Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 11-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | China Auto Logistics Inc | |
Entity Central Index Key | 1355042 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 4,034,394 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $5,038,445 | $7,793,952 |
Restricted cash | 17,692,627 | 12,171,490 |
Accounts receivable - trade | 172,863 | |
Receivable related to financing services | 89,259,251 | 101,764,549 |
Inventories | 15,307,439 | 16,042,462 |
Advances to suppliers | 88,309,797 | 68,670,928 |
Prepaid expenses | 28,151 | 24,420 |
Value added tax receivable | 312,837 | 470,663 |
Total current assets | 216,121,410 | 206,938,464 |
Property, plant, and equipment, net | 66,856,609 | 67,126,002 |
Ownership interest in Car King Tianjin | ||
Goodwill | 4,032,731 | 4,013,416 |
Intangible assets, net | 408,134 | 433,874 |
Total assets | 287,418,884 | 278,511,756 |
Current liabilities | ||
Bank overdrafts | 2,406,503 | 2,423,015 |
Lines of credit related to financing services | 62,626,517 | 63,106,959 |
Short term borrowings | 69,240,968 | 68,909,343 |
Accounts payable | 1,301,443 | 99,710 |
Notes payable to suppliers | 19,642,828 | 16,290,625 |
Accrued expenses | 342,497 | 3,540,275 |
Customer deposits | 47,607,947 | 38,372,704 |
Deferred revenue | 901,897 | 634,979 |
Rental deposits | 81,845 | 81,453 |
Payable related to Zhonghe Acquisition - current portion, net | 17,311,791 | 16,900,426 |
Due to former shareholder | 2,213,280 | |
Due to director | 481,383 | 457,628 |
Income tax payable | 680,351 | 677,092 |
Other payable | 2,223,931 | |
Deferred tax liability | 466,207 | 529,665 |
Total current liabilities | 225,316,108 | 214,237,154 |
Payable related to Zhonghe Acquisition, excluding current portion, net | 18,682,364 | 18,244,177 |
Deferred tax liability | 10,384,775 | 10,499,323 |
Total liabilities | 254,383,247 | 242,980,654 |
China Auto Logistics Inc. shareholders' equity: | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding | ||
Common stock, $0.001 par value, 95,000,000 shares authorized, 4,034,394 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively | 4,034 | 4,034 |
Additional paid-in capital | 22,979,734 | 22,979,734 |
Accumulated other comprehensive income | 7,502,279 | 7,330,995 |
Retained earnings | 2,000,931 | 4,667,372 |
Total China Auto Logistics Inc. shareholders' equity | 32,486,978 | 34,982,135 |
Noncontrolling interests | 548,659 | 548,967 |
Total equity | 33,035,637 | 35,531,102 |
Total liabilities and shareholders' equity | $287,418,884 | $278,511,756 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Balance Sheets [Abstract] | ||
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 4,034,394 | 4,034,394 |
Common stock, shares outstanding | 4,034,394 | 4,034,394 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Statements of Income [Abstract] | ||
Net revenue | $87,350,162 | $106,975,050 |
Cost of revenue | 86,868,320 | 105,551,253 |
Gross profit | 481,842 | 1,423,797 |
Operating expenses: | ||
Selling and marketing | 193,664 | 186,527 |
General and administrative | 1,057,399 | 1,244,832 |
Total operating expenses | 1,251,063 | 1,431,359 |
Loss from operations | -769,221 | -7,562 |
Other income (expenses) | ||
Interest income | 84,868 | 60,900 |
Interest expense | -1,918,797 | -1,322,583 |
Gain on disposal of property and equipment | 11,694 | |
Equity loss - share of investee company loss | -293,791 | -295,264 |
Foreign exchange loss | -96 | |
Total other expenses | -2,127,720 | -1,545,349 |
Loss before income taxes | -2,896,941 | -1,552,911 |
Income tax benefit | -230,077 | -205,873 |
Net loss | -2,666,864 | -1,347,038 |
Add: Net loss attributable to noncontrolling interests | -423 | -871 |
Net loss attributable to shareholders of China Auto Logistics Inc. | ($2,666,441) | ($1,346,167) |
Loss per share attributable to shareholders of China Auto Logistics Inc.- basic and diluted | ($0.66) | ($0.33) |
Weighted average number of common share Outstanding - basic and diluted | 4,034,494 | 4,034,494 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive (Loss) Income (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Statements of Comprehensive Income [Abstract] | ||
Net loss | ($2,666,864) | ($1,347,038) |
Other comprehensive (loss) income | ||
Foreign currency translation adjustments | 171,399 | -529,050 |
Comprehensive loss | -2,495,465 | -1,876,088 |
Add: Comprehensive loss attributable to noncontrolling interests | -308 | -1,676 |
