Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Dec. 22, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | KIWA BIO-TECH PRODUCTS GROUP CORP | |
Entity Central Index Key | 1,159,275 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 12,557,870 | |
Trading Symbol | KWBT | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 23,275 | $ 13,469 |
Accounts receivable, net | 15,245,255 | 1,122,754 |
Prepaid expenses | 1,214,261 | 1,417,554 |
Rent deposit and other receivable | 127,419 | 38,897 |
Advance to suppliers | 2,979,664 | 1,880,044 |
Due from related party- non-trade | 963,846 | |
Inventory | 10,826 | |
Deferred cost of goods sold | 10,274,930 | |
Total current assets | 30,839,476 | 4,472,718 |
OTHER ASSETS | ||
Property, plant and equipment, net | 84,453 | 55,319 |
Rent deposit – non-current | 38,003 | 34,519 |
Due from related party- non-trade | 1,522,434 | |
Deposit for Long-Term investment | 751,050 | |
Deferred tax asset | 246,872 | |
Total non-current assets | 1,120,378 | 1,612,272 |
Total assets | 31,959,854 | 6,084,990 |
Current liabilities | ||
Accounts payable | 8,869,452 | 1,073,094 |
Advances from customers | 32,686 | |
Due to related parties | 130,199 | 261,259 |
Convertible notes payable, net of discount of $13,466 at September 30, 2017 | 286,992 | 150,250 |
Derivative liabilities | 370,733 | |
Notes payable | 360,000 | 360,000 |
Salary payable | 1,315,413 | 1,154,921 |
Taxes payable | 414,970 | |
Interest payable | 1,733,544 | 1,524,988 |
Other payables and accruals | 1,640,889 | 924,875 |
Deferred revenue | 14,996,057 | |
Current liabilities of discontinued operation | 4,464,685 | |
Total current liabilities | 29,735,965 | 10,329,042 |
Convertible note payable – non-current, net of discount of $ 455,827 at September 30, 2017 | 370,321 | |
Total Liabilities | 30,106,286 | 10,329,042 |
Shareholder’s equity (deficiency) | ||
Preferred stock - $0.001 par value, Authorized 20,000,000 shares. Issued and outstanding 500,000 and 500,000 shares at September 30, 2017 and December 31, 2016, respectively. | 500 | 500 |
Common stock - $0.001 per value. Authorized 100,000,000 shares. Issued and outstanding 11,167,719 and 8,728,981 shares at September 30, 2017 and December 31, 2016, respectively | 11,168 | 8,729 |
Additional paid-in capital | 18,733,056 | 15,234,878 |
Statutory Reserve | 127,473 | 127,473 |
Accumulated deficit | (17,072,416) | (19,561,255) |
Accumulated other comprehensive gain (loss) | 53,787 | (54,377) |
Total shareholders’ equity (deficiency) | 1,853,568 | (4,244,052) |
Total liabilities and shareholder’s equity | $ 31,959,854 | $ 6,084,990 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Convertible notes payable, net of discount, current | $ 13,466 | |
Convertible notes payable, net of discount, non-current | $ 455,827 | |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred Stock, shares issued | 500,000 | 500,000 |
Preferred Stock, shares outstanding | 500,000 | 500,000 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 11,167,719 | 8,728,981 |
Common Stock, shares outstanding | 11,167,719 | 8,728,981 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenue | $ 31,025 | $ 1,185,309 | $ 30,411 | $ 1,185,310 |
Cost of goods sold | (19,697) | (770,451) | (19,308) | (770,451) |
Gross Profit | 11,328 | 414,858 | 11,103 | 414,859 |
Operating expenses | ||||
Research and development expenses | 37,469 | 37,303 | 110,194 | 112,580 |
Selling expenses | 147,782 | 236,252 | ||
General and administrative expenses | 1,068,446 | 181,333 | 2,073,035 | 375,915 |
Total operating expenses | 1,253,697 | 218,636 | 2,419,481 | 488,495 |
Operating Income (Loss) | (1,242,369) | 196,222 | (2,408,378) | (73,636) |
Other income/(expense), net | ||||
Trademark license income-related party | 76,235 | 786,329 | ||
Change in fair value of derivative liabilities | 205,612 | 199,051 | ||
Interest expense | (168,573) | (47,745) | (356,256) | (142,296) |
Other income | 372,711 | 373,512 | ||
Foreign exchange loss | (18,257) | (35,342) | ||
Total other income/(expense), net | 391,493 | 28,490 | 180,965 | 644,033 |
Income (loss) from continuing operations before income taxes | (850,876) | 224,712 | (2,227,413) | 570,397 |
Provision (benefit) for income taxes | ||||
Current | 78,945 | 78,945 | ||
Deferred | (123,068) | (220,860) | ||
Total provision (benefit) for income taxes | (123,068) | 78,945 | (220,860) | 78,945 |
Income (loss) from continuing operations | (727,808) | 145,767 | (2,006,553) | 491,452 |
Discontinued operations: | ||||
Loss from discontinued operations, net of taxes | (52,166) | (16,790) | (159,745) | |
Gain on disposal of discontinued operations, net of taxes | 4,512,182 | |||
Income (loss) from discontinued operations, net of taxes | (52,166) | 4,495,392 | (159,745) | |
Net Income (loss) | (727,808) | 93,601 | 2,488,839 | 331,707 |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustment | 39,845 | 9,765 | 108,164 | 103,870 |
Total comprehensive income (loss) | $ (687,963) | $ 103,366 | $ 2,597,003 | $ 435,577 |
Earnings per share – Basis: | ||||
Income (loss) from continuing operations | $ (0.07) | $ 0.03 | $ (0.20) | $ 0.12 |
Discontinued operations | (0.01) | 0.46 | (0.04) | |
Net Income (loss) | (0.07) | 0.02 | 0.26 | 0.08 |
Earnings per share – Diluted: | ||||
Income (loss) from continuing operations | (0.07) | 0.03 | (0.15) | 0.06 |
Discontinued operations | (0.01) | 0.38 | (0.02) | |
Net Income (loss) | $ (0.07) | $ 0.02 | $ 0.23 | $ 0.04 |
Weighted average number of common shares outstanding - basic | 10,640,453 | 5,447,326 | 9,846,791 | 4,133,119 |
Weighted average number of common shares outstanding - diluted | 11,581,789 | 6,442,528 | 11,891,678 | 9,555,574 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from continuing operating activities: | ||
Net income | $ 2,488,839 | $ 331,707 |
(Income) loss from discontinued operations, net of taxes | (4,495,392) | 159,745 |
Net Income (loss) from continuing operations | (2,006,553) | 491,452 |
Adjustments to reconcile net income to net cash used in continuing operating activities: | ||
Bad debt | 237,998 | |
Depreciation | 29,527 | 13,039 |
Accrued interest | 356,256 | 142,296 |
Stock compensation for consulting fee | 474,301 | 57,717 |
Gain on derivative liabilities | (199,051) | |
Deferred income tax | (241,452) | |
Changes in continuing operating assets and liabilities: | ||
Accounts receivable | (14,002,636) | (1,240,550) |
Prepaid expenses | 47,169 | (7,500) |
Rent deposit and other receivable | (86,938) | (37,809) |
Advance to suppliers | (1,071,968) | (1,700,605) |
Due from related party – non-trade | 611,155 | |
Inventory | (10,588) | |
Deferred cost of goods sold | (10,049,349) | |
Accounts payable | 7,579,497 | 794,868 |
Advance from customers | 31,968 | |
Due to related parties | 110,690 | 150,411 |
Salary payable | 157,968 | 93,993 |
Taxes payable | (409,408) | 78,945 |
Other payables and accruals | 407,319 | 425,985 |
Deferred revenue | 14,666,825 | |
Net cash used in continuing operating activities | (3,367,270) | (737,758) |
Net cash used by discontinued operations | ||
Net cash used in operating activities | (3,367,270) | (737,758) |
Cash flows from investing activities: | ||
Payment of deposit for Long-Term investment | (734,561) | |
Purchase of property, plant and equipment | (58,427) | (79,604) |
Net cash used in investing activities | (792,988) | (79,604) |
Cash flows from financing activities: | ||
Working capital borrowed from related parties, net of payments to related parties | 30,346 | 51,500 |
Proceeds from sale of common stock | 3,221,127 | 766,281 |
Proceeds from convertible notes | 976,356 | |
Net cash provided by financing activities | 4,227,829 | 817,781 |
Effect of exchange rate change | (57,765) | (595) |
Cash and cash equivalents: | ||
Net increase | 9,806 | (176) |
Balance at beginning of period | 13,469 | 721 |
Balance at end of period | 23,275 | 545 |
Non-cash financing activities: | ||
Issuance of common stock for debt settlements | 3,191,974 | |
Issuance of common stock for consulting services | 234,396 | |
Issuance of common stock for financing services | 1,022,156 | |
Supplemental Disclosures of Cash flow Information: | ||
Cash paid for interest | ||
Cash paid for income taxes | $ 457,564 |
Description of Business and Org
Description of Business and Organization | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Organization | 1. Description of Business and Organization Organization Kiwa Bio-Tech Products Group Corporation (“the Company”) is the result of a share exchange transaction accomplished on March 12, 2004 between the shareholders of Kiwa Bio-Tech Products Group Ltd. (“Kiwa BVI”), a company originally organized under the laws of the British Virgin Islands on June 5, 2002 and Tintic Gold Mining Company (“Tintic”), a corporation originally incorporated in the state of Utah on June 14, 1933 to perform mining operations in Utah. The share exchange resulted in a change of control of Tintic, with former Kiwa BVI stockholders owning approximately 89% of Tintic on a fully diluted basis and Kiwa BVI surviving as a wholly-owned subsidiary of Tintic. Subsequent to the share exchange transaction, Tintic changed its name to Kiwa Bio-Tech Products Group Corporation. On July 21, 2004, the Company completed its reincorporation in the State of Delaware. On March 8, 2017, we completed our reincorporation in the State of Nevada. The Company operates through a series of subsidiaries in the Peoples Republic of China as detailed in the following Organizational Chart. The Company had previously operated its business through its subsidiaries Kiwa Bio-Tech Products (Shandong) Co., Ltd. (“Kiwa Shandong”) and Tianjin Kiwa Feed Co., Ltd. (“Kiwa Tianjin”). Kiwa Tianjin has been dissolved since July, 11, 2012. On February 11, 2017, the Company entered an Equity Transfer Agreement with Dian Shi Cheng Jing (Beijing) Technology Co. (“Transferee”) to transfer all of shareholders’ right, title and interest in Kiwa Shandong to the Transferee for RMB1.00. On April 12, 2017, the government processing of transfer has been completed. Currently, the Company mainly operates its business through its subsidiaries Kiwa Baiao Bio-Tech (Beijing) Co., Ltd. (“Kiwa Beijing”), Kiwa Bio-Tech Products (Shenzhen) Co., Ltd. (“Kiwa Shenzhen”), which was incorporated in China in November 2016 and Kiwa Bio-Tech Products (Hebei) Co., Ltd. (“Kiwa Hebei”), which was incorporated in China in December 2016. Kiwa Beijing was acquired from a group of unrelated third parties in January 2016 together with its holding company HK Baina Group Holding Company for approximately $34,000 (RMB 220,000) and renamed to Kiwa Baiao Bio-Tech (Beijing) Co., Ltd. from Oriental Baina Co., Ltd. in February 2016. HK Baina Group Holding Company and Oriental Baina Co., Ltd. have no operations prior to the acquisition and the purchase price was initially recorded as goodwill and fully impaired at the year end of 2016. In July 2017, the Company established Kiwa Bio-Tech Asia Holding (Shenzhen) Ltd. (“Kiwa Asia”) to be the direct holding company of Kiwa Beijing, Kiwa Shenzhen and Kiwa Hebei. The Company established Inner Mongolia Jing Nong Investment & Management, Ltd. (“Kiwa Jing Nong”) in August 2017. Business The Company develops, manufactures, distributes and markets innovative, cost-effective and environmentally safe bio-technological products for agricultural use. Our products are designed to enhance the quality of human life by increasing the value, quality and productivity of crops and decreasing the negative environmental impact of chemicals and other wastes. Prior to August 2016, the Company did not have any license to sell its bio-technological fertilizer products in China and could not generate direct sales on its own. Instead the Company had been licensing its trademark to Kangtan Gerui (Beijing) Bio-Tech Co., Ltd. (“Gerui”), a related party (see Note 10), in China to sell fertilizers. The Company charged Gerui 10% of net sales of fertilizers bearing the Company’s trademark. The trademark license income was recorded in the captioned “Trademark license income-related party” in the accompanying unaudited condensed consolidated statements of operations and comprehensive income. In August 2016, the Company obtained a fertilizer sales permit from the Chinese government. As a result, the Company ceased its cooperation with Gerui and began to sell products directly to customers on its own. |
Summaries of Significant Accoun
Summaries of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summaries of Significant Accounting Policies | 2. Summaries of Significant Accounting Policies Basic of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary to give a fair presentation have been included. Interim results are not necessarily indicative of results of a full year. The information in this Form 10-Q should be read in conjunction with information included in the annual report for the fiscal year ended December 31, 2016 on Form 10-K/A filed with the SEC on November 22, 2017. Principle of Consolidation These consolidated unaudited condensed financial statements include the financial statements of the Company and its wholly-owned subsidiaries, Kiwa BVI, Hong Kong Baina Group Holding Company, Kiwa Beijing, Kiwa Shandong, Kiwa Shenzhen, Kiwa Hebei, Kiwa Asia and Kiwa Jing Nong. All significant inter-company balances or transactions are eliminated on consolidation. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting estimates include the valuation of securities issued, derivative liabilities, deferred tax assets and related valuation allowance. Certain of our estimates, including evaluating the collectability of accounts receivable and the fair market value of long-lived assets, could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. We re-evaluate all of our accounting estimates annually based on these conditions and record adjustments when necessary. Cash and Cash Equivalents Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Because of the short maturity of these investments, the carrying amounts approximate their fair value. Restricted cash is excluded from cash and cash equivalents. Accounts receivable and allowance for doubtful accounts Accounts receivable represent customer accounts receivables. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Company’s estimate is based on historical collection experience, the economic environment, trends in the microbial fertilizer industry, and a review of the current status of trade accounts receivable. Management reviews its accounts receivable each reporting period to determine if the allowance for doubtful accounts is adequate. Such allowances, if any, would be recorded in the period the impairment is identified. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. Uncollectible accounts receivable are charged against the allowance for doubtful accounts when all reasonable efforts to collect the amounts due have been exhausted. Inventory Inventories are stated at the lower of cost, determined on the weighted average method, and net realizable value. Work in progress and finished goods are composed of direct materials, direct labor and a portion of manufacturing overhead. Net realizable value is the estimated based on selling price in the ordinary course of business, less estimated costs to complete and dispose. Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Gains or losses on disposals are reflected as gain or loss in the year of disposal. The cost of improvements that extend the life of property, plant and equipment are capitalized. These capitalized costs may include structural improvements, equipment and fixtures. All ordinary repair and maintenance costs are expensed as incurred. Depreciation for financial reporting purposes is provided using the straight-line method over the estimated useful lives of the assets as follows: Useful Life (In years) Buildings 30 - 35 Machinery and equipment 5 - 10 Automobiles 8 Office equipment 2 - 5 Computer software 3 Leasehold improvement The shorter of the lease term and useful life Impairment of Long-Lived Assets The Company’s long-lived assets consist of property, plant and equipment. The Company evaluates its investment in long-lived assets, including property and equipment, for recoverability whenever events or changes in circumstances indicate the net carrying amount may not be recoverable. It is possible that these assets could become impaired as a result of legal factors, market conditions, operational performance indicators, technological or other industry changes. