Document_and_Entity_Informatio
Document and Entity Information (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Jan. 27, 2014 | Jun. 30, 2012 | |
Document and Entity Information: | ' | ' | ' |
Entity Registrant Name | 'China Logistics Group Inc | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 30-Sep-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Central Index Key | '0001123493 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 130,607,716 | ' |
Entity Public Float | ' | ' | $415,082 |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'Q3 | ' | ' |
CHINA_LOGISTICS_GROUP_INC_AND_
CHINA LOGISTICS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash | $2,046,002 | $2,335,156 |
Restricted cash | 81,481 | 79,351 |
Note receivable | ' | 7,935 |
Accounts receivable, net | 1,475,506 | 1,277,741 |
Other Receivables, net | 343,035 | 349,093 |
Prepaid expense - related party | 72,154 | ' |
Advance to vendors and other current assets | 398,911 | 57,869 |
Total current assets | 4,417,089 | 4,107,145 |
Property and equipment, net | 149,836 | 64,862 |
Total assets | 4,566,925 | 4,172,007 |
Current liabilities: | ' | ' |
Accounts payable | 2,229,873 | 2,636,667 |
Advances from customers | 960,101 | 302,042 |
Convertible notes payable, net | 114,576 | 0 |
Derivative liabilities | 55,324 | ' |
Due to related parties | 551,120 | 1,050,937 |
Accrued expense - related parties | 21,690 | ' |
Accrued expense and other current liabilities | 514,218 | 423,598 |
Total current liabilities | 4,446,902 | 4,413,244 |
Total liabilities | 4,446,902 | 4,413,244 |
Shareholers' equity (deficit): | ' | ' |
Preferred stock, $0.001 par value, 10,000,000 shares authorized; Series B convertible preferred stock - $0.001 par value, 1,295,000 shares authorized; 0 and 450,000 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | ' | 450 |
Common stock, $0.001 par value, 500,000,000 shares authorized; 112,391,455 and 41,508,203 shares issued and outstanding at September 30, 2013 and December 31, 2012 | 112,391 | 41,508 |
Additional paid-in capital | 21,363,203 | 20,636,980 |
Accumulated deficit | -20,688,873 | -20,247,282 |
Accumulated other comprehensive loss | -88,857 | -94,549 |
Total China Logistics Group, Inc. shareholders' equity | 697,864 | 337,107 |
Non-controlling interest | -577,841 | -578,344 |
Total shareholders' equity (deficit) | 120,023 | -241,237 |
Total liabilities and shareholders' equity (deficit) | $4,566,925 | $4,172,007 |
CHINA_LOGISTICS_GROUP_INC_AND_1
CHINA LOGISTICS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenues: | ' | ' | ' | ' |
Sales | $3,192,631 | $6,349,846 | $10,082,430 | $17,917,318 |
Cost of sales | 2,917,863 | 6,343,360 | 9,073,975 | 16,682,335 |
Gross profit | 274,768 | 6,486 | 1,008,455 | 1,234,983 |
Operating expenses: | ' | ' | ' | ' |
Selling, general and administrative | 288,291 | 254,258 | 907,969 | 769,870 |
Gain on disposal of property and equipment | -3,362 | ' | -3,362 | -1,089 |
Bad debt expenses | 13,679 | -2,877 | 181,030 | 9,422 |
Total operating expenses | 298,608 | 251,381 | 1,085,637 | 778,203 |
(Loss) income from operations | -23,840 | -244,895 | -77,182 | 456,780 |
Other income (expenses): | ' | ' | ' | ' |
Interest income | 5,382 | 3,447 | 10,503 | 3,632 |
Interest expense | -83,392 | ' | -281,074 | ' |
Foreign currency translation loss | -4,206 | ' | -38,662 | ' |
Loss from change in fair value of derivative liability | -31,802 | ' | -60,642 | ' |
Other (expense) income | -1,075 | 36,312 | 500 | 33,424 |
Total other (expenses) income, (net) | -115,093 | 39,759 | -369,375 | 37,056 |
(Loss) income before income taxes | -138,933 | -205,136 | -446,557 | 493,836 |
Benefit from (provision for) income taxes | ' | 161 | ' | -3,303 |
Net (loss) income | -138,933 | -204,975 | -446,557 | 490,533 |
Less: net income attributable to the non-controlling interest | -3,501 | -94,685 | -4,966 | 261,242 |
Net (loss) income attributable to China Logistics Group, Inc. shareholders | -135,432 | -110,290 | -441,591 | 229,291 |
Comprehensive income: | ' | ' | ' | ' |
Net (loss) income | -138,933 | -204,975 | -446,557 | 490,533 |
Foreign currency translation adjustment | 2,481 | -67,092 | 11,161 | -28,263 |
Comprehensive (loss) income | -136,452 | -272,067 | -435,396 | 462,270 |
Less: comprehensive (loss) income attributable to the non-controlling interest | -2,285 | -127,560 | 503 | 247,393 |
Comprehensive (loss) income attributable to China Logistic Group, Inc. shareholders | ($134,167) | ($144,507) | ($435,899) | $214,877 |
Net (loss) income per common share: | ' | ' | ' | ' |
Earnings Per Share - Basic | ($0.00) | ($0.00) | ($0.01) | $0.01 |
Earnings Per Share - Diluted | ($0.00) | ($0.00) | ($0.01) | $0 |
Weighted average number of shares outstanding: | ' | ' | ' | ' |
Weighted average number of shares outstanding - Basic | 101,658,431 | 41,508,203 | 73,479,756 | 41,508,203 |
Weighted average number of shares outstanding - Diluted | 101,658,431 | 41,508,203 | 73,479,756 | 46,008,203 |
CHINA_LOGISTICS_GROUP_INC_AND_2
CHINA LOGISTICS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net (loss) income | ($446,557) | $490,533 |
Adjustments to reconcile net income (loss) to net cash provide by (used in) operating activities: | ' | ' |
Depreciation expense | 22,243 | 5,456 |
Amortization of debt discount | 203,848 | ' |
Interest expense attributable to beneficial conversion feature of convertible note | 21,906 | ' |
Loss from change in fair value of derivative liabilities | 60,642 | ' |
Increase in allowance for doubtful accounts | 181,030 | 9,422 |
Gain on disposal of property and equipment | -3,362 | ' |
Stock-based compensation | 35,000 | ' |
Changes in operating assets and liabilities: | ' | ' |
Restricted cash | -80,474 | -79,258 |
Notes receivable | 8,047 | ' |
Accounts receivable | -132,605 | 1,093,025 |
Other receivables | -208,415 | 34,315 |
Prepaid expense - related parties | 17,087 | ' |
Advance to vendors and other current assets | -308,625 | -689,522 |
Accounts payable | -447,222 | -479,092 |
Advance from customers | 641,917 | 418,604 |
Due to related parties | -96,968 | ' |
Accrued expense - related parties | 21,422 | ' |
Accrued expense and current liabilities | 136,766 | 96,414 |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | -293,846 | 899,897 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchase of property plant and equipment | -105,600 | -24,210 |
Proceeds from disposal of property and equipment | 4,515 | 1,426 |
Collection of advance to related parties | ' | 44,340 |
Advance to related parties | ' | -11,047 |
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | -101,085 | 10,509 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from convertible loans payable, net | 136,500 | ' |
Repayment of advances to related parties | -89,050 | -166,737 |
Advances from related parties | ' | 31,975 |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 47,450 | -134,762 |
EFFECT OF EXCHANGE RATE ON CASH | 58,327 | -56,730 |
NET (DECREASE) INCREASE IN CASH | -289,154 | 718,914 |
CASH | 2,335,156 | 1,396,896 |
CASH | 2,046,002 | 2,115,810 |
Cash paid for: | ' | ' |
Income taxes | ' | 23,843 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ' | ' |
Common stock issued for future service | 27,000 | ' |
Common stock issued for convertible notes and accrued interest | 632,463 | ' |
Notes, advances, and interest payable - related party reclassified to convertible notes | $385,755 | ' |
Note_1_Organization_and_Descri
Note 1 - Organization and Description of Business | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 1 - Organization and Description of Business | ' |
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS | |
China Logistics Group, Inc. (“we”, “us”, “our” or the “Company”) is a Florida corporation and was incorporated on March 19, 1999 under the name of ValuSALES.com, Inc. We changed our name to Video Without Boundaries, Inc. on November 16, 2001. On August 31, 2006 we changed our name from Video Without Boundaries, Inc. to MediaReady, Inc. and on February 14, 2008, we changed our name from MediaReady, Inc. to China Logistics Group, Inc. | |
On December 31, 2007 we entered into an acquisition agreement with Shandong Jiajia International Freight and Forwarding Co., Ltd. (“Shandong Jiajia”) and its sole shareholders Messrs. Hui Liu and Wei Chen, through which we acquired a 51% interest in Shandong Jiajia. The transaction was accounted for as a capital transaction, implemented through a reverse recapitalization. | |
Shandong Jiajia, formed in 1999 as a Chinese limited liability company, is an international freight forwarder and logistics management company. Shandong Jiajia acts as an agent for international freight and shipping companies. Shandong Jiajia sells cargo space and arranges land, maritime, and air international transportation for clients seeking to import or export merchandise from or into China. Headquartered in Qingdao, Shandong Jiajia has branches in Shanghai, Xiamen, Lianyungang and Tianjin with additional sales office in Rizhao. |
Note_2_basis_of_Presentation_a
Note 2 -basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Notes | ' | ||||||||||||
Note 2 -basis of Presentation and Summary of Significant Accounting Policies | ' | ||||||||||||
NOTE 2 –BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||
Going concern | |||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis. The Company has an accumulated deficit of $20,688,873 at September 30, 2013. During the nine months ended September 30, 2013, the Company used cash in operating activities of $374,320. The Company has reported net loss of $446,557 and net income of $490,533 for the nine months ended September 30, 2013 and 2012, respectively. The Company’s ability to continue as a going concern is dependent upon its ability to increase its revenues to historic levels, generate profitable operations in the future and to obtain any necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted at this time. These matters raise substantial doubt about the ability of the Company to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. | |||||||||||||
Basis of presentation | |||||||||||||
The accompanying unaudited condensed consolidated financial statements for the three and nine months periods ended September 30, 2013 and 2012 have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The consolidated financial statements for the interim periods presented are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the periods presented. Financial results for interim periods are not necessarily indicative of results that should be expected for the full year. The accompanying condensed consolidated financial statements include our accounts and those of our 51% owned subsidiary, Shandong Jiajia. All inter-company transactions and balances have been eliminated in consolidation. | |||||||||||||
Use of estimates | |||||||||||||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates in 2013 and 2012 include the allowance for doubtful accounts, the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, the value of stock-based compensation and the fair value of derivative liabilities. | |||||||||||||
Fair value of financial instruments | |||||||||||||
The Company adopted the guidance of the Financial Accounting standards Boards (“FASB”) Accounting Standards Codification (“ASC”) Topic 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: | |||||||||||||
Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. | |||||||||||||
Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. | |||||||||||||
Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. | |||||||||||||
The carrying amounts reported in the condensed consolidated balance sheets for cash, note receivable, accounts receivable, other receivables, due from related party, advance to vendors and other current assets, convertible notes payable, accounts payable, advance from customers, due to related parties, accrued expense – related parties and accrued expense and other current liabilities approximate their fair market value based on the short-term maturity of these instruments. | |||||||||||||