Comprehensive loss attributable to shareholders of China Auto Logistics Inc. | ($2,495,157) | ($1,874,412) |
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 | ($2,666,864) | ($1,347,038) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 617,563 | 672,605 |
Gain on disposal of property and equipment | -11,694 | |
Equity loss - share of investee company loss | 293,791 | 295,264 |
Change of Inventory reserve | -142,203 | |
Recovery of reserve for due from Car King Tianjin | -293,791 | |
Change of deferred tax assets | 35,551 | |
Change of deferred tax liabilities | -94,586 | -101,202 |
Changes in operating assets and liabilities: | ||
Restricted cash | -5,438,791 | 10,270,967 |
Accounts receivable - trade, Car King Tianjin | -327,033 | |
Receivable related to auto mall management fees | 255,494 | |
Accounts receivable - trade | -172,111 | |
Receivables related to financing services | 12,938,491 | -36,569,995 |
Inventories | 808,693 | -2,566,324 |
Advances to suppliers | -19,224,370 | -4,466,903 |
Prepaid expenses, other current assets and other assets | -3,598 | -33,479 |
Value added tax receivable | 159,394 | -437,033 |
Accounts payable | 1,196,026 | 190,380 |
Line of credit related to financing services | -780,731 | 28,655,094 |
Notes payable to suppliers | 3,259,559 | -9,810,975 |
Accrued expenses | 13,919 | 164,962 |
Accrued interest | -2,672,382 | 792,178 |
Customer deposits | 9,011,191 | 1,670,872 |
Deferred revenue | 262,714 | -21,101 |
Income tax payable | 57,823 | |
Net cash used in by operating activities | -2,785,883 | -12,773,790 |
Cash flows from investing activities | ||
Proceeds from disposal of property and equipment | 17,954 | |
Purchase of property and equipment | -652 | |
Advances to Car King Tianjin | -1,308,130 | |
Net cash used in investing activities | -1,290,828 | |
Cash flows from financing activities | ||
Bank overdraft | -28,050 | -3,122 |
Proceeds from short-term borrowings | 17,927,573 | 31,875,389 |
Repayments of short-term borrowings | -17,927,573 | -3,254,646 |
Decrease in restricted cash related to short-term borrowings | -19,035,807 | |
Proceeds from director | 186,000 | 205,942 |
Repayments to director | -152,670 | -310,728 |
Net cash provided by financing activities | 5,280 | 9,477,028 |
Effect of exchange rate change on cash | 25,096 | -89,395 |
Net decrease in cash and cash equivalents | -2,755,507 | -4,676,985 |
Cash and cash equivalents at the beginning of period | 7,793,952 | 15,041,505 |
Cash and cash equivalents at the end of period | 5,038,445 | 10,364,520 |
Supplemental disclosure of cash flow information | ||
Interest paid | 5,291,550 | 1,590,426 |
Income taxes paid | ||
Non-cash activities: | ||
Reclassification of the balance in due to former shareholder to other payable after an assignment of the balance to an unrelated party | 2,223,931 | |
Increase in advances to Car King Tianjin for unpaid rent | $244,467 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |
Mar. 31, 2015 | ||
Summary Of Significant Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | -1 | Summary of Significant Accounting Policies |
Organization, Nature of Business and Basis of Presentation | ||
China Auto Logistics Inc. (the “Company” or “China Auto”) operates through its wholly-owned subsidiary Ever Auspicious International Limited, a Hong Kong corporation (“HKCo.”), and its wholly-owned subsidiary Tianjin Seashore New District Shisheng Business Trading Group Co. Ltd. (“Shisheng”), a company established under the laws of the People’s Republic of China (“PRC”) and Shisheng’s wholly owned and majority owned subsidiaries, Tianjin Ganghui Information Technology Corp. (“Ganghui”), Tianjin Hengjia Port Logistics Corp. (“Hengjia”), Zhengji International Trading Corp. (“Zhengji”), and Tianjin Zhonghe Auto Sales Service Co., Ltd. (“Zhonghe”). The Company also has a 40% ownership interest in a joint venture between Zhonghe and Car King (China) Used Car Trading Co., Ltd. (“Car King Tianjin”). | ||
The Company’s principal businesses include (i) sales of imported automobiles (“Sales of Automobiles”), (ii) financing services related to imported automobiles (“Financing Services”), (iii) automobile information websites and advertising services (“Web-based Advertising Services”), (iv) logistics services related to the automobile importing process and other automobile value added services, such as assistance with customs clearance, storage and nationwide delivery services (“Automobile Value Added Services”), and (v) airport auto mall automotive services including selling used cars through Car King Tianjin and leasing the Airport International Auto Mall facility in Tianjin, China (the “Airport International Auto Mall”) to Car King Tianjin and other tenants (“Airport Auto Mall Automotive Services”). The Cooperation Agreement dated March 1, 2013, by and between the Company and Tianjin Prominent Hero International Logistics Co., Ltd, to manage the International Auto Mall in Tianjin, China, expired according to its terms on February 28, 2014, and was not renewed. Therefore, as of March 1, 2014, the Company no longer provides auto mall management services. | ||
