Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 15-May-15 | |
Document Information [Line Items] | ||
Entity Registrant Name | Comjoyful International Co | |
Entity Central Index Key | 13033 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | KJFI | |
Entity Common Stock, Shares Outstanding | 2,080,873 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
Current assets: | ||||
Cash | $58,074 | $28,329 | ||
Inventories | 151,229 | 154,771 | ||
Other current assets | 74,189 | 62,428 | ||
Total current assets | 283,492 | 245,528 | ||
Property and equipment, net | 92,878 | 100,480 | ||
Advance payment for leasehold improvements | 778,234 | 752,776 | ||
Rental deposits | 97,502 | 97,099 | ||
Intangible assets, net | 20,432 | 22,102 | ||
Total Assets | 1,272,538 | 1,217,985 | ||
Current liabilities: | ||||
Other current liabilities | 1,583,499 | [1] | 1,517,751 | [1] |
Due to third parties | 770,058 | [1] | 687,539 | [1] |
Due to owners | 784,874 | [1] | 283,054 | [1] |
Unearned income-current portion | 511,289 | [1] | 802,148 | [1] |
Total current liabilities | 3,649,720 | 3,290,492 | ||
Unearned income-long-term portion | 2,724,279 | [1] | 2,484,025 | [1] |
Advances from investors of new clubs | 553,867 | [1] | 551,578 | [1] |
Total liabilities | 6,927,866 | 6,326,095 | ||
Commitments and Contingencies | ||||
Deficit | ||||
Preferred stock, $0.01 par value,100,000,000 shares authorized; none issued | 0 | 0 | ||
Common stock, $0.01 par value, 50,000,000 shares authorized, 2,080,873 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 20,808 | 20,808 | ||
Additional Paid-in capital | 3,134,763 | 3,139,140 | ||
Accumulated deficit | -8,438,915 | -7,932,249 | ||
Accumulated other comprehensive loss | -42,667 | -26,192 | ||
Total Comjoyful International Company stockholders’ deficit | -5,326,011 | -4,798,493 | ||
Non-controlling interests | -329,317 | -309,617 | ||
Total Deficit | -5,655,328 | -5,108,110 | ||
Total Liabilities and Deficit | $1,272,538 | $1,217,985 | ||
[1] | Certain of the assets of the VIEs can be used only to settle obligations of the consolidated VIEs. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets. |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, authorized | 100,000,000 | 100,000,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, issued | 2,080,873 | 2,080,873 |
Common stock, outstanding | 2,080,873 | 2,080,873 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenues | $110,635 | $362,767 |
Cost of revenues | -143,790 | -454,948 |
Gross loss | -33,155 | -92,181 |
Operating expenses | ||
Selling and general and administrative expenses | -481,700 | -511,204 |
Total operating expenses | -481,700 | -511,204 |
Loss from operations | -514,855 | -603,385 |
Other income/(expenses) | ||
Interest expenses | -10,385 | -7,124 |
Other expenses | -27 | -329 |
Total other expenses | -10,412 | -7,453 |
Loss before income taxes expenses | -525,267 | -610,838 |
Income tax expenses | 0 | 0 |
Net loss | -525,267 | -610,838 |
Less: Net loss attributable to non-controlling interests | -18,601 | -23,196 |
Net loss attributable to Comjoyful International Company | -506,666 | -587,642 |
Comprehensive loss | ||
Net loss | -525,267 | -610,838 |
Foreign currency translation adjustment | -17,574 | 17,712 |
Total comprehensive loss | -542,841 | -593,126 |
Less: Comprehensive loss attributable to non-controlling interests | -19,700 | -38,167 |
Comprehensive Loss Attributable to Comjoyful International Company | ($523,141) | ($554,959) |
Loss Per Share Basic and Diluted (in dollars per share) | ($0.24) | ($0.31) |
Weight Average Number of Common Shares Outstanding-Basic and Diluted (in shares) | 2,080,873 | 1,872,423 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities: | ||
Net loss | ($525,267) | ($610,838) |
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities: | ||
Depreciation | 8,296 | 101,875 |
Amortization of intangible assets | 1,755 | 2,755 |
Changes in current assets and liabilities: | ||
Inventories | 4,168 | 15,966 |
Other current assets | -11,459 | -40,131 |
Other current liabilities | 59,219 | 110,926 |
Unearned income | -63,993 | -137,348 |
Net cash used in operating activities | -527,281 | -556,795 |
Cash flows from investing activities: | ||
Cash paid to purchase property, plant and equipment | -309 | -12,640 |
Advance payment for leasehold improvements | -22,248 | -37,976 |
Net Cash used in investing activities | -22,557 | -50,616 |
Cash flows from financing activities: | ||
Loan to an owner | -128,709 | -69,206 |
Collection from an owner | 221,150 | 648,611 |
Due to owners | 406,875 | 11,235 |
Due to third parties | 79,357 | 49,201 |
Net cash provided by financing activities | 578,673 | 639,841 |
Effect of foreign exchange rate on cash | 910 | -16,259 |
Net change in cash | 29,745 | 16,171 |
Cash at beginning of period | 28,329 | 28,920 |
Cash at end of the period | 58,074 | 45,091 |
Supplemental cash flow information | ||
Interest paid | 0 | 0 |
Income taxes paid | $0 | $0 |
ORGANIZATION_AND_DESCRIPTION_O
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended | |
Mar. 31, 2015 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1 | ORGANIZATION AND DESCRIPTION OF BUSINESS |
Comjoyful International Company (the "Company"), formerly known as Camelot Corporation ("Camelot Colorado"), was incorporated pursuant to the laws of the State of Colorado on September 5, 1975, and completed a $500,000 public offering of its common stock in March 1976. The Company made several acquisitions and divestments of businesses. The Company was delisted from NASDAQ's Small Cap Market on February 26, 1998. In July 1998 all employees of the Company were terminated. | ||
On April 28, 2011, at the special meeting, a majority of the shareholders of Camelot Corporation approved the adoption of a proposed Agreement and Plan of Merger, to reincorporate Camelot Corporation, a Colorado corporation in the State of Nevada by merger with and into a Nevada corporation with the name Camelot Corporation ("Camelot Nevada") (the "Migratory Merger"). Camelot Colorado formed Camelot Nevada expressly for the purpose of the Migratory Merger. | ||
On September 21, 2012, Andrea Lucanto ("Ms. Lucanto"), the sole officer and director of the Company agreed to assume the debt of $74,345 owed by the company to a third party. In exchange Ms. Lucanto was issued 74,345 shares of the company's common stock. The stock was valued at $1.00 per share, which was negotiated by both parties. Upon issuance of the shares Ms. Lucanto owns 1,784,497 shares of Common Stock, or approximately 85.76% of the issued and outstanding Common Stock. | ||
On December 12, 2012, Comjoyful International Ltd., a company incorporated under the laws of the British Virgin Islands ("Comjoyful BVI"), and Ms.Lucanto entered into a Stock Purchase Agreement pursuant to which Ms. Lucanto sold to Comjoyful BVI 1,784,497 shares of the Common Stock, representing approximately 85.76% of the total issued and outstanding shares of Common Stock (the "Transaction"). At the closing of the Transaction, Ms. Lucanto resigned from her positions as officer and director of the Company. As a result, Comjoyful BVI attained voting control of the Company, and Mr. Yazhong Liao became the Chief Executive Officer, President and Chief Financial Officer, and was also appointed as a director of the Company. | ||
On December 28, 2012, the Company and its wholly-owned subsidiary (the "Company Sub") entered into an Agreement and Plan of Merger and on January 2, 2013 filed with the Secretary of State of Nevada Articles of Merger, pursuant to which the Company Sub was merged with and into the Company (the "Name Change Merger"). The legal existence of the Company Sub, which had no assets or operations on the date of the Name Change Merger, was terminated effective as of the consummation of the Name Change Merger. Under Nevada law (NRS Section 92A.180), the Company may merge the Company Sub into itself without stockholder approval and effectuate a name change without stockholder approval. As a result, the Company changed its name to Comjoyful International Company. | ||
On January 17, 2014 (the “Signing Date”), through a series of contractual arrangements (the “VIE Agreements”), the Company acquired Wuxi Kangjiafu Royal Traditional Investment Management Co., Ltd. (“Wuxi KJF”), a company based in Wuxi, Jiangsu province, the People’s Republic of China (the “PRC” or “China”), in the business of operating healthcare clubs specialized in providing Chinese traditional physiotherapy services and other relaxing treatments For proposes of entering into the VIE Agreements, Nanjing Kangjiafu Investment Consulting Co., Ltd. (the “Nanjing KJF”) was incorporated in June 2013 by our fully-owned subsidiary, Comjoyful Industrial Development Limited, a Hong Kong company incorporated in April 2013. | ||
Entrusted Management Agreement | ||
Pursuant to an entrusted management agreement (the “Entrusted Management Agreement”) among Yazhong Liao (“Mr. Liao”), Zhangmei Zhang (“Ms. Zhang”), Huiwen Qu (“Mr. Qu”) (collectively, the “Wuxi KJF Shareholders”), and Nanjing KJF, agreed to entrust the business operations and management of Wuxi KJF to Nanjing KJF until Nanjing KJF acquires all of the assets or equity of Wuxi KJF (as more fully described under “Exclusive Option Agreement” below). Pursuant to the Entrusted Management Agreement, Nanjing KJF manages all of Wuxi KJF’s operations, and controls all of Wuxi KJF’s cash flow and assets through entrusted or designated bank accounts, and Nanjing KJF assumes all the operation risks and bears all losses of Wuxi KJF, including paying all Wuxi KJF’s debts to the extent Wuxi KJF is not able to pay such debts. Nanjing KJF has right to collect a management fee from Wuxi KJF, which shall be paid after payment of a certain service fee to Nanjing KJF, as more fully described in the section entitled “Exclusive Technology Service Agreement” below. Wuxi KJF must appoint the persons designated by Nanjing KJF to be its executive director or directors, general manager, chief financial officer and any other senior officers. The Entrusted Management Agreement will remain in effect until Nanjing KJF acquires Wuxi KJF or Wuxi KJF is dissolved. | ||
Shareholders’ Voting Proxy Agreement | ||