ASC Topic 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. | |||||||||||||
The following table reflects changes for the nine months ended September 30, 2013 for all financial assets and liabilities categorized as Level 3 as of September 30, 2013. | |||||||||||||
Liabilities: | |||||||||||||
Balance of derivative liabilities as of January 1, 2013 | $ 0 | ||||||||||||
Initial fair value of derivative liabilities attributable to conversion features of convertible notes | 196,253 | ||||||||||||
Reclassification of additional paid-in capital upon conversion | (80,287) | ||||||||||||
Loss from change in the fair value of derivative liabilities | (60,642) | ||||||||||||
Balance of derivative liabilities as of September 30, 2013 | $ 55,324 | ||||||||||||
Concentration of credit risk | |||||||||||||
The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. | |||||||||||||
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and accounts receivable and other receivables. The Company deposits its cash with high credit quality financial institutions in the United States and the PRC. At September 30, 2013, the Company had deposits of approximately $2.0 million in banks in the PRC. In the PRC, there is no equivalent federal deposit insurance as in the United States; as such these amounts held in banks in the PRC are not insured. The Company has not experienced any losses in such bank accounts through September 30, 2013. | |||||||||||||
Cash and cash equivalents | |||||||||||||
For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The carrying value of these instruments approximates fair value. | |||||||||||||
Restricted cash | |||||||||||||
Restricted cash consists of one-year term cash deposit held by a bank in China. | |||||||||||||
Accounts receivable and other receivables | |||||||||||||
Accounts receivable and other receivables are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews accounts receivable and other receivables on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. At September 30, 2013, allowance for doubtful accounts on accounts receivable totaled $3,362,749 and the allowance for doubtful accounts on other receivables amounted to $428,150. At December 31, 2012, allowance for doubtful accounts on accounts receivable totaled $3,303,295 and the allowance for doubtful accounts on other receivables amounted to $196,427, respectively. | |||||||||||||
Advance to vendors and other current assets | |||||||||||||
Advances to vendors and other current assets consist primarily of prepayments or deposits from us for contracted shipping arrangements that have not been utilized by our customers. These amounts are recognized as cost of revenues as shipments are completed and customers utilize the shipping arrangement. Advances to vendors and other current assets totaled $398,911 and $57,869 at September 30, 2013 and December 31, 2012, respectively. | |||||||||||||
Property and equipment and long-lived assets | |||||||||||||
Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives. Leasehold improvements, if any, are amortized on a straight-line basis over the shorter of the lease period or the estimated useful life. The Company periodically evaluates the carrying value of long-lived assets to be held and used in the business, generally in conjunction with the annual business planning cycle, and when events and circumstances otherwise warrant. If the carrying value of a long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value for assets to be held and used. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risks involved. There was no impairment recognized during the nine month ended September 30, 2013 and 2012. | |||||||||||||
Advances from customers | |||||||||||||
Advances from customers consist of prepayments to us for contracted cargo that has not yet been shipped to the recipient and for other advance deposits. These amounts are recognized as revenue when all of the revenue recognition criteria have been met. Advances from customers totaled $960,101 and $302,042, at September 30, 2013 and December 31, 2012, respectively. | |||||||||||||
Revenue recognition | |||||||||||||
The Company provides freight forwarding services to our customers. Our business model involves placing our customers’ freight on prearranged contracted transport. Our revenue recognition policy is in accordance with the guidance of ASC 605, “Revenue Recognition.” In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The Company provides transportation services, generally under contract, by third parties with whom the Company has contracted these services. | |||||||||||||
Typically, the Company recognizes revenue in connection with our freight forwarding service when the payment terms are as follows: | |||||||||||||
- | When merchandise departs the shipper's location if the trade pricing terms are CIF (cost, insurance and freight), | ||||||||||||
- | When merchandise departs the shipper’s location if the trade pricing terms are CFR (cost and freight cost); or | ||||||||||||
- | When merchandise arrives at the destination port if the trade pricing terms are FOB (free on board) destination. | ||||||||||||
The Company recognizes direct shipping costs concurrently with the recognition of the related revenue for each shipment. These costs are generally isolated by billings as the Company does not own the shipping containers or transportation vessels. | |||||||||||||
Stock based compensation | |||||||||||||
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC Topic 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The FASB ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. | |||||||||||||
Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company records compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated, based on the then current fair value, at each subsequent reporting date. | |||||||||||||
Derivative liabilities | |||||||||||||
ASC Subtopic 815-40, “Contracts in Entity’s Own Equity,” requires that entities recognize as derivative liabilities the derivative instruments, including certain derivative instruments embedded in other contracts that are not indexed to an entity’s own stock. Pursuant to the provisions of ASC Section 815-40-15, an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The adoption of ASC Subtopic 815-40 has affected the accounting for (i) certain freestanding warrants that contain exercise price adjustment features and (ii) convertible bonds issued by foreign subsidiaries with a strike price denominated in a foreign currency. In the case of any such warrants and convertible bonds, ASC Subtopic 815-40 provides that such warrants and bonds are to be treated as a liability at fair value with changes in fair value recognized in earnings. | |||||||||||||
Basic and diluted earnings per share | |||||||||||||
Pursuant to ASC 260-10-45, basic income (loss) per common share is computed by dividing income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted income (loss) per share reflects the potential dilution that could occur if securities were exercised or converted into common stock or other contracts to issue common stock resulting in the issuance of common stock that would then share in our income subject to anti-dilution limitations. Potentially dilutive common shares consist of common stock issuable for stock warrants, and shares issuable upon conversion of Series B convertible preferred stock. In period where the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact.. The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2013 and 2012: | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
Numerator: | 2013 | 2012 | 2013 | 2012 | |||||||||
Net (loss) income applicable to China Logistics Group, Inc. shareholders | $ (135,432) | $ (110,290) | $ (441,591) | $ 229,291 | |||||||||
Denominator: | |||||||||||||
Denominator for basic earnings per share: | |||||||||||||
Weighted average shares outstanding | 101,658,431 | 41,508,203 | 73,479,756 | 41,508,203 | |||||||||
Series B convertible preferred stock | 0 | 0 | 0 | 4,500,000 | |||||||||
Denominator for diluted earnings per share: | |||||||||||||
Diluted weighted average shares outstanding | 101,658,431 | 41,508,203 | 73,479,756 | 46,008,203 | |||||||||
(Loss) earnings per common share - basic | $ (0.00) | $ (0.00) | $ (0.01) | $ 0.01 | |||||||||
(Loss) earnings per common share - diluted | $ (0.00) | $ (0.00) | $ (0.01) | $ 0.00 | |||||||||
The Company's aggregate common stock equivalents at September 30, 2013 and 2012 included the following: | |||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | ||||||||||||
Warrants | 0 | 31,558,500 | |||||||||||
Series B convertible preferred stock | 0 | 4,500,000 | |||||||||||
Total | 0 | 36,058,500 | |||||||||||
Foreign currency translation | |||||||||||||
The accompanying unaudited condensed consolidated financial statements are presented in United States dollars. The functional currency of Shandong Jiajia is the RMB, the official currency of the PRC. In accordance with ASC 830-20-35, assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial statements. Gains and losses resulting from the translation of local currency financial statements into U.S. dollars are reflected in other comprehensive income in the consolidated statements of operations and comprehensive income (loss). | |||||||||||||
RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place through PRC authorized institutions. Translation of amounts from RMB into United States dollars (“$”) has been made at the following exchange rates for the respective periods: | |||||||||||||
September 30, | September 30, | December 31, | |||||||||||
2013 | 2012 | 2012 | |||||||||||
Period end RMB: U.S. dollar exchange rate | 6.1364 | 6.3190 | 6.3011 | ||||||||||
Average fiscal-year-to-date RMB: U.S. dollar exchange rate | 6.2132 | 6.3085 | |||||||||||
Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. | |||||||||||||
Cash flows from the Company's operations are calculated based upon the local currencies using the average translation rate. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. | |||||||||||||
Income taxes | |||||||||||||
We account for income taxes in accordance with ASC 740, “Income Taxes.” ASC 740 requires the recognition of deferred tax assets and liabilities to reflect the future tax consequences of events that have been recognized in our financial statements or tax returns. Measurement of the deferred items is based on enacted tax laws. In the event the future consequences of differences between the financial reporting and tax basis of our assets and liabilities result in a deferred tax asset, ASC 740 requires an evaluation of the probability that the Company will generate sufficient taxable income to be able to realize the future benefits indicated by the deferred tax assets. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some or the entire deferred tax asset will not be realized. | |||||||||||||
Comprehensive income (loss) | |||||||||||||
We follow ASC 220, “Comprehensive Income” to recognize the elements of comprehensive income (loss). Comprehensive income (loss) is comprised of net income (loss) and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Our comprehensive income (loss) for the three and nine months ended September 30, 2013 and 2012 included net income (loss) and foreign currency translation adjustments. | |||||||||||||
Non-controlling interest | |||||||||||||
Non-controlling interests in our subsidiaries are recorded as a component of our equity, separate from the parent’s equity. Purchase or sale of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations attributable to the non-controlling interest are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings. | |||||||||||||
Related parties | |||||||||||||
Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions are recorded at fair value of the goods or services exchanged. | |||||||||||||
Reclassification | |||||||||||||