The accompanying condensed consolidated balance sheet as of December 31, 2014, which has been derived from the audited consolidated financial statements and the accompanying unaudited condensed consolidated financial statements, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations and the Company believes that the disclosures made are adequate to make the information not misleading. | ||
In the opinion of management, these condensed consolidated financial statements reflect all adjustments which are of a normal recurring nature and which are necessary to present fairly the financial position of China Auto as of March 31, 2015 and the results of its operations, and cash flows for the three-month periods ended March 31, 2015 and 2014. These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2014. The results of operations for the three-month period ended March 31, 2015 are not necessarily indicative of the results which may be expected for the entire fiscal year. | ||
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
Going Concern | ||
The Company incurred operating losses and had negative operating cash flows and may continue to generate negative cash flows as the Company implements its business plan for the remainder of 2015. There can be no assurance that the Company’s continuing efforts to execute its business plan will be successful and that the Company will be able to continue as a going concern. The accompanying interim condensed consolidated financial statements have been prepared in conformity with US GAAP, which contemplate the Company’s continuation as a going concern. The Company’s net loss attributable to shareholders for the three months ended March 31, 2015 was $2,666,441 as compared to $1,346,167 for the three months ended March 31, 2014. | ||
As of March 31, 2015, the Company had a working capital deficit of $9,194,698, including $69,240,968 in current liabilities for short-term borrowings which are due during the period between July 2015 and February 2016, and $17,311,791 in current liabilities payable to Hezhong related to the Company’s acquisition of Zhonghe (the “Zhonghe Acquisition”), which is due in November in 2015, and for which the Company does not currently have the necessary capital to re-pay. Net cash used in operations during the three months ended March 31, 2015 was $2,785,883. These factors raise substantial doubt about the Company’s ability to continue as a going concern. | ||
The Company invested heavily in Car King Tianjin through cash investment, advances, and leasing a portion of the Airport International Auto Mall to Car King Tianjin to operate a used car business. The Company believes that there is a strong market for used car sales in China and Car King Tianjin will provide us with opportunities for long-term growth. However, the Company cannot precisely predict the extent of the growth and whether such growth will convert into substantial profits in the future. | ||
The Company does not currently have sufficient cash or commitments for financing to sustain its operations for the next twelve months. The Company’s plan continues to be to develop new customer relationships and substantially increase our cash flows from operations and revenue derived from our products/services. If the Company’s revenues do not reach the level anticipated in our plan, the Company may require additional financing in order to execute our operating plan. If additional financing is required, the Company cannot predict whether this additional financing will be in the form of equity, debt, or another form, and the Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In the event that financing sources are not available, or that the Company is unsuccessful in increasing its revenues and profits, the Company may be unable to implement its current plans for expansion, repay our debt obligations or respond to competitive pressures, any of which would have a material adverse effect on its business, prospects, financial condition and results of operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. | ||