Pursuant to a shareholders’ voting proxy agreement (the “Shareholders’ Voting Proxy Agreement”) between the Wuxi KJF Shareholders and Nanjing KJF, the Wuxi KJF Shareholders irrevocably appointed the designee of Nanjing KJF as their proxy to vote on all matters with respect to the Wuxi KJF Shareholders’ shares of Nanjing KJF. The Shareholders’ Voting Proxy Agreement may not be terminated prior to the completion of acquisition of all assets or equity of Wuxi KJF by Nanjing KJF. | ||
Exclusive Option Agreement | ||
Pursuant to the exclusive option agreement (the “Exclusive Option Agreement”) among the Wuxi KJF Shareholders, Wuxi KJF and Nanjing KJF, the Wuxi KJF Shareholders and Wuxi KJF granted Nanjing KJF an irrevocable, exclusive purchase option to purchase all or part of the shares of Wuxi KJF held by the Wuxi KJF Shareholders, and all the assets and business of Wuxi KJF. The option is exercisable at any time but only to the extent that such purchase does not violate any PRC law then in effect. The exercise price will be the minimum price permitted under then applicable PRC law. Only the Nanjing KJF has the power to terminate the Exclusive Option Agreement. | ||
Exclusive Technology Service Agreement | ||
Pursuant to the technology service agreement between Wuxi KJF and Nanjing KJF (the “Exclusive Technology Service Agreement”), Wuxi KJF engaged Nanjing KJF as the sole technology service provider relating to, among other things, consultation of product marketing, investment management, global marketing, enterprise management and certain other business services required by Wuxi KJF. Pursuant to the Exclusive Technology Service Agreement, Wuxi KJF agreed to pay a service fee to Nanjing KJF based on certain factors set forth in the agreement, and Wuxi KJF agreed not to engage any third party for any of its technology services provided under the agreement. In addition, Nanjing KJF exclusively owns all intellectual property rights resulting from the performance of this agreement. The Exclusive Technology Service Agreement will remain in effect until the acquisition of all assets or equity of Wuxi KJF by Nanjing KJF is completed or Wuxi KJF is dissolved. | ||
Share Equity Pledge Agreement | ||
In order to guarantee the performance by Wuxi KJF and Wuxi KJF Shareholders of their respective obligations under the VIE Agreements, Wuxi KJF, the Wuxi KJF Shareholders and Nanjing KJF entered into a Share Equity Pledge Agreement, pursuant to which the Wuxi KJF Shareholders pledged to Nanjing KJF all of their rights, titles and equity interest in Wuxi KJF, including the right to all dividends, money, interest, voting and other rights and benefits arising in respect of such equity interests. The Share Equity Pledge Agreement also prohibits the Wuxi KJF Shareholders from transferring their equity interests in Wuxi KJF while the agreement remains in effect. | ||
As a result of the transactions described above, Comjoyful International Company became the record and beneficial owner of the share capital of Wuxi KJF and its subsidiaries indirectly. The reverse recapitalization of the Company was consummated. | ||
Wuxi KJF, formerly known as Wuxi KangJiaFu Royal Traditional Health Management Co., Ltd., was incorporated in Wuxi City, Jiangsu Province of PRC on September 17, 2010, as a limited liability company which was 60% owned by Wuxi KangJiaFu Biotech Technology Co., Ltd, (the "KJF Biotech") and 40% owned by 20 individual shareholders with 2% each (the "Other Founders"). The Company is principally engaged in providing an integrated suite of physiotherapy services and solutions to individual customers. | ||
On September 10, 2012, Mr. Yazhong Liao, Ms. Zhangmei Zhang and Mr. Huiwen Qu signed a series of share transfer agreements with KJF Biotech and Other Founders. According to these agreements, KJF Biotech and Other Founders of Wuxi KJF transferred all of their shares to Mr. Yazhong Liao, Ms. Zhangmei Zhang and Mr. Huiwen Qu. Therefore, Mr. Yazhong Liao, Ms. Zhangmei Zhang and Mr. Huiwen Qu owned 60.004%, 27.498% and 12.498% equity interest of Wuxi KJF, respectively. | ||
Wuxi Binhu District KangJiaFu Royal Traditional Health Preserving Club (the "Wuxi Club") was incorporated in Wuxi City, Jiangsu Province of PRC on January 26, 2011 as a limited partnership. 39.8% of Wuxi Club was owned by Wuxi KJF, 60% was owned by 10 individual limited partners and 0.2% was owned by general partner Huiwen Qu. When Wuxi Club was incorporated, Wuxi KJF signed Unanimous Action Letter together with other 10 limited partners and one general partner. Pursuant to the Unanimous Action Letter, Wuxi KJF and the other 11 partners agreed that they would vote in concert on corporate matters with respect to Wuxi Club. Therefore, Wuxi KJF has the controlling voting interest of Wuxi Club and Wuxi Club is consolidated as a subsidiary of Wuxi KJF. | ||
On November 15, 2012, KJF Group Inc. (the “KJF Group”) was incorporated in British Virgin Islands as a BVI Business Company. On November 15, 2012, KJF Group issued 50,000 shares with a par value of US$1.00 to 195 members. Mr. Yazhong Liao, Ms. Zhangmei Zhang, Mr. Huiwen Qu, Ms. Xiuxia Ji and Mr. Yimin Gu owned 14.994%, 13.994%, 11.996%, 4.998% and 4.918% ordinary shares of KJF Group, respectively, which is 50.9% in total. The other 190 individuals owned 49.1% ordinary shares of KJF Group. These 190 individuals are all individual investors Wuxi KJF entered into partnership co-investment agreements with them in order to establish new clubs and expand business, including Wuxi, Nanjing, Jintan, Nantong, Yixing, Changzhou, Jiangyin and Shanghai. By issuing shares of KJF Group to these investors, Wuxi KJF has entered into agreement with them that the initial co-investment agreements were forfeited and their investment in clubs would be consideration for subscribing KJF Group’s shares at RMB100,000 for 99 shares (the “New Agreement”). The New Agreement is effective upon the consummation of the going public of Wuxi KJF. Equity interest of the above 190 individual investors in correspondence clubs would be returned if the going public did not consummate. | ||
On December 18, 2012, in accordance with the New Agreement, the new partners Ms. Qiuqiu Qian, Mr. Mingjie Xu and Mr. Xinhua Gu signed All Partners Resolution together with Wuxi KJF, 10 individual limited partners and general partner Huiwen Qu. According to the All Partners Resolution, 10 individual limited partners transferred all of their shares in Wuxi Club to the new partners and Wuxi KJF. Therefore, Wuxi KJF, Ms. Qiuqiu Qian, Mr. Mingjie Xu, Mr. Xinhua Gu, and Mr. Huiwen Qu owned 96.2%, 1.2%, 1.2%, 1.2%, and 0.2% equity interest of Wuxi Club, respectively. On January 17, 2014, as the consummation of the going public of Wuxi KJF became effective though the reverse recapitalization of the Company, non-controlling interests of the total equity interest in Wuxi Club decreased from 60.2% to 3.8%. | ||
Nanjing KangJiaFu Royal Traditional Health Preserving Club (the "Nanjing Club") was originally founded in Nanjing City, Jiangsu Province of PRC on August 31, 2012, as a limited partnership which was 58.33% owned by Wuxi KJF, 41.59% owned by 20 individual limited partners and 0.08% owned by general partner Huiwen Qu. In accordance with New Agreement, Wuxi KJF owned 79.17% of the total equity interest in Nanjing Club and Non-controlling interest owned 20.83% of the total equity interest in Nanjing club, respectively. On January 17, 2014, as the consummation of the going public of Wuxi KJF became effective though the reverse recapitalization of the Company, non-controlling interests of the total equity interest in Nanjing Club decreased from 41.67% to 20.83%. | ||
Jintan KangJiaFu Royal Traditional Health Investment Management Co., Ltd. (the "Jintan Club") was originally founded in Jintan City, Jiangsu Province of PRC on October 10, 2013, as a subsidiary which was 100% owned by Wuxi KJF. | ||
GOING_CONCERN
GOING CONCERN | 3 Months Ended | |
Mar. 31, 2015 | ||
Going Concern [Abstract] | ||
Going Concern [Text Block] | 2 | GOING CONCERN |
The consolidated financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. The Company had recurring consolidated losses of $525,267 for the three months ended March 31, 2015 and $610,838 for the three months ended March 31, 2014, negative working capital of $3,366,228 as of March 31, 2015 and $3,044,964 as of December 31, 2014, and has a total deficit of $5,655,328 as of March 31, 2015 and $5,108,110 as of December 31, 2014. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. | ||
In view of these matters, continuation as a going concern is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financial requirements, raise additional capital, and the success of its future operations. The financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should the Company not continue as a going concern. | ||
The management plans to raise necessary working capital by developing new products and services, and the stockholders of the Company Mr. Yazhong Liao, Ms. Zhangmei Zhang and Mr. Huiwen Qu would provide any capital shortfall. KJF Biotech has also repaid $2,510,441 to Wuxi KJF during the year 2014. There are no assurances that the Company will be successful in achieving these goals. | ||
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Accounting Policies [Abstract] | ||||||
Significant Accounting Policies [Text Block] | 3 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Consolidated financial statements | ||||||
The interim consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). | ||||||
The interim consolidated financial information as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The interim consolidated financial information should be read in conjunction with the financial statements and the notes thereto, included in the Company’s Form 10-K for the fiscal year ended December 31, 2014, previously filed with the SEC. | ||||||
In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s consolidated financial position as of March 31, 2015, its consolidated results of operations for three months ended March 31, 2015 and 2014, and its consolidated cash flows for the three months ended March 31, 2015 and 2014, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods. | ||||||
Foreign currency transactions and translation | ||||||
The reporting currency of the Company is United States Dollars (the “USD”) and the functional currency of Wuxi KJF is Renminbi (the “RMB”) as China is the primary economic environment in which they operate. | ||||||