Certain reclassifications have been made in prior year same period’s financial statements to conform to the current period’s financial presentation. | |||||||||||||
Recent accounting pronouncements | |||||||||||||
In March 2013, the FASB issued ASU 2013-05 “Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” ASU 2013-05 addresses the accounting for the cumulative translation adjustment when a parent either sells part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. For public entities, the ASU is effective prospectively for fiscal years, and interim periods, within those years, beginning after December 15, 2013. Early adoption is permitted. The adoption of ASU 2013-05 is not expected to have a material impact on the Company’s consolidated financial statements. | |||||||||||||
In July 2013, the FASB issued ASU 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." ASU 2013-11 provides guidance on the presentation of unrecognized tax benefits related to any disallowed portion of net operating loss carryforwards, similar tax losses, or tax credit carryforwards, if they exist. ASU 2013-11 is effective for fiscal years beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on the Company’s consolidated financial statements. | |||||||||||||
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Note_3_Accounts_Receivable
Note 3 - Accounts Receivable | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Notes | ' | ||||||
Note 3 - Accounts Receivable | ' | ||||||
NOTE 3 – ACCOUNTS RECEIVABLE | |||||||
At September 30, 2013 and December 31, 2012, accounts receivable consisted of the following: | |||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Accounts receivable | $ 4,838,255 | $ 4,581,036 | |||||
Less: allowance for doubtful accounts | (3,362,749) | (3,303,295) | |||||
Accounts receivable, net | $ 1,475,506 | $ 1,277,741 | |||||
The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. |
Note_4_Other_Receivables
Note 4 - Other Receivables | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Notes | ' | ||||||
Note 4 - Other Receivables | ' | ||||||
NOTE 4 – OTHER RECEIVABLES | |||||||
Other receivables are primarily comprised of advances to other entities with which we have a strategic or other business relationship, and deferred expenses. The amounts advanced to our strategic partners are unsecured, repayable on demand, and bear no interest. We also advance money to employees for business trips which are then subsequently expensed upon processing of an expense report. The components of other receivables at September 30, 2013 and December 31, 2012 were as follows: | |||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Advances receivable | $ 693,499 | $ 467,207 | |||||
Deferred expenses | 20,650 | 58,383 | |||||
Other | 57,036 | 19,930 | |||||
771,185 | 545,520 | ||||||
Less: allowance for doubtful accounts | (428,150) | (196,427) | |||||
Other Receivables, net | $ 343,035 | $ 349,093 |
Note_5_Property_and_Equipment
Note 5 - Property and Equipment | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Notes | ' | ||||||
Note 5 - Property and Equipment | ' | ||||||
NOTE 5 – PROPERTY AND EQUIPMENT | |||||||
Property and equipment at September 30, 2013 and December 31, 2012 consisted of the following: | |||||||
(Useful lives) | September 30, | December 31, | |||||
2013 | 2012 | ||||||
Vehicle(5 years) | $ 120,210 | $ 47,976 | |||||
Furniture and office equipment(4 - 5 years) | 169,837 | 153,089 | |||||
290,047 | 201,065 | ||||||
Less: accumulated depreciation | (140,211) | (136,203) | |||||
Property and equipment, net | $ 149,836 | $ 64,862 | |||||
For the three months ended September 30, 2013 and 2012, depreciation expense amounted to $9,055 and $2,010, respectively. For the nine months ended September 30, 2013 and 2012, depreciation expense amounted to $22,243 and $5,456, respectively. |
Note_6_Accrued_Expenses_and_Ot
Note 6 - Accrued Expenses and Other Current Liabilities | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Notes | ' | ||||||
Note 6 - Accrued Expenses and Other Current Liabilities | ' | ||||||
NOTE 6 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||||||
Accrued expenses and other current liabilities are primarily comprised of (1) non-interest bearing advances from unrelated parties used for working capital purposes and payable on demand, (2) accruals for professional fees that have not yet been billed and office rent that has not yet paid, (3) accrued salaries and employees’ benefits, and (4) taxes payable. The components of accruals and other current liabilities at September 30, 2013 and December 31, 2012 were as follows: | |||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Advances payables | $ 388,031 | $ 273,994 | |||||
Accrued expenses | 73,113 | 97,276 | |||||
Accrued salaries and employees' benefits | 45,809 | 51,971 | |||||
Taxes payable | 7,265 | 357 | |||||
Accrued expenses and other current liabilities | $ 514,218 | $ 423,598 |
Note_7_Convertible_Notes_Payab
Note 7 - Convertible Notes Payable | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Notes | ' | ||||||
Note 7 - Convertible Notes Payable | ' | ||||||
NOTE 7 – CONVERTIBLE NOTES PAYABLE | |||||||
Convertible notes and related derivative liabilities | |||||||
On February 5, 2013, the Company and Hanover Holding I, LLC (“Hanover”) entered into a Securities Purchase Agreement, providing for the issuance of the 12% Convertible Promissory Note in the principal amount of $27,000. The 12% convertible promissory note and all accrued interest were due on October 5, 2013. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the note is paid. Hanover is entitled, at its option, at any time after the issuance of this Note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of Common Stock equal to a price which is a 70% discount from the average of the two (2) lowest Daily VWAPs in the 10 days prior to the day that Hanover requests conversion, unless otherwise modified by mutual agreement between the Parties (the "Conversion Price"). The Note has a Flex Floor at $0.0225 (the “Original Floor”). If the stock goes below the Original Floor, the stock has 10 business days during which the stock must close above the Original Floor for three consecutive trading days in order to maintain the Original Floor. If the stock is unable to meet these requirements after these 10 business days, a New Floor is set equivalent to 50% of the lowest trading price in the same 10 business days (the "New Floor").If the stock price dips below the New Floor, the stock will once again have l0 business days during which the stock must close above the New Floor for three consecutive trading days in order to maintain the New Floor. The stock will have to continue to maintain a price above the New Floor. If the price is unable to close above the New Floor for three consecutive trading days in 10 business days after the price has dipped, the Flex Floor will be eliminated. If the Company’s common stock is chilled for deposit at DTC and/or becomes chilled at any point while this Agreement remains outstanding, an additional 8% discount will be attributed to the Conversion Price defined hereof. The Company determined that the conversion feature of the 12% convertible promissory note represents an embedded derivative since the note is convertible into a variable number of shares. Accordingly, the 12% convertible note was not considered to be conventional debt and the embedded conversion feature was required to be bifurcated from the debt host and accounted for as a derivative liability. Accordingly, on February 5, 2013, the fair value of this derivative instrument of $35,502 was recorded as a liability on the accompanying unaudited condensed consolidated balance sheets. Any gains and losses recorded from changes in the fair value of the liability for derivative contracts was recorded as a component of other income/(expense) in the accompanying unaudited condensed consolidated statements of operations and comprehensive income (loss). On September 17, 2013, the principal amount of $10,000 of this note was converted into 1,970,444 shares of the Company’s common stock at the cost basis of $0.005075 per share. During the fourth quarter of fiscal 2013, the rest of outstanding principal amount and all accrued and unpaid interest of the note were converted into 4,016,261 shares of the Company’s common stock at the cost basis of $0.004759 per share. | |||||||
On February 6, 2013, CD International Enterprises, Inc. (the “CDII”) assigned certain loans and interest it is owed by the Company amounting to $50,952 to Magna Group LLC (“Magna”). In connection with this assignment, the Company and Magna entered into a Securities Purchase Agreement, providing for the issuance of the 6% Convertible Promissory Note (the “Magna Note”) in the principal amount of $50,952. The 6% convertible promissory note and all accrued interest were due on February 6, 2014. Magna is entitled, at its option, at any time after the issuance of this Note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of Common Stock equal to a price which is a 30% discount from the average of the two (2) lowest Daily VWAPs in the 10 days prior to the day that Magna requests conversion, unless otherwise modified by mutual agreement between the Parties (the "Conversion Price"). Magna will have a one-time Conversion Price to be used upon the first conversion of the Note that is equal to a price which is a 30% discount from the lowest Daily VWAP in the 10 days prior to the day that Magna requests conversion. The Note has a Flex Floor at $0.0225 (the “Original Floor”). If the stock goes below the Original Floor, the stock has 10 business days during which the stock must close above the Original Floor for three consecutive trading days in order to maintain the Original Floor. If the stock is unable to meet these requirements after these 10 business days, a New Floor is set equivalent to 50% of the lowest trading price in the same 10 business days (the "New Floor"). If the stock price dips below the New Floor, the stock will once again have l0 business days during which the stock must close above the New Floor for three consecutive trading days in order to maintain the New Floor. The stock will have to continue to maintain a price above the New Floor. If the price is unable to close above the New Floor for three consecutive trading days in 10 business days after the price has dipped, the Flex Floor will be eliminated. If the Company’s common stock is chilled for deposit at DTC and/or becomes chilled at any point while this Agreement remains outstanding, an additional 8% discount will be attributed to the Conversion Price defined hereof. In February 2013, the entire outstanding principal amount and all accrued and unpaid interest was converted into 1,047,852 and 1,373,035 shares of Company’s common stock at the cost basis of $0.02863 per share and $0.01526 per share, respectively. The Company determined that the conversion feature of the convertible debentures represents an embedded derivative since the debentures are convertible into a variable number of shares. Accordingly, the 6% convertible note was not considered to be conventional debt and the embedded conversion feature was required to be bifurcated from the debt host and accounted for as a derivative liability. Accordingly, on February 6, 2013, the fair value of this derivative instrument of $78,542 was recorded as a liability on the accompanying unaudited condensed consolidated balance sheets. Any gains and losses recorded from changes in the fair value of the liability for derivative contracts was recorded as a component of other income/ (expense) in the accompanying unaudited condensed consolidated statements of operations and comprehensive income (loss). | |||||||