Principles of Consolidation | ||
The condensed consolidated financial statements include the financial statements of China Auto and its wholly-owned and majority-owned subsidiaries. All inter-company transactions and balances have been eliminated in the preparation of the condensed consolidated financial statements. | ||
Currency Reporting | ||
The Company’s operations in the PRC use the local currency, Renminbi (“RMB”), as their functional currency, whereas amounts reported in the accompanying condensed consolidated financial statements and disclosures are stated in U.S. dollars, the reporting currency of the Company, unless stated otherwise. As such, the condensed consolidated balance sheets of the Company have been translated into U.S. dollars at the current rates as of March 31, 2015 and December 31, 2014 and the condensed consolidated statements of income have been translated into U.S. dollars at the weighted average rates during the periods the transactions were recognized. | ||
The resulting foreign currency translation adjustments are recorded in determining other comprehensive income in the condensed consolidated statements of comprehensive income and as a separate component of equity in the condensed consolidated balance sheets. | ||
Revenue Recognition | ||
The Company’s main source of income was generated through (1) Sales of Automobiles, (2) Financing Services (3) Web-based Advertising Services including fees from (i) displaying graphical advertisements on the Company websites and (ii) web-based listing services that allow customers to place automobile related information on the Company’s websites, (4) Automobile Value Added Services, and (5) Airport Auto Mall Automotive Services. As indicated above, as of March 1, 2014, the Company no longer performs auto mall management services, and therefore, it will no longer recognize revenue related to such services. | ||
The Company recognizes revenue when there is persuasive evidence of an arrangement, delivery has occurred upon shipment or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectibility is reasonably assured. | ||
The Company recognizes Sales of Automobiles upon delivery and acceptance by the customers and where collectibility is reasonably assured. | ||
Service revenue related to Financing Services is recognized ratably over the financing period. | ||
Service fees for graphical advertisements on the Company’s websites are charged on a fixed fee basis. The Company recognizes the advertising revenue when the service is performed over the service term. The Company charges a monthly fee for listing services and recognizes the revenue when services are performed. The Company offers sales incentives to its customers in the form of (i) subscription exemption; (ii) discounted prices and (iii) free advertisements. The Company classifies sales incentives as a reduction of net revenues. Revenues, net of discounts and allowances, are recognized ratably over the service periods. | ||
The Company recognizes revenue from Automobile Value Added Services when such services are performed. | ||
Airport Auto Mall Automotive Services include (i) the rental of the Airport International Auto Mall, and (ii) equity income (loss) derived from Car King Tianjin. Rental income from the Airport International Auto Mall is recognized over the lease term on a straight-line basis. The Company’s lease agreement, entered into with Car King Tianjin in January 2014 (the “Rental Agreement”), contains a contingent rental arrangement for fiscal years 2016, 2017 and 2018, under which rental income is determined based on a percentage of Car King Tianjin’s gross profit. Notwithstanding this arrangement, the Rental Agreement contains both a minimum and a maximum annual rental amount. Contingent rental income is recognized when specified targets are met. The equity income (loss) derived from Car King Tianjin is recognized based on the Company’s ownership share in Car King Tianjin’s net income (loss) | ||
Value added taxes (“VAT”) represent amounts collected on behalf of specific regulatory agencies that require remittance by a specified date. These amounts are collected at the time of sales and are detailed on invoices provided to customers. The Company accounts for VAT on a net basis. The Company recorded and paid business taxes based on a percentage of the net service revenues and reported the service revenue net of the business taxes and other sales related taxes. | ||
