxes payable | $402,108 | $2,608,821 |
DEI [Member] | ' | ' |
Income Taxes [Line Items] | ' | ' |
Value added tax payable | ' | 365,558 |
Income tax payable | 291,684 | 1,988,083 |
Business tax payable | -6,432 | -6,592 |
Other | 116,856 | 261,772 |
Total taxes payable | $402,108 | $2,608,821 |
CAPITAL_STOCK_Details
CAPITAL STOCK (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | |||||
Jun. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 26, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
First Tranche [Member] | Second Tranche [Member] | Third Tranche [Member] | |||||||
CAPITAL STOCK [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, shares authorized | ' | ' | ' | 10,000,000 | 10,000,000 | ' | ' | ' | ' |
Preferred Stock, par value per share | ' | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' |
Preferred Stock, shares issued | ' | ' | ' | 290 | 290 | ' | ' | ' | ' |
Preferred Stock, shares outstanding | ' | ' | ' | 290 | 290 | ' | ' | ' | ' |
Common stock, shares authorized | ' | ' | ' | 200,000,000 | 200,000,000 | ' | ' | ' | ' |
Common stock, par value per share | ' | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' |
Common stock, shares outstanding | ' | ' | ' | 20,805,860 | 20,805,860 | 10,702,309 | ' | ' | ' |
Common stock, shares issued | ' | ' | ' | 20,805,860 | 20,805,860 | ' | ' | ' | ' |
Acquisition of Digital Entertainment International, shares | ' | ' | 290 | ' | ' | ' | ' | ' | ' |
Shares issued for services | 80,000 | 257,000 | ' | ' | ' | ' | ' | ' | ' |
Value of shares issued for services | $164,800 | $529,080 | ' | ' | ' | ' | ' | ' | ' |
Vesting Schedule [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage | ' | ' | ' | ' | ' | ' | 70.00% | 74.00% | 78.00% |
Conversion of preferred stock, shares | ' | ' | ' | ' | ' | ' | 14,689,444 | 5,488,364 | 7,484,132 |
STOCK_OPTIONS_AND_WARRANTS_Nar
STOCK OPTIONS AND WARRANTS (Narrative) (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Nonvested options | ' | ' |
Iroquois Master Fund [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Warrants outstanding | 99,060 | ' |
Warrant exercise price | $5.16 | ' |
Employees [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Non-cash compensation expense | $324,079 | $49,858 |
Management, Board Members, Employees and Consultants [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Non-cash compensation expense | $0 | $0 |
STOCK_OPTIONS_AND_WARRANTS_Sum
STOCK OPTIONS AND WARRANTS (Summary of Stock Option Plans) (Details) | 6 Months Ended |
Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total Available | 6,428,128 |
Options Granted | ' |
Options Exercised | ' |
Remaining Available | 4,788,967 |
2013 Plan [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total Available | 3,000,000 |
Options Granted | ' |
Options Exercised | ' |
Remaining Available | 3,000,000 |
2012 Plan [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total Available | 3,000,000 |
Options Granted | ' |
Options Exercised | ' |
Remaining Available | 1,788,667 |
2010 Plan [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total Available | 166,667 |
Options Granted | ' |
Options Exercised | ' |
Remaining Available | ' |
2009 Plan [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total Available | 166,667 |
Options Granted | ' |
Options Exercised | ' |
Remaining Available | ' |
2008 Plan [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total Available | 16,667 |
Options Granted | ' |
Options Exercised | ' |
Remaining Available | 28 |
2008 Key Employee Plan [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total Available | 33,334 |
Options Granted | ' |
Options Exercised | ' |
Remaining Available | 260 |
2007 Plan [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total Available | 16,667 |
Options Granted | ' |
Options Exercised | ' |
Remaining Available | 12 |
2007 Key Employee Plan [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total Available | 16,667 |
Options Granted | ' |
Options Exercised | ' |
Remaining Available | ' |
2006 Key Employee Plan [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Total Available | 11,459 |
Options Granted | ' |
Options Exercised | ' |
Remaining Available | ' |
STOCK_OPTIONS_AND_WARRANTS_Sum1
STOCK OPTIONS AND WARRANTS (Summary of Stock Options Activity) (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Shares | ' | ' |
Outstanding at beginning of year | 250,000 | ' |
Options Granted | ' | ' |
Exercised | ' | ' |
Forfeited | ' | ' |
Expired | ' | ' |
Outstanding at end of year | 250,000 | 250,000 |
Vested and expected to vest in the future | ' | ' |
Exercisable at end of period | ' | ' |
Weighted Average Exercise Price | ' | ' |
Outstanding at beginning of year | $3.52 | ' |
Granted | ' | ' |
Exercised | ' | ' |
Forfeited | ' | ' |
Expired | ' | ' |
Outstanding at end of year | $3.52 | $3.52 |
Vested and expected to vest in the future | ' | ' |