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Financial Instruments The Company analyzes all financial instruments with features of both liabilities and equity under FASB Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” and FASB ASC Topic 815 “Derivatives and Hedging”. Embedded conversion features of convertible debentures not considered to be derivative instruments The embedded conversion features of convertible debentures not considered to be derivative instruments provide for a rate of conversion that is below market value. Such feature is normally characterized as a “beneficial conversion feature” (“BCF”). The relative fair values of the BCF were recorded as discounts from the face amount of the respective debt instrument. The Company amortized the discount using the straight-line method which approximates the effective interest method through maturity of such instruments. Embedded conversion features of convertible debentures that are classified as derivative liabilities The embedded conversion features of convertible debentures that are classified as derivative liabilities are recorded at fair value as a discount from the face amount of the respective debt instrument. The discount is being amortized to interest expense over the life of the note using the straight-line method, which approximates the effective interest method. These instruments are accounted for as derivative liabilities and marked-to-market each reporting period. The change in the value of the derivative liabilities is charged against or credited to income in the captioned “change in fair value of derivative liabilities” in the accompanying unaudited condensed consolidated statements of operations and comprehensive income. Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820- 10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value with U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: ● Level 1: quoted market prices available in active markets for identical assets or liabilities as of the reporting date. ● Level 2: pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. ● Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalent, prepaid expenses, accounts payable and accrued expenses, approximate their fair value because of the short maturity of those instruments. Derivative instruments are carried at fair value, estimated using the Black Scholes Merton model. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not however practical to determine the fair value of advances from stockholders, if any, due to their related party nature. Revenue Recognition The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company derives its revenues from sales contracts with its customers with revenues being recognized upon delivery of products. Persuasive evidence of an arrangement is demonstrated via sales contract and invoice; and the sales price to the customer is fixed upon acceptance of the sales contract and there is no separate sales rebate, discount, or volume incentive. The Company recognizes revenue when title and ownership of the goods are transferred upon shipment to the customer by the Company and collectability of payment is reasonably assured. The Company’s customers are mainly agricultural cooperative company and distributors who then resell the Company’s products to individual farmers. Because the crop growing cycle usually takes approximately 3 to 9 months in the agricultural industry, for some co-ops and distributors, it will take approximately similar time frame of 3 to 9 months for farmers to harvest crops and to realize profits to repay them. As a result, for the sales contracts with these customers, the collectability of payment is highly dependent on the successful harvest of corps and the customers’ ability to collect money from farmers. The Company deemed the collectability of payment may not be reasonably assured until after the Company get paid. For those sales contracts that the Company has shipped its products but the payment is contingent on collections of payments from the downstream customers, the Company considers the revenue recognition criteria are not met and therefore defers the revenue and cost of goods sold until payments are collected. These revenue and cost of goods sold are classified in the captioned “Deferred revenue” and “Deferred cost of goods sold” in the accompanying unaudited condensed consolidated balance sheets. For other customers whose repayment term is within normal business course and not dependent on the harvest of corps, the Company recognized revenue when title and ownership of the goods are transferred upon shipment to the customer by the Company. Deferred Revenue and Deferred Cost of Goods Sold Deferred revenue and deferred cost of goods sold result from transactions where the Company has shipped product for which all revenue recognition criteria have not yet been met. Deferred cost of goods sold related to deferred product revenues includes direct inventory costs. Once all revenue recognition criteria have been met, the deferred revenues and associated cost of goods sold are recognized. Income Taxes The Company accounts for income taxes under the provisions of FASB ASC Topic 740, “Income Tax,” which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are recognized for the future tax consequence attributable to the difference between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are measured using the enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company establishes a valuation when it is more likely than not that the assets will not be recovered. ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes,” defines uncertainty in income taxes and the evaluation of a tax position as a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. United States federal, state and local income tax returns prior to 2014 are not subject to examination by any applicable tax authorities. PRC tax returns filed for 2014, 2015 and 2016 are subject to examination by any applicable tax authorities. Stock Based Compensation The Company accounts for share-based compensation awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period. The Company records stock-based compensation expense at fair value on the grant date and recognizes the expense over the employee’s requisite service period. The Company’s expected volatility assumption is based on the historical volatility of Company’s stock. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is based on the Company’s current and expected dividend policy. The Company accounts for share-based compensation awards to non-employees in accordance with FASB ASC Topic 718 and FASB ASC Subtopic 505-50, “Equity-Based Payments to Non-employees”. Under FASB ASC Topic 718 and FASB ASC Subtopic 505-50, stock compensation granted to non-employees has been determined as the fair value of the consideration received or the fair value of equity instrument issued, whichever is more reliably measured and is recognized as an expense as the goods or services are received. Foreign Currency Translation and Other Comprehensive Income The Company uses United States dollars (“US Dollar” or “US$” or “$”) for financial reporting purposes. However, the Company maintains the books and records in its functional currency, Chinese Renminbi (“RMB”) and Hong Kong Dollar (“HKD”), being the functional currency of the economic environment in which its operations are conducted. In general, the Company translates its assets and liabilities into U.S. dollars using the applicable exchange rates prevailing at the balance sheet date, and the statement of comprehensive loss and the statement of cash flow are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as accumulated other comprehensive income. Other comprehensive income for the nine months ended September 30, 2017 and 2016 represented foreign currency translation adjustments and were included in the unaudited condensed consolidated statements of operations and comprehensive income. The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the unaudited condensed consolidated financial statements were as follows: As of September 30, 2017 As of December 31, 2016 Balance sheet items, except for equity accounts 6.6574 6.9472 Three months ended September 30, 2017 2016 Items in the statements of comprehensive income 6.6721 6.6702 Nine months ended September 30, 2017 2016 Items in the statements of comprehensive income 6.8068 6.5806 The exchange rates used to translate amounts in HKD into U.S. Dollars for the purposes of preparing the consolidated financial statements were as follows: As of September 30, 2017 As of December 31, 2016 Balance sheet items, except for equity accounts 7.8107 - Three months ended September 30, 2017 2016 Items in the statements of comprehensive income 7.8143 - Nine months ended September 30, 2017 2016 Items in the statements of comprehensive income 7.7868 - Earnings Per Common Share Net income per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. Common stock equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted earnings per share. Commitments and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unassured claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unassured claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. Cash Flow Reporting The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of : (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments; (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. ASU 2014-09 also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. Based on the FASB’s Exposure Draft Update issued on April 29, 2015, and approved in July 2015, Revenue from Contracts With Customers (Topic 606): Deferral of the Effective Date, ASU 2014-09 is now effective for reporting periods beginning after December 15, 2017, with early adoption permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. While no significant impact is expected upon adoption of the new guidance, the Company will not be able to make that determination until the time of adoption based upon outstanding contracts at that time. In September 2017, the FASB issued Accounting Standards Update (ASU) No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, on the balance sheet for all leases with terms longer than 12 months, as well as the disclosure of key information about leasing arrangements. ASU 2016-02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term. ASU 2016-02 requires classification of all cash payments within operating activities in the statement of cash flows. Disclosures are required to provide the amount, timing and uncertainty of cash flows arising from leases. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. ASU 2016-02 is effective for fiscal years beginning after December IS, 2018, including interim periods within those fiscal years. Early application is permitted. The Company has not yet evaluated the impact of the adoption of ASU 2016-02 on the Company’s unaudited condensed consolidated financial statement presentation or disclosures. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The amendments in this guidance are clarifying the definition of a business to assist entities when determining whether an integrated set of assets and activities meets the definition of a business. The update provides that when substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this new guidance is not expected to have a material impact on our unaudited condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04—Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this guidance to eliminate the requirement to calculate the implied fair value of goodwill to measure goodwill impairment charge (Step 2). As a result, an impairment charge will equal the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the amount of goodwill allocated to the reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should be applied on a prospective basis. The guidance is effective for goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for goodwill impairment tests performed after January 1, 2017. The impact of this guidance for the Company will depend on the outcomes of future goodwill impairment tests. In May 2017, the FASB issued Accounting Standards Update No. 2017-09 (ASU 2017-09), Compensation — Stock Compensation (Topic 718) Scope of Modification Accounting. The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The adoption of ASU 2017-09 which will become effective for annual periods beginning after December 15, 2017 and for interim periods within those annual periods, is not expected to have any impact on the Company’s unaudited condensed consolidated financial statement presentation or disclosures. In July 2017, the FASB issued Accounting Standards Update No. 2017-11 (ASU 2017-11), Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The amendments in ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The adoption of ASU 2017-11 which will become effective for annual periods beginning after December 15, 2018 and for interim periods within those annual periods. The Company elected to early adopt ASU 2017-11 when preparing these unaudited condensed consolidated financial statements for the nine months ended September 30, 2017. Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s unaudited condensed consolidated financial statement presentation or disclosures. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | 3. Going Concern The unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of September 30, 2017, the Company had an accumulated deficit of $17,072,416, and net cash used in continuing operating activities of $3,367,270. These circumstances, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty. The accompanying unaudited condensed consolidated financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. Though the Company is generating additional revenue but not cash flow while seeking additional equity financing, the Company does not have enough cash to support the operation without raising additional capital, within the one year from the date of the issuance of these financial statements. To the extent that the Company is unable to successfully raise the capital necessary to fund its future cash requirements on a timely basis and under acceptable terms and conditions, the Company may not have sufficient liquidity to maintain operations and repay its liabilities for the next twelve months. As a result, the Company may be unable to implement its current plans for expansion, repay its debt obligations or respond to competitive pressures, any of which would have a material adverse effect on its business, prospects, financial condition and results of operations. |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2017 | |
Accounts Receivable, Net [Abstract] | |
Accounts Receivable, Net | 4. Accounts Receivable, net As of September 30, 2017 and December 31, 2016, we had approximately $15.2 million and $1.1 million, respectively, of accounts receivable from the Company’s customers. Since the Company obtained a fertilizer sales permit from the Chinese government in August 2016 and began to sell the products directly to its customers in September 2016, the Company’s strategy was to gain market shares in the bio-fertilizer market by extending longer credit term to its customers. As a result, the Company’s accounts receivable increased from approximately $1.1 million at December 31, 2016 to approximately $15.2 million at September 30, 2017. The Company’s current payment terms on these customers are ranging from 60 days to 9 months after receipts of the goods depending on the creditworthiness of these customers. These customers are either agricultural cooperative company or distributors who then resell the Company’s products to individual farmers. The reason the Company decides to extend credit for up to 9 months is mainly because the crop growing cycle usually takes approximately 3 to 9 months in the agricultural industry, it will take approximately similar time frame of 3 to 9 months for farmers to harvest crops and to realize profits to repay us. It is very common for cooperative farms and distributors to request longer sales credit under these circumstances. Based on the evaluation of the collectability of these accounts receivable, the Company has provided allowance for doubtful accounts of approximately $0.3 million as of September 30, 2017. As of the date of this report, the Company has subsequently collected approximately $8.7 million or 56% of these outstanding accounts receivable as of September 30, 2017. The Company expects to fully collect the remaining balance of approximately $6.8 million of these accounts receivable by December 31, 2017. The Company’s provision on allowance for doubtful accounts is based on historical collection experience, the economic environment, trends in the microbial fertilizer industry, and a review of the current status of trade accounts receivable and come up with an aging allowance method. Currently, the Company provides a provision of 1%-6% of the allowance for doubtful accounts for accounts receivable balance that are more than 180 days old but less than one year old, 50% of the allowance for doubtful accounts for accounts receivable from one to one and half years old, 100% of the allowance for doubtful accounts for accounts receivable beyond one and half years old, plus additional amount as necessary, which the Company’s collection department had determined the collection of the full amount is remote with the approval from its management to provide a 100% provision allowance for doubtful accounts. The Company’s management has continued to evaluate the reasonableness of the valuation allowance policy and update it if necessary. Accounts receivable consisted of the following: September 30, 2017 December 31, 2016 Accounts receivable $ 15,543,835 $ 1,177,994 Less: Allowance for doubtful accounts (298,580 ) (55,240 ) Accounts receivable, net $ 15,245,255 $ 1,122,754 Movement of allowance for doubtful accounts is as follows: Nine months ended September 30, 2017 Year ended December 31, 2016 Beginning balance $ 55,240 $ - Provision for doubtful accounts 237,998 55,240 Less: write-off - - Exchange rate effect 5,342 - Ending balance $ 298,580 $ 55,240 |