On August 8, 2013, the Company and LG Capital Funding LLC (“LG”) entered into a note purchase agreement, providing for the issuance of an 8% convertible note in the principal amounts of $51,500. In connection with the convertible promissory note, the Company paid a fee of $5,500 and received net cash proceed of $46,000. The principal amount and accrued interest of note are due on April 8, 2014. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date thereof until the note is paid. LG is entitled, at its option, at any time after the issuance of the note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of common stock equal to a price which is 57% of the average of three lowest trading price in the 10 consecutive trading days prior to the day that LG requests conversion. The Note has a Flex Floor at $0.001 (the “Original Floor”). If the stock goes below the Original Floor, the stock has 10 business days during which the stock must close above the Original Floor for three consecutive trading days in order to maintain the Original Floor. If the stock is unable to meet these requirements after these 10 business days, a New Floor is set equivalent to 50% of the lowest trading price in the same 10 business days (the "New Floor"). If the stock price dips below the New Floor, the stock will once again have l0 business days during which the stock must close above the New Floor for three consecutive trading days in order to maintain the New Floor. The stock will have to continue to maintain a price above the New Floor. If the price is unable to close above the New Floor for three consecutive trading days in 10 business days after the price has dipped, the Flex Floor will be eliminated. The Company determined that the conversion feature of the 8% convertible promissory note represents an embedded derivative since the note is convertible into a variable number of shares. Accordingly, the 8% convertible note was not considered to be conventional debt and the embedded conversion feature was required to be bifurcated from the debt host and accounted for as a derivative liability. Accordingly, on August 8, 2013, the fair value of this derivative instrument of $82,209 was recorded as a liability on the accompanying unaudited condensed consolidated balance sheets. Any gains and losses recorded from changes in the fair value of the liability for derivative contracts was recorded as a component of other income/(expense) in the accompanying unaudited condensed consolidated statements of operations and comprehensive income (loss). | |||||||
The fair value of the derivative liabilities were estimated using the Black-Scholes-Merton option pricing model with the following assumptions: | |||||||
Dividend rate | 0 | ||||||
Term (in years) | 0.04 to 1 year | ||||||
Volatility | 318% to 389% | ||||||
Risk-free interest rate | 0.01% to 0.14% | ||||||
At September 30, 2013, and on the initial measurements of the derivative liabilities, and on the conversion dates of these convertible notes, the Company valued the derivative liabilities resulting in a loss in fair value of derivative liabilities of $11,658 for the nine months ended September 30, 2013. For the nine months ended September 30, 2013, amortization of debt discounts related to these convertible notes amounted to $89,374, which has been included in interest expense on the accompanying unaudited condensed consolidated statements of operations and comprehensive income (loss). | |||||||
Other convertible notes | |||||||
On April 8, 2013, the Company issued a 4% convertible note of the Company in the aggregate principal amount of $82,143 to its consultant CDII in connection with the exchange for working capital advances due to CDII in 2012 and prior to this convertible note. Pursuant to this convertible note, CDII was entitled, at its option, at any time after the issuance of this note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of common stock equal to a price which is 80% of the lowest VWAP in the 10 consecutive trading days prior to the day that CDII requests conversion. On May 21, 2013, this note was fully converted into 3,422,617 shares of the Company’s common stock at a conversion price is $0.024 per share. | |||||||
On April 18, 2013, CDII assigned certain notes payable and the related accrued interest due to CDII amounting to $77,700 to Magna and Magna and the Company entered into an Assignment and Modification Agreement in connection with the issuance of a 6% convertible note of the Company to Magna in the aggregate principal amount of $77,700. The principal amount and its interest were due on January 18, 2014. Magna is entitled, at its option, at any time after the issuance of this note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of Common Stock equal to a price which is 70% of the lowest VWAP in the 10 consecutive trading days prior to the day that Magna requests conversion. In May and June 2013, this Note was fully converted into 7,629,231 shares of the Company’s common stock at an average conversion price is $0.01018 per share. | |||||||
On May 24, 2013, the Company, CDII and CFO Oncall, Inc (“CFO Oncall”) entered into an assignment agreement, in which CDII assigned to CFO Oncall a note payable originally dated December 19, 2009 of $20,000 and accrued interest of $1,906 for an aggregate amount of $21,906 to CFO Oncall, and the Company issued a 4% Convertible Promissory Note in the principal amount of $21,906 to CFO Oncall. CFO Oncall was entitled, at its option, at any time after the issuance of this note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of common stock equal to $0.0114. On June 25, 2013, this note has been fully converted into 1,921,590 shares of the Company’s common stock. The convertible note was considered to have an embedded beneficial conversion feature (“BCF”) because the effective conversion price was less than the fair value of the Company’s common stock. The value of the beneficial conversion feature was $21,906 and was recorded as interest expense on the accompanying unaudited condensed consolidated statements of operations and comprehensive income (loss). | |||||||
On May 29, 2013, the Company, CDII and Magna entered into an assignment agreement, in which CDII sold a series of notes owed to it by the Company to Magna with the aggregate principal amount of $108,000 and accrued interest of $10,030, and the Company issued a 6% convertible promissory note in the principal amount of $118,030 to Magna. The principal amount and its interest were due on January 29, 2014. Magna is entitled, at its option, at any time after the issuance of this note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of common stock equal to a price which is 70% of the lowest 2 daily VWAPs in the 10 consecutive trading days prior to the day that Magna requests conversion. On June 26, 2013, $45,000 of this note was converted into 4,952,449 shares of the Company’s common stock at a conversion price of $0.009 per share. On July 12, 2013, $15,000 of this note was converted into 2,031,144 shares of the Company’s common stock at a conversion price of $0.007385 per share. On July 30, 2013, $15,000 of this note was converted into 2,747,253 shares of the Company’s common stock at a conversion price of $0.00546 per share. On August 8, 2013, $15,000 of this note was converted into 2,747,253 shares of the Company’s common stock at a conversion price of $0.00546 per share. On August 14, 2013, $18,000 of this note was converted into 3,361,345 shares of the Company’s common stock at a conversion price of $0.005355 per share. On August 27, 2013, the remaining balance of principal of $10,030 and accrued and unpaid interest of $582 was converted into 1,919,025 shares of the Company’s common stock at a conversion price of $0.00553 per share. | |||||||
On June 12, 2013, the Company, CDII and Iconic Holdings, LLC (“Iconic”) entered into a series of agreements, in which Iconic purchased from CDII a $30,000 note that the Company owed to CDII dated October 2, 2011 and interest payable of $3,300, and the Company issued a 10% Convertible Promissory Note in the principal amount of $33,000 to Iconic. The 10% convertible promissory note and all accrued interest are due on June 12, 2014. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the lower rate of twenty percent (20%) per annum or the highest rate permitted by law from the due date thereof until the note is paid. Iconic is entitled, at its option, at any time after the issuance of this note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of Common Stock equal to a price which is 70% of the lowest trading price in the 10 consecutive trading days prior to the day that Iconic requests conversion. On July 16, 2013, $7,517 of this note was converted into 1,167,244 shares of the Company’s common stock at a conversion price of $0.00644 per share. On July 31, 2013, $23,907 of this note was converted into 4,553,711 shares of the Company’s common stock at a conversion price of $0.00525 per share. At September 30, 2013, principal amount due under this convertible note was $1,576. | |||||||
On June 12, 2013, the Company, CDII and Iconic entered into a series of agreements, in which Iconic purchased from CDII a $50,000 note dated December 2, 2011 that the Company owed to CDII and interest payable of $2,976, and the Company issued a 10% Convertible Promissory Note in the principal amount of $52,976 to Iconic. The 10% convertible promissory note and all accrued interest were due on June 12, 2014. Any amount of principal or interest on this note which is not paid when due shall bear interest at the lower rate of twenty percent (20%) per annum or the highest rate permitted by law from the due date thereof until the note is paid. Iconic is entitled, at its option, at any time after the issuance of this Note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of Common Stock equal to a price which is 70% of the lowest trading price in the 10 consecutive trading days prior to the day that Iconic requests conversion. On June 30, 2013, $32,073 of this note was converted into 3,963,786 shares of the Company’s common stock at a conversion price of $0.008 per share. On July 8, 2013, $12,320 of this note was converted into 2,000,000 shares of the Company’s common stock at a conversion price of $0.00616 per share. On July 16, 2013, the remaining balance of $8,583 was fully converted into 1,332,756 shares of the Company’s common stock at a conversion price of $0.00644 per share. | |||||||
On June 12, 2013, the Company and Iconic entered into two note purchase agreements, providing for the issuance of two 10% convertible note with the principal amount of $17,500 and $27,500 respectively, for an aggregate principal amount of $45,000. In connection with these convertible promissory notes, the Company paid a fee of $6,500 and received net cash proceeds of $38,500. The $6,500 fee paid was reflected as a debt discount to be amortized over the life of the loan. The principal amount and accrued interest of both notes are due on June 12, 2014. Any amount of principal or interest on the notes which is not paid when due shall bear interest at the lower rate of twenty percent (20%) per annum or the highest rate permitted by law from the due date thereof until the notes are paid. Iconic is entitled, at its option, at any time after the issuance of this Note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of common stock equal to a price which is 60% of the lowest trading price in the 10 consecutive trading days prior to the day that Iconic requests conversion. At September 30, 2013, principal amount due under this convertible note amounted to $45,000. | |||||||
On August 27, 2013, the Company and JSJ Investments Inc. (“JSJ”) entered into a note purchase agreement, providing for the issuance of a convertible note in the principal amounts of $25,000. The principal amount of the note is due on February 27, 2014. Any amount of principal on the note which is not paid when due shall bear interest at the rate of 10% per annum from the due date thereof until the note is paid. JSJ is entitled, at its option, at any time after the issuance of the note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of common stock equal to a price which is 55% (45% discount) of the average of the three lowest trades on the previous 10 trading days to the date of conversion, with a maximum conversion price equal to that price would be obtained if the conversion were to be made on the date that this note was executed, and shares will not be converted under a price of $0.0005. At September 30, 2013, principal amount due under this convertible note was $25,000. | |||||||