For financial reporting purposes, the financial statements of Wuxi KJF, which are prepared using RMB, are translated into the reporting currency, United States dollar ("U.S. dollar") so to be consolidated with the Company’s. Monetary assets and liabilities denominated in currencies other than the reporting currency are translated into the reporting currency at the rates of exchange ruling at the balance sheet date. Revenues and expenses are translated using average rates prevailing during the reporting period. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in owners’ deficit. Transaction gains and losses are recognized in the statements of operations and comprehensive income. | ||||||
The exchange rates applied are as follows: | ||||||
March 31, 2015 | December 31, 2014 | |||||
Balance sheet items, except for equity accounts | 6.1206 | 6.146 | ||||
Three months ended March 31, | ||||||
2015 | 2014 | |||||
Items in the statements of operations and comprehensive loss, and statements cash flows | 6.1444 | 6.1177 | ||||
Use of estimates | ||||||
The preparation of the consolidated financial statements in accordance with US GAAP requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets, liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates and assumptions including those related to the useful lives and recoverability of the carrying amount of property, plant and equipment, impairment of long-lived assets, and deferred tax based on historical experience and various other factors believed to be reasonable under the circumstances, and accruals for income tax uncertainties and other contingencies. Changes in facts and circumstances may result in revised estimates. | ||||||
Cash and cash equivalents | ||||||
Cash and cash equivalents consist of cash on hand and demand deposits or liquid investments that are placed with banks and other financial institutions and are unrestricted as to withdrawal or use, or have remaining maturities of three months or less. | ||||||
Inventories | ||||||
Inventories are materials used in the physiotherapy process. Such items include; Chinese traditional medicine packages, essential oil, towels and so on, are stated at the lower of cost or market value. Cost is determined using weighted average method. | ||||||
Fair value of financial instruments | ||||||
ASC Topic 820 "Fair Value Measurement and Disclosures," defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: | ||||||
Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||
Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||
Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates their hierarchy disclosures in each quarter. | ||||||
Financial instruments include cash and cash equivalents, advance to suppliers, other current assets, amounts due from related parties, amounts due to related parties, and other current liabilities. The carrying amount reported in consolidated balance sheets approximated their fair values because of the short maturity of these instruments. | ||||||
Property and equipment | ||||||
Property and equipment are stated at cost less accumulated depreciation. | ||||||
The cost of an asset comprises its purchase price and any directly attributable costs of bringing that asset to its present working condition and location for its intended use. Repairs and maintenance of fixed assets are expensed as incurred. Subsequent expenditures for major reconstruction, expansion, improvement and renovation are capitalized when it is probable that future economic benefits in excess of the original assessment of performance will flow to the Company. Capitalized expenditures arising from major reconstruction, expansion and improvement are depreciated using the straight-line method over the remaining useful lives of the fixed assets. Capitalized expenditures arising from the renovation of fixed assets are depreciated on the straight-line basis over the expected beneficial periods. | ||||||
The leasehold improvements represent the actual cost for bringing the club spaces and office spaces, the Company leased to the condition necessary for their intended use (to provide service to our customers or to provide work place for administrative staff). The costs include payments to fitment construction companies, construction materials, air conditioning system, electricity system, etc. Leasehold improvements are amortized over 5-year period, which is the shorter of the lease term and estimated useful life. | ||||||
Depreciation is provided to write off the cost of property and equipment over their useful lives from the date on which they become fully operational and after taking into account their estimated salvage values, using the straight-line method: | ||||||
Furniture, computer and electronic equipment and leasehold improvement | 5 years | |||||
Office equipment | 5 years | |||||
Motor vehicle | 5 years | |||||
Management estimates the salvage value of property plant and equipment to be 5% of original value excluding leasehold improvement. The salvage value of leasehold improvement estimated by the management is 0%. | ||||||
Intangible assets | ||||||
Intangible assets consists of software and are stated at cost less accumulated amortization. | ||||||
Intangible assets are amortized using the straight-line basis over the estimated useful lives as follows: | ||||||
Accounting and operational software | 5 years | |||||
Impairment of Long-Lived Assets | ||||||
Long-lived assets, including property and equipment and purchased intangible assets with finite useful lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | ||||||
Recoverability of long-lived assets or asset groups to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. The Company recorded impairment losses for long-lived assets of nil for the three months ended March 31, 2015 and nil for the three months ended March 31, 2014 (See Note 6) | ||||||
Revenue recognition | ||||||
Revenues are recognized when the following four criteria are met: (i)persuasive evidence of an arrangement exists, (ii)the service has been rendered, (iii)the fees are fixed or determinable, and (iv)collectability is reasonably assured. | ||||||
Service Revenue | ||||||
The Company generates service revenue primarily from providing physiotherapy services including pedicure, sauna and massage to its individual customers. Upon receipt of the upfront cash payments for the pre purchase of multiple massages from the individual customer, the full payment will be deferred and recognized as unearned income. The Company recognizes service revenue proportionately when services are provided to the customer, and there is no expiration date for the prepayment. Unearned income for which the deliveries of services are expected to occur after twelve months is recognized as long-term portion of unearned income liability. | ||||||
The Company also provides its customers Health Recuperation service, which mainly arranges its customers to take holiday in some famous tourist cities. The Company is responsible for the whole service including providing recruiting members, transportation and accommodation etc. The service fee is collected in advance. The Company recognizes Health Recuperation service when the service is rendered completely. Considering the Company is main service provider and obligator for the whole service, revenue is recognized on a gross basis. | ||||||
Sundry Foods Revenue | ||||||
The Company also sells sundry foods to the individual customers when provided with physiotherapy services. Sundry Food Revenue is recognized after foods are delivered, the price is fixed or determinable and collection of the receivable is reasonably assured. | ||||||
Health Drink Products Revenue | ||||||
The Company sells health drink products to its customers. Health drink products revenue is recognized after the health drink products are delivered, the price is fixed or determinable and collection of the receivable is reasonably assured. | ||||||
Cost of Revenues | ||||||
Cost of revenues primarily consists of salaries, bonuses and allowances paid to physiotherapists and other service staff, rental payments, materials consumed during the physiotherapy, the depreciation and amortization of property and equipment, and the business taxes. Cost of health drink products primarily consists of materials and processing fee. | ||||||
Operating leases | ||||||
Wuxi KJF, Wuxi Club, Nanjing Club and Jintan Club all lease office or operating premises under non-cancelable operating leases. Payments made under operating leases are charged to the consolidated statements of income on a straight-line basis over the lease term. Rental and property management fee expenses for the three months ended March 31, 2015 and 2014 were $168,242 and $170,230, respectively. | ||||||
Wuxi KJF and Wuxi Club signed the lease agreement and property management agreement with the same landlord as their office and operation are in the same premise in July 2010. The lease term was 9 years with no renewal period. The rental increases 16.7% at the end of the third year and 21.4% at the end of the sixth year, and the property management fee remains flat. | ||||||
Nanjing Club signed the lease and property management agreement in August 2011. The lease term was 10 years with no renewal period. There was a 184-day rental holiday at the inception of the lease and the rental increases 5% each year from the third year of the lease term and the property management fee remains flat. | ||||||
Jintan Club signed the lease and property management agreement in April 2012. The lease term was 10 years with no renewal period. The rental increases 6% each year and the property management fee remains flat. | ||||||
Wuxi KJF signed the lease and property management agreement for future Nantong Club in September 2011. The lease term was 10 years with no renewal period. There was a 150-day rental holiday at the inception of the lease and the rental increases 5% at the end of the third year and the end of the sixth year, and the property management fee remains flat. | ||||||
Income taxes | ||||||
Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. | ||||||
The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provision for income taxes. | ||||||
Comprehensive loss | ||||||
Comprehensive loss includes net loss and foreign currency translation adjustments. Comprehensive loss is reported in the consolidated statements of operations and comprehensive loss. Accumulated other comprehensive loss, as presented on the balance sheets are the cumulative foreign currency translation adjustments. | ||||||