Prepaid Expense
Prepaid Expense | 9 Months Ended |
Sep. 30, 2017 | |
Prepaid Expense | |
Prepaid Expense | 5. Prepaid Expense Prepaid expenses consisted of the following: Notes September 30, 2017 December 31, 2016 Prepaid office rent $ 21,080 $ 12,504 Prepaid government filing expense 33,036 5,000 Prepaid consulting expenses (1) 1,160,145 1,400,050 $ 1,214,261 $ 1,417,554 (1) Prepaid consulting expense for issuance of common stock As of September 30, 2017, the Company issued a total of 1,825,916 shares of common stock to three consulting companies for investor relation consulting services, one individual for financing service, one consulting company for IT service and four individuals for the growth and development strategy consulting service in China, which represents the amount of $1,922,696 based on quoted price at issuance. Pursuant to the indemnification terms of the services agreements, the Company has the rights to demand the full services being accomplished as scheduled during the service period and to enforce the consultants to pay pro-rata penalties if the consultants do not fulfill the contract services within the services periods. As of September 30, 2017, the Company evaluated the performance of the consultants and concluded all the contracts were on schedule of delivery. The Company recorded the prepaid consulting expenses totally $1,922,696 and amortized the consulting fee over the service periods per agreements based on the progress of services delivered. For the nine months ended September 30, 2017 and 2016, the amortization of consulting expense was $474,301 and $57,717, respectively. |
Advance to Suppliers
Advance to Suppliers | 9 Months Ended |
Sep. 30, 2017 | |
Advance To Suppliers | |
Advance to Suppliers | 6. Advance to suppliers Since currently the Company does not have manufacturing facility, it has contracted with several third parties to produce fertilizer products. These third parties produce the fertilizer products in accordance with the product formula and specification instructed by the Company. Pursuant to the agreements entered by the Company and those third-party companies, the Company was required to make partially prepayments in advance of securing the purchases or completion of productions on a timely basis. As of September 30, 2017 and December 31, 2016, such advance to suppliers was $ 2,979,664 and $1,880,044, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 7. Property, Plant and Equipment Property, plant and equipment, net consisted of the following: September 30, 2017 December 31, 2016 Property, Plant and Equipment Office equipment $ 14,270 $ 896 Furniture 22,813 7,838 Leasehold improvement 74,251 66,896 Construction in progress 26,137 - Others 1,082 - Property, plant and equipment - total $ 138,553 $ 75,630 Less: accumulated depreciation (54,100 ) (20,311 ) Property, plant and equipment - net $ 84,453 $ 55,319 Depreciation expense was $11,878 and $10,045 for the three months ended September 30, 2017 and 2016, and $29,527 and $ 13,039 for the nine months ended September 30, 2017 and 2016, respectively. |
Deposit for Long-Term Investmen
Deposit for Long-Term Investment | 9 Months Ended |
Sep. 30, 2017 | |
Investments Schedule [Abstract] | |
Deposit for Long-Term Investment | 8. Deposit for Long-Term Investment On June 8, 2017, Kiwa Hebei entered an equity purchase agreement with the shareholders of Yantai Peng Hao New Materials Technology Co. Ltd. (“Peng Hao”) to acquire 100% interest in Peng Hao for approximately RMB 15,000,000 (approximately US$ 2.2 million). As of September 30, 2017, Kiwa Hebei has made deposit payment of RMB 5,000,000 (approximately $751,050). |
Salary Payable
Salary Payable | 9 Months Ended |
Sep. 30, 2017 | |
Compensation Related Costs [Abstract] | |
Salary Payable | 9. Salary payable There were $1,208,492 and $1,145,492 as at September 30, 2017 and December 31, 2016, respectively, among the balance of salary payable which were due to the former Chairman of the Board and CEO Mr. Li, and the current Chairman of the Board and CEO Ms. Wang. Mr. Li was the Chairman of the Board until November 2015 and was the Chief Executive Officer of the Company until July 2015. No salary was paid to Mr. Li during his service period. Ms. Wang served as Chairman of the Board since November 2015 and served as CEO since August 2016. No salary was paid to Ms. Wang since December 2015. The Company expects to be in negotiations with both parties to settle these obligations. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party Transactions Amounts due from related parties consisted of the following as of September 30, 2017 and December 31, 2016: Item Nature Notes September 30, 2017 December 31, 2016 Kangtan Gerui (Beijing) Bio-Tech Co., Ltd. (“Gerui”) Non-trade (1) $ 963,846 $ 1,522,434 Total $ 963,846 $ 1,522,434 (1) Gerui Ms. Feng Li, a member of the Company’s board of directors and shareholder of the Company (Ms. Li held approximately 20% of the Company’s Common Stock and 50% of the Company’s Series A Preferred Stock), is also a 23% shareholder of Gerui. According to the agreement between the Company and Gerui, all the balances will be paid off before June 30, 2018. During the nine months ended September 30, 2017, the Company collected $558,588 from Gerui and the remaining balance was $963,846 as at September 30, 2017. The management has determined that no allowance for doubtful debts was necessary. Amounts due to related parties consisted of the following as of September 30, 2017 and December 31, 2016: Item Nature Notes September 30, 2017 December 31, 2016 Ms. Yvonne Wang (“Ms. Wang”) Non-trade (1) 130,199 100,798 Subtotal 130,199 100,798 CAAS IARRP and IAED Institutes Trade (2) - 160,461 Subtotal - 160,461 Total amount due to related parties 130,199 261,259 (1) Ms. Wang Effective as of November 20, 2015, the Company appointed Ms. Wang as the Chairman of the Board and effective as of August 11, 2016, the Company’s Board of Directors has assigned Ms. Wang the additional titles of Acting President, Acting Chief Executive Officer and Acting Chief Financial Officer. During the nine months ended September 30, 2017, Ms. Wang paid various expenses on behalf of the Company. As of September 30, 2017, the amount due to Ms. Wang was $130,199. (2) CAAS IARRP and IAED Institutes On November 5, 2015, the Company signed a strategic cooperation agreement (the “Agreement”) with China Academy of Agricultural Science (“CAAS”)’s Institute of Agricultural Resources & Regional Planning (“IARRP”) and Institute of Agricultural Economy & Development (“IAED”). The term of the Agreement was three years that began on November 20, 2015 and ends on November 19, 2018. Pursuant to the agreement, Kiwa agree to fund RMB 1 million (approximately $160,000) each year to the Spatial Agriculture Planning Method & Applications Innovation Team that belongs to the Institutes. Professor Yong Chang Wu, the authorized representative of CAAS IARRP, is also one of the Company’s directors effective since November 20, 2015 until March 13, 2017. The Company recorded $37,469 and $37,303 research and development expenses related to the institutes, for the three months ended September 30, 2017 and 2016, respectively, and $110,194 and $112,580 research and development expenses for the nine months ended September 30, 2017 and 2016, respectively. The amount due to CAAS IARRP and IAED Institutes was reclassified to other payables and accruals at September 30, 2017 since Professor Yong Chang Wu is no longer the Company’s director from March 13, 2017. See note 13. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | 11. Convertible Notes Payable (1) Convertible Notes Payable - Current Convertible notes payable - current consists of $ 150,250 of 6% secured convertible notes issued to FirsTrust Group Inc. on June 29, 2006 and $136,742 (face amount $150,208 net of discount of $13,466) of 15% convertible note issued to Mr. Geng Liu on January 17, 2017. 6% secured convertible notes – FirsTrust Group Inc. On June 29, 2006, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with six institutional investors (collectively, the “Purchasers”) for the issuance and sale of 6% secured convertible notes, due three years from the date of issuance, in the aggregate principal amount of $2,450,000 (the “6% Convertible Notes”), convertible into shares of the Company’s common stock. On August 12, 2013, the Company, entered into a Settlement Agreement and Release (the “Release”) with the holders (the “Holders”) of the “6% Convertible Notes” in the aggregate principal amount of $2,000,000. Pursuant to the terms of the Release, the Company paid the Holders $75,000 for a full release, including the forgiveness of past defaults of unpaid principal amounts, interests and penalties. During the course of the time, certain notes had been converted as well. On March 18, 2008, FirsTrust Group, Inc. (“FirsTrust”) purchased the three remaining 6% Convertible Notes, totaling $168,000 ($59,100, $50,400 and $59,100 respectively), from Nite Capital, one of the six institutional investors which purchased a total of $300,000 of the Note in three tranches ($105,000, $90,000, $105,000 respectively), for a cash payment of $100,000. After the Release and conversion, FirsTrust is the only holder of the outstanding 6% Convertible Note with outstanding principal amount of $150,250. On June 29, 2009, the 6% Notes were due. The Company informed the Purchasers of its inability to repay the outstanding balance on the due date. Therefore, the 6% Notes are in default and the default interest rate of 15% per annum is being charged on the 6% Notes. The conversion price of the Notes is based on a 40% discount to the average of the lowest three days trading price of the Company’s common stock on the OTC Bulletin Board over a 20-day trading period. The conversion price is also adjusted for certain subsequent issuances of equity securities of the Company at prices below the conversion price then in effect. The Notes contain a volume limitation that prohibits the holder from further converting the 6% Notes if doing so would cause the holder and its affiliates to hold more than 4.99% of the Company’s outstanding common stock. The Company has elected to early adopt the guidance in ASU 2017-11. As a result, the Company has concluded that the conversion feature of the Notes is indexed to its own stock and would be classified and recorded as equity. The Company retrospectively applied the guidance to the above Notes and determined that the impact of the conversion feature for the above Notes is immaterial. The Company also incurs a financial liquidated damages in cash or shares at the option of the Company (equal to 2% of the outstanding amount of the Notes per month plus accrued and unpaid interest on the Notes, prorated for partial months) if it breaches any affirmative covenants in the Purchase Agreement, including a covenant to maintain a sufficient number of authorized shares under its Certificate of Incorporation to cover at least 110% of the stock issuable upon full conversion of the Notes. Pursuant to the relevant provisions for liquidated damages in Purchase Agreement, the Company has accrued the amounts of $61,730 and $57,672 for liquidated damages for the nine months ended September 30, 2017 and 2016, respectively. The Company also accrued $16,857 and $16,919 for interest at the rate of 15% per annum for the nine months ended September 30, 2017 and 2016, respectively. The total 15% interest was $200,218 and $177,681 at September 30, 2017 and 2016, respectively. The total accrued liquidated damages were $544,056 and $462,423 at September 30, 2017 and 2016, respectively. The Company’s obligations under the Notes are secured by a first priority security interest in the Company’s intellectual property pursuant to an Intellectual Property Security Agreement with the Holders. In addition, Mr. Li, the Company’s former Chief Executive Officer until July 1, 2015, has pledged all of his common stock of the Company as collateral for the Company’s obligations under the 6% Convertible Notes. 15% convertible notes- Mr. Geng Liu On January 17, 2017, the Company entered a Convertible Note Agreement with Mr. Geng Liu with principal of RMB 3 million. The note bears interest at 15% per annum and will mature on January 16, 2018. Before the maturity date, the Note holder has an option to convert partial or all of the outstanding principal to the Company’s common shares with a conversion price of $0.90 per share. As of September 30, 2017, the Company has received partial principal totaled RMB 1 million ($150,208 equivalentrevalued as at September 30, 2017). The notes are convertible into shares of the common stock, at conversion price is $0.9 which is lower than the price of the Company’s common stock on the date of issue. Therefore, the conversion feature embedded in the convertible note meet the definition of beneficial conversion feature (“BCF”). The Company evaluated the intrinsic value of the BCF as $45,094 at the issue date. The relative fair values of the BCF were recorded into additional paid in capital, and the remainder proceeds of $99,850 from issuance of the convertible note was allocated to convertible notes payable. For the nine months ended September 30, 2017, the Company recorded interest expense of $45,535 on the note, including the amortization of the debt discount resulting from the value of beneficial conversion feature, and the carrying value of the note as at September 30, 2017 was $136,742 . (2) Convertible Notes Payable - Non-current and derivative liabilities Convertible notes payable – non-current consists $826,148 of 15% convertible note issued to Mr. Junwei Zheng on May 9, 2017. 15% convertible notes- Mr. Junwei Zheng On May 9, 2017, the Company entered a Convertible Note Agreement with Mr. Junwei Zheng with principal of RMB 30 million. The note bears interest at 15% per annum and will mature on May 8, 2019. Before the maturity date, the Note holder has an option to convert partial or all of the outstanding principal and accrued interest to the Company’s common shares with a conversion price of $3.5 per share. As of September 30, 2017, the Company has received partial principal totaled RMB 5.5 million ($826,148 equivalent revalued at September 30, 2017). The notes are convertible into shares of the common stock, at conversion price is $3.5 which is higher than the price of the Company’s common stock on the date of issue, therefore the conversion feature embedded in the note was out of money at the issue date thus did not meet the definition of BCF. The Company determined that conversion option embedded in the note meet the definition of a derivative instrument. Since the embedded conversion price of the conversion feature is denominated in U.S. dollar, a currency other than the convertible note payable currency. As a result, the embedded conversion feature is not considered indexed to the Company’s own stock due to the variable exchange rate between U.S. Dollar and RMB, and as such, the Company determined that the embedded conversion feature to be carried as a liability and remeasured at fair value at each financial reporting date until such time as the conversion feature is exercised or expired. The Company evaluated the fair value of the embedded conversion feature at the issue date and recorded the amount into as discount to convertible note payable. The discount to convertible note payable is being amortized to interest expense over the life of the note using the straight-line method, which approximates the effective interest method. The fair value of embedded conversion feature were calculated using the BlackScholesMerton model based on the following variables at inception on May 9, 2017: ● Strike price of $3.5, for the conversion options ● Expected volatility of 260.8% calculated using the Company’s historical price of its common stock ● Expected dividend yield of 0% ● Risk-free interest rate of 1.37%, for the conversion options ● Expected lives of 2.0 years ● Market price at issuance date of $2.7 The fair value of embedded conversion feature were calculated using the BlackScholesMerton model based on the following variables on September 30, 2017: ● Strike price of $3.5, for the conversion options ● Expected volatility of 158.1% calculated using the Company’s historical price of its common stock ● Expected dividend yield of 0% ● Risk-free interest rate of 1.43%, for the conversion options ● Expected lives of 1.58 years ● Market price at remeasurement date of $2.5 On May 9, 2017, the Company recorded $569,784 as derivative liability for fair value of the conversion option. The initial carrying value of the Notes was $227,051. On September 30, 2017, the fair value of derivative liabilities was recalculated at $370,733. For the three months and nine months ended September 30, 2017, the Company recognized a gain of $205,612 and $199,051, respectively, in change in fair value of derivative liabilities. For the nine months ended September 30, 2017, the Company recorded interest expense of $162,520 on the note, including the amortization of the debt discount resulting from the value of the embedded conversion feature, and the carrying value of the note as of September 30, 2017 was $370,321. |