Pursuant to ASB Topic 470-20-525 (Debt with conversion and other options), since these other convertible promissory notes had fixed conversion percentages ranging from 55% to 80% of the stock price, the Company determined it had a fixed maximum amounts that can be settled for the debt. Accordingly, during the nine months ended September 30, 2013, the Company accrued a put premium amount aggregating $196,267 in this period since the notes are convertible for the conversion premium and recorded a debt discount of $196,267 which is amortized over the life of the respective note. Upon conversion of certain other convertible notes to common stock during the nine months ended September 30, 2013, the Company reduced the put premium by $142,380 and reclassified the same amount to additional paid-in capital. For the nine months ended September 30, 2013, in connection with the amortization of the debt discount, the Company recorded interest expense of $163,458. | |||||||
At September 30, 2013 and December 31, 2012, convertible promissory notes consisted of the following: | |||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Principal amount | $ 140,076 | $ 0 | |||||
Put premium | 53,887 | 0 | |||||
193,963 | 0 | ||||||
Less: unamortized debt discount | (79,387) | 0 | |||||
Convertible note payable, net | $ 114,576 | $ 0 |
Note_8_Stockholders_Equity
Note 8 - Stockholders' Equity | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Notes | ' | |||||||||
Note 8 - Stockholders' Equity | ' | |||||||||
NOTE 8 – STOCKHOLDERS’ EQUITY | ||||||||||
Preferred stock | ||||||||||
The Company has 10,000,000 shares of preferred stock, par value $0.001, authorized, 1,000,000 of which we designated as our Series A Convertible Preferred Stock in December 2007 in connection with our acquisition of a 51% interest in Shandong Jiajia. On March 28, 2008 shareholders holding the Series A Convertible Preferred Stock converted their 1,000,000 shares into 2,500,000 shares of common stock, and no shares of Series A Convertible Preferred Stock were outstanding at September 30, 2013 and December 31, 2012. | ||||||||||
In December 2007, we designated 1,295,000 shares of our preferred stock as Series B Convertible Preferred stock in connection with our acquisition of a 51% interest in Shandong Jiajia. Each share of Series B Convertible Preferred Stock is convertible into 10 shares of our common stock. In March 2008, holders of the Series B Convertible Preferred Stock converted 845,000 shares into 8,450,000 shares of common stock, and in February 2013, holders of the Series B Convertible Preferred Stock converted 450,000 shares into 4,500,000 shares of common stock. There were 0 and 450,000 shares of Series B Convertible Preferred Stock outstanding at September 30, 2013 and December 31, 2012, respectively. | ||||||||||
Common stock | ||||||||||
In January 2013, the Company issued 10,000,000 shares of its common stock to Mr. Wei Chen, the Company’s Chief Executive Officer for his services rendered and to be rendered in fiscal 2012 and fiscal 2013. The shares were valued at the fair market value of $30,000 on the grant date, and the Company recorded stock-based compensation of $30,000. | ||||||||||
In August 2013, the Company issued 4,000,000 shares of its common stock to a consultant for his service from August 2013 through July 2014. The shares were valued at the fair market value of $32,000 on the grant date. The Company recorded stock-based compensation of $5,000 during the nine months ended September 30, 2013 and recorded prepaid expense of $27,000 at September 30, 2013, which will be amortized over the rest of his service periods. | ||||||||||
In February 2013, the Company issued 4,500,000 shares of its common stock in connection with the conversion of 450,000 shares of Series B Convertible Preferred Stock. | ||||||||||
During the nine months ended September 30, 2013, the Company issued 52,383,252 shares of its common stock in connection with the conversion of convertible notes. | ||||||||||
Common stock purchase warrants | ||||||||||
Warrant activity for the nine months ended September 30, 2013 was summarized as follows: | ||||||||||
Number of warrants | Weighted Average | Weighted Average | ||||||||
Exercise Price | Remaining Contractual | |||||||||
Life (Years) | ||||||||||
Outstanding at December 31, 2012 | 31,558,500 | $ 0.20 | 0.33 | |||||||
Granted | 0 | 0 | 0 | |||||||
Exercised | 0 | 0 | 0 | |||||||
Expired | (31,558,500) | (0.20) | 0 | |||||||
Outstanding at September 30, 2013 | 0 | $ 0 | 0 |
Note_9_related_Party_Transacti
Note 9 -related Party Transactions | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Notes | ' | ||||||
Note 9 -related Party Transactions | ' | ||||||
NOTE 9 –RELATED PARTY TRANSACTIONS | |||||||
Due from related party | |||||||
From time to time, the Company makes payment to CDII, a consultant of the Company, in connection with the prepayments for professional fees. CDII is not under the common control of Mr. Wei Chen, the Company’s Chief Executive officer, and Mr. Hui Liu, the Company’s director. | |||||||
At September 30, 2013 and December 31, 2012, prepaid expense - related party consisted of the following; | |||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Prepayments made to CD International Enterprises, Inc. | $ 72,154 | $ 0 | |||||
$ 72,154 | $ 0 | ||||||
Prepaid expense - related party of $72,154 at September 30, 2013 reflects payments made to CD International Enterprises, Inc., which is the consultant of the Company, in connection with the prepayment for professional fees. | |||||||
Due to related parties | |||||||
On September 30, 2013 and December 31, 2012, due to related parties consisted of the following: | |||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Due to Xiangfen Chen (1) | $ 25,567 | $ 72,509 | |||||
Due to Bin Liu (2) | 182,627 | 194,949 | |||||
Due to Tianjin Sincere Logistics Co., Ltd. | 107,176 | 177,137 | |||||
Due to Shunbo International Freight Ltd. (3) | 37,563 | 2,671 | |||||
Due to Lianyunbu (4) | 149,298 | 145,982 | |||||
Due to Shang Jing (5) | 48,889 | 47,611 | |||||
Due to CD International Enterprises, Inc. | 0 | 410,078 | |||||
Total Due to related parties | $ 551,120 | $ 1,050,937 | |||||
(1) Xiangfen Chen is the general manager of Shandong Jiajia Xiamen branch. | |||||||
(2) Bin Liu is the general manager of Shandong Jiajia Tianjin branch. Mr. Liu is a 90% owner of Tianjin Sincere Logistics Co., Ltd. | |||||||
(3) Lianyungang Shunbo International Freight Ltd. is a company owned by Shunhua Jiang, the Spouse of Shouliu Tang, the general manager of Lianyungang branch. | |||||||
(4) Langyunbu is an entity affiliated with Hui Liu, who is a member of the Company’s Board of Directors and Chief Executive Officer of Shangdong Jiajia. | |||||||
(5) Shang Jing is the general manager of Shandong Jiajia Qingdao branch. | |||||||
Due to related parties of $551,120 at September 30, 2013 reflect advances from related parties. The advances are unsecured, non-interest bearing and repayable on demand. Shandong Jiajia used the proceeds for general working capital purpose. | |||||||
The amounts due to CD International Enterprises, Inc. as of December 31, 2012 was $410,078, which included $323,000 of working capital loans and $87,078 related to professional fees, primarily legal and accounting paid by CDII on the Company’s behalf. The proceeds from these promissory notes were used for working capital purposes. The notes accrued interest at 4% annually and were due at various dates in 2012. In 2013, CD International Enterprises, Inc. assigned these loans and related accrued and unpaid interest to third parties and these notes were exchanged for convertible notes pursuant to related securities purchase agreements (see note 11). | |||||||
Operating leases - related parties | |||||||
On December 31, 2011, Shandong Jiajia Xiamen branch entered into a lease for office space with Xiangfen Chen (the “Xiamen Office Lease". Pursuant to the Xiamen Office Lease, Xiamen branch leases approximately 95 square meter of office space from Mr. Chen in Xiamen City. Rent under the Xiamen Office Lease is RMB 900 (approximately $150) per month. The term of the Xiamen Office Lease is a year and expires on December 31, 2012. On December 31, 2012, Shandong Jiajia Xiamen branch renewed the Xiamen Office Lease. Rent under the renewed Xiamen Office Lease is RMB 900 (approximately $150) per month. The term of the renewed Xiamen Office Lease is a year and expires on December 31, 2013. For the nine months ended September 30, 2013 and 2012, rent expense related to the Xiamen Office Lease amounted $1,304 and $1,284, respectively. At September 30, 2013 and December 31, 2012, accrued rent for the Xiamen Office Lease amounted to $1,320 and $0, respectively, which were included in accrued expense - related parties on the accompanying consolidated balance sheets | |||||||
On May 31, 2011, the Company entered into a lease for office space with Mr. Wei Chen (the “Shanghai Office Lease”), its Chairman and CEO. Pursuant to the Shanghai Office Lease, the Company leases approximately 7,008 square feet of office space in Shanghai City. The office serves as the Company’s principal executive office. Rent under the Shanghai Office Lease is RMB 25,000 (approximately $4,000) per month. The Company also needs to pay a property management fee to an unrelated party of RMB 11,719 (approximately $1,900) per month in connection with the Shanghai Office Lease. The term of the Shanghai Office Lease is two years and expires on May 31, 2013. On May 31, 2013, the Company renewed the Shanghai Office Lease. Pursuant to the renewed Shanghai Office Lease, the monthly rent is RMB 25,000 (approximately $4,000). The Company also needs to pay a property management fee to an unrelated party of RMB 11,719 (approximately $1,900) per month in connection with the renewed Shanghai Office Lease. The term of the renewed Shanghai Office Lease is a year and expires on May 31, 2014. For the nine months ended September 30, 2013 and 2012, rent expense related to the Shanghai Office Lease amounted $36,213 and $35,666, respectively. At September 30, 2013 and December 31, 2012, accrued rent for the Xiamen Office Lease amounted to $20,370 and $0, respectively, which were included in accrued expense – related parties on the accompanying consolidated balance sheets. | |||||||
At September 30, 2013 and December 31, 2012, the total accrued rent for the above mentioned operating leases with related parties amounted to $21,690 and $0, respectively, which amount were included in accrued expense – related parties on the accompanying consolidated balance sheets. |
Note_10_Foreign_Operations
Note 10 - Foreign Operations | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Notes | ' | ||||||||||||
Note 10 - Foreign Operations | ' | ||||||||||||
NOTE 10 – FOREIGN OPERATIONS | |||||||||||||
The tables below present assets information by operating region at September 30, 2013 and December 31, 2012, respectively: | |||||||||||||
September 30, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
United States | $ 99,186 | $ 0 | |||||||||||
People's Republic of China | 4,467,739 | 4,172,007 | |||||||||||
Total | $ 4,566,925 | $ 4,172,007 | |||||||||||
The tables below present sales information by operating region for the three and nine months ended September 30, 2013 and 2012, respectively: | |||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
United States | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||
People's Republic of China | 3,192,631 | 6,349,846 | 10,082,430 | 17,917,318 | |||||||||
Total | $ 3,192,631 | $ 6,349,846 | $ 10,082,430 | $ 17,917,318 |
Note_11_Consulting_Agreement
Note 11 - Consulting Agreement | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 11 - Consulting Agreement | ' |