Significant risks and uncertainties | ||||||
Credit risk | ||||||
Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash. The maximum exposure of such assets to credit risk is their carrying amount as of the balance sheet dates. As of March 31, 2015 and December 31, 2014, the Company held cash in banks of $6,766 and $8,958, respectively, which were deposited in financial institutions located in Mainland China, which were uninsured by the government authority. To limit exposure to credit risk relating to deposits, the Company primarily place cash deposits with large financial institutions in China which management believes are of high credit quality. | ||||||
The Company’s operations are carried out in Mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation, and the extraction of mining resources, among other factors. | ||||||
Recently issued accounting pronouncements | ||||||
There were various accounting standards and updates recently issued, none of which are expected to have a material impact on the Company's financial position, operations, or cash flows. | ||||||
INVENTORIES
INVENTORIES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Increase (Decrease) in Inventories [Abstract] | ||||||||
Inventory Disclosure [Text Block] | 4 | INVENTORIES | ||||||
Inventories as of March 31, 2015 and December 31, 2014 consisted of the following: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
(Unaudited) | ||||||||
Medicinal materials | $ | 42,799 | $ | 45,545 | ||||
Other materials | 108,430 | 109,226 | ||||||
Total | $ | 151,229 | $ | 154,771 | ||||
OTHER_CURRENT_ASSETS
OTHER CURRENT ASSETS | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||
Other Current Assets [Text Block] | 5 | OTHER CURRENT ASSETS | ||||||
Other current assets as of March 31, 2015 and December 31, 2014 consisted of the following: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
(Unaudited) | ||||||||
Advances to staff for business use | $ | 1,025 | $ | 9,072 | ||||
Advance to suppliers | 69,561 | 52,704 | ||||||
Others | 3,603 | 652 | ||||||
Total | $ | 74,189 | $ | 62,428 | ||||
Advance to suppliers mainly represents prepayment to suppliers for purchase materials and other necessary ingredients for the production of health drink. | ||||||||
PROPERTY_AND_EQUIPMENT_NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Property, Plant and Equipment, Net [Abstract] | ||||||||
Property, Plant and Equipment Disclosure [Text Block] | 6 | PROPERTY AND EQUIPMENT, NET | ||||||
Property and equipment consisted of the following as of March 31, 2015 and December 31, 2014: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
(Unaudited) | ||||||||
Leasehold improvements | $ | 9,500 | $ | 10,228 | ||||
Furniture and office equipment | 53,597 | 53,414 | ||||||
Computer and electronic equipment | 30,278 | 29,860 | ||||||
Motor vehicle | 75,299 | 74,988 | ||||||
168,674 | 168,490 | |||||||
Less: Accumulated depreciation and amortization | (75,796 | (68,010 | ||||||
Total | $ | 92,878 | $ | 100,480 | ||||
Depreciation and amortization expenses for the three months ended March 31, 2015 and 2014 were $8,296 and $101,875, respectively. | ||||||||
We performed our long-lived assets impairment test as of December 31, 2014. As the carrying value of Wuxi Club and Jintan Club are higher than the undiscounted cash flows, impairment loss should be recognized. An impairment loss is recognized for the difference between the carrying amount of the asset and its fair value. We determined that the implied fair value of long-lived assets of Wuxi Club and Jintan Club were nil. Therefore, a long-lived impairment loss of$1,074,821 was recognized for the year ended December 31, 2014. | ||||||||
ADVANCE_PAYMENT_FOR_LEASEHOLD_
ADVANCE PAYMENT FOR LEASEHOLD IMPROVEMENT | 3 Months Ended | |
Mar. 31, 2015 | ||
Advance Payment for Leasehold Improvement [Abstract] | ||
Advance Payment for Leasehold Improvement [Text Block] | 7 | ADVANCE PAYMENT FOR LEASEHOLD IMPROVEMENT |
Wuxi KJF has paid in advance to decoration suppliers for leasehold improvement for the Nantong club. As of March 31, 2015 and December 31, 2014, the balance of advance payment for leasehold improvement amounted to $778,234 and $752,776, respectively. | ||
RENTAL_DEPOSITS
RENTAL DEPOSITS | 3 Months Ended | |
Mar. 31, 2015 | ||
Rental Deposits Disclosure [Abstract] | ||
Rental Deposits Disclosure [Text Block] | 8 | RENTAL DEPOSITS |
Wuxi KJF rents premises for its business clubs and was required to pay rental deposits pursuant to rental agreements and the rental deposits will be refunded after the lease terminates. As of March 31, 2015 and December 31, 2014, the rental deposits amounted to $97,502 and $97,099, respectively. | ||
INTANGIBLE_ASSETS_NET
INTANGIBLE ASSETS, NET | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||||
Intangible Assets Disclosure [Text Block] | 9 | INTANGIBLE ASSETS, NET | ||||||
Intangible assets consisted of the following as of March 31, 2015 and December 31, 2014: | ||||||||
March 31, 2015 | December 31,2014 | |||||||
(Unaudited) | ||||||||
Accounting and operational software | $ | 32,158 | $ | 32,025 | ||||
Less: Accumulated amortization | -11,726 | -9,923 | ||||||
Total | $ | 20,432 | $ | 22,102 | ||||
Amortization expenses for the three months ended March 31, 2015 and 2014 were $1,755 and $2,755, respectively. The estimated annual amortization expense for intangible asset is $7,048 for the years ended December 31, 2015 and 2016, $6,477 for the year ended December 31, 2017 and $1,620 for the year ended December 31, 2018. | ||||||||
OTHER_CURRENT_LIABILITIES
OTHER CURRENT LIABILITIES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Other Liabilities Disclosure [Abstract] | ||||||||
Other Liabilities Disclosure [Text Block] | 10 | OTHER CURRENT LIABILITIES | ||||||
Other current liabilities as of March 31, 2015 and December 31, 2014 consisted of the following: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
(Unaudited) | ||||||||
Payable for leasehold improvement and accrued rental expenses | $ | 1,453,321 | $ | 1,390,910 | ||||
Payroll payable | 53,242 | 52,884 | ||||||
Other tax payable | 76,936 | 73,957 | ||||||
Total | $ | 1,583,499 | $ | 1,517,751 | ||||
DUE_TO_THIRD_PARTIES
DUE TO THIRD PARTIES | 3 Months Ended | |
Mar. 31, 2015 | ||
Due To Third Parties [Abstract] | ||
Due To Third Parties [Text Block] | 11 | DUE TO THIRD PARTIES |
On June 3, 2013, Wuxi KJF borrowed $464,550 from individual investor Teng Guoxiang for Jintan Club decoration with annual interest rate 4.2%, matured on March 31, 2014. On the same day, Wuxi KJF and individual investor Teng Guoxiang extended the maturing date of the borrowing to December 31, 2014 with annual interest rate 18.0%. On December 31, 2014, Wuxi KJF repaid $81,357 to Teng Guoxiang. On the same day, Wuxi KJF and individual investor Teng Guoxiang extended the maturing date of the borrowing to September 30, 2015 with annual interest rate 6%. During the three months ended March 31, 2015, Wuxi KJF borrowed $79,357 from Teng Guoxiang for Jintan Club decoration with annual interest rate 5.75%, | ||
Interest expense for the above loans was $10,536 and $7,136 for the three months ended March 31, 2015 and 2014, respectively. | ||
The weighted average interest rate on these loans outstanding was 5.75% and 11.15% as of the date of March 31, 2015 and December 31, 2014, respectively. | ||
ADVANCES_FROM_INVESTORS_OF_NEW
ADVANCES FROM INVESTORS OF NEW CLUBS | 3 Months Ended | |
Mar. 31, 2015 | ||
Advances from Investors of new Clubs [Abstract] | ||
Advances from Investors of new Clubs [Text Block] | 12 | ADVANCES FROM INVESTORS OF NEW CLUBS |
Wuxi KJF entered into partnership co-investment agreements with 401 individual investors in order to establish new clubs and expand business, including Wuxi, Nanjing, Jintan, Nantong, Yixing, Changzhou, Jiangyin and Shanghai. As of March 31, 2015 and December 31, 2014, only Wuxi Club and Jintan Club had started operations and other clubs were still in start-up stage, advances from investors of new clubs amounted to $553,867 and $551,578, respectively. | ||
There was no restriction on the use of cash received from investors for clubs. | ||
UNEARNED_INCOME
UNEARNED INCOME | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Deferred Revenue Disclosure [Abstract] | |||||||||
Deferred Revenue Disclosure [Text Block] | 13 | UNEARNED INCOME | |||||||
31-Mar-15 | 31-Dec-14 | ||||||||
(Unaudited) | |||||||||
Current portion | $ | 511,289 | $ | 802,148 | |||||
Long-term portion | 2,724,279 | 2,484,025 | |||||||
Total | $ | 3,235,568 | $ | 3,286,173 | |||||
The balances of unearned income as of March 31, 2015 and December 31, 2014 represented prepayments made by the customers for prepaying massages service and “Health Recuperation” service. Service revenue is recognized proportionally when services are provided to customers, reducing the unearned income balance. There is no expiration date for the prepayment, and the period in which revenue will be realized is uncertain. Income from deliveries of services of $511,289 and $802,148 was expected to be earned in twelve months as of March 31, 2015 and December 31, 2014, respectively. The estimation was made based on the Company’s revenue projection according to both existing clubs’ historical experience and the plan for the opening of new clubs. During the three months ended March 31, 2015 and 2014, customers’ consumption of unearned income of $97,312 and $349,713 was recognized as revenue, respectively. The prepayment is not refundable once made by the customers. | |||||||||
INCOME_TAXES
INCOME TAXES | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Income Tax Disclosure [Abstract] | ||||||
Income Tax Disclosure [Text Block] | 14 | INCOME TAXES | ||||
The Company and its subsidiaries file separate income tax returns. | ||||||
The United States of America | ||||||
Comjoyful International Company is incorporated in the State of Nevada in the U.S., and is subject to a gradual U.S. federal corporate income tax of 15% to 35%. The State of Nevada does not impose any corporate state income tax. | ||||||
Hong Kong | ||||||