Note Payable
Note Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Note Payable | 12. Note Payable On May 29, 2007, the Company issued a $360,000 promissory note (the “Promissory Note”) to an unrelated individual (the “Original Note holder”). This note bears interest at 18% per annum and was due on July 27, 2007. This note is currently in default and bears interest of 25% per annum (the “Default rate”) until paid in full. This note is secured by a pledge of shares of the Company’s common stock owned by Investlink (China) Limited (the “Pledged Shares”). The Company accrued $22,500 and 22,500 interest expense on note payable for the three months ended September 30, 2017 and 2016, respectively, and $67,500 and $67,500 interest expense on note payable for the nine months ended September 30, 2017 and 2016, respectively. As of December 31, 2016, the Original Note holder informed the Company that all right, title and interests in the Promissory Note has been assigned and transferred to FirsTrust. As of September 30, 2017, all of $360,000 of Promissory Note to FirsTrust is still outstanding, and total accrued interest of the Promissory Note is $ 926,800. The Company has begun preliminary discussion with FirsTrust with regards to a potential settlement of the Note, but no agreement has been reached yet. |
Other Payables and Accruals
Other Payables and Accruals | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Payables and Accruals | 13. Other Payables and accruals Other payable consisted of the following: Notes September 30, 2017 December 31, 2016 Stock subscription proceeds received in advance (1) $ 1,310,522 $ 460,617 Investment received in advance (2) - 79,168 Accrued expenses 59,216 385,090 R&D expense payable 271,151 - $ 1,640,889 $ 924,875 (1). The Company received RMB 3.2 million in 2016 and RMB 5.5 million for the nine months ended September 30, 2017 from four unrelated potential investors, which was approximately $1,310,522. The Company has subsequently issued 38,000 shares of common stock to one investor for the amount $ 76,000 (RMB 0.5 million) and the other investment agreements have not been finalized yet for the remaining part. (2). The Company received the investment funds in advance in 2016 from Mr. Geng Liu, which amount was approximately $79,168. Subsequently on January 17, 2017, the Company entered a Convertible Note Agreement with Mr. Geng. The note bears interest at 15% per annum and will mature on January 16, 2018. See Note 12. |
Stockholders_ Equity (Deficienc
Stockholders’ Equity (Deficiency) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders’ Equity (Deficiency) | 14. Stockholders’ Equity (Deficiency) Preferred stock On December 14, 2015, the Company issued 500,000 shares of preferred stock for the aggregate amount of $1,000,000 as debt cancellation owed to two related party individuals. Reverse Split On January 14, 2016, the Company filed a Certificate of Amendment of its Certificate of Incorporation with the State of Delaware with reference to a 1-for-200 reverse stock split with respect to its Common Stock with effective date of January 28, 2016. In connection with the reverse split, the Company’s authorized capital was amended to be 120,000,000 shares, comprising 100,000,000 shares of Common Stock par value $0.001 and 20,000,000 shares of Preferred Stock par value $0.001. All relevant information relating to numbers of shares and per share information have been retrospectively adjusted to reflect the reverse stock split for all periods presented. Common stock During the nine months ended September 30, 2017, the Company issued 1,674,900 common shares to six individuals residing in China for net proceeds of $2,410,654. On June 30, 2017, the Company issued 97,850 common shares to ten employees for cash at $1.95 per share for an aggregate price to $190,807. The difference $102,273 based on the calculation between stock price and employee purchase price was recognized as expense of employee benefits and accordingly, credited the same amount to APIC. During the nine months ended September 30, 2017, the Company entered into ten consulting agreements and issued 665,988 shares of common stocks to consultants for financing, business development services and IT services based on market price of issuance. Additional paid-in-capital As disclosed in Note 11(1), on January 17, 2017, the Company issued RMB 1 million ($144,944 equivalent).Convertible Note to Mr. Geng Liu with BCF embedded. The Company evaluated the intrinsic value of the BCF as $45,094 at the issue date and recorded the amount into additional paid in capital. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | 15. Stock-based Compensation On March 15, 2017, the Board of Directors approved a new stock option plan with ten years’ term. As of September 30, 2017, the Company has not granted any incentive compensation under this plan. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 16. Fair Value Measurements The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities recorded at fair value on recurring basis that were accounted for at fair value as of: September 30, 2017 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Derivative liabilities — — $ 370,733 $ 370,733 Total — — $ 370,733 $ 370,733 The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2017 and for the year ended December 31, 2016: Nine months ended September 30, 2017 Year ended December 31, 2016 Beginning balance $ - $ - Fair value of derivative liabilities at inception 569,784 - Change in fair value of derivative liabilities (199,051 ) - Ending balance $ 370,733 $ - |
Income Tax
Income Tax | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 17. Income Tax In accordance with the current tax laws in the U.S., the Company is subject to a corporate tax rate of 34% on its taxable income. No provision for taxes is made for U.S. income tax for the three and nine months ended September 30, 2017 and 2016 as it has no taxable income in the U.S. In accordance with the current tax laws in China, Kiwa Shandong, Kiwa Beijing, Kiwa Shenzhen and Kiwa Hebei is subject to a corporate income tax rate of 25% on its taxable income. Kiwa Shandong has not provided for any corporate income taxes since it had no taxable income for the three and nine months ended September 30, 2017 and 2016. Kiwa Shenzhen and Kiwa Hebei has not provided for any corporate income taxes since it had no taxable income for the three and nine months ended September 30, 2017 and 2016. For the three and nine months ended September 30, 2017, Kiwa Beijing recorded no current income tax provision. In accordance with the relevant tax laws in the British Virgin Islands, Kiwa BVI, as an International Business Company, is exempt from income taxes. A reconciliation of the provision for income taxes from continuing operation determined at the local income tax rate to the Company’s effective income tax rate is as follows: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Pre-tax income (loss) from continuing operation $ (850,876 ) $ 224,712 $ (2,227,413 ) $ 570,397 U.S. federal corporate income tax rate 34 % 34 % 34 % 34 % Income tax expense (benefit) computed at U.S. federal corporation income tax rate (289,298 ) 76,402 (757,320 ) 193,935 Reconciling items: Rate differential for PRC earnings 85,840 (32,403 ) 133,249 (28,419 ) Change of valuation allowance 73,251 60,880 381,789 180,581 Effect of tax exempted income in BVI 7,139 (25,934 ) 21,422 (267,152 ) Effective tax expenses (benefits) $ (123,068 ) $ 78,945 $ (220,860 ) $ 78,945 The Company had deferred tax assets from continuing operation as follows: September 30, 2017 December 31, 2016 Net operating losses carried forward by the Company and its China subsidiaries except for Kiwa Beijing $ 2,814,453 $ 2,555,064 Less: Valuation allowance (2,814,453 ) (2,555,064 ) Bad debt allowance 63,244 - Net operating losses carried forward by Kiwa Beijing 183,628 - Net deferred tax assets $ 246,872 $ - As of September 30, 2017 and December 31, 2016, the Company had approximately $8.3 million and $7.5 million net operating loss carryforwards available to reduce future taxable income. Net operating loss of the parent Company could be carried forward and taken against any taxable income for a period of not more than twenty years from the year of the initial loss pursuant to Section 172 of the Internal Revenue Code of 1986, as amended. The net operating loss of Kiwa Shenzhen could be carried forward for a period of not more than five years from the year of the initial loss pursuant to relevant PRC tax laws and regulations. It is more likely than not that the deferred tax assets cannot be utilized in the future because there will not be significant future earnings from the entity which generated the net operating loss. Therefore, the Company recorded a full valuation allowance on its deferred tax assets. As of September 30, 2017, the Company had approximately $0.1 million deferred tax assets on bad debt allowance. Bad debt allowance must be approved by the PRC tax authority prior to being deducted as an expense item on the tax return. As of September 30, 2017 and December 31, 2016, the Company has no material unrecognized tax benefits which would favorably affect the effective income tax rate in future periods and does not believe that there will be any significant increases or decreases of unrecognized tax benefits within the next twelve months. No interest or penalties relating to income tax matters have been imposed on the Company during the nine months ended September 30, 2017 and December 31, 2016, and no provision for interest and penalties is deemed necessary as of September 30, 2017 and December 31, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 18. Commitments and Contingencies The Company has the following material contractual obligations: (1) Investment in manufacturing facilities in Penglai City, Shandong Province in China As disclosed in Note 8, on June 8, 2017, Kiwa Hebei entered an equity purchase agreement with the shareholders of Yantai Peng Hao New Materials Technology Co. Ltd. (“Peng Hao”) to acquire 100% interest in Peng Hao for approximately RMB 15,000,000 (approximately US$ 2.2 million). As of September 30, 2017, Kiwa Hebei has made deposit payment of RMB 5,000,000 (approximately $751,050) and is committed to pay the remaining RMB10,000,000 based on the payment milestone in the equity purchase agreement. (2) Strategic cooperation with the institutes in China On November 5, 2015, the Company signed a strategic cooperation agreement (the “Agreement”) with China Academy of Agricultural Science (“CAAS”)’s Institute of Agricultural Resources & Regional Planning (“IARRP”) and Institute of Agricultural Economy & Development (“IAED”). Pursuant to the Agreement, the Company will form a strategic partnership with the two institutes and establish an “International Cooperation Platform for Internet and Safe Agricultural Products”. To fund the cooperation platform’s R&D activities, the Company will provide RMB 1 million (approximately $160,000) per year to the Spatial Agriculture Planning Method & Applications Innovation Team that belongs to the Institutes. The term of the Agreement is for three years beginning November 20, 2015 and will expire on November 19, 2018. However, the Company is only liable for the annual funds to be provided to the extent of the contract obligations performed by CAAS IARRP and IAED, and the agreement is terminable before the three years’ commitment date based on negotiations of both parties. (3) Lease payments (a) On March 21, 2016, Kiwa Baiao Bio-Tech (Beijing) Co., Ltd. entered an office lease agreement with two-year term. Monthly lease payment fee totaled RMB 68,133 or approximately USD $10,536. (b) On November 20, 2016, Kiwa Baiao Bio-Tech (Beijing) Co., Ltd. entered an apartment lease agreement for its employees. The lease term is one year with monthly lease payment of RMB 6,000 or approximately USD $896. This lease was terminated on May 31, 2017 upon mutual agreement. (c) On March 1, 2017, Kiwa Bio-Tech (Shenzhen) Co., Ltd, a newly established subsidiary entered an office lease agreement with one-year term. Monthly lease payment is RMB 29,000 or approximately of USD $4,320. This lease was terminated on August 31, 2017. (d) On June 20, 2017, Kiwa Bio-Tech (Shenzhen) Co., Ltd, a newly established subsidiary entered an office lease agreement with two-year term. Monthly lease payment is RMB 117,221 or approximately of USD $17,213 for the first year and RMB 124,254 or approximately of USD $18,245 for the second year. And the previous lease agreement terminated automatically since the landlord is the same one. (e) On September 1, 2017, Kiwa Bio-Tech (Shenzhen) Co., Ltd. entered a storage lease agreement with one-year term. Monthly lease payment fee totaled RMB 4,800 or approximately USD $721. (f) On May 5, 2017, Kiwa Bio-Tech Products Group Corporation entered an office lease agreement with 13 months term. Monthly lease payment totaled USD $781.15. (g) On July 1, 2017, Kiwa Bio-Tech Products Group Corporation entered an office lease agreement with one-year term. Monthly lease payment totaled USD $1,087. (h) On July 4, 2017, Kiwa Bio-Tech (Hebei) Co., Ltd, a newly established subsidiary entered an office lease agreement with one-year term. Monthly lease payment is RMB 2,000 or approximately of USD $301. (i) On September 1, 2017, Kiwa Bio-Tech (Hebei) Co., Ltd, entered an apartment lease agreement for its employees. The lease term is one year with monthly lease payment of RMB 1,060 or approximately USD $161. The future lease payments at September 30, 2017 are summarized below. Twelve months ending September 30, 2018 $ 314,214 Twelve months ending September 30, 2019 $ 167,976 Thereafter - Total minimum lease payment $ 482,190 |
Concentration of Risk
Concentration of Risk | 9 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risk | 19. Concentration of Risk Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. As of September 30, 2017 and December 31, 2016, $23,275, and $13,469 were deposited with various major financial institutions located in the PRC, respectively. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. Customer and vendor concentration risk For the nine months ended September 30, 2017, five customers accounted for 23%, 14%, 14%, 14% and 14% of the Company’s sales. For the nine months ended September 30, 2016, one customer accounted for 100% of the Company’s revenues. As of September 30, 2017, three customers accounted for 45%, 30% and 12% of the Company’s accounts receivable. As of December 31, 2016, one customer accounted for 100% of the Company’s accounts receivable. For the nine months ended September 30, 2017, one supplier accounted for 93% of the Company’s total purchases. For the nine months ended September 30, 2016, one supplier accounted for 91% of the Company’s total purchases. As of September 30, 2017, two suppliers accounted for 81% and 13% of the Company’s accounts payable. As of December 31, 2016, two suppliers accounted for 57% and 43% of the Company’s accounts payable. |
Discontinued Operation
Discontinued Operation | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operation | 20. Discontinued Operation On February 11, 2017, the Company executed an Equity Transfer Agreement with Dian Shi Cheng Jing (Beijing) Technology Co. (“Transferee”) whereby the Company transferred all of its right, title and interest in Kiwa Bio-Tech Products (Shandong) Co., Ltd. (“Shandong”) to the Transferee for the RMB 1.00. The government approval and processing of the transaction was completed on April 12, 2017. This transaction was considered as completed and effective on April 12, 2017. The following table summarizes the assets and liabilities of the discontinued operation, excluding intercompany balances eliminated in consolidation, at April 12, 2017 and December 31, 2016, respectively: April 12, 2017 December 31, 2016 Assets held for sale: Property, plant and equipment – Original cost 2,117,324 2,117,324 Less: accumulated depreciation (765,598 ) (765,598 ) Less: impairment (1,351,726 ) (1,351,726 ) Deferred tax assets 1,013,365 1,013,365 Less: Deferred tax assets allowance (1,013,365 ) (1,013,365 ) Total assets of business held for sale $ - $ - Liabilities of business held for sale: Accounts Payable 253,208 251,466 Advances from customers 12,972 12,883 Salary payable 537,127 533,432 Accrued expense 29,035 28,835 Other payable 102,291 101,588 Due to related party-trade 1,130,534 1,122,754 Loan payable 1,666,813 1,655,343 Construction cost payable 257,309 255,539 Tax payable 522,893 502,845 Total liabilities of business held for sale $ 4,512,182 $ 4,464,685 The income statements for the three and nine months ended September 30, 2017 and 2016 reflected the Kiwa Shandong business segment as a discontinued operation. The following results of operations of Kiwa Shandong are presented as a loss from a discontinued operation in the unaudited condensed consolidated statements of operations: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Net sales - - - - Gross profit - - - - Operating expense - 52,166 16,790 159,745 Income tax - - - - Loss from discontinued operations $ - $ 52,166 $ 16,790 $ 159,745 The following is the calculation of the gain on the sale of Kiwa Shandong: Selling price $ - Net assets (liabilities) transferred at the transaction date $ (4,512,182 ) Gain on sale of discontinued operations $ 4,512,182 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 21. Subsequent Events On October 24, 2017, the Company issued 38,000 shares of restricted common stock at $2.00 per share to Erli Wei for an aggregate amount of $76,000. The Company has received the full amount. On October 19, 2017, the Company issued total 14,151 common shares at $1.04 per share price to FirsTrust Group, Inc. for the conversion of convertible note. According to the convertible note agreement, the conversion price is based on a 40% discount to the average of the lowest three days trading price of the Company’s common stock on the OTC Bulletin Board over a 20-day trading period per the convertible notes agreement. On October 24, 2017, the Company issued a total of 1,338,000 common shares to nine individuals for their consulting services to assist the Company in marketing and financing projects. The number of shares was determined based on the fair value of the services. The agreements have terms ranging from one to three years. |