Receivables Related to Financing Services | ||
The Company records receivables related to Financing Services when cash is loaned to customers to finance their purchases of automobiles. Upon repayment by customers, the Company records the amounts as reductions of receivables related to Financing Services. Receivables related to Financing Services represent the aggregate outstanding balance of loans from customers related to their purchases of automobiles and are considered receivables held for investment. The Company charges a fee for providing loan services and such fees are prepaid by customers. The Company amortizes these fees over the receivable term, which is typically 90 days, using the straight-line method. The Company records such amortized amounts as financing fee income and the unamortized amount is classified as deferred revenue on the Company’s condensed consolidated balance sheets. | ||
The Company evaluates the collectibility of outstanding receivables at the end of each of the reporting periods and makes estimates for potential credit losses. The Company has not experienced any losses on its receivables related to Financing Services historically and accordingly did not record any allowance for credit losses as of March 31, 2015 and December 31, 2014. | ||
Basic and Diluted Earnings (Loss) Per Share | ||
Basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per common share is computed similarly to basic earnings per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of March 31, 2015 and 2014, the Company did not have any common stock equivalents, therefore, the basic earnings (loss) per share is the same as the diluted earnings (loss) per share. | ||
New Accounting Standards | ||
The Company is not aware of any recently issued accounting pronouncements that, when adopted, will have a material effect on the Company’s financial position, results of operations or cash flows. | ||
Restricted_Cash
Restricted Cash | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Restricted Cash [Abstract] | |||||||||
Restricted cash | -2 | Restricted Cash | |||||||
Restricted cash consists of cash which is not available for use in the Company’s operations and is summarized as follows: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Collateral for bank’s issuance of letters of credit to the Company’s customers | $ | 5,906,681 | $ | 2,393,338 | |||||
Collateral for notes payable to suppliers | 11,785,946 | 9,778,152 | |||||||
$ | 17,692,627 | $ | 12,171,490 |
Property_and_Equipment_Net
Property and Equipment, Net | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property and Equipment Net [Abstract] | |||||||||
Property and Equipment, Net | -3 | Property and Equipment | |||||||
A summary of property and equipment is as follows: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Buildings and land use rights, net of impairment loss of $3,020,576 as of March 31, 2015 and $3,006,109 as of December 31, 2014 | 69,821,578 | 69,487,171 | |||||||
Computers | 228,470 | 227,377 | |||||||
Office equipment, furniture and fixtures | 110,347 | 109,818 | |||||||
Leasehold improvements | 34,375 | 34,210 | |||||||
Automobiles | 1,094,490 | 1,089,248 | |||||||
71,289,260 | 70,947,824 | ||||||||
Less: Accumulated depreciation and amortization | (4,432,651 | ) | (3,821,822 | ) | |||||
$ | 66,856,609 | $ | 67,126,002 | ||||||
Depreciation and amortization expenses for property and equipment amounted to approximately $589,857 and $644,807 for the three months ended March 31, 2015 and 2014, respectively. | |||||||||
Goodwill
Goodwill | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Intangible Assets, Net\Goodwill [Abstract] | |||||||||||||
Goodwill | -4 | Goodwill | |||||||||||
The changes in the carrying amount of goodwill for the year ended December 31, 2014 and the three months ended March 31, 2015 are as follows: | |||||||||||||
Reporting Segments | |||||||||||||
Sales of Automobiles | Airport Auto Mall Automotive Services | Total | |||||||||||
Balance as of December 31, 2013 | 4,031,873 | 16,127,492 | 20,159,365 | ||||||||||
Impairment loss | - | (16,041,383 | ) | (16,041,383 | ) | ||||||||
Translation adjustment | (18,457 | ) | (86,109 | ) | (104,566 | ) | |||||||
Balance as of December 31, 2014 | 4,013,416 | - | 4,013,416 | ||||||||||
Translation adjustment | 19,315 | - | 19,315 | ||||||||||
Balance as of March 31, 2015 | $ | 4,032,731 | $ | - | $ | 4,032,731 |
Intangible_Assets_Net
Intangible Assets, Net | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