NOTE 11 - CONSULTING AGREEMENT | |
On July 18, 2013, the Company entered a consulting agreement with CDII, a related party (see note 9). Pursuant to the term of the agreement, the Company shall issue 18 million shares of Company’s common stock in total to CDII as the compensation for the consulting services that provided in the fiscal year of 2012 and 2013. In October 2013, the Company issued 9,000,000 shares of its common stock to CDII for fiscal 2012 consulting service. The shares were valued at the fair market value of $90,000 on the grant date. |
Note_12_Subsequent_Events
Note 12 - Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 12 - Subsequent Events | ' |
NOTE 12 - SUBSEQUENT EVENTS | |
In October 2013, the Company issued 4,016,261 shares of its common stock in connection with the conversion of convertible notes. | |
In October 2013, the Company issued 9,000,000 shares of its common stock to CDII for fiscal 2012 consulting service. The shares were valued at the fair market value of $90,000 on the grant date. | |
In October 2013, the Company issued 5,200,000 shares of its common stock to a consultant for its service from October 2013 through December 2014. The shares were valued at the fair market value of $49,400 on the grant date. | |
On October 21, 2013, the Company and GEL Properties, LLC (“GEL”) entered into a note purchase agreement, providing for the issuance of a 6% convertible note in the principal amounts of $30,000. In connection with the convertible note, the Company paid a fee of $4,500 and received net cash proceed of $25,500. The principal amount and accrued interest of note are due on October 21, 2014. GEL is entitled, at its option, at any time after the issuance of the note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of common stock equal to a price which is 60% of the lowest closing bid price of the last day of 5 trading days prior to conversion (including the day upon which a notice of conversion is received by the Company). In the event the Company experiences a DTC “Chill” on its shares while this note is eligible for conversion into common shares, the conversion price shall be decreased to 55% instead of 60% while that “Chill” is in effect. |
Note_2_basis_of_Presentation_a1
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Use of Estimates (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Use of Estimates | ' |
Use of estimates | |
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates in 2013 and 2012 include the allowance for doubtful accounts, the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, the value of stock-based compensation and the fair value of derivative liabilities. |
Note_2_basis_of_Presentation_a2
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 9 Months Ended | |
Sep. 30, 2013 | ||
Policies | ' | |
Fair Value of Financial Instruments | ' | |
Fair value of financial instruments | ||
The Company adopted the guidance of the Financial Accounting standards Boards (“FASB”) Accounting Standards Codification (“ASC”) Topic 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: | ||
Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. | ||
Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. | ||
Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. | ||
The carrying amounts reported in the condensed consolidated balance sheets for cash, note receivable, accounts receivable, other receivables, due from related party, advance to vendors and other current assets, convertible notes payable, accounts payable, advance from customers, due to related parties, accrued expense – related parties and accrued expense and other current liabilities approximate their fair market value based on the short-term maturity of these instruments. | ||
ASC Topic 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. | ||
The following table reflects changes for the nine months ended September 30, 2013 for all financial assets and liabilities categorized as Level 3 as of September 30, 2013. | ||
Liabilities: | ||
Balance of derivative liabilities as of January 1, 2013 | $ 0 | |
Initial fair value of derivative liabilities attributable to conversion features of convertible notes | 196,253 | |
Reclassification of additional paid-in capital upon conversion | (80,287) | |
Loss from change in the fair value of derivative liabilities | (60,642) | |
Balance of derivative liabilities as of September 30, 2013 | $ 55,324 |
Note_2_basis_of_Presentation_a3
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Concentration of Credit Risk (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Concentration of Credit Risk | ' |
Concentration of credit risk | |
The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. | |
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and accounts receivable and other receivables. The Company deposits its cash with high credit quality financial institutions in the United States and the PRC. At September 30, 2013, the Company had deposits of approximately $2.0 million in banks in the PRC. In the PRC, there is no equivalent federal deposit insurance as in the United States; as such these amounts held in banks in the PRC are not insured. The Company has not experienced any losses in such bank accounts through September 30, 2013. |
Note_2_basis_of_Presentation_a4
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Cash and Cash Equivalents | ' |
Cash and cash equivalents | |
For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The carrying value of these instruments approximates fair value. |
Note_2_basis_of_Presentation_a5
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Restricted Cash (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Restricted Cash | ' |
Restricted cash | |
Restricted cash consists of one-year term cash deposit held by a bank in China. |
Note_2_basis_of_Presentation_a6
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Accounts Receivable and Other Receivables (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Accounts Receivable and Other Receivables | ' |
Accounts receivable and other receivables | |
Accounts receivable and other receivables are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews accounts receivable and other receivables on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. At September 30, 2013, allowance for doubtful accounts on accounts receivable totaled $3,362,749 and the allowance for doubtful accounts on other receivables amounted to $428,150. At December 31, 2012, allowance for doubtful accounts on accounts receivable totaled $3,303,295 and the allowance for doubtful accounts on other receivables amounted to $196,427, respectively. |
Note_2_basis_of_Presentation_a7
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Advance To Vendors and Other Current Assets (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Advance To Vendors and Other Current Assets | ' |
Advance to vendors and other current assets | |
Advances to vendors and other current assets consist primarily of prepayments or deposits from us for contracted shipping arrangements that have not been utilized by our customers. These amounts are recognized as cost of revenues as shipments are completed and customers utilize the shipping arrangement. Advances to vendors and other current assets totaled $398,911 and $57,869 at September 30, 2013 and December 31, 2012, respectively. |
Note_2_basis_of_Presentation_a8
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Property and Equipment and Long-lived Assets (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Property and Equipment and Long-lived Assets | ' |
Property and equipment and long-lived assets | |
Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives. Leasehold improvements, if any, are amortized on a straight-line basis over the shorter of the lease period or the estimated useful life. The Company periodically evaluates the carrying value of long-lived assets to be held and used in the business, generally in conjunction with the annual business planning cycle, and when events and circumstances otherwise warrant. If the carrying value of a long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value for assets to be held and used. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risks involved. There was no impairment recognized during the nine month ended September 30, 2013 and 2012. |
Note_2_basis_of_Presentation_a9
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Advances From Customers (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Advances From Customers | ' |
Advances from customers | |
Advances from customers consist of prepayments to us for contracted cargo that has not yet been shipped to the recipient and for other advance deposits. These amounts are recognized as revenue when all of the revenue recognition criteria have been met. Advances from customers totaled $960,101 and $302,042, at September 30, 2013 and December 31, 2012, respectively. |
Recovered_Sheet1
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Revenue Recognition (Policies) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Policies | ' | |||
Revenue Recognition | ' | |||
Revenue recognition | ||||
The Company provides freight forwarding services to our customers. Our business model involves placing our customers’ freight on prearranged contracted transport. Our revenue recognition policy is in accordance with the guidance of ASC 605, “Revenue Recognition.” In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The Company provides transportation services, generally under contract, by third parties with whom the Company has contracted these services. | ||||
Typically, the Company recognizes revenue in connection with our freight forwarding service when the payment terms are as follows: | ||||
- | When merchandise departs the shipper's location if the trade pricing terms are CIF (cost, insurance and freight), | |||
- | When merchandise departs the shipper’s location if the trade pricing terms are CFR (cost and freight cost); or | |||
- | When merchandise arrives at the destination port if the trade pricing terms are FOB (free on board) destination. | |||
The Company recognizes direct shipping costs concurrently with the recognition of the related revenue for each shipment. These costs are generally isolated by billings as the Company does not own the shipping containers or transportation vessels. |
Recovered_Sheet2
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Stock Based Compensation (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Stock Based Compensation | ' |
Stock based compensation | |
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC Topic 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The FASB ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. | |
Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company records compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated, based on the then current fair value, at each subsequent reporting date. |
Recovered_Sheet3
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Derivative Liabilities (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Derivative Liabilities | ' |
Derivative liabilities | |
ASC Subtopic 815-40, “Contracts in Entity’s Own Equity,” requires that entities recognize as derivative liabilities the derivative instruments, including certain derivative instruments embedded in other contracts that are not indexed to an entity’s own stock. Pursuant to the provisions of ASC Section 815-40-15, an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The adoption of ASC Subtopic 815-40 has affected the accounting for (i) certain freestanding warrants that contain exercise price adjustment features and (ii) convertible bonds issued by foreign subsidiaries with a strike price denominated in a foreign currency. In the case of any such warrants and convertible bonds, ASC Subtopic 815-40 provides that such warrants and bonds are to be treated as a liability at fair value with changes in fair value recognized in earnings. |
Recovered_Sheet4