Summaries of Significant Acco27
Summaries of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basic of Presentation | Basic of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary to give a fair presentation have been included. Interim results are not necessarily indicative of results of a full year. The information in this Form 10-Q should be read in conjunction with information included in the annual report for the fiscal year ended December 31, 2016 on Form 10-K/A filed with the SEC on November 22, 2017. |
Principle of Consolidation | Principle of Consolidation These consolidated unaudited condensed financial statements include the financial statements of the Company and its wholly-owned subsidiaries, Kiwa BVI, Hong Kong Baina Group Holding Company, Kiwa Beijing, Kiwa Shandong, Kiwa Shenzhen, Kiwa Hebei, Kiwa Asia and Kiwa Jing Nong. All significant inter-company balances or transactions are eliminated on consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting estimates include the valuation of securities issued, derivative liabilities, deferred tax assets and related valuation allowance. Certain of our estimates, including evaluating the collectability of accounts receivable and the fair market value of long-lived assets, could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. We re-evaluate all of our accounting estimates annually based on these conditions and record adjustments when necessary. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Because of the short maturity of these investments, the carrying amounts approximate their fair value. Restricted cash is excluded from cash and cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable represent customer accounts receivables. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Company’s estimate is based on historical collection experience, the economic environment, trends in the microbial fertilizer industry, and a review of the current status of trade accounts receivable. Management reviews its accounts receivable each reporting period to determine if the allowance for doubtful accounts is adequate. Such allowances, if any, would be recorded in the period the impairment is identified. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. Uncollectible accounts receivable are charged against the allowance for doubtful accounts when all reasonable efforts to collect the amounts due have been exhausted. |
Inventory | Inventory Inventories are stated at the lower of cost, determined on the weighted average method, and net realizable value. Work in progress and finished goods are composed of direct materials, direct labor and a portion of manufacturing overhead. Net realizable value is the estimated based on selling price in the ordinary course of business, less estimated costs to complete and dispose. |
Property, Plant and Equipment | Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Gains or losses on disposals are reflected as gain or loss in the year of disposal. The cost of improvements that extend the life of property, plant and equipment are capitalized. These capitalized costs may include structural improvements, equipment and fixtures. All ordinary repair and maintenance costs are expensed as incurred. Depreciation for financial reporting purposes is provided using the straight-line method over the estimated useful lives of the assets as follows: Useful Life (In years) Buildings 30 - 35 Machinery and equipment 5 - 10 Automobiles 8 Office equipment 2 - 5 Computer software 3 Leasehold improvement The shorter of the lease term and useful life |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets The Company’s long-lived assets consist of property, plant and equipment. The Company evaluates its investment in long-lived assets, including property and equipment, for recoverability whenever events or changes in circumstances indicate the net carrying amount may not be recoverable. It is possible that these assets could become impaired as a result of legal factors, market conditions, operational performance indicators, technological or other industry changes. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. |
Financial Instruments | Financial Instruments The Company analyzes all financial instruments with features of both liabilities and equity under FASB Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” and FASB ASC Topic 815 “Derivatives and Hedging”. Embedded conversion features of convertible debentures not considered to be derivative instruments The embedded conversion features of convertible debentures not considered to be derivative instruments provide for a rate of conversion that is below market value. Such feature is normally characterized as a “beneficial conversion feature” (“BCF”). The relative fair values of the BCF were recorded as discounts from the face amount of the respective debt instrument. The Company amortized the discount using the straight-line method which approximates the effective interest method through maturity of such instruments. Embedded conversion features of convertible debentures that are classified as derivative liabilities The embedded conversion features of convertible debentures that are classified as derivative liabilities are recorded at fair value as a discount from the face amount of the respective debt instrument. The discount is being amortized to interest expense over the life of the note using the straight-line method, which approximates the effective interest method. These instruments are accounted for as derivative liabilities and marked-to-market each reporting period. The change in the value of the derivative liabilities is charged against or credited to income in the captioned “change in fair value of derivative liabilities” in the accompanying unaudited condensed consolidated statements of operations and comprehensive income. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820- 10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value with U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: ● Level 1: quoted market prices available in active markets for identical assets or liabilities as of the reporting date. ● Level 2: pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. ● Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalent, prepaid expenses, accounts payable and accrued expenses, approximate their fair value because of the short maturity of those instruments. Derivative instruments are carried at fair value, estimated using the Black Scholes Merton model. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not however practical to determine the fair value of advances from stockholders, if any, due to their related party nature. |
Revenue Recognition | Revenue Recognition The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company derives its revenues from sales contracts with its customers with revenues being recognized upon delivery of products. Persuasive evidence of an arrangement is demonstrated via sales contract and invoice; and the sales price to the customer is fixed upon acceptance of the sales contract and there is no separate sales rebate, discount, or volume incentive. The Company recognizes revenue when title and ownership of the goods are transferred upon shipment to the customer by the Company and collectability of payment is reasonably assured. The Company’s customers are mainly agricultural cooperative company and distributors who then resell the Company’s products to individual farmers. Because the crop growing cycle usually takes approximately 3 to 9 months in the agricultural industry, for some co-ops and distributors, it will take approximately similar time frame of 3 to 9 months for farmers to harvest crops and to realize profits to repay them. As a result, for the sales contracts with these customers, the collectability of payment is highly dependent on the successful harvest of corps and the customers’ ability to collect money from farmers. The Company deemed the collectability of payment may not be reasonably assured until after the Company get paid. For those sales contracts that the Company has shipped its products but the payment is contingent on collections of payments from the downstream customers, the Company considers the revenue recognition criteria are not met and therefore defers the revenue and cost of goods sold until payments are collected. These revenue and cost of goods sold are classified in the captioned “Deferred revenue” and “Deferred cost of goods sold” in the accompanying unaudited condensed consolidated balance sheets. For other customers whose repayment term is within normal business course and not dependent on the harvest of corps, the Company recognized revenue when title and ownership of the goods are transferred upon shipment to the customer by the Company. |
Deferred Revenue and Deferred Cost of Goods Sold | Deferred Revenue and Deferred Cost of Goods Sold Deferred revenue and deferred cost of goods sold result from transactions where the Company has shipped product for which all revenue recognition criteria have not yet been met. Deferred cost of goods sold related to deferred product revenues includes direct inventory costs. Once all revenue recognition criteria have been met, the deferred revenues and associated cost of goods sold are recognized. |
Income Taxes | Income Taxes The Company accounts for income taxes under the provisions of FASB ASC Topic 740, “Income Tax,” which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are recognized for the future tax consequence attributable to the difference between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are measured using the enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company establishes a valuation when it is more likely than not that the assets will not be recovered. ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes,” defines uncertainty in income taxes and the evaluation of a tax position as a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. United States federal, state and local income tax returns prior to 2014 are not subject to examination by any applicable tax authorities. PRC tax returns filed for 2014, 2015 and 2016 are subject to examination by any applicable tax authorities. |
Stock Based Compensation | Stock Based Compensation The Company accounts for share-based compensation awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period. The Company records stock-based compensation expense at fair value on the grant date and recognizes the expense over the employee’s requisite service period. The Company’s expected volatility assumption is based on the historical volatility of Company’s stock. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is based on the Company’s current and expected dividend policy. The Company accounts for share-based compensation awards to non-employees in accordance with FASB ASC Topic 718 and FASB ASC Subtopic 505-50, “Equity-Based Payments to Non-employees”. Under FASB ASC Topic 718 and FASB ASC Subtopic 505-50, stock compensation granted to non-employees has been determined as the fair value of the consideration received or the fair value of equity instrument issued, whichever is more reliably measured and is recognized as an expense as the goods or services are received. |
Foreign Currency Translation and Other Comprehensive Income | Foreign Currency Translation and Other Comprehensive Income The Company uses United States dollars (“US Dollar” or “US$” or “$”) for financial reporting purposes. However, the Company maintains the books and records in its functional currency, Chinese Renminbi (“RMB”) and Hong Kong Dollar (“HKD”), being the functional currency of the economic environment in which its operations are conducted. In general, the Company translates its assets and liabilities into U.S. dollars using the applicable exchange rates prevailing at the balance sheet date, and the statement of comprehensive loss and the statement of cash flow are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as accumulated other comprehensive income. Other comprehensive income for the nine months ended September 30, 2017 and 2016 represented foreign currency translation adjustments and were included in the unaudited condensed consolidated statements of operations and comprehensive income. The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the unaudited condensed consolidated financial statements were as follows: As of September 30, 2017 As of December 31, 2016 Balance sheet items, except for equity accounts 6.6574 6.9472 Three months ended September 30, 2017 2016 Items in the statements of comprehensive income 6.6721 6.6702 Nine months ended September 30, 2017 2016 Items in the statements of comprehensive income 6.8068 6.5806 The exchange rates used to translate amounts in HKD into U.S. Dollars for the purposes of preparing the consolidated financial statements were as follows: As of September 30, 2017 As of December 31, 2016 Balance sheet items, except for equity accounts 7.8107 - Three months ended September 30, 2017 2016 Items in the statements of comprehensive income 7.8143 - Nine months ended September 30, 2017 2016 Items in the statements of comprehensive income 7.7868 - |
Earnings Per Common Share | Earnings Per Common Share Net income per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. Common stock equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted earnings per share. |
Commitments and Contingencies | Commitments and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unassured claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unassured claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. |