Intangible Assets, Net\Goodwill [Abstract] | |||||||||||||||||||||||
Intangible Assets, Net | -5 | Intangible Assets, Net | |||||||||||||||||||||
The Company acquired customer relations in connection with the Zhonghe Acquisition on November 30, 2013. As of March 31, 2015 and December 31, 2014, the customer relations is summarized as follows: | |||||||||||||||||||||||
Life | Cost | Foreign currency translation adjustments | Less: Accumulated Impairment | Less: Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Intangible assets subject to amortization – Customer Relations | |||||||||||||||||||||||
As of March 31, 2015 | 5 years | $ | 555,002 | $ | 1,545 | $ | - | $ | (148,413 | ) | $ | 408,134 | |||||||||||
As of December 31, 2014 | 5 years | $ | 555,002 | $ | (1,120 | ) | $ | - | $ | (120,008 | ) | $ | 433,874 | ||||||||||
Amortization expense for intangible assets was $27,706 and $27,798 for the three months ended March 31, 2015 and 2014, respectively. | |||||||||||||||||||||||
Equity_Investment_in_Car_King_
Equity Investment in Car King Tianjin | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Equity Investment in Car King Tianjin [Abstract] | |||||||||
Equity Investment in Car King Tianjin | -6 | Equity Investment in Car King Tianjin | |||||||
The Company’s investment in Car King Tianjin is accounted for using the equity method of accounting. Car King Tianjin’s operations commenced on March 6, 2014. The results of operations and financial position of the Company’s equity basis investments are summarized below: | |||||||||
Condensed statements of operations information: | Three Months Ended | Three Months Ended | |||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Net sales | $ | 1,795,160 | $ | 604,766 | |||||
Gross profit | 576,687 | 156,784 | |||||||
Net loss | (734,477 | ) | (738,160 | ) | |||||
The Company’s equity in net loss of Car King Tianjin | $ | (293,791 | ) | $ | (295,264 | ) | |||
Condensed balance sheet information: | As of | As of | |||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Current assets | $ | 4,309,869 | $ | 1,462,036 | |||||
Non current assets | 1,006,011 | 1,039,338 | |||||||
Total assets | $ | 5,315,880 | $ | 2,501,374 | |||||
Current liabilities | $ | 6,269,618 | $ | 2,716,389 | |||||
Deficit | (953,738 | ) | (215,015 | ) | |||||
Current liabilities and deficit | $ | 5,315,880 | $ | 2,501,374 | |||||
The Company is entitled to 40% of Car King Tianjin’s net profit or loss. As of March 31, 2015 and December 31, 2014, the Company’s equity investment balance in Car King Tianjin was $0. The amount due from Car King Tianjin was reduced by $381,495 and $86,007 for the amount of shared cumulative loss in excess of the investment in Car King Tianjin as of March 31, 2015 and December 31, 2014, respectively. Net balance due from Car King Tianjin was $1,762,847 and $1,803,706 as of March 31, 2015 and December 31, 2014, respectively. Due to the cumulative loss incurred by Car King Tianjin, the Company fully reserved the $1,762,847 and $1,803,706 due from Car King Tianjin as a result of the uncertainties of collecting these advances as of March 31, 2015 and December 31, 2014, respectively. |
Bank_Overdraft
Bank Overdraft | 3 Months Ended | |
Mar. 31, 2015 | ||
Bank Overdraft [Abstract] | ||
Bank Overdraft | -7 | Bank Overdraft |
In January 2014, the Company entered into an overdraft agreement with PuDong Development Bank. Under the terms of the agreement, the Company can draw on its bank account up to $2,455,353 (RMB 15,000,000) in excess of the funds on deposit. The overdraft amount is subject to an annual interest rate of 6.72% and the maximum overdraft period cannot exceed 89 days. The overdraft agreement is guaranteed by Ms. Cheng Weihong, a Director and Senior Vice President of the Company, and a non-related entity which is a supplier of the Company, and matured in December 2014. The outstanding balance of the facility was $2,423,015 as of December 31, 2014. | ||
In January 2015, the Company entered into an overdraft agreement with PuDong Development Bank. Under the terms of the agreement, the Company can draw on its bank account up to $2,455,353 (RMB 15,000,000) in excess of the funds on deposit. The overdraft amount is subject to an annual interest rate of 6.72% and the maximum overdraft period cannot exceed 89 days. The overdraft agreement is guaranteed by Ms. Cheng Weihong, a Director and Senior Vice President of the Company, and a non-related entity which is a supplier of the Company, and matures in December 2015. The outstanding balance of the facility was $2,406,503 as of March 31, 2015. | ||