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Basic and Diluted Earnings Per Share (Policies) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Policies | ' | ||||||||||||
Basic and Diluted Earnings Per Share | ' | ||||||||||||
Basic and diluted earnings per share | |||||||||||||
Pursuant to ASC 260-10-45, basic income (loss) per common share is computed by dividing income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted income (loss) per share reflects the potential dilution that could occur if securities were exercised or converted into common stock or other contracts to issue common stock resulting in the issuance of common stock that would then share in our income subject to anti-dilution limitations. Potentially dilutive common shares consist of common stock issuable for stock warrants, and shares issuable upon conversion of Series B convertible preferred stock. In period where the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact.. The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2013 and 2012: | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
Numerator: | 2013 | 2012 | 2013 | 2012 | |||||||||
Net (loss) income applicable to China Logistics Group, Inc. shareholders | $ (135,432) | $ (110,290) | $ (441,591) | $ 229,291 | |||||||||
Denominator: | |||||||||||||
Denominator for basic earnings per share: | |||||||||||||
Weighted average shares outstanding | 101,658,431 | 41,508,203 | 73,479,756 | 41,508,203 | |||||||||
Series B convertible preferred stock | 0 | 0 | 0 | 4,500,000 | |||||||||
Denominator for diluted earnings per share: | |||||||||||||
Diluted weighted average shares outstanding | 101,658,431 | 41,508,203 | 73,479,756 | 46,008,203 | |||||||||
(Loss) earnings per common share - basic | $ (0.00) | $ (0.00) | $ (0.01) | $ 0.01 | |||||||||
(Loss) earnings per common share - diluted | $ (0.00) | $ (0.00) | $ (0.01) | $ 0.00 | |||||||||
The Company's aggregate common stock equivalents at September 30, 2013 and 2012 included the following: | |||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | ||||||||||||
Warrants | 0 | 31,558,500 | |||||||||||
Series B convertible preferred stock | 0 | 4,500,000 | |||||||||||
Total | 0 | 36,058,500 |
Recovered_Sheet5
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Foreign Currency Translation (Policies) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Policies | ' | |||||||||
Foreign Currency Translation | ' | |||||||||
Foreign currency translation | ||||||||||
The accompanying unaudited condensed consolidated financial statements are presented in United States dollars. The functional currency of Shandong Jiajia is the RMB, the official currency of the PRC. In accordance with ASC 830-20-35, assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial statements. Gains and losses resulting from the translation of local currency financial statements into U.S. dollars are reflected in other comprehensive income in the consolidated statements of operations and comprehensive income (loss). | ||||||||||
RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place through PRC authorized institutions. Translation of amounts from RMB into United States dollars (“$”) has been made at the following exchange rates for the respective periods: | ||||||||||
September 30, | September 30, | December 31, | ||||||||
2013 | 2012 | 2012 | ||||||||
Period end RMB: U.S. dollar exchange rate | 6.1364 | 6.3190 | 6.3011 | |||||||
Average fiscal-year-to-date RMB: U.S. dollar exchange rate | 6.2132 | 6.3085 | ||||||||
Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. | ||||||||||
Cash flows from the Company's operations are calculated based upon the local currencies using the average translation rate. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. |
Recovered_Sheet6
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Income Taxes (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Income Taxes | ' |
Income taxes | |
We account for income taxes in accordance with ASC 740, “Income Taxes.” ASC 740 requires the recognition of deferred tax assets and liabilities to reflect the future tax consequences of events that have been recognized in our financial statements or tax returns. Measurement of the deferred items is based on enacted tax laws. In the event the future consequences of differences between the financial reporting and tax basis of our assets and liabilities result in a deferred tax asset, ASC 740 requires an evaluation of the probability that the Company will generate sufficient taxable income to be able to realize the future benefits indicated by the deferred tax assets. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some or the entire deferred tax asset will not be realized. |
Recovered_Sheet7
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Comprehensive Income (loss) (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Comprehensive Income (loss) | ' |
Comprehensive income (loss) | |
We follow ASC 220, “Comprehensive Income” to recognize the elements of comprehensive income (loss). Comprehensive income (loss) is comprised of net income (loss) and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. Our comprehensive income (loss) for the three and nine months ended September 30, 2013 and 2012 included net income (loss) and foreign currency translation adjustments. |
Recovered_Sheet8
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Non-controlling Interest (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Non-controlling Interest | ' |
Non-controlling interest | |
Non-controlling interests in our subsidiaries are recorded as a component of our equity, separate from the parent’s equity. Purchase or sale of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations attributable to the non-controlling interest are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings. |
Recovered_Sheet9
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Related Parties (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Related Parties | ' |
Related parties | |
Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions are recorded at fair value of the goods or services exchanged. |
Recovered_Sheet10
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Reclassification (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Reclassification | ' |
Reclassification | |
Certain reclassifications have been made in prior year same period’s financial statements to conform to the current period’s financial presentation. |
Recovered_Sheet11
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Recent Accounting Pronouncements | ' |
Recent accounting pronouncements | |
In March 2013, the FASB issued ASU 2013-05 “Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” ASU 2013-05 addresses the accounting for the cumulative translation adjustment when a parent either sells part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. For public entities, the ASU is effective prospectively for fiscal years, and interim periods, within those years, beginning after December 15, 2013. Early adoption is permitted. The adoption of ASU 2013-05 is not expected to have a material impact on the Company’s consolidated financial statements. | |
In July 2013, the FASB issued ASU 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." ASU 2013-11 provides guidance on the presentation of unrecognized tax benefits related to any disallowed portion of net operating loss carryforwards, similar tax losses, or tax credit carryforwards, if they exist. ASU 2013-11 is effective for fiscal years beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on the Company’s consolidated financial statements. | |
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Recovered_Sheet12
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Fair Value of Financial Instruments: Changes in level 3 financial assets and liabilities table (Tables) | 9 Months Ended | |
Sep. 30, 2013 | ||
Tables/Schedules | ' | |
Changes in level 3 financial assets and liabilities table | ' | |
Liabilities: | ||
Balance of derivative liabilities as of January 1, 2013 | $ 0 | |
Initial fair value of derivative liabilities attributable to conversion features of convertible notes | 196,253 | |
Reclassification of additional paid-in capital upon conversion | (80,287) | |
Loss from change in the fair value of derivative liabilities | (60,642) | |
Balance of derivative liabilities as of September 30, 2013 | $ 55,324 |
Recovered_Sheet13
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Basic and Diluted Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Tables/Schedules | ' | ||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | ||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
Numerator: | 2013 | 2012 | 2013 | 2012 | |||||||||
Net (loss) income applicable to China Logistics Group, Inc. shareholders | $ (135,432) | $ (110,290) | $ (441,591) | $ 229,291 | |||||||||
Denominator: | |||||||||||||
Denominator for basic earnings per share: | |||||||||||||
Weighted average shares outstanding | 101,658,431 | 41,508,203 | 73,479,756 | 41,508,203 | |||||||||
Series B convertible preferred stock | 0 | 0 | 0 | 4,500,000 | |||||||||
Denominator for diluted earnings per share: | |||||||||||||
Diluted weighted average shares outstanding | 101,658,431 | 41,508,203 | 73,479,756 | 46,008,203 | |||||||||
(Loss) earnings per common share - basic | $ (0.00) | $ (0.00) | $ (0.01) | $ 0.01 | |||||||||
(Loss) earnings per common share - diluted | $ (0.00) | $ (0.00) | $ (0.01) | $ 0.00 |
Recovered_Sheet14
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Basic and Diluted Earnings Per Share: Common stock equivalents table (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Tables/Schedules | ' | ||||||
Common stock equivalents table | ' | ||||||
September 30, | September 30, | ||||||
2013 | 2012 | ||||||
Warrants | 0 | 31,558,500 | |||||
Series B convertible preferred stock | 0 | 4,500,000 | |||||
Total | 0 | 36,058,500 |
Recovered_Sheet15
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Foreign Currency Translation: Foreign exchange rates table (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Tables/Schedules | ' | |||||||||
Foreign exchange rates table | ' | |||||||||
September 30, | September 30, | December 31, | ||||||||
2013 | 2012 | 2012 | ||||||||
Period end RMB: U.S. dollar exchange rate | 6.1364 | 6.3190 | 6.3011 | |||||||
Average fiscal-year-to-date RMB: U.S. dollar exchange rate | 6.2132 | 6.3085 |
Note_3_Accounts_Receivable_Sch
Note 3 - Accounts Receivable: Schedule of Accounts and Notes Receivable (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Tables/Schedules | ' | ||||||
Schedule of Accounts and Notes Receivable | ' | ||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Accounts receivable | $ 4,838,255 | $ 4,581,036 | |||||
Less: allowance for doubtful accounts | (3,362,749) | (3,303,295) | |||||
Accounts receivable, net | $ 1,475,506 | $ 1,277,741 |
Note_4_Other_Receivables_Other
Note 4 - Other Receivables: Other receivables table (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Tables/Schedules | ' | ||||||
Other receivables table | ' | ||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Advances receivable | $ 693,499 | $ 467,207 | |||||
Deferred expenses | 20,650 | 58,383 | |||||
Other | 57,036 | 19,930 | |||||
771,185 | 545,520 | ||||||
Less: allowance for doubtful accounts | (428,150) | (196,427) | |||||
Other Receivables, net | $ 343,035 | $ 349,093 |
Note_5_Property_and_Equipment_
Note 5 - Property and Equipment: Property and equipment table (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Tables/Schedules | ' | ||||||
Property and equipment table | ' | ||||||
(Useful lives) | September 30, | December 31, | |||||
2013 | 2012 | ||||||
Vehicle(5 years) | $ 120,210 | $ 47,976 | |||||
Furniture and office equipment(4 - 5 years) | 169,837 | 153,089 | |||||
290,047 | 201,065 | ||||||
Less: accumulated depreciation | (140,211) | (136,203) | |||||
Property and equipment, net | $ 149,836 | $ 64,862 |
Note_6_Accrued_Expenses_and_Ot1