Cash Flow Reporting | Cash Flow Reporting The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of : (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments; (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. ASU 2014-09 also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. Based on the FASB’s Exposure Draft Update issued on April 29, 2015, and approved in July 2015, Revenue from Contracts With Customers (Topic 606): Deferral of the Effective Date, ASU 2014-09 is now effective for reporting periods beginning after December 15, 2017, with early adoption permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. While no significant impact is expected upon adoption of the new guidance, the Company will not be able to make that determination until the time of adoption based upon outstanding contracts at that time. In September 2017, the FASB issued Accounting Standards Update (ASU) No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, on the balance sheet for all leases with terms longer than 12 months, as well as the disclosure of key information about leasing arrangements. ASU 2016-02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term. ASU 2016-02 requires classification of all cash payments within operating activities in the statement of cash flows. Disclosures are required to provide the amount, timing and uncertainty of cash flows arising from leases. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. ASU 2016-02 is effective for fiscal years beginning after December IS, 2018, including interim periods within those fiscal years. Early application is permitted. The Company has not yet evaluated the impact of the adoption of ASU 2016-02 on the Company’s unaudited condensed consolidated financial statement presentation or disclosures. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The amendments in this guidance are clarifying the definition of a business to assist entities when determining whether an integrated set of assets and activities meets the definition of a business. The update provides that when substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this new guidance is not expected to have a material impact on our unaudited condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04—Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this guidance to eliminate the requirement to calculate the implied fair value of goodwill to measure goodwill impairment charge (Step 2). As a result, an impairment charge will equal the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the amount of goodwill allocated to the reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should be applied on a prospective basis. The guidance is effective for goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for goodwill impairment tests performed after January 1, 2017. The impact of this guidance for the Company will depend on the outcomes of future goodwill impairment tests. In May 2017, the FASB issued Accounting Standards Update No. 2017-09 (ASU 2017-09), Compensation — Stock Compensation (Topic 718) Scope of Modification Accounting. The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The adoption of ASU 2017-09 which will become effective for annual periods beginning after December 15, 2017 and for interim periods within those annual periods, is not expected to have any impact on the Company’s unaudited condensed consolidated financial statement presentation or disclosures. In July 2017, the FASB issued Accounting Standards Update No. 2017-11 (ASU 2017-11), Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The amendments in ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The adoption of ASU 2017-11 which will become effective for annual periods beginning after December 15, 2018 and for interim periods within those annual periods. The Company elected to early adopt ASU 2017-11 when preparing these unaudited condensed consolidated financial statements for the nine months ended September 30, 2017. Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s unaudited condensed consolidated financial statement presentation or disclosures. |
Summaries of Significant Acco28
Summaries of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Assets | Depreciation for financial reporting purposes is provided using the straight-line method over the estimated useful lives of the assets as follows: Useful Life (In years) Buildings 30 - 35 Machinery and equipment 5 - 10 Automobiles 8 Office equipment 2 - 5 Computer software 3 Leasehold improvement The shorter of the lease term and useful life |
Schedule of Foreign Currency Exchange Rate | The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the unaudited condensed consolidated financial statements were as follows: As of September 30, 2017 As of December 31, 2016 Balance sheet items, except for equity accounts 6.6574 6.9472 Three months ended September 30, 2017 2016 Items in the statements of comprehensive income 6.6721 6.6702 Nine months ended September 30, 2017 2016 Items in the statements of comprehensive income 6.8068 6.5806 The exchange rates used to translate amounts in HKD into U.S. Dollars for the purposes of preparing the consolidated financial statements were as follows: As of September 30, 2017 As of December 31, 2016 Balance sheet items, except for equity accounts 7.8107 - Three months ended September 30, 2017 2016 Items in the statements of comprehensive income 7.8143 - Nine months ended September 30, 2017 2016 Items in the statements of comprehensive income 7.7868 - |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounts Receivable, Net [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following: September 30, 2017 December 31, 2016 Accounts receivable $ 15,543,835 $ 1,177,994 Less: Allowance for doubtful accounts (298,580 ) (55,240 ) Accounts receivable, net $ 15,245,255 $ 1,122,754 |
Schedule of Movement of Allowance for Doubtful Accounts | Movement of allowance for doubtful accounts is as follows: Nine months ended September 30, 2017 Year ended December 31, 2016 Beginning balance $ 55,240 $ - Provision for doubtful accounts 237,998 55,240 Less: write-off - - Exchange rate effect 5,342 - Ending balance $ 298,580 $ 55,240 |
Prepaid Expense (Tables)
Prepaid Expense (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Prepaid Expense | |
Schedule of Prepaid Expense | Prepaid expenses consisted of the following: Notes September 30, 2017 December 31, 2016 Prepaid office rent $ 21,080 $ 12,504 Prepaid government filing expense 33,036 5,000 Prepaid consulting expenses (1) 1,160,145 1,400,050 $ 1,214,261 $ 1,417,554 (1) Prepaid consulting expense for issuance of common stock As of September 30, 2017, the Company issued a total of 1,825,916 shares of common stock to three consulting companies for investor relation consulting services, one individual for financing service, one consulting company for IT service and four individuals for the growth and development strategy consulting service in China, which represents the amount of $1,922,696 based on quoted price at issuance. Pursuant to the indemnification terms of the services agreements, the Company has the rights to demand the full services being accomplished as scheduled during the service period and to enforce the consultants to pay pro-rata penalties if the consultants do not fulfill the contract services within the services periods. As of September 30, 2017, the Company evaluated the performance of the consultants and concluded all the contracts were on schedule of delivery. The Company recorded the prepaid consulting expenses totally $1,922,696 and amortized the consulting fee over the service periods per agreements based on the progress of services delivered. For the nine months ended September 30, 2017 and 2016, the amortization of consulting expense was $474,301 and $57,717, respectively. |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property Plant and Equipment | Property, plant and equipment, net consisted of the following: September 30, 2017 December 31, 2016 Property, Plant and Equipment Office equipment $ 14,270 $ 896 Furniture 22,813 7,838 Leasehold improvement 74,251 66,896 Construction in progress 26,137 - Others 1,082 - Property, plant and equipment - total $ 138,553 $ 75,630 Less: accumulated depreciation (54,100 ) (20,311 ) Property, plant and equipment - net $ 84,453 $ 55,319 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Gerui [Member] | |
Schedule of Related Party Transactions | Amounts due from related parties consisted of the following as of September 30, 2017 and December 31, 2016: Item Nature Notes September 30, 2017 December 31, 2016 Kangtan Gerui (Beijing) Bio-Tech Co., Ltd. (“Gerui”) Non-trade (1) $ 963,846 $ 1,522,434 Total $ 963,846 $ 1,522,434 (1) Gerui Ms. Feng Li, a member of the Company’s board of directors and shareholder of the Company (Ms. Li held approximately 20% of the Company’s Common Stock and 50% of the Company’s Series A Preferred Stock), is also a 23% shareholder of Gerui. According to the agreement between the Company and Gerui, all the balances will be paid off before June 30, 2018. During the nine months ended September 30, 2017, the Company collected $558,588 from Gerui and the remaining balance was $963,846 as at September 30, 2017. The management has determined that no allowance for doubtful debts was necessary. |
Ms.Wang, CAAS IARRP and IAED Institutes [Member] | |
Schedule of Related Party Transactions | Amounts due to related parties consisted of the following as of September 30, 2017 and December 31, 2016: Item Nature Notes September 30, 2017 December 31, 2016 Ms. Yvonne Wang (“Ms. Wang”) Non-trade (1) 130,199 100,798 Subtotal 130,199 100,798 CAAS IARRP and IAED Institutes Trade (2) - 160,461 Subtotal - 160,461 Total amount due to related parties 130,199 261,259 (1) Ms. Wang Effective as of November 20, 2015, the Company appointed Ms. Wang as the Chairman of the Board and effective as of August 11, 2016, the Company’s Board of Directors has assigned Ms. Wang the additional titles of Acting President, Acting Chief Executive Officer and Acting Chief Financial Officer. During the nine months ended September 30, 2017, Ms. Wang paid various expenses on behalf of the Company. As of September 30, 2017, the amount due to Ms. Wang was $130,199. (2) CAAS IARRP and IAED Institutes On November 5, 2015, the Company signed a strategic cooperation agreement (the “Agreement”) with China Academy of Agricultural Science (“CAAS”)’s Institute of Agricultural Resources & Regional Planning (“IARRP”) and Institute of Agricultural Economy & Development (“IAED”). The term of the Agreement was three years that began on November 20, 2015 and ends on November 19, 2018. Pursuant to the agreement, Kiwa agree to fund RMB 1 million (approximately $160,000) each year to the Spatial Agriculture Planning Method & Applications Innovation Team that belongs to the Institutes. Professor Yong Chang Wu, the authorized representative of CAAS IARRP, is also one of the Company’s directors effective since November 20, 2015 until March 13, 2017. The Company recorded $37,469 and $37,303 research and development expenses related to the institutes, for the three months ended September 30, 2017 and 2016, respectively, and $110,194 and $112,580 research and development expenses for the nine months ended September 30, 2017 and 2016, respectively. The amount due to CAAS IARRP and IAED Institutes was reclassified to other payables and accruals at September 30, 2017 since Professor Yong Chang Wu is no longer the Company’s director from March 13, 2017. See note 13. |
Other Payables and Accruals (Ta
Other Payables and Accruals (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Payable | Other payable consisted of the following: Notes September 30, 2017 December 31, 2016 Stock subscription proceeds received in advance (1) $ 1,310,522 $ 460,617 Investment received in advance (2) - 79,168 Accrued expenses 59,216 385,090 R&D expense payable 271,151 - $ 1,640,889 $ 924,875 (1). The Company received RMB 3.2 million in 2016 and RMB 5.5 million for the nine months ended September 30, 2017 from four unrelated potential investors, which was approximately $1,310,522. The Company has subsequently issued 38,000 shares of common stock to one investor for the amount $ 76,000 (RMB 0.5 million) and the other investment agreements have not been finalized yet for the remaining part. (2). The Company received the investment funds in advance in 2016 from Mr. Geng Liu, which amount was approximately $79,168. Subsequently on January 17, 2017, the Company entered a Convertible Note Agreement with Mr. Geng. The note bears interest at 15% per annum and will mature on January 16, 2018. See Note 12. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities recorded at fair value on recurring basis that were accounted for at fair value as of: September 30, 2017 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Derivative liabilities — — $ 370,733 $ 370,733 Total — — $ 370,733 $ 370,733 |
Schedule of Liabilities Measured at Fair Value on Recurring Basis | The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2017 and for the year ended December 31, 2016: Nine months ended September 30, 2017 Year ended December 31, 2016 Beginning balance $ - $ - Fair value of derivative liabilities at inception 569,784 - Change in fair value of derivative liabilities (199,051 ) - Ending balance $ 370,733 $ - |
Income Tax (Tables)
Income Tax (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of U.S. Tax Rate | A reconciliation of the provision for income taxes from continuing operation determined at the local income tax rate to the Company’s effective income tax rate is as follows: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Pre-tax income (loss) from continuing operation $ (850,876 ) $ 224,712 $ (2,227,413 ) $ 570,397 U.S. federal corporate income tax rate 34 % 34 % 34 % 34 % Income tax expense (benefit) computed at U.S. federal corporation income tax rate (289,298 ) 76,402 (757,320 ) 193,935 Reconciling items: Rate differential for PRC earnings 85,840 (32,403 ) 133,249 (28,419 ) Change of valuation allowance 73,251 60,880 381,789 180,581 Effect of tax exempted income in BVI 7,139 (25,934 ) 21,422 (267,152 ) Effective tax expenses (benefits) $ (123,068 ) $ 78,945 $ (220,860 ) $ 78,945 |
Schedule of Deferred Tax Assets | The Company had deferred tax assets from continuing operation as follows: September 30, 2017 December 31, 2016 Net operating losses carried forward by the Company and its China subsidiaries except for Kiwa Beijing $ 2,814,453 $ 2,555,064 Less: Valuation allowance (2,814,453 ) (2,555,064 ) Bad debt allowance 63,244 - Net operating losses carried forward by Kiwa Beijing 183,628 - Net deferred tax assets $ 246,872 $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Lease Payments | The future lease payments at September 30, 2017 are summarized below. Twelve months ending September 30, 2018 $ 314,214 Twelve months ending September 30, 2019 $ 167,976 Thereafter - Total minimum lease payment $ 482,190 |
Discontinued Operation (Tables)
Discontinued Operation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Disposal Groups, Including Discontinued Operations | The following table summarizes the assets and liabilities of the discontinued operation, excluding intercompany balances eliminated in consolidation, at April 12, 2017 and December 31, 2016, respectively: April 12, 2017 December 31, 2016 Assets held for sale: Property, plant and equipment – Original cost 2,117,324 2,117,324 Less: accumulated depreciation (765,598 ) (765,598 ) Less: impairment (1,351,726 ) (1,351,726 ) Deferred tax assets 1,013,365 1,013,365 Less: Deferred tax assets allowance (1,013,365 ) (1,013,365 ) Total assets of business held for sale $ - $ - Liabilities of business held for sale: Accounts Payable 253,208 251,466 Advances from customers 12,972 12,883 Salary payable 537,127 533,432 Accrued expense 29,035 28,835 Other payable 102,291 101,588 Due to related party-trade 1,130,534 1,122,754 Loan payable 1,666,813 1,655,343 Construction cost payable 257,309 255,539 Tax payable 522,893 502,845 Total liabilities of business held for sale $ 4,512,182 $ 4,464,685 The income statements for the three and nine months ended September 30, 2017 and 2016 reflected the Kiwa Shandong business segment as a discontinued operation. The following results of operations of Kiwa Shandong are presented as a loss from a discontinued operation in the unaudited condensed consolidated statements of operations: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Net sales - - - - Gross profit - - - - Operating expense - 52,166 16,790 159,745 Income tax - - - - Loss from discontinued operations $ - $ 52,166 $ 16,790 $ 159,745 |
Schedule of Calculation of Gain on Sales | The following is the calculation of the gain on the sale of Kiwa Shandong: Selling price $ - Net assets (liabilities) transferred at the transaction date $ (4,512,182 ) Gain on sale of discontinued operations $ 4,512,182 |
Description of Business and O38
Description of Business and Organization (Details Narrative) - USD ($) | 1 Months Ended | |||
Jan. 31, 2016 | Sep. 30, 2017 | Feb. 11, 2017 | Aug. 31, 2016 | |
Percentage of ownership | 89.00% | |||
Gerui [Member] | ||||
Sales percentage | 10.00% | |||
HK Baina Group Holding [Member] | ||||
Payment to acquire business | $ 34,000 | |||
RMB [Member] | HK Baina Group Holding [Member] | ||||
Payment to acquire business | $ 220,000 | |||
Equity Transfer Agreement [Member] | RMB [Member] | ||||
Sale of stock, price per share | $ 1 |
Summaries of Significant Acco39
Summaries of Significant Accounting Policies (Details Narrative) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Accounting Policies [Abstract] | |
Investment term | 3 months |
Income tax largest amount of benefit, description | greater than 50 percent |
Stock based compensation issued or outstanding |
Summaries of Significant Acco40
Summaries of Significant Accounting Policies - Schedule of Estimated Useful Lives of Assets (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Buildings [Member] | Minimum [Member] | |
Property, plant and equipment useful life (In years) | 30 years |
Buildings [Member] | Maximum [Member] | |
Property, plant and equipment useful life (In years) | 35 years |
Machinery And Equipment [Member] | Minimum [Member] | |
Property, plant and equipment useful life (In years) | 5 years |
Machinery And Equipment [Member] | Maximum [Member] | |
Property, plant and equipment useful life (In years) | 10 years |
Automobiles [Member] | |
Property, plant and equipment useful life (In years) | 8 years |
Office Equipment [Member] | Minimum [Member] | |
Property, plant and equipment useful life (In years) | 2 years |
Office Equipment [Member] | Maximum [Member] | |
Property, plant and equipment useful life (In years) | 5 years |
Computer Software [Member] | |
Property, plant and equipment useful life (In years) | 3 years |
Leasehold Improvements [Member] | |
Property, plant and equipment useful life, description | The shorter of the lease term and useful life |
Summaries of Significant Acco41
Summaries of Significant Accounting Policies - Schedule of Foreign Currency Exchange Rate (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Balance Sheet Items, Except for Equity Accounts [Member] | RMB [Member] | |||||