Lines_of_Credit_Related_to_Fin
Lines of Credit Related to Financing Services | 3 Months Ended | |
Mar. 31, 2015 | ||
Lines of Credit Related to Financing Services [Abstract] | ||
Lines of Credit Related to Financing Services | -8 | Lines of Credit Related to Financing Services |
The Company provides Financing Services to its customers using the Company’s bank facility lines of credit. The Company earns a service fee for drawing its facility lines related to its customers’ purchases of automobiles and payment of import taxes. Customers bear all the interest and fees charged by the banks and prepay those fees upon the execution of their service contracts with the Company. Customers are also required to make a deposit in the range of 10% to 15% of the purchase price of the automobiles. If customers default on payment, the banks take custody of the automobiles until the borrowings are fully repaid. | ||
Interest charged by the banks for draws on these facility lines of credit is classified as cost of revenue in the consolidated statements of operations. Interest expense related to these lines of credit was $700,314 and $972,638 for the three months ended March 31, 2015 and 2014, respectively. | ||
A summary of the Company’s lines of credit related to Financing Services follows: | ||
China Merchants Bank | ||
In June 2014, the Company entered into a facility line of credit agreement with China Merchants Bank, pursuant to which the Company can borrow a maximum amount of $11,458,316 (RMB70,000,000). Borrowings under this facility line of credit bear interest at rates to be determined upon drawing. During three months ended March 31, 2015, interest was charged at rates ranging between 3.73% and 4.79% per annum, and borrowings under this facility were repayable within 3 months from the dates of drawing. As of March 31, 2015 and December 31, 2014, the Company had an outstanding balance of $0 and $3,661,523, respectively, under this facility line of credit. This facility line of credit is guaranteed by Ms. Cheng Weihong, a Director and Senior Vice President of the Company, and a non-related entity which is a supplier of the Company, and matured in February 2015. | ||
In March 2015, the Company entered into a facility line of credit agreement with China Merchants Bank, pursuant to which the Company can borrow a maximum amount of $11,458,316 (RMB70,000,000). Borrowings under this facility line of credit bear interest at rates to be determined upon drawing. During three months ended March 31, 2015, interest was charged at rates ranging between 3.51% and 4.79% per annum, and borrowings under this facility were repayable within 3 months from the dates of drawing. As of March 31, 2015 and December 31, 2014, the Company had an outstanding balance of $2,390,966 and $0, respectively, under this facility line of credit. This facility line of credit is guaranteed by Ms. Cheng Weihong, a Director and Senior Vice President of the Company, and a non-related entity which is a supplier of the Company, and matures in March 2016. | ||
Agricultural Bank of China | ||
In September 2014 the Company entered into a facility line of credit agreement with Agricultural Bank of China, pursuant to which the Company can borrow a maximum amount of $85,118,921 (RMB520,000,000). This facility line of credit is guaranteed by five non-related entities, which are customers, suppliers or both. During the three months ended March 31, 2015, borrowings under this facility line of credit bear interest at rates ranging from 4.23% to 6.29% per annum, and were repayable on the due dates, which were determined prior to each draw. As of March 31, 2015 and December 31, 2014, the Company had outstanding balances of $44,609,149 and $49,414,953, respectively, under this facility line of credit. This facility matures in September 2015. | ||
PuDong Development Bank | ||
In December 2013, the Company entered into a facility line of credit agreement with PuDong Development Bank, pursuant to which the Company can borrow a maximum amount of $19,642,828 (RMB120,000,000). During the year ended December 31, 2014, borrowings under this facility line of credit bore interest at rates ranging from 5.03% to 5.43% per annum. As of March 31, 2015 and December 31, 2014, the Company had outstanding balances of $0 and $3,546,934, respectively, under this facility line of credit. This facility line of credit is guaranteed by Ms. Cheng Weihong, a Director and Senior Vice President of the Company, and a non-related entity, which is a supplier of the Company, and matured in December 2014. | ||