Comjoyful Industrial Development Limited ("Comjoyful HK") is incorporated in Hong Kong and Hong Kong’s profits tax rate is 16.5% from the year 2013 to 2014. Comjoyful HK did not earn any income that was derived in Hong Kong for the years ended December 31, 2014 and 2013, and therefore, Comjoyful HK was not subject to Hong Kong Profits Tax. The payments of dividends by Hong Kong companies are not subject to any Hong Kong withholding tax. | ||||||
PRC | ||||||
The entities incorporated in PRC file separate tax returns to PRC taxation authorities. Effective from January 1, 2008, the PRC’s statutory rate is 25%. The entities are subject to an income tax rate of 25%, unless otherwise specified. | ||||||
The Company’s VIE files separate tax returns to PRC taxation authorities. | ||||||
Wuxi KJF, Nanjing KJF and Jintan Club | ||||||
Nanjing KJF, Wuxi KJF and Jintan Club are subject to PRC Enterprise Income Tax ("EIT") on the taxable income in accordance with the relevant PRC income tax laws. The EIT rate for companies operating in the PRC is 25%. | ||||||
Reconciliation between the statutory PRC EIT rate of 25% and the effective tax rate is as follows: | ||||||
Three months ended March 31, | ||||||
2015 | 2014 | |||||
% | % | |||||
Reconciling items: | ||||||
PRC statutory tax rate | -25 | -25 | ||||
Non- deductible expenses | 14 | 14 | ||||
Change in valuation allowance | 11 | 11 | ||||
Effective tax rate | 0 | 0 | ||||
Wuxi KJF and Jintan Club had deferred tax assets of $1,474,914 and $1,367,454 as of March 31, 2015 and December 31, 2014, respectively that consist of tax loss carry forwards. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those net operating losses are available. The Company considers projected future taxable income and tax planning strategies in making its assessment. At present, Wuxi KJF and Jintan Club do not have a sufficient operation profit to conclude that it is more-likely-than-not that Wuxi KJF and Jintan Club will be able to realize all of its tax benefits in the near future and therefore a valuation allowance was established for the full value of the deferred tax asset. | ||||||
Wuxi Club and Nanjing Club | ||||||
Wuxi Club and Nanjing Club are not subject to EIT as they are limited liability partnerships, however each individual partner is subject to the individual income tax ("IIT") on his/her distributive share of taxable income in accordance with the relevant PRC income tax laws. The IIT is calculated by taxable income multiplying with applicable tax rate, and then minus deducting amount. Each enterprise partner is subject to EIT at its applicable EIT rate on its distributive share of taxable income from the partnership. Wuxi KJF, as Wuxi Club and Nanjing Club’s enterprise partner, is subject its distributive share in Wuxi Club and Nanjing Club’s taxable income to EIT at 25% tax rate. Wuxi KJF could also carry forward its distributive share in Wuxi Club and Nanjing Club’s deductible loss for 5 years to offset any future distributive taxable income from the respective club. But the distributive deductible loss from the 2 partnerships (Wuxi Club and Nanjing Club) could not be used to offset Wuxi KJF’s other operating income. Wuxi Club and Nanjing Club both incurred net loss for the three months ended March 31, 2015 and 2014, and the amount was included in Wuxi KJF’s reconciliation and deferred tax assets determination. | ||||||
The Company did not identify significant unrecognized tax benefits for the three months ended March 31, 2015 and 2014. They did not incur any interest and penalties related to potential underpaid income tax expenses and also believed that the adoption of pronouncement issued by FASB regarding accounting for uncertainty in income taxes did not have a significant impact on the unrecognized tax benefits within 12 months from March 31, 2015. | ||||||
EMPLOYEE_BENEFIT_PLAN
EMPLOYEE BENEFIT PLAN | 3 Months Ended | |
Mar. 31, 2015 | ||
Compensation and Retirement Disclosure [Abstract] | ||
Compensation and Employee Benefit Plans [Text Block] | 15 | EMPLOYEE BENEFIT PLAN |
Full time employees of the Company and Wuxi KJF located in the PRC (mainland), participate in a government-mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance and other welfare benefits are provided to employees. The Company and Wuxi KJF accrue for these benefits based on certain percentages of the employees' salaries. The Company and Wuxi KJF accrued the welfare benefits of $19,647 and $27,405 for the three months ended March 31, 2015 and 2014, respectively. | ||
RELATED_PARTY_TRANSACTIONS_AND
RELATED PARTY TRANSACTIONS AND BALANCES | 3 Months Ended | |
Mar. 31, 2015 | ||
Related Party Transactions [Abstract] | ||
Related Party Transactions Disclosure [Text Block] | 16 | RELATED PARTY TRANSACTIONS AND BALANCES |
On its foundation, Wuxi KJF was 60% owned by KJF Biotech and 40% owned by 20 individual shareholders with 2% each. On September 10, 2012, Mr. Yazhong Liao, Ms. Zhangmei Zhang and Mr. Huiwen Qu signed a series of share transfer agreements with KJF Biotech and Other Founders. According to these agreements, KJF Biotech and Other Founders of the Company transferred all of their shares to Mr. Yazhong Liao, Ms. Zhangmei Zhang and Mr. Huiwen Qu. Therefore, Mr. Yazhong Liao, Ms. Zhangmei Zhang and Mr. Huiwen Qu owned 60.004%, 27.498% and 12.498% equity interest of Wuxi KJF, respectively. KJF Biotech’s current owners are Mr. Yazhong Liao, Ms. Zhangmei Zhang and Mr. Huiwen Qu. The Company and KJF Biotech share certain officers and employees, who are working roughly half the time for the Company and half the time for KJF Biotech. The salaries and associated expenses of these officers and employees are equally shared by the Company and KJF Biotech. During the three months ended March 31, 2015 and 2014, Wuxi KJF recorded $10,594 and $15,428 expenses for those shared officers and employees in selling and general and administrative expenses, respectively. | ||
During three months ended March 31, 2015, the amount of loans Wuxi KJF made to KJF Biotech was $128,709, and KJF Biotech repaid to Wuxi KJF $221,150. During three months ended March 31, 2014, the amount of loans Wuxi KJF made to KJF Biotech was $69,206, and KJF Biotech repaid to Wuxi KJF $648,611. | ||
The balances of due to owners as of March 31, 2015 and December 31, 2014 were $784,874 and $283,054, respectively, and represented payment made by KJF Biotech for operation purposes on behalf of Wuxi Club and non-interest bearing loan from Mr. Yazhong Liao, Ms. Zhangmei Zhang, Xiuxia Ji, Yimin Gu and Mr. Huiwen Qu for daily operations. | ||
The Company’s trademark “Kangjiafu” was registered by KJF Biotech and the Company licensed it from KJF Biotech at no cost. The license agreement expires in November 2018. | ||
CONCENTRATIONS_AND_CREDIT_RISK
CONCENTRATIONS AND CREDIT RISKS | 3 Months Ended | |
Mar. 31, 2015 | ||
Risks and Uncertainties [Abstract] | ||
Concentration Risk Disclosure [Text Block] | 17 | CONCENTRATIONS AND CREDIT RISKS |
As of March 31, 2015 and December 31, 2014, the Company held cash in banks of $6,766 and $8,958, respectively that is uninsured by the government authority. To limit exposure to credit risk relating to deposits, the Company primarily places cash deposits only with large financial institutions in the PRC with acceptable credit ratings. | ||
The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. The business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. | ||
No single customer accounted for 10% or more of total sales for the three months ended March 31, 2015 and 2014. | ||
No single supplier accounted for 10% or more of total inventory and service purchases for the three months ended March 31, 2015 and 2014. | ||
COMMITMENTS_AND_CONTINGENCY
COMMITMENTS AND CONTINGENCY | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies Disclosure [Text Block] | 18 | COMMITMENTS AND CONTINGENCY | |||
Capital commitments | |||||
As of March 31, 2015, there were capital commitments amounting to $61,393 which were mainly related the leasehold improvements of the new clubs.. | |||||
Operating lease commitments | |||||
The Company leased offices spaces and employee living spaces under non-cancellable operating leases. Future minimum rental commitments for the next five years are as follows: | |||||
December 31, | |||||
2015 | $ | 507,065 | |||
2016 | 707,406 | ||||
2017 | 736,718 | ||||
2018 | 790,689 | ||||
2019 | 681,167 | ||||
2020 and then after | 901,821 | ||||
Total | $ | 4,324,866 | |||
Contingency | |||||
Wuxi Club completed fitment work at the end of 2010. Just before the local Fire Control Bureau’s issuance of the Fire Control Permit to Wuxi Club, provincial government issued a new regulation, which forbids the operation of any densely-populated business on or above 4th floors of a building. Wuxi Club is located on 29th floor of a building. The local Fire Control Bureau did not issue Fire Control Permit to Wuxi Club but verbally agreed that Wuxi Club could go on operating on the 29th floor. According to Article 58 of Fire Protection Law of the People's Republic of China, local government has the right to cease the operation of a business if the required Fire Control Permit is not obtained. The local Fire Control Bureau performed regular annual fire control inspection on Wuxi Club without any defects noted. We believe the local Fire Control Bureau has substantially approved our operations. Wuxi Club has not received any notification from the government that the operation shall be ceased. Cease of operation of Wuxi Club remains a possibility but management does not consider it probable. | |||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended | |
Mar. 31, 2015 | ||
Subsequent Events [Abstract] | ||
Subsequent Events [Text Block] | 19 | SUBSEQUENT EVENTS |
Management has considered all events occurring through the date the financial statements have been issued, and has determined that there are no such events that are material to the financial statements. | ||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Accounting Policies [Abstract] | ||||||
Consolidation, Policy [Policy Text Block] | Consolidated financial statements | |||||
The interim consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). | ||||||
The interim consolidated financial information as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The interim consolidated financial information should be read in conjunction with the financial statements and the notes thereto, included in the Company’s Form 10-K for the fiscal year ended December 31, 2014, previously filed with the SEC. | ||||||