Foreign currency exchange rate, translation | 6.6574 | 6.9472 | |||
Balance Sheet Items, Except for Equity Accounts [Member] | HKD [Member] | |||||
Foreign currency exchange rate, translation | 7.8107 | ||||
Items in the Statements of Comprehensive Income [Member] | RMB [Member] | |||||
Foreign currency exchange rate, translation | 6.6721 | 6.6702 | 6.8068 | 6.5806 | |
Items in the Statements of Comprehensive Income [Member] | HKD [Member] | |||||
Foreign currency exchange rate, translation | 7.8143 | 7.7868 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ 17,072,416 | $ 19,561,255 | |
Net cash used in operating activities | $ 3,367,270 | $ 737,758 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts receivable, net | $ 15,245,255 | $ 1,122,754 | |
Allowance for doubtful accounts | 298,580 | 55,240 | |
Accounts Receivable [Member] | |||
Accounts receivable collected amount | $ 8,700,000 | $ 6,800,000 | |
Allowance for doubtful accounts description | Currently, the Company provides a provision of 1%-6% of the allowance for doubtful accounts for accounts receivable balance that are more than 180 days old but less than one year old, 50% of the allowance for doubtful accounts for accounts receivable from one to one and half years old, 100% of the allowance for doubtful accounts for accounts receivable beyond one and half years old, plus additional amount as necessary, which the Companys collection department had determined the collection of the full amount is remote with the approval from its management to provide a 100% provision allowance for doubtful accounts. |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Accounts Receivable (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Receivable, Net [Abstract] | |||
Accounts receivable | $ 15,543,835 | $ 1,177,994 | |
Less: Allowance for doubtful accounts | (298,580) | (55,240) | |
Accounts receivable, net | $ 15,245,255 | $ 1,122,754 |
Accounts Receivable, Net - Sc45
Accounts Receivable, Net - Schedule of Movement of Allowance for Doubtful Accounts (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Accounts Receivable, Net [Abstract] | |||
Beginning balance | $ 55,240 | ||
Provision for doubtful accounts | 237,998 | 55,240 | |
Less: write-off | |||
Exchange rate effect | 5,342 | ||
Ending balance | $ 298,580 | $ 55,240 |
Prepaid Expense (Details Narrat
Prepaid Expense (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Stock issued for services, value | $ 234,396 | |
Prepaid consulting expenses | 1,922,696 | |
Amortization of consulting expenses | $ 474,301 | $ 57,717 |
Three Consulting Companies [Member] | ||
Stock issued for services | 1,825,916 | |
Stock issued for services, value | $ 1,922,696 |
Prepaid Expense - Schedule of P
Prepaid Expense - Schedule of Prepaid Expense (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | |
Prepaid Expense | |||
Prepaid office rent | $ 21,080 | $ 12,504 | |
Prepaid government filing expense | 33,036 | 5,000 | |
Prepaid consulting expenses | [1] | 1,160,145 | 1,400,050 |
Prepaid expenses | $ 1,214,261 | $ 1,417,554 | |
[1] | Prepaid consulting expense for issuance of common stock As of September 30, 2017, the Company issued a total of 1,825,916 shares of common stock to three consulting companies for investor relation consulting services, one individual for financing service, one consulting company for IT service and four individuals for the growth and development strategy consulting service in China, which represents the amount of $1,922,696 based on quoted price at issuance. Pursuant to the indemnification terms of the services agreements, the Company has the rights to demand the full services being accomplished as scheduled during the service period and to enforce the consultants to pay pro-rata penalties if the consultants do not fulfill the contract services within the services periods. As of September 30, 2017, the Company evaluated the performance of the consultants and concluded all the contracts were on schedule of delivery. The Company recorded the prepaid consulting expenses totally $1,922,696 and amortized the consulting fee over the service periods per agreements based on the progress of services delivered. For the nine months ended September 30, 2017 and 2016, the amortization of consulting expense was $474,301 and $57,717, respectively. |
Advance to Suppliers (Details N
Advance to Suppliers (Details Narrative) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Advance To Suppliers | ||
Advance to suppliers | $ 2,979,664 | $ 1,880,044 |
Property, Plant and Equipment49
Property, Plant and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 11,878 | $ 10,045 | $ 29,527 | $ 13,039 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property Plant and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property, plant and equipment - total | $ 138,553 | $ 75,630 |
Less: accumulated depreciation | (54,100) | (20,311) |
Property, plant and equipment - net | 84,453 | 55,319 |
Office Equipment [Member] | ||
Property, plant and equipment - total | 14,270 | 896 |
Furniture [Member] | ||
Property, plant and equipment - total | 22,813 | 7,838 |
Leasehold Improvement [Member] | ||
Property, plant and equipment - total | 74,251 | 66,896 |
Construction in Progress [Member] | ||
Property, plant and equipment - total | 26,137 | |
Others [Member] | ||
Property, plant and equipment - total | $ 1,082 |
Deposit for Long-Term Investm51
Deposit for Long-Term Investment (Details Narrative) | Jun. 08, 2017USD ($) | Jun. 08, 2017CNY (¥) | Sep. 30, 2017USD ($) | Sep. 30, 2017CNY (¥) |
Ownership interest | 89.00% | 89.00% | ||
Equity Purchase Agreement [Member] | ||||
Payments to acquire new factory | $ | $ 751,050 | |||
Equity Purchase Agreement [Member] | RMB [Member] | ||||
Payments to acquire new factory | ¥ | ¥ 5,000,000 | |||
Yantai Peng Hao New Materials Technology Co. Ltd [Member] | Equity Purchase Agreement [Member] | ||||
Ownership interest | 100.00% | 100.00% | ||
Payments to acquire new factory | $ | $ 2,200,000 | |||
Yantai Peng Hao New Materials Technology Co. Ltd [Member] | Equity Purchase Agreement [Member] | RMB [Member] | ||||
Payments to acquire new factory | ¥ | ¥ 15,000,000 |
Salary Payable (Details Narrati
Salary Payable (Details Narrative) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Chairman of Board and CEO [Member] | ||
Due to officers | $ 1,208,492 | $ 1,145,492 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | Nov. 05, 2015USD ($) | Nov. 05, 2015CNY (¥) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) |
Related Party Transaction [Line Items] | ||||||
Ownership interest | 89.00% | 89.00% | ||||
Research and development costs | $ 37,469 | $ 37,303 | $ 110,194 | $ 112,580 | ||
Gerui [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership interest | 23.00% | 23.00% | ||||
Proceeds collected from related parties | $ 558,588 | |||||
Due from related party | $ 963,846 | 963,846 | ||||
Ms.Wang [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties | 130,199 | 130,199 | ||||
CAAS IARRP and IAED Institutes [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction amount | $ 160,000 | |||||
Research and development costs | $ 37,469 | $ 37,303 | $ 110,194 | $ 112,580 | ||
CAAS IARRP and IAED Institutes [Member] | RMB [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction amount | ¥ | ¥ 1,000,000 | |||||
Series A Preferred Stock [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership interest | 50.00% | 50.00% | ||||
Common Stock [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership interest | 20.00% | 20.00% |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Due to related parties | $ 130,199 | $ 261,259 | |
Gerui [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | 963,846 | 1,522,434 | |
Gerui [Member] | Non-Trade Transaction [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | [1] | 963,846 | 1,522,434 |
Ms.Wang [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 130,199 | 100,798 | |
Ms.Wang [Member] | Non-Trade Transaction [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties | [2] | 130,199 | 100,798 |
CAAS IARRP and IAED Institutes [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 160,461 | ||
CAAS IARRP and IAED Institutes [Member] | Trade Transaction [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties | [3] | $ 160,461 | |
[1] | Gerui Ms. Feng Li, a member of the Company's board of directors and shareholder of the Company (Ms. Li held approximately 20% of the Company's Common Stock and 50% of the Company's Series A Preferred Stock), is also a 23% shareholder of Gerui. According to the agreement between the Company and Gerui, all the balances will be paid off before June 30, 2018. During the nine months ended September 30, 2017, the Company collected $558,588 from Gerui oand the remaining balance was $963,846 as at September 30, 2017. The management has determined that no allowance for doubtful debts was necessary. | ||
[2] | Ms. Wang Effective as of November 20, 2015, the Company appointed Ms. Wang as the Chairman of the Board and effective as of August 11, 2016, the Company's Board of Directors has assigned Ms. Wang the additional titles of Acting President, Acting Chief Executive Officer and Acting Chief Financial Officer. During the nine months ended September 30, 2017, Ms. Wang paid various expenses on behalf of the Company. As of September 30, 2017, the amount due to Ms. Wang was $130,199. | ||
[3] | CAAS IARRP and IAED Institutes On November 5, 2015, the Company signed a strategic cooperation agreement (the "Agreement") with China Academy of Agricultural Science ("CAAS")'s Institute of Agricultural Resources & Regional Planning ("IARRP") and Institute of Agricultural Economy & Development ("IAED"). The term of the Agreement was three years that began on November 20, 2015 and ends on November 19, 2018. Pursuant to the agreement, Kiwa agree to invest RMB 1 million (approximately $160,000) each year to the Spatial Agriculture Planning Method & Applications Innovation Team that belongs to the Institutes. Professor Yong Chang Wu, the authorized representative of CAAS IARRP, is also one of the Company's directors effective since November 20, 2015 until March 13, 2017. The Company recorded $37,469 and $37,303 research and development expenses related to the institutes, for the three months ended September 30, 2017 and 2016, respectively, and $110,194 and $112,580 research and development expenses for the nine months ended September 30, 2017 and 2016, respectively. The amount due to CAAS IARRP and IAED Institutes was reclassified to other payables and accruals at September 30, 2017 since Professor Yong Chang Wu is no longer the Company's director from March 13, 2017. See note 13. |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) | May 09, 2017USD ($)$ / shares | Jan. 17, 2017USD ($)$ / shares | Jan. 17, 2017USD ($)$ / shares | Aug. 12, 2013USD ($) | Mar. 18, 2008USD ($) | Jun. 29, 2006USD ($) | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2017CNY (¥) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | May 09, 2017CNY (¥) | Jan. 17, 2017CNY (¥) | Dec. 31, 2015USD ($) |
Convertible notes payable | $ 286,992 | $ 286,992 | $ 150,250 | ||||||||||||
Accrued interest expense | 356,256 | $ 142,296 | |||||||||||||
Interest expense | 22,500 | $ 22,500 | 67,500 | 67,500 | |||||||||||
Debt instruments face amount | $ 227,051 | ||||||||||||||
Proceeds from convertible notes payable | 976,356 | ||||||||||||||
Derivative liability | $ 569,784 | 370,733 | 370,733 | ||||||||||||
Derivative liabilities fair value | 370,733 | 370,733 | |||||||||||||
Gain loss on derivative | 205,612 | 199,051 | |||||||||||||
Change in fair value of derivative liabilities | 199,051 | ||||||||||||||
Purchasers [Member] | Securities Purchase Agreement [Member] | |||||||||||||||
Convertible notes payable | $ 2,450,000 | ||||||||||||||
Percentage of secured convertible notes issued | 6.00% | ||||||||||||||
Notes beard interest | 6.00% | ||||||||||||||
Holders [Member] | Securities Purchase Agreement [Member] | |||||||||||||||
Convertible notes payable | $ 2,000,000 | ||||||||||||||
Notes beard interest | 6.00% | ||||||||||||||
Payment of debt | $ 75,000 | ||||||||||||||
15% Convertible Note [Member] | |||||||||||||||
Convertible notes payable | $ 136,742 | $ 136,742 | |||||||||||||
6% Notes [Member] | |||||||||||||||
Notes beard interest | 15.00% | ||||||||||||||
Debt instruments maturity date | Jun. 29, 2009 | ||||||||||||||
FirsTrust Group, Inc [Member] | |||||||||||||||
Convertible notes payable | $ 150,250 | $ 150,250 | |||||||||||||
Notes beard interest | 15.00% | 15.00% | 15.00% | 15.00% | |||||||||||
Conversion price percentage | 40.00% | 40.00% | |||||||||||||
Percentage of common stock outstanding | 4.99% | 4.99% | |||||||||||||
Percentage of equal outstanding amount of notes | 2.00% | 2.00% | |||||||||||||
Conversion of debt upon stock issued percentage | 110.00% | 110.00% | |||||||||||||
Penalty damage expense | $ 61,730 | $ 57,672 | |||||||||||||
Accrued interest expense | 16,857 | 16,919 | |||||||||||||
Interest expense | 200,218 | 177,681 | |||||||||||||
Accrued liquidated damages | 544,056 | $ 462,423 | |||||||||||||
15% Convertible Notes [Member] | Geng Liu [Member] | Convertible Note Agreement [Member] | |||||||||||||||
Convertible notes payable | $ 136,742 | 136,742 | |||||||||||||
Notes beard interest | 15.00% | 15.00% | 15.00% | ||||||||||||
Debt instruments maturity date | Jan. 16, 2018 | ||||||||||||||
Accrued interest expense | 45,535 | ||||||||||||||
Debt conversion price | $ / shares | $ 0.90 | $ 0.90 | |||||||||||||
Partial principal | 150,208 | ||||||||||||||
Minimum conversion price | $ / shares | $ 0.9 | ||||||||||||||
Intrinsic value of beneficial conversion feature | $ 45,094 | ||||||||||||||
Proceeds from convertible notes payable | 99,850 | ||||||||||||||
15% Convertible Notes [Member] | Geng Liu [Member] | Convertible Note Agreement [Member] | RMB [Member] | |||||||||||||||
Debt instruments face amount | ¥ | ¥ 3,000,000 | ||||||||||||||
Partial principal | ¥ | ¥ 1,000,000 | ||||||||||||||
15% Convertible Notes [Member] | Mr. Junwei Zheng [Member] | Convertible Note Agreement [Member] | |||||||||||||||
Convertible notes payable | $ 370,321 | 370,321 | |||||||||||||
Notes beard interest | 15.00% | 15.00% | |||||||||||||
Debt instruments maturity date | May 8, 2019 | ||||||||||||||
Accrued interest expense | 162,520 | ||||||||||||||
Debt conversion price | $ / shares | $ 3.5 | ||||||||||||||
Partial principal | $ 826,148 | ||||||||||||||
Minimum conversion price | $ / shares | 3.5 | ||||||||||||||
Strike price of conversion options | $ / shares | $ 3.5 | $ 3.5 | |||||||||||||
Expected volatility, rate | 260.80% | 158.10% | 158.10% | ||||||||||||
Expected dividend yield, rate | 0.00% | 0.00% | 0.00% | ||||||||||||
Risk-free interest rate | 1.37% | 1.43% | 1.43% | ||||||||||||
Expected term | 2 years | 1 year 6 months 29 days | 1 year 6 months 29 days | ||||||||||||
Market price | $ / shares | $ 2.7 | $ 2.5 | $ 2.5 | ||||||||||||
Derivative liabilities fair value | $ 370,733 | $ 370,733 | |||||||||||||
Gain loss on derivative | 205,612 | 205,612 | |||||||||||||
Change in fair value of derivative liabilities | $ 199,051 | $ 199,051 | |||||||||||||
15% Convertible Notes [Member] | Mr. Junwei Zheng [Member] | Convertible Note Agreement [Member] | RMB [Member] | |||||||||||||||
Debt instruments face amount | ¥ | ¥ 30,000,000 | ||||||||||||||
Partial principal | ¥ | ¥ 5,500,000 | ||||||||||||||
FirsTrust Group, Inc [Member] | |||||||||||||||
Convertible notes payable | $ 150,250 | ||||||||||||||
Percentage of secured convertible notes issued | 6.00% | ||||||||||||||
FirsTrust Group, Inc [Member] | 6% Convertible Note [Member] | |||||||||||||||
Percentage of secured convertible notes issued | 6.00% | ||||||||||||||
Payment acquire debt | $ 168,000 | ||||||||||||||
Cash payment | 100,000 | ||||||||||||||
FirsTrust Group, Inc [Member] | 6% Convertible Note [Member] | Share-based Compensation Award, Tranche One [Member] | |||||||||||||||
Payment acquire debt | 59,100 | ||||||||||||||
FirsTrust Group, Inc [Member] | 6% Convertible Note [Member] | Share-based Compensation Award, Tranche Two [Member] | |||||||||||||||
Payment acquire debt | 50,400 | ||||||||||||||
FirsTrust Group, Inc [Member] | 6% Convertible Note [Member] | Share-based Compensation Award, Tranche Three [Member] | |||||||||||||||
Payment acquire debt | 59,100 | ||||||||||||||
Mr. Geng Liu [Member] | |||||||||||||||
Convertible notes payable | $ 150,208 | 150,208 | |||||||||||||
Percentage of secured convertible notes issued | 15.00% | ||||||||||||||
Debt discount | $ 13,466 | $ 13,466 | |||||||||||||
Nite Capital LP [Member] | 6% Secured Convertible Note [Member] | Six Institutional Investors [Member] | |||||||||||||||
Payment acquire debt | 300,000 | ||||||||||||||
Nite Capital LP [Member] | 6% Secured Convertible Note [Member] | Six Institutional Investors [Member] | Share-based Compensation Award, Tranche One [Member] | |||||||||||||||
Payment acquire debt | 105,000 | ||||||||||||||