Note 6 - Accrued Expenses and Other Current Liabilities: Accruals and other current liabilities table (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Tables/Schedules | ' | ||||||
Accruals and other current liabilities table | ' | ||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Advances payables | $ 388,031 | $ 273,994 | |||||
Accrued expenses | 73,113 | 97,276 | |||||
Accrued salaries and employees' benefits | 45,809 | 51,971 | |||||
Taxes payable | 7,265 | 357 | |||||
Accrued expenses and other current liabilities | $ 514,218 | $ 423,598 |
Note_7_Convertible_Notes_Payab1
Note 7 - Convertible Notes Payable: Schedule of Derivative Liabilities at Fair Value (Tables) | 9 Months Ended | ||
Sep. 30, 2013 | |||
Tables/Schedules | ' | ||
Schedule of Derivative Liabilities at Fair Value | ' | ||
Dividend rate | 0 | ||
Term (in years) | 0.04 to 1 year | ||
Volatility | 318% to 389% | ||
Risk-free interest rate | 0.01% to 0.14% |
Note_7_Convertible_Notes_Payab2
Note 7 - Convertible Notes Payable: Convertible promissory notes table (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Tables/Schedules | ' | ||||||
Convertible promissory notes table | ' | ||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Principal amount | $ 140,076 | $ 0 | |||||
Put premium | 53,887 | 0 | |||||
193,963 | 0 | ||||||
Less: unamortized debt discount | (79,387) | 0 | |||||
Convertible note payable, net | $ 114,576 | $ 0 |
Note_8_Stockholders_Equity_War
Note 8 - Stockholders' Equity: Warrant activities table (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Tables/Schedules | ' | |||||||||
Warrant activities table | ' | |||||||||
Number of warrants | Weighted Average | Weighted Average | ||||||||
Exercise Price | Remaining Contractual | |||||||||
Life (Years) | ||||||||||
Outstanding at December 31, 2012 | 31,558,500 | $ 0.20 | 0.33 | |||||||
Granted | 0 | 0 | 0 | |||||||
Exercised | 0 | 0 | 0 | |||||||
Expired | (31,558,500) | (0.20) | 0 | |||||||
Outstanding at September 30, 2013 | 0 | $ 0 | 0 |
Note_9_related_Party_Transacti1
Note 9 -related Party Transactions: Due from related parties table (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Tables/Schedules | ' | ||||||
Due from related parties table | ' | ||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Prepayments made to CD International Enterprises, Inc. | $ 72,154 | $ 0 | |||||
$ 72,154 | $ 0 |
Note_9_related_Party_Transacti2
Note 9 -related Party Transactions: Due to related parties table (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Tables/Schedules | ' | ||||||
Due to related parties table | ' | ||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Due to Xiangfen Chen (1) | $ 25,567 | $ 72,509 | |||||
Due to Bin Liu (2) | 182,627 | 194,949 | |||||
Due to Tianjin Sincere Logistics Co., Ltd. | 107,176 | 177,137 | |||||
Due to Shunbo International Freight Ltd. (3) | 37,563 | 2,671 | |||||
Due to Lianyunbu (4) | 149,298 | 145,982 | |||||
Due to Shang Jing (5) | 48,889 | 47,611 | |||||
Due to CD International Enterprises, Inc. | 0 | 410,078 | |||||
Total Due to related parties | $ 551,120 | $ 1,050,937 |
Note_10_Foreign_Operations_Ass
Note 10 - Foreign Operations: Assets by operating region table (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Tables/Schedules | ' | ||||||
Assets by operating region table | ' | ||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
United States | $ 99,186 | $ 0 | |||||
People's Republic of China | 4,467,739 | 4,172,007 | |||||
Total | $ 4,566,925 | $ 4,172,007 |
Note_10_Foreign_Operations_Sal
Note 10 - Foreign Operations: Sales by operating region table (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Tables/Schedules | ' | ||||||||||||
Sales by operating region table | ' | ||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
United States | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||
People's Republic of China | 3,192,631 | 6,349,846 | 10,082,430 | 17,917,318 | |||||||||
Total | $ 3,192,631 | $ 6,349,846 | $ 10,082,430 | $ 17,917,318 |
Recovered_Sheet16
Note 2 -basis of Presentation and Summary of Significant Accounting Policies (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Details | ' | ' |
Approximate accumulated deficit | $20,688,873 | ' |
Cash used in operating activities | 374,320 | ' |
Approximate Net Loss | 446,557 | ' |
Approximate Net lncome | ' | $490,533 |
Recovered_Sheet17
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Fair Value of Financial Instruments: Changes in level 3 financial assets and liabilities table (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Balance of derivative liabilities | $55,324 | $0 |
Initial fair value of derivative liabilities | 196,253 | ' |
Reclassification of additional paid-in capital upon conversion | -80,287 | ' |
Loss from change in the fair value of derivative liabilities | ($60,642) | ' |
Recovered_Sheet18
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Concentration of Credit Risk (Details) (USD $) | Sep. 30, 2013 |
In Millions, unless otherwise specified | |
Details | ' |
Deposits in PRC Banks | $2 |
Recovered_Sheet19
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Accounts Receivable and Other Receivables (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Allowance for Doubtful Accounts Receivable, Current | $3,362,749 | $3,303,295 |
Allowance for doubtful accounts on other receivable | $428,150 | $196,427 |
Recovered_Sheet20
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Advance To Vendors and Other Current Assets (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Other Prepaid Expense, Current | $398,911 | $57,869 |
Recovered_Sheet21
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Advances From Customers (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Advances from customers | $960,101 | $302,042 |
Recovered_Sheet22
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Basic and Diluted Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Details | ' | ' | ' | ' |
Net Income applicable to common stockholders | ($135,432) | ($110,290) | ($441,591) | $229,291 |
Basic weighted average shares outstanding | 101,658,431 | 41,508,203 | 73,479,756 | 41,508,203 |
Series B convertible preferred stock | 0 | 0 | 0 | 4,500,000 |
Diluted weighted average shares outstanding | 101,658,431 | 41,508,203 | 73,479,756 | 46,008,203 |
Earnings Loss Per Common Share Basic | $0 | $0 | ($0.01) | $0.01 |
Earnings Loss Per Common Share Diluted | $0 | $0 | ($0.01) | $0 |
Recovered_Sheet23
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Basic and Diluted Earnings Per Share: Common stock equivalents table (Details) | Sep. 30, 2013 | Sep. 30, 2012 |
Details | ' | ' |
Warrants Outstanding | 0 | 31,558,500 |
Series B convertible preferred stock outstanding | 0 | 4,500,000 |
Total potential dilutive shares outstanding | 0 | 36,058,500 |
Recovered_Sheet24
Note 2 -basis of Presentation and Summary of Significant Accounting Policies: Foreign Currency Translation: Foreign exchange rates table (Details) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
Details | ' | ' | ' |
Period end RMB: U.S. dollar exchange rate | 6.1364 | 6.3011 | 6.319 |
Average fiscal-year-to-date RMB: U.S. dollar exchange rate | 6.2132 | ' | 6.3085 |
Note_3_Accounts_Receivable_Sch1
Note 3 - Accounts Receivable: Schedule of Accounts and Notes Receivable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Accounts Receivable, Gross | $4,838,255 | $4,581,036 |
Allowance for Doubtful Accounts Receivable | -3,362,749 | -3,303,295 |
Accounts Receivable, Net, Current | $1,475,506 | $1,277,741 |
Note_4_Other_Receivables_Other1
Note 4 - Other Receivables: Other receivables table (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Advances receivable | $693,499 | $467,207 |
Deferred expenses | 20,650 | 58,383 |
Other Assets, Miscellaneous | 57,036 | 19,930 |
Allowance for Doubtful Accounts, Premiums and Other Receivables | -428,150 | -196,427 |
Other Receivables | $343,035 | $349,093 |
Note_5_Property_and_Equipment_1
Note 5 - Property and Equipment: Property and equipment table (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Automobile | $120,210 | $47,976 |
Furniture and Fixtures, Gross | 169,837 | 153,089 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | -140,211 | -136,203 |
Property and equipment, net | $149,836 | $64,862 |
Note_6_Accrued_Expenses_and_Ot2
Note 6 - Accrued Expenses and Other Current Liabilities: Accruals and other current liabilities table (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Accounts Payable, Other, Current | $388,031 | $273,994 |
Accrued expenses | 73,113 | 97,276 |
Accrued Salaries | 45,809 | 51,971 |
Taxes Payable | 7,265 | 357 |
Accrued Liabilities, Current | $514,218 | $423,598 |
Note_7_Convertible_Notes_Payab3
Note 7 - Convertible Notes Payable (Details) (USD $) | Aug. 27, 2013 | Aug. 08, 2013 | Jun. 12, 2013 | 29-May-13 | 24-May-13 | Apr. 18, 2013 | Apr. 08, 2013 | Feb. 06, 2013 | Feb. 05, 2013 |
Details | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible Promissory Note with Hanover Holding | ' | ' | ' | ' | ' | ' | ' | ' | $27,000 |
Loans and interest assigned from CDII to Magna Group | ' | ' | ' | ' | ' | ' | ' | 50,952 | ' |
Convertible Promissory Note with LG Capital Funding LLC | ' | 51,500 | ' | ' | ' | ' | ' | ' | ' |
Convertible note issued | 25,000 | ' | 33,000 | 118,030 | 21,906 | 77,700 | 82,143 | ' | ' |
Convertible note issued Iconic | ' | ' | $52,976 | ' | ' | ' | ' | ' | ' |
Note_7_Convertible_Notes_Payab4
Note 7 - Convertible Notes Payable: Convertible promissory notes table (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Principal amount of Convertible Notes | $140,076 | $0 |
Put premium of Convertible Notes | 53,887 | 0 |
unamortized debt discount of Convertible Notes | -79,387 | 0 |
Convertible notes payable, net | $114,576 | $0 |
Note_8_Stockholders_Equity_Det
Note 8 - Stockholders' Equity (Details) | 9 Months Ended |
Sep. 30, 2013 | |
Details | ' |
Shares issued related to Conversion of the certain other convertible notes | 52,383,252 |
Note_8_Stockholders_Equity_War1
Note 8 - Stockholders' Equity: Warrant activities table (Details) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' | ' |
Number of Shares Underlying Warrants | ' | $0 | $31,558,500 |
Weighted Average exercise Price | ' | $0 | $0.20 |
Weighted Average Contractual Term | ' | 0 | 0.33 |
Number of Shares UnderlyingWarrants Expired | -31,558,500 | ' | ' |
Weighted Average Price of Shares UnderlyingWarrants Expired | -0.2 | ' | ' |
Note_9_related_Party_Transacti3
Note 9 -related Party Transactions: Due from related parties table (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Prepayment made to CD International Enterprises, Inc. | $72,154 | $0 |
Note_9_related_Party_Transacti4
Note 9 -related Party Transactions: Due to related parties table (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Due to Xiangfen Chen | $25,567 | $72,509 |
Due to Bin Liu | 182,627 | 194,949 |
Due to Tianjin Sincere Logistics Co., Ltd. | 107,176 | 177,137 |
Due to Shunbo International Freight Ltd. | 37,563 | 2,671 |
Due to Lianyunbu | 149,298 | 145,982 |
Due to Shang Jing | 48,889 | 47,611 |
Due to CD International Enterprises, Inc. | 0 | 410,078 |
Due to related parties | $551,120 | $1,050,937 |
Note_9_related_Party_Transacti5
Note 9 -related Party Transactions (Details) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Details | ' | ' | ' |
Rent expense to related parties | $1,304 | $1,284 | ' |
Accrued rent to related parties | $1,320 | ' | $0 |
Note_10_Foreign_Operations_Ass1
Note 10 - Foreign Operations: Assets by operating region table (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Assets - US | $99,186 | $0 |
Assets - PRC | 4,467,739 | 4,172,007 |
Assets - Total | $4,566,925 | $4,172,007 |
Note_10_Foreign_Operations_Sal1
Note 10 - Foreign Operations: Sales by operating region table (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Details | ' | ' | ' | ' |
Sales Revenue - US | $0 | $0 | $0 | $0 |
Sales Revenue - PRC | 3,192,631 | 6,349,846 | 10,082,430 | 17,917,318 |
Sales Revenue - Total | $3,192,631 | $6,349,846 | $10,082,430 | $17,917,318 |