In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s consolidated financial position as of March 31, 2015, its consolidated results of operations for three months ended March 31, 2015 and 2014, and its consolidated cash flows for the three months ended March 31, 2015 and 2014, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods. | ||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign currency transactions and translation | |||||
The reporting currency of the Company is United States Dollars (the “USD”) and the functional currency of Wuxi KJF is Renminbi (the “RMB”) as China is the primary economic environment in which they operate. | ||||||
For financial reporting purposes, the financial statements of Wuxi KJF, which are prepared using RMB, are translated into the reporting currency, United States dollar ("U.S. dollar") so to be consolidated with the Company’s. Monetary assets and liabilities denominated in currencies other than the reporting currency are translated into the reporting currency at the rates of exchange ruling at the balance sheet date. Revenues and expenses are translated using average rates prevailing during the reporting period. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in owners’ deficit. Transaction gains and losses are recognized in the statements of operations and comprehensive income. | ||||||
The exchange rates applied are as follows: | ||||||
March 31, 2015 | December 31, 2014 | |||||
Balance sheet items, except for equity accounts | 6.1206 | 6.146 | ||||
Three months ended March 31, | ||||||
2015 | 2014 | |||||
Items in the statements of operations and comprehensive loss, and statements cash flows | 6.1444 | 6.1177 | ||||
Use of Estimates, Policy [Policy Text Block] | Use of estimates | |||||
The preparation of the consolidated financial statements in accordance with US GAAP requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets, liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates and assumptions including those related to the useful lives and recoverability of the carrying amount of property, plant and equipment, impairment of long-lived assets, and deferred tax based on historical experience and various other factors believed to be reasonable under the circumstances, and accruals for income tax uncertainties and other contingencies. Changes in facts and circumstances may result in revised estimates. | ||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents | |||||
Cash and cash equivalents consist of cash on hand and demand deposits or liquid investments that are placed with banks and other financial institutions and are unrestricted as to withdrawal or use, or have remaining maturities of three months or less. | ||||||
Inventory, Policy [Policy Text Block] | Inventories | |||||
Inventories are materials used in the physiotherapy process. Such items include; Chinese traditional medicine packages, essential oil, towels and so on, are stated at the lower of cost or market value. Cost is determined using weighted average method. | ||||||
Fair Value Measurement, Policy [Policy Text Block] | Fair value of financial instruments | |||||
ASC Topic 820 "Fair Value Measurement and Disclosures," defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: | ||||||
Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||
Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||
Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates their hierarchy disclosures in each quarter. | ||||||
Financial instruments include cash and cash equivalents, advance to suppliers, other current assets, amounts due from related parties, amounts due to related parties, and other current liabilities. The carrying amount reported in consolidated balance sheets approximated their fair values because of the short maturity of these instruments. | ||||||
Property, Plant and Equipment, Policy [Policy Text Block] | Property and equipment | |||||
Property and equipment are stated at cost less accumulated depreciation. | ||||||
The cost of an asset comprises its purchase price and any directly attributable costs of bringing that asset to its present working condition and location for its intended use. Repairs and maintenance of fixed assets are expensed as incurred. Subsequent expenditures for major reconstruction, expansion, improvement and renovation are capitalized when it is probable that future economic benefits in excess of the original assessment of performance will flow to the Company. Capitalized expenditures arising from major reconstruction, expansion and improvement are depreciated using the straight-line method over the remaining useful lives of the fixed assets. Capitalized expenditures arising from the renovation of fixed assets are depreciated on the straight-line basis over the expected beneficial periods. | ||||||
The leasehold improvements represent the actual cost for bringing the club spaces and office spaces, the Company leased to the condition necessary for their intended use (to provide service to our customers or to provide work place for administrative staff). The costs include payments to fitment construction companies, construction materials, air conditioning system, electricity system, etc. Leasehold improvements are amortized over 5-year period, which is the shorter of the lease term and estimated useful life. | ||||||
Depreciation is provided to write off the cost of property and equipment over their useful lives from the date on which they become fully operational and after taking into account their estimated salvage values, using the straight-line method: | ||||||
Furniture, computer and electronic equipment and leasehold improvement | 5 years | |||||
Office equipment | 5 years | |||||
Motor vehicle | 5 years | |||||
Management estimates the salvage value of property plant and equipment to be 5% of original value excluding leasehold improvement. The salvage value of leasehold improvement estimated by the management is 0%. | ||||||
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible assets | |||||
Intangible assets consists of software and are stated at cost less accumulated amortization. | ||||||
Intangible assets are amortized using the straight-line basis over the estimated useful lives as follows: | ||||||
Accounting and operational software | 5 years | |||||
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of Long-Lived Assets | |||||
Long-lived assets, including property and equipment and purchased intangible assets with finite useful lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | ||||||
Recoverability of long-lived assets or asset groups to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. The Company recorded impairment losses for long-lived assets of nil for the three months ended March 31, 2015 and nil for the three months ended March 31, 2014 (See Note 6) | ||||||
Revenue Recognition, Policy [Policy Text Block] | Revenue recognition | |||||
Revenues are recognized when the following four criteria are met: (i)persuasive evidence of an arrangement exists, (ii)the service has been rendered, (iii)the fees are fixed or determinable, and (iv)collectability is reasonably assured. | ||||||
Service Revenue | ||||||
The Company generates service revenue primarily from providing physiotherapy services including pedicure, sauna and massage to its individual customers. Upon receipt of the upfront cash payments for the pre purchase of multiple massages from the individual customer, the full payment will be deferred and recognized as unearned income. The Company recognizes service revenue proportionately when services are provided to the customer, and there is no expiration date for the prepayment. Unearned income for which the deliveries of services are expected to occur after twelve months is recognized as long-term portion of unearned income liability. | ||||||
The Company also provides its customers Health Recuperation service, which mainly arranges its customers to take holiday in some famous tourist cities. The Company is responsible for the whole service including providing recruiting members, transportation and accommodation etc. The service fee is collected in advance. The Company recognizes Health Recuperation service when the service is rendered completely. Considering the Company is main service provider and obligator for the whole service, revenue is recognized on a gross basis. | ||||||
Sundry Foods Revenue | ||||||
The Company also sells sundry foods to the individual customers when provided with physiotherapy services. Sundry Food Revenue is recognized after foods are delivered, the price is fixed or determinable and collection of the receivable is reasonably assured. | ||||||
Health Drink Products Revenue | ||||||
The Company sells health drink products to its customers. Health drink products revenue is recognized after the health drink products are delivered, the price is fixed or determinable and collection of the receivable is reasonably assured. | ||||||
Cost of Sales, Policy [Policy Text Block] | Cost of Revenues | |||||
Cost of revenues primarily consists of salaries, bonuses and allowances paid to physiotherapists and other service staff, rental payments, materials consumed during the physiotherapy, the depreciation and amortization of property and equipment, and the business taxes. Cost of health drink products primarily consists of materials and processing fee. | ||||||
Lease, Policy [Policy Text Block] | Operating leases | |||||
Wuxi KJF, Wuxi Club, Nanjing Club and Jintan Club all lease office or operating premises under non-cancelable operating leases. Payments made under operating leases are charged to the consolidated statements of income on a straight-line basis over the lease term. Rental and property management fee expenses for the three months ended March 31, 2015 and 2014 were $168,242 and $170,230, respectively. | ||||||
Wuxi KJF and Wuxi Club signed the lease agreement and property management agreement with the same landlord as their office and operation are in the same premise in July 2010. The lease term was 9 years with no renewal period. The rental increases 16.7% at the end of the third year and 21.4% at the end of the sixth year, and the property management fee remains flat. | ||||||
Nanjing Club signed the lease and property management agreement in August 2011. The lease term was 10 years with no renewal period. There was a 184-day rental holiday at the inception of the lease and the rental increases 5% each year from the third year of the lease term and the property management fee remains flat. | ||||||