In January 2015, the Company entered into a facility line of credit agreement with PuDong Development Bank, pursuant to which the Company can borrow a maximum amount of $19,642,828 (RMB120,000,000). During the year ended December 31, 2014, borrowings under this facility line of credit bear interest at rates ranging from 4.82% to 5.67% per annum. As of March 31, 2015 and December 31, 2014, the Company had outstanding balances of $8,774,867 and $0, respectively, under this facility line of credit. This facility line of credit is guaranteed by Ms. Cheng Weihong, a Director and Senior Vice President of the Company, and a non-related entity, which is a supplier of the Company, and matures in December 2015. | ||
China Zheshang Bank | ||
In August 2014, the Company entered into a facility line of credit agreement with China Zheshang Bank, pursuant to which the Company can borrow a maximum amount of $29,464,242 (RMB180,000,000). This facility line of credit is guaranteed by (i) Mr. Tong Shiping, the Company’s Chairman, President and CEO, (ii) Ms. Cheng Weihong, a Director and Senior Vice President of the Company, (iii) Tianjin Binhai International Automall Ltd. Co., a customer, and (iv) Zhonghe, the Company’s subsidiary. Borrowings under this facility line of credit bear interest at rates ranging from 3.65% to 5.5% per annum, and are repayable within 3 months from the dates of drawing. As of March 31, 2015 and December 31, 2014, the Company had outstanding balances of $2,288,985 and $831,215, respectively, under this facility line of credit. This facility matures in August 2015. | ||
Industrial and Commercial Bank of China | ||
In February 2014, the Company entered into a facility line of credit agreement with Industrial and Commercial Bank of China, pursuant to which the Company can borrow a maximum amount of $16,369,023 (RMB100,000,000). This facility line of credit is guaranteed by Zhonghe, the Company’s subsidiary. During the three months ended March 31, 2015, borrowings under this facility line of credit bear interest at rates ranging from 3.65% to 3.83% per annum and were repayable on the due dates, which were determined prior to each draw. As of March 31, 2015 and December 31, 2014, the Company had outstanding balances of $212,268 and $4,761,227, respectively, under this facility line of credit. This facility matured in February 2015 and was not renewed. | ||
China Minsheng Bank | ||
In April 2014, the Company entered into a facility line of credit agreement with China Minsheng Bank, pursuant to which the Company can borrow a maximum amount of $13,095,219 (RMB80,000,000). This facility line of credit is guaranteed by (i) Mr. Tong Shiping, the Company’s Chairman, President and CEO, (ii) Ms. Cheng Weihong, a Director and Senior Vice President of the Company, (iii) Tianjin Binhai International Automall Ltd. Co., a customer, and (iv) Zhonghe, the Company’s subsidiary. During the three months ended March 31, 2015, borrowings under this facility line of credit bear interest at rates ranging from 1.56% to 1.96% per annum, and were repayable on the due dates, which were determined prior to each draw. As of March 31, 2015 and December 31, 2014, the Company had outstanding balances of $3,595,954 and $891,107, respectively, under this facility line of credit. This facility matured in April 2015 and was renewed with substantially the same terms. | ||
Shengjing Bank | ||
In December 2014, the Company entered into a facility line of credit agreement with Shengjing Bank, pursuant to which the Company can borrow a maximum amount of $8,184,512 (RMB50,000,000). This facility line of credit is guaranteed by (i) Mr. Tong Shiping, the Company’s Chairman, President and CEO, (ii) Ms. Cheng Weihong, a Director and Senior Vice President of the Company, (iii) Tianjin Ning Chuan International Trading co., Ltd., a supplier. As of March 31, 2015 and December 31, 2014, the Company had outstanding balances of $754,328 and $0 under this facility line of credit. During the three months ended March 31, 2015, borrowings under this facility line of credit bear interest at rates ranging from 4.2% to 5.2% per annum. This facility matures in November 2015. |
Short_Term_Borrowings
Short Term Borrowings | 3 Months Ended | |
Mar. 31, 2015 | ||
Short Term Borrowings [Abstract] | ||
Short Term Borrowings | -9 | Short Term Borrowings |
Agricultural Bank of China | ||
In March