Exercisable at end of period | ' | ' |
Weighted Average Remaining Contractual Term | ' | ' |
Outstanding | '10 years | '10 years 6 months |
Vested and expected to vest in the future | ' | ' |
Exercisable at end of period | '10 years | ' |
Aggregate Intrinsic Value | ' | ' |
Outstanding at beginning of year | ' | ' |
Exercised | ' | ' |
Outstanding at end of year | ' | ' |
Vested and expected to vest in the future | ' | ' |
Exercisable at end of period | ' | ' |
INCOME_PER_COMMON_SHARE_Narrat
INCOME PER COMMON SHARE (Narrative) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 |
Warrants [Member] | Warrants [Member] | Options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ' |
Anti-dilutive shares | ' | ' | 99,060 | 99,060 | 250,000 |
Warrant exercise price | ' | ' | $5.16 | $5.16 | ' |
Options exercise price | $3.52 | $3.52 | ' | ' | $3.52 |
INCOME_PER_COMMON_SHARE_Schedu
INCOME PER COMMON SHARE (Schedule of Earnings Per Share) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
INCOM PER COMMON SHARE [Abstract] | ' | ' | ' | ' |
Net income from operations | $1,380,184 | $5,385,139 | $3,386,766 | $8,389,136 |
Net income available to common stockholders | $1,380,184 | $5,385,139 | $3,386,766 | $8,389,136 |
Weighted average number of common shares outstanding during the period used in basic and diluted loss per share (denominator) | 20,805,860 | 20,761,025 | 20,805,860 | 20,708,042 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2009 | Dec. 31, 2009 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 |
USD ($) | CNY | Landlord [Member] | Landlord [Member] | Landlord [Member] | Landlord [Member] | Landlord [Member] | Landlord [Member] | Landlord [Member] | Landlord [Member] | First Tranche [Member] | Second Tranche [Member] | Third Tranche [Member] | |
USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | ||||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Bond issuance | $16,400,000 | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting Schedule [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares issued for business acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 210 | 40 | 40 |
Revenue objective | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,000,000 | 70,000,000 |
Net income objective | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,000,000 | 14,000,000 |
Conversion of preferred stock, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,689,444 | 5,488,364 | 7,484,132 |
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation amount | ' | ' | 1,200,000 | 7,500,000 | 1,100,000 | 7,000,000 | 950,000 | 5,900,000 | 320,000 | 2,000,000 | ' | ' | ' |
Future minimum annual rental payments due | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 1,507,625 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 1,362,124 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 818,844 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 316,524 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2019 | 111,684 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Thereafter | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | $4,116,801 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
SEGMENT_REPORTNG_Details
SEGMENT REPORTNG (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | $13,857,077 | $25,857,239 | $28,601,536 | $48,493,632 | ' |
Cost of revenues | 5,722,898 | 14,362,500 | 12,075,113 | 28,624,131 | ' |
Gross profit | 8,134,179 | 11,494,739 | 16,526,423 | 19,869,501 | ' |
Depreciation and amortization | 1,845,000 | 1,705,000 | 3,649,110 | 3,354,115 | ' |
Total assets | 226,012,107 | 210,889,000 | 226,012,107 | 210,889,000 | 240,833,459 |
Wholesale [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 4,420,000 | 13,991,000 | 10,306,000 | 27,750,000 | ' |
Cost of revenues | 3,620,000 | 10,810,000 | 8,438,000 | 21,999,000 | ' |
Gross profit | 800,000 | 3,181,000 | 1,868,000 | 5,751,000 | ' |
Depreciation and amortization | 211,000 | 68,000 | 395,000 | 128,000 | ' |
Total assets | 69,115,000 | 51,754,000 | 69,115,000 | 51,754,000 | ' |
Retail [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 991,000 | 2,272,000 | 1,725,000 | 4,298,000 | ' |
Cost of revenues | 682,000 | 1,669,000 | 1,229,000 | 3,146,000 | ' |
Gross profit | 309,000 | 603,000 | 496,000 | 1,152,000 | ' |
Depreciation and amortization | 142,000 | 222,000 | 265,000 | 440,000 | ' |
Total assets | 46,457,000 | 33,451,000 | 46,457,000 | 33,451,000 | ' |
Kiosks/ Podcasting [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 8,446,000 | 9,594,000 | 16,571,000 | 16,446,000 | ' |
Cost of revenues | 1,421,000 | 1,884,000 | 2,408,000 | 3,479,000 | ' |
Gross profit | 7,025,000 | 7,710,000 | 14,163,000 | 12,967,000 | ' |
Depreciation and amortization | 1,492,000 | 1,415,000 | 2,989,000 | 2,786,000 | ' |
Total assets | $110,440,000 | $125,684,000 | $110,440,000 | $125,684,000 | ' |