Jintan Club signed the lease and property management agreement in April 2012. The lease term was 10 years with no renewal period. The rental increases 6% each year and the property management fee remains flat. | ||||||
Wuxi KJF signed the lease and property management agreement for future Nantong Club in September 2011. The lease term was 10 years with no renewal period. There was a 150-day rental holiday at the inception of the lease and the rental increases 5% at the end of the third year and the end of the sixth year, and the property management fee remains flat. | ||||||
Income Tax, Policy [Policy Text Block] | Income taxes | |||||
Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. | ||||||
The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provision for income taxes. | ||||||
Comprehensive Income, Policy [Policy Text Block] | Comprehensive loss | |||||
Comprehensive loss includes net loss and foreign currency translation adjustments. Comprehensive loss is reported in the consolidated statements of operations and comprehensive loss. Accumulated other comprehensive loss, as presented on the balance sheets are the cumulative foreign currency translation adjustments. | ||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Significant risks and uncertainties | |||||
Credit risk | ||||||
Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash. The maximum exposure of such assets to credit risk is their carrying amount as of the balance sheet dates. As of March 31, 2015 and December 31, 2014, the Company held cash in banks of $6,766 and $8,958, respectively, which were deposited in financial institutions located in Mainland China, which were uninsured by the government authority. To limit exposure to credit risk relating to deposits, the Company primarily place cash deposits with large financial institutions in China which management believes are of high credit quality. | ||||||
The Company’s operations are carried out in Mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation, and the extraction of mining resources, among other factors. | ||||||
New Accounting Pronouncements, Policy [Policy Text Block] | Recently issued accounting pronouncements | |||||
There were various accounting standards and updates recently issued, none of which are expected to have a material impact on the Company's financial position, operations, or cash flows. | ||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Accounting Policies [Abstract] | ||||||
Schedule of Intercompany Foreign Currency Balances [Table Text Block] | The exchange rates applied are as follows: | |||||
March 31, 2015 | December 31, 2014 | |||||
Balance sheet items, except for equity accounts | 6.1206 | 6.146 | ||||
Three months ended March 31, | ||||||
2015 | 2014 | |||||
Items in the statements of operations and comprehensive loss, and statements cash flows | 6.1444 | 6.1177 | ||||
Property And Equipment Useful Lives [Table Text Block] | Depreciation is provided to write off the cost of property and equipment over their useful lives from the date on which they become fully operational and after taking into account their estimated salvage values, using the straight-line method: | |||||
Furniture, computer and electronic equipment and leasehold improvement | 5 years | |||||
Office equipment | 5 years | |||||
Motor vehicle | 5 years | |||||
Amortized Intangible Assets Estimated Useful Lives [Table Text Block] | Intangible assets are amortized using the straight-line basis over the estimated useful lives as follows: | |||||
Accounting and operational software | 5 years | |||||
INVENTORIES_Tables
INVENTORIES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Increase (Decrease) in Inventories [Abstract] | ||||||||
Schedule of Inventory, Current [Table Text Block] | Inventories as of March 31, 2015 and December 31, 2014 consisted of the following: | |||||||
March 31, 2015 | December 31, 2014 | |||||||
(Unaudited) | ||||||||
Medicinal materials | $ | 42,799 | $ | 45,545 | ||||
Other materials | 108,430 | 109,226 | ||||||
Total | $ | 151,229 | $ | 154,771 | ||||
OTHER_CURRENT_ASSETS_Tables
OTHER CURRENT ASSETS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||
Schedule of Other Current Assets [Table Text Block] | Other current assets as of March 31, 2015 and December 31, 2014 consisted of the following: | |||||||
March 31, 2015 | December 31, 2014 | |||||||
(Unaudited) | ||||||||
Advances to staff for business use | $ | 1,025 | $ | 9,072 | ||||
Advance to suppliers | 69,561 | 52,704 | ||||||
Others | 3,603 | 652 | ||||||
Total | $ | 74,189 | $ | 62,428 | ||||
PROPERTY_AND_EQUIPMENT_NET_Tab
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Property, Plant and Equipment, Net [Abstract] | ||||||||
Property, Plant and Equipment [Table Text Block] | Property and equipment consisted of the following as of March 31, 2015 and December 31, 2014: | |||||||
March 31, 2015 | December 31, 2014 | |||||||
(Unaudited) | ||||||||
Leasehold improvements | $ | 9,500 | $ | 10,228 | ||||
Furniture and office equipment | 53,597 | 53,414 | ||||||
Computer and electronic equipment | 30,278 | 29,860 | ||||||
Motor vehicle | 75,299 | 74,988 | ||||||
168,674 | 168,490 | |||||||
Less: Accumulated depreciation and amortization | (75,796 | (68,010 | ||||||
Total | $ | 92,878 | $ | 100,480 | ||||
INTANGIBLE_ASSETS_NET_Tables
INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Intangible assets consisted of the following as of March 31, 2015 and December 31, 2014: | |||||||
March 31, 2015 | December 31,2014 | |||||||
(Unaudited) | ||||||||
Accounting and operational software | $ | 32,158 | $ | 32,025 | ||||
Less: Accumulated amortization | -11,726 | -9,923 | ||||||
Total | $ | 20,432 | $ | 22,102 | ||||
OTHER_CURRENT_LIABILITIES_Tabl
OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Other Liabilities Disclosure [Abstract] | ||||||||
Other Current Liabilities [Table Text Block] | Other current liabilities as of March 31, 2015 and December 31, 2014 consisted of the following: | |||||||
March 31, 2015 | December 31, 2014 | |||||||
(Unaudited) | ||||||||
Payable for leasehold improvement and accrued rental expenses | $ | 1,453,321 | $ | 1,390,910 | ||||
Payroll payable | 53,242 | 52,884 | ||||||
Other tax payable | 76,936 | 73,957 | ||||||
Total | $ | 1,583,499 | $ | 1,517,751 | ||||
UNEARNED_INCOME_Tables
UNEARNED INCOME (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Deferred Revenue Disclosure [Abstract] | |||||||||
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | 31-Mar-15 | 31-Dec-14 | |||||||
(Unaudited) | |||||||||
Current portion | $ | 511,289 | $ | 802,148 | |||||
Long-term portion | 2,724,279 | 2,484,025 | |||||||
Total | $ | 3,235,568 | $ | 3,286,173 | |||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Income Tax Disclosure [Abstract] | ||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Reconciliation between the statutory PRC EIT rate of 25% and the effective tax rate is as follows: | |||||
Three months ended March 31, | ||||||
2015 | 2014 | |||||
% | % | |||||
Reconciling items: | ||||||
PRC statutory tax rate | -25 | -25 | ||||
Non- deductible expenses | 14 | 14 | ||||
Change in valuation allowance | 11 | 11 | ||||
Effective tax rate | 0 | 0 | ||||
COMMITMENTS_AND_CONTINGENCY_Ta
COMMITMENTS AND CONTINGENCY (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | The Company leased offices spaces and employee living spaces under non-cancellable operating leases. Future minimum rental commitments for the next five years are as follows: | ||||
December 31, | |||||
2015 | $ | 507,065 | |||
2016 | 707,406 | ||||
2017 | 736,718 | ||||
2018 | 790,689 | ||||
2019 | 681,167 | ||||
2020 and then after | 901,821 | ||||
Total | $ | 4,324,866 | |||
ORGANIZATION_AND_DESCRIPTION_O1
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Textual) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | |||||||||||||||||||||||||||||
Mar. 31, 2015 | Sep. 17, 2010 | Jan. 26, 2011 | Aug. 31, 2012 | Dec. 12, 2012 | Sep. 21, 2012 | Mar. 31, 1976 | Sep. 17, 2010 | Nov. 15, 2012 | Sep. 10, 2012 | Nov. 15, 2012 | Sep. 10, 2012 | Dec. 18, 2012 | Nov. 15, 2012 | Sep. 10, 2012 | Aug. 31, 2012 | Jan. 26, 2011 | Nov. 15, 2012 | Nov. 15, 2012 | Dec. 18, 2012 | Aug. 31, 2012 | Jan. 26, 2011 | Aug. 31, 2012 | Dec. 18, 2012 | Dec. 18, 2012 | Dec. 18, 2012 | Nov. 15, 2012 | Nov. 15, 2012 | Nov. 15, 2012 | Jan. 17, 2014 | Jan. 17, 2014 | Aug. 31, 2012 | Oct. 10, 2013 | |
20 Individual Shareholders [Member] | 20 Individual Shareholders [Member] | 10 Individual Limited Partners [Member] | 20 Individual Limited Partners [Member] | Andrea Lucanto [Member] | Andrea Lucanto [Member] | Camelot Corporation [Member] | Wuxi KangJiaFu Biotech Technology Co Ltd [Member] | Mr. Yazhong Liao [Member] | Mr. Yazhong Liao [Member] | Ms. Zhangmei Zhang [Member] | Ms. Zhangmei Zhang [Member] | Mr. Huiwen Qu [Member] | Mr. Huiwen Qu [Member] | Mr. Huiwen Qu [Member] | General Partner Huiwen Qu [Member] | General Partner Huiwen Qu [Member] | Ms. Xiuxia Ji [Member] | Mr. Yimin Gu [Member] | Wuxi KJF [Member] | Wuxi KJF [Member] | Wuxi KJF [Member] | Wuxi KJF [Member] | Ms Qiuqiu Qian [Member] | Mr Mingjie Xu [Member] | Mr Xinhua Gu [Member] | Kjf Group [Member] | Kjf Group [Member] | Other 190 Individuals [Member] | Wuxi Club [Member] | Nanjing Club [Member] | Nanjing Club [Member] | Jintan Club [Member] | |
USD ($) | USD ($) | New Agreement [Member] | USD ($) | CNY | |||||||||||||||||||||||||||||
Organization And Description Of Business [Line Items] | |||||||||||||||||||||||||||||||||
Entity Incorporation, Date of Incorporation | 5-Sep-75 | ||||||||||||||||||||||||||||||||
Proceeds from Issuance Initial Public Offering | $500,000 | ||||||||||||||||||||||||||||||||
Noncash or Part Noncash Acquisition, Debt Assumed | 74,345 | ||||||||||||||||||||||||||||||||
Development Stage Entities, Stock Issued, Shares, Issued for Noncash Consideration | 74,345 | ||||||||||||||||||||||||||||||||
Sale of Stock, Price Per Share | $1 | $1 | |||||||||||||||||||||||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 1,784,497 | 1,784,497 | 50,000 | 50,000 | |||||||||||||||||||||||||||||