Nite Capital LP [Member] | 6% Secured Convertible Note [Member] | Six Institutional Investors [Member] | Share-based Compensation Award, Tranche Two [Member] | |||||||||||||||
Payment acquire debt | 90,000 | ||||||||||||||
Nite Capital LP [Member] | 6% Secured Convertible Note [Member] | Six Institutional Investors [Member] | Share-based Compensation Award, Tranche Three [Member] | |||||||||||||||
Payment acquire debt | $ 105,000 | ||||||||||||||
Mr. Junwei Zheng [Member] | |||||||||||||||
Convertible notes payable | $ 826,148 | ||||||||||||||
Percentage of secured convertible notes issued | 15.00% |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | May 29, 2007 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Promissory note | $ 360,000 | $ 360,000 | $ 360,000 | |||
Accrued interest expense | 22,500 | $ 22,500 | 67,500 | $ 67,500 | ||
Unrelated Individual [Member] | ||||||
Promissory note | $ 360,000 | |||||
Note interest rate | 18.00% | |||||
Note maturity date | Jul. 27, 2007 | |||||
Note default rate | 25.00% | |||||
FirsTrust [Member] | ||||||
Promissory note | $ 360,000 | 360,000 | ||||
Accrued interest expense | $ 926,800 |
Other Payables and Accruals (De
Other Payables and Accruals (Details Narrative) | Jan. 17, 2017 | Sep. 30, 2017USD ($)shares | Sep. 30, 2017CNY (¥)shares | Sep. 30, 2017CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | |
Stock subscription received | [1] | $ 1,310,522 | $ 460,617 | ||||
Investment received in advance | [2] | 79,168 | |||||
Four Unrelated Potential Investors [Member] | RMB [Member] | |||||||
Stock subscription received | ¥ | ¥ 5,500,000 | ¥ 3,200,000 | |||||
One Investors [Member] | |||||||
Stock issued during period, shares | shares | 38,000 | 38,000 | |||||
Stock issued during period, value | $ 76,000 | ||||||
One Unrelated Potential Investors [Member] | RMB [Member] | |||||||
Stock issued during period, value | ¥ | ¥ 500,000 | ||||||
Mr. Geng Liu [Member] | |||||||
Investment received in advance | $ 79,168 | ||||||
Mr. Geng Liu [Member] | Convertible Note Agreement [Member] | |||||||
Debt intrument, interest rate | 15.00% | ||||||
Debt instrument, maturity date | Jan. 16, 2018 | ||||||
[1] | The Company received RMB 3.2 million in 2016 and RMB 5.5 million for the nine months ended September 30, 2017 from four unrelated potential investors, which was approximately $1,310,522. The Company has subsequently issued 38,000 shares of common stock to one investor for the amount $ 76,000 (RMB 0.5 million) and the other investment agreements have not been finalized yet for the remaining part. | ||||||
[2] | The Company received the investment funds in advance in 2016 from Mr. Geng Liu, which amount was approximately $79,168. Subsequently on January 17, 2017, the Company entered a Convertible Note Agreement with Mr. Geng. The note bears interest at 15% per annum and will mature on January 16, 2018. See Note 12. |
Other Payables and Accruals - S
Other Payables and Accruals - Schedule of Other Payables (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |||
Stock subscription proceeds received in advance | [1] | $ 1,310,522 | $ 460,617 |
Investment received in advance | [2] | 79,168 | |
Accrued expenses | 59,216 | 385,090 | |
R&D expense payable | 271,151 | ||
Other payables | $ 1,640,889 | $ 924,875 | |
[1] | The Company received RMB 3.2 million in 2016 and RMB 5.5 million for the nine months ended September 30, 2017 from four unrelated potential investors, which was approximately $1,310,522. The Company has subsequently issued 38,000 shares of common stock to one investor for the amount $ 76,000 (RMB 0.5 million) and the other investment agreements have not been finalized yet for the remaining part. | ||
[2] | The Company received the investment funds in advance in 2016 from Mr. Geng Liu, which amount was approximately $79,168. Subsequently on January 17, 2017, the Company entered a Convertible Note Agreement with Mr. Geng. The note bears interest at 15% per annum and will mature on January 16, 2018. See Note 12. |
Stockholders_ Equity (Deficie59
Stockholders’ Equity (Deficiency) (Details Narrative) | Jun. 30, 2017USD ($)$ / sharesshares | Jan. 17, 2017USD ($) | Jan. 17, 2017CNY (¥) | Jan. 14, 2016$ / sharesshares | Dec. 14, 2015USD ($)shares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($) | Dec. 31, 2016$ / sharesshares |
Reserve split stock | 1-for-200 | |||||||
Capital stock, shares authorized | shares | 120,000,000 | |||||||
Common stock, shares authorized | shares | 100,000,000 | 100,000,000 | 100,000,000 | |||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares authorized | shares | 20,000,000 | 20,000,000 | 20,000,000 | |||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Proceeds from issuance of common stock | $ 3,221,127 | $ 766,281 | ||||||
Proceeds from convertible note | $ 976,356 | |||||||
10 Employees [Member] | ||||||||
Common stock issued during period, cash, shares | shares | 97,850 | |||||||
Shares issued price per share | $ / shares | $ 1.95 | |||||||
Stock issued during period | $ 190,807 | |||||||
Expenses of employee benefits | $ 102,273 | |||||||
Consultants [Member] | Seven Consulting Agreements [Member] | ||||||||
Common stock issued during period, cash, shares | shares | 665,988 | |||||||
Common Stock [Member] | ||||||||
Common stock issued during period, cash, shares | shares | 1,674,900 | |||||||
Proceeds from issuance of common stock | $ 2,410,654 | |||||||
Two Related Party Individuals [Member] | Preferred Stock [Member] | ||||||||
Stock issued during period cancelled | shares | 500,000 | |||||||
Stock issued during period cancelled, value | $ 1,000,000 | |||||||
Mr. Geng Liu [Member] | ||||||||
Proceeds from convertible note | $ 144,944 | |||||||
Intrinsic value of beneficial conversion feature | $ 45,094 | |||||||
Mr. Geng Liu [Member] | RMB [Member] | ||||||||
Proceeds from convertible note | ¥ | ¥ 1,000,000 |
Stock-based Compensation (Detai
Stock-based Compensation (Details Narrative) | Mar. 15, 2017 |
Board of Directors [Member] | |
Stock option plan term | 10 years |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) | Sep. 30, 2017 | May 09, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Derivative liabilities | $ 370,733 | $ 569,784 | ||
Total | 370,733 | |||
Fair Value, Inputs, Level 1 [Member] | ||||
Derivative liabilities | ||||
Total | ||||
Fair Value, Inputs, Level 2 [Member] | ||||
Derivative liabilities | ||||
Total | ||||
Fair Value, Inputs, Level 3 [Member] | ||||
Derivative liabilities | 370,733 | |||
Total | $ 370,733 |
Fair Value Measurements - Sch62
Fair Value Measurements - Schedule of Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | ||
Beginning balance | ||
Fair value of derivative liabilities at inception | 569,784 | |
Change in fair value of derivative liabilities | (199,051) | |
Ending balance | $ 370,733 |
Income Tax (Details Narrative)
Income Tax (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Effective income tax rate | 25.00% | |
Operating loss carry forwards | $ 8,300,000 | $ 7,500,000 |
Deferred tax assets on bad debt allowance | 100,000 | |
Unrecognized tax benefits | ||
Interest and penalties | ||
Provision for interest and penalties | ||
United States [Member] | ||
Effective income tax rate | 34.00% |
Income Tax - Schedule of Reconc
Income Tax - Schedule of Reconciliation of U.S. Tax Rate (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Pre-tax income (loss) from continuing operation | $ (850,876) | $ 224,712 | $ (2,227,413) | $ 570,397 |
U.S. federal corporate income tax rate | 34.00% | 34.00% | 34.00% | 34.00% |
Income tax expense (benefit) computed at U.S. federal corporation income tax rate | $ (289,298) | $ 76,402 | $ (757,320) | $ 193,935 |
Rate differential for PRC earnings | 85,840 | (32,403) | 133,249 | (28,419) |
Change of valuation allowance | 73,251 | 60,880 | 381,789 | 180,581 |
Effect of tax exempted income in BVI | 7,139 | (25,934) | 21,422 | (267,152) |
Effective tax expenses (benefits) | $ (123,068) | $ 78,945 | $ (220,860) | $ 78,945 |
Income Tax - Schedule of Deferr
Income Tax - Schedule of Deferred Tax Assets (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Net operating losses carried forward by the Company and its China subsidiaries except for Kiwa Beijing | $ 2,814,453 | $ 2,555,064 |
Less: Valuation allowance | (2,814,453) | (2,555,064) |
Bad debt allowance | 63,244 | |
Net operating losses carried forward by Kiwa Beijing | 183,628 | |
Net deferred tax assets | $ 246,872 |
Commitments and Contingencies66
Commitments and Contingencies (Details Narrative) | Sep. 02, 2017USD ($) | Sep. 02, 2017CNY (¥) | Jul. 04, 2017USD ($) | Jul. 04, 2017CNY (¥) | Jul. 02, 2017USD ($) | Jun. 20, 2017USD ($) | Jun. 20, 2017CNY (¥) | Jun. 08, 2017USD ($) | Jun. 08, 2017CNY (¥) | May 05, 2017USD ($) | Mar. 02, 2017USD ($) | Mar. 02, 2017CNY (¥) | Nov. 20, 2016USD ($) | Nov. 20, 2016CNY (¥) | Mar. 21, 2016USD ($) | Mar. 21, 2016CNY (¥) | Nov. 05, 2015USD ($) | Nov. 05, 2015CNY (¥) | Sep. 30, 2017USD ($) | Sep. 30, 2017CNY (¥) |
Kiwa Baiao Bio-Tech (Beijing) Co., Ltd [Member] | Office Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | $ | $ 10,536 | |||||||||||||||||||
Lease term | 2 years | 2 years | ||||||||||||||||||
Kiwa Baiao Bio-Tech (Beijing) Co., Ltd [Member] | Apartment Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | $ | $ 896 | |||||||||||||||||||
Lease term | 1 year | 1 year | ||||||||||||||||||
Lease Expiration Date | May 31, 2017 | May 31, 2017 | ||||||||||||||||||
Kiwa Baiao Bio-Tech (Shenzhen) Co., Ltd [Member] | Office Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | $ | $ 17,213 | $ 4,320 | ||||||||||||||||||
Lease term | 2 years | 2 years | 1 year | 1 year | ||||||||||||||||
Kiwa Baiao Bio-Tech (Shenzhen) Co., Ltd [Member] | Office Lease Agreement [Member] | Second Year [Member] | ||||||||||||||||||||
Payments for Rent | $ | $ 18,245 | |||||||||||||||||||
Kiwa Baiao Bio-Tech Product Group [Member] | Office Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | $ | $ 301 | $ 1,087 | $ 781 | |||||||||||||||||
Lease term | 1 year | 1 year | 1 year | 13 months | ||||||||||||||||
Kiwa Baiao Bio-Tech Product Group [Member] | Apartment Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | $ | $ 161 | |||||||||||||||||||
Lease term | 1 year | 1 year | ||||||||||||||||||
Kiwa Baiao Bio-Tech Product Group [Member] | Storage Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | $ | $ 721 | |||||||||||||||||||
Lease term | 1 year | 1 year | ||||||||||||||||||
CAAS IARRP and IAED Institutes [Member] | ||||||||||||||||||||
Related party transaction, amounts of transaction | $ | $ 160,000 | |||||||||||||||||||
Description of related party transaction | The term of the Agreement is for three years beginning November 20, 2015 and will expire on November 19, 2018. | The term of the Agreement is for three years beginning November 20, 2015 and will expire on November 19, 2018. | ||||||||||||||||||
RMB [Member] | Kiwa Baiao Bio-Tech (Beijing) Co., Ltd [Member] | Office Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | ¥ | ¥ 68,133 | |||||||||||||||||||
RMB [Member] | Kiwa Baiao Bio-Tech (Beijing) Co., Ltd [Member] | Apartment Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | ¥ | ¥ 6,000 | |||||||||||||||||||
RMB [Member] | Kiwa Baiao Bio-Tech (Shenzhen) Co., Ltd [Member] | Office Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | ¥ | ¥ 117,221 | ¥ 29,000 | ||||||||||||||||||
RMB [Member] | Kiwa Baiao Bio-Tech (Shenzhen) Co., Ltd [Member] | Office Lease Agreement [Member] | Second Year [Member] | ||||||||||||||||||||
Payments for Rent | ¥ | ¥ 124,254 | |||||||||||||||||||
RMB [Member] | Kiwa Baiao Bio-Tech Product Group [Member] | Office Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | ¥ | ¥ 2,000 | |||||||||||||||||||
RMB [Member] | Kiwa Baiao Bio-Tech Product Group [Member] | Apartment Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | $ | $ 1,060 | |||||||||||||||||||
RMB [Member] | Two Institutes In China [Member] | ||||||||||||||||||||
Related party transaction, amounts of transaction | ¥ | ¥ 1,000,000 | |||||||||||||||||||
RMB [Member] | CAAS IARRP and IAED Institutes [Member] | ||||||||||||||||||||
Related party transaction, amounts of transaction | ¥ | ¥ 1,000,000 | |||||||||||||||||||
RMB [Member] | Kiwa Baiao Bio-Tech Product Group [Member] | Storage Lease Agreement [Member] | ||||||||||||||||||||
Payments for Rent | ¥ | ¥ 4,800 | |||||||||||||||||||
Equity Purchase Agreement [Member] | ||||||||||||||||||||
Acquisition of purchase price | $ | $ 2,200,000 | |||||||||||||||||||
Equity Purchase Agreement [Member] | First Payment [Member] | ||||||||||||||||||||
Payment of purchase agreement | $ | $ 751,050 | |||||||||||||||||||
Equity Purchase Agreement [Member] | RMB [Member] | ||||||||||||||||||||
Acquisition of purchase price | ¥ | ¥ 15,000,000 | |||||||||||||||||||
Equity Purchase Agreement [Member] | RMB [Member] | First Payment [Member] | ||||||||||||||||||||
Payment of purchase agreement | ¥ | ¥ 5,000,000 | |||||||||||||||||||
Equity Purchase Agreement [Member] | RMB [Member] | Second Payment [Member] | ||||||||||||||||||||
Payment of purchase agreement | ¥ | ¥ 10,000,000 | |||||||||||||||||||
Peng Hao [Member] | Equity Purchase Agreement [Member] | ||||||||||||||||||||
Acquisition percentage | 100.00% | 100.00% |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Lease Payments (Details) | Sep. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Twelve months ending September 30, 2018 | $ 314,214 |
Twelve months ending September 30, 2019 | 167,976 |
Thereafter | |
Total minimum lease payment | $ 482,190 |
Concentration of Risk (Details
Concentration of Risk (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash and cash equivalents | $ 23,275 | $ 545 | $ 13,469 | $ 721 |
Customer One [Member] | Accounts Receivable [Member] | ||||
Concentration risk percentage | 45.00% | 100.00% | ||
Customer One [Member] | Sales [Member] | ||||
Concentration risk percentage | 23.00% | |||
Customer Two [Member] | Accounts Receivable [Member] | ||||
Concentration risk percentage | 30.00% | |||
Customer Two [Member] | Sales [Member] | ||||
Concentration risk percentage | 14.00% | |||
Customer Three [Member] | Accounts Receivable [Member] | ||||
Concentration risk percentage | 12.00% | |||
Customer Three [Member] | Sales [Member] | ||||
Concentration risk percentage | 14.00% | |||
Customer Four [Member] | Sales [Member] | ||||
Concentration risk percentage | 14.00% | |||
Customer Five [Member] | Sales [Member] | ||||
Concentration risk percentage | 14.00% | |||
One Customer [Member] | Sales Revenue, Net [Member] | ||||
Concentration risk percentage | 100.00% | |||
One Supplier [Member] | Cost of Goods, Total [Member] | ||||
Concentration risk percentage | 93.00% | 91.00% | ||
Supplier One [Member] | Accounts Payable [Member] | ||||
Concentration risk percentage | 81.00% | 57.00% | ||
Supplier Two [Member] | Accounts Payable [Member] | ||||
Concentration risk percentage | 13.00% | 43.00% |
Discontinued Operation (Details
Discontinued Operation (Details Narrative) | Feb. 11, 2017 |
RMB [Member] | |
Foreign currency translation | 1 |
Discontinued Operation - Summar
Discontinued Operation - Summary of Disposal Groups, Including Discontinued Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Apr. 12, 2017 | Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||||
Property, plant and equipment - total | $ 2,117,324 | $ 2,117,324 | ||||
Less: accumulated depreciation | (765,598) | (765,598) | ||||
Less: impairment on long-lived assets | (1,351,726) | (1,351,726) | ||||
Deferred tax assets | 1,013,365 | 1,013,365 | ||||
Less: Deferred tax assets allowance | (1,013,365) | (1,013,365) | ||||
Total assets of business held for sale | ||||||
Accounts Payable | 253,208 | 251,466 | ||||
Advances from customers | 12,972 | 12,883 | ||||
Salary payable | 537,127 | 533,432 | ||||
Accrued expense | 29,035 | 28,835 | ||||
Other payable | 102,291 | 101,588 | ||||
Due to related party-trade | 1,130,534 | 1,122,754 | ||||
Loan payable | 1,666,813 | 1,655,343 | ||||
Construction cost payable | 257,309 | 255,539 | ||||
Tax payable | 522,893 | 502,845 | ||||
Total liabilities of business held for sale | $ 4,512,182 | $ 4,464,685 | ||||
Net sales | ||||||
Gross profit | ||||||
Operating expense | 52,166 | 16,790 | 159,745 | |||
Income tax | ||||||
Loss from discontinued operations | $ 52,166 | $ 16,790 | $ 159,745 |
Discontinued Operation - Schedu
Discontinued Operation - Schedule of Calculation of Gain on Sales (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Selling price | ||||
Net assets (liabilities) transferred at the transaction date | (4,512,182) | |||
Gain on sale of discontinued operations | $ 4,512,182 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Oct. 24, 2017 | Oct. 19, 2017 |
FirsTrust Group, Inc [Member] | ||
Number of common shares issued for conversion of convertible notes | 14,151 | |
Common stock conversion price per share | $ 1.04 | |
Conversion percentage | 40.00% | |
Erli Wei [Member] | Restricted Stock Common [Member] | ||
Shares issued during period restricted shares | 38,000 | |
Shares issued price per share | $ 2 | |
Shares issued during period restricted, value | $ 76,000 | |
Nine Individuals [Member] | ||
Shares issued during period, shares issued for services | 1,338,000 |