Sale of Stock, Percentage of Ownership after Transaction | 85.76% | 85.76% | |||||||||||||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | 60.00% | 41.59% | 60.00% | 14.99% | 60.00% | 13.99% | 27.50% | 0.20% | 12.00% | 12.50% | 0.08% | 0.20% | 5.00% | 4.92% | 96.20% | 58.33% | 39.80% | 79.17% | 1.20% | 1.20% | 1.20% | 50.90% | 50.90% | 49.10% | 60.20% | 41.67% | 20.83% | 100.00% | |||
Equity Method Investments | 100,000 | ||||||||||||||||||||||||||||||||
Equity Method Investment Ownership Decreased Percentage | 3.80% | 20.83% | |||||||||||||||||||||||||||||||
Percentage of Individual Shareholders | 2.00% |
GOING_CONCERN_Details_Textual
GOING CONCERN (Details Textual) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Net loss | $525,267 | $610,838 | |
Total Deficit | 5,655,328 | 5,108,110 | |
Working Capital Deficit | 3,366,228 | 3,044,964 | |
Due from Officers or Stockholders | $2,510,441 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Balance sheet items, except for equity accounts | 6.1206 | 6.146 | |
Items in the statements of operations and comprehensive loss, and statements cash flows | 6.1444 | 6.1177 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 3 Months Ended |
Mar. 31, 2015 | |
Furniture, computer and electronic equipment and leasehold improvement [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Office equipment [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Motor vehicle [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (Accounting and operational software [Member], Vehicles [Member]) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting and operational software [Member] | Vehicles [Member] | |
Accounting and operational software | 5 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Owned Property Management Costs | $168,242 | $170,230 | |
Due from Banks | $6,766 | $8,958 | |
Wuxi KJF and Wuxi Club [Member] | |||
Lessor Leasing Arrangements, Operating Leases, Term of Contract | 9 years | ||
Wuxi KJF and Wuxi Club [Member] | End of the third year [Member] | |||
Operating Lease, Percentage of Increase in Rental amount after third year | 16.70% | ||
Wuxi KJF and Wuxi Club [Member] | End of the sixth year [Member] | |||
Operating Lease, Percentage of Increase in Rental amount after sixth year | 21.40% | ||
Nanjing Club [Member] | |||
Lessor Leasing Arrangements, Operating Leases, Term of Contract | 10 years | ||
Operating Lease Percentage Of Increase In Rental Amount | 5.00% | ||
Jintan Club [Member] | |||
Lessor Leasing Arrangements, Operating Leases, Term of Contract | 10 years | ||
Operating Lease Percentage Of Increase In Rental Amount | 6.00% | ||
Wuxi KJF [Member] | |||
Lessor Leasing Arrangements, Operating Leases, Term of Contract | 10 years | ||
Operating Lease Percentage Of Increase In Rental Amount | 5.00% | ||
Leaseholds and Leasehold Improvements [Member] | |||
Leasehold Improvement, Salvage Value, Percentage | 0.00% | ||
Property Excluding Leasehold [Member] | |||
Property, Plant and Equipment excluding Leasehold Improvement, Salvage Value, Percentage | 5.00% |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Medicinal materials | $42,799 | $45,545 |
Other materials | 108,430 | 109,226 |
Total | $151,229 | $154,771 |
OTHER_CURRENT_ASSETS_Details
OTHER CURRENT ASSETS (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Advances to staff for business use | $1,025 | $9,072 |
Advance to suppliers | 69,561 | 52,704 |
Others | 3,603 | 652 |
Total | $74,189 | $62,428 |
PROPERTY_AND_EQUIPMENT_NET_Det
PROPERTY AND EQUIPMENT, NET (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $168,674 | $168,490 |
Less: Accumulated depreciation and amortization | -75,796 | -68,010 |
Total | 92,878 | 100,480 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 9,500 | 10,228 |
Furniture and office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 53,597 | 53,414 |
Computer and electronic equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 30,278 | 29,860 |
Motor vehicle [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $75,299 | $74,988 |
PROPERTY_AND_EQUIPMENT_NET_Det1
PROPERTY AND EQUIPMENT, NET (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation, Depletion and Amortization, Nonproduction, Total | $8,296 | $101,875 | |
Impairment of Long-Lived Assets Held-for-use | $1,074,821 |
ADVANCE_PAYMENT_FOR_LEASEHOLD_1
ADVANCE PAYMENT FOR LEASEHOLD IMPROVEMENT (Details Textual) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Advances to Leasehold Improvements | $778,234 | $752,776 |
RENTAL_DEPOSITS_Details_Textua
RENTAL DEPOSITS (Details Textual) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Deposits Assets | $97,502 | $97,099 |
INTANGIBLE_ASSETS_NET_Details
INTANGIBLE ASSETS, NET (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Accounting and operational software | $32,158 | $32,025 |
Less: Accumulated amortization | -11,726 | -9,923 |
Total | $20,432 | $22,102 |
INTANGIBLE_ASSETS_NET_Details_
INTANGIBLE ASSETS, NET (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Amortization of Intangible Assets | $1,755 | $2,755 |
Finite-Lived Intangible Assets, Amortization Expense, Next Rolling Twelve Months | 7,048 | |
Finite-Lived Intangible Assets, Amortization Expense, Rolling Year Two | 7,048 | |
Finite-Lived Intangible Assets, Amortization Expense, Rolling Year Three | 6,477 | |
Finite-Lived Intangible Assets, Amortization Expense, Rolling Year Four | $1,620 |
OTHER_CURRENT_LIABILITIES_Deta
OTHER CURRENT LIABILITIES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
Payable for leasehold improvement and accrued rental expenses | $1,453,321 | $1,390,910 | ||
Payroll payable | 53,242 | 52,884 | ||
Other tax payable | 76,936 | 73,957 | ||
Total | $1,583,499 | [1] | $1,517,751 | [1] |
[1] | Certain of the assets of the VIEs can be used only to settle obligations of the consolidated VIEs. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Companybs general assets. |
DUE_TO_THIRD_PARTIES_Details_T
DUE TO THIRD PARTIES (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Jun. 03, 2013 | |
Long-term Debt, Gross | $79,357 | $464,550 | ||
Debt Instrument, Interest Rate, Effective Percentage | 5.75% | 18.00% | 4.20% | |
Interest Expense, Debt | 10,536 | 7,136 | ||
Debt, Weighted Average Interest Rate | 5.75% | 11.15% | ||
Wuxi KJF [Member] | ||||
Debt Instrument, Interest Rate, Effective Percentage | 6.00% | |||
Repayments of Notes Payable | $81,357 |
ADVANCES_FROM_INVESTORS_OF_NEW1
ADVANCES FROM INVESTORS OF NEW CLUBS (Details Textual) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Advances from investors new clubs | $553,867 | $551,578 |
UNEARNED_INCOME_Details
UNEARNED INCOME (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
Current portion | $511,289 | [1] | $802,148 | [1] |
Long-term portion | 2,724,279 | [1] | 2,484,025 | [1] |
Total | $3,235,568 | $3,286,173 | ||
[1] | Certain of the assets of the VIEs can be used only to settle obligations of the consolidated VIEs. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Companybs general assets. |
UNEARNED_INCOME_Details_Textua
UNEARNED INCOME (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Deferred Revenue, Revenue Recognized | $97,312 | $349,713 |
INCOME_TAXES_Details
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Reconciling items: | ||
PRC statutory tax rate | -25.00% | -25.00% |
Non- deductible expenses | 14.00% | 14.00% |
Change in valuation allowance | 11.00% | 11.00% |
Effective tax rate | 0.00% | 0.00% |
INCOME_TAXES_Details_Textual
INCOME TAXES (Details Textual) (USD $) | 3 Months Ended | 24 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | -25.00% | -25.00% | |
Effective Income Tax Rate Reconciliation Profit Tax Rate | 16.50% | ||
Wuxi KJF And Jintan Club [Member] | |||
Deferred Tax Assets, Gross, Total | 1,474,914 | 1,367,454 | |
Wuxi KJF, Nanjing KJF and Jintan Club [Member] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | ||
Wuxi Club And Nanjing Club [Member] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | ||
Maximum [Member] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | ||
Minimum [Member] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 15.00% |
EMPLOYEE_BENEFIT_PLAN_Details_
EMPLOYEE BENEFIT PLAN (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Defined Benefit Plan, Benefits Paid | $19,647 | $27,405 |
RELATED_PARTY_TRANSACTIONS_AND1
RELATED PARTY TRANSACTIONS AND BALANCES (Details Textual) (USD $) | 3 Months Ended | |||||||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Sep. 17, 2010 | Sep. 10, 2012 | Dec. 18, 2012 | Aug. 31, 2012 | Jan. 26, 2011 | |||
Selling, General and Administrative Expense, Total | $481,700 | $511,204 | ||||||||
Proceeds from Issuance of Long-term Debt, Total | 128,709 | 69,206 | ||||||||
Repayments of Long-term Debt, Total | 221,150 | 648,611 | ||||||||
Due to Related Parties, Current | 784,874 | [1] | 283,054 | [1] | ||||||
KJF Biotech [Member] | ||||||||||
Equity Method Investment, Ownership Percentage | 60.00% | |||||||||
20 Individual Shareholders [Member] | ||||||||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | ||||||||
Percentage of Individual Shareholders | 2.00% | |||||||||
Mr. Yazhong Liao [Member] | ||||||||||
Equity Method Investment, Ownership Percentage | 60.00% | |||||||||
Ms. Zhangmei Zhang [Member] | ||||||||||
Equity Method Investment, Ownership Percentage | 27.50% | |||||||||
Mr. Huiwen Qu [Member] | ||||||||||
Equity Method Investment, Ownership Percentage | 12.50% | |||||||||
Wuxi KJF [Member] | ||||||||||
Equity Method Investment, Ownership Percentage | 96.20% | 58.33% | 39.80% | |||||||
Selling, General and Administrative Expense, Total | $10,594 | $15,428 | ||||||||
[1] | Certain of the assets of the VIEs can be used only to settle obligations of the consolidated VIEs. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Companybs general assets. |
CONCENTRATIONS_AND_CREDIT_RISK1
CONCENTRATIONS AND CREDIT RISKS (Details Textual) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Due from Banks | 6,766 | $8,958 | |
Product [Member] | |||
Concentration Risk, Percentage | 10.00% | 10.00% | |
Sales [Member] | |||
Concentration Risk, Percentage | 10.00% | 10.00% |
COMMITMENTS_AND_CONTINGENCY_De
COMMITMENTS AND CONTINGENCY (Details) (USD $) | Dec. 31, 2014 |
2015 | $507,065 |
2016 | 707,406 |
2017 | 736,718 |
2018 | 790,689 |
2019 | 681,167 |
2020 and then after | 901,821 |
Total | $4,324,866 |
COMMITMENTS_AND_CONTINGENCY_De1
COMMITMENTS AND CONTINGENCY (Details Textual) (Leasehold Improvements [Member], USD $) | Mar. 31, 2015 |
Leasehold Improvements [Member] | |
Capital Leased Assets, Gross | $61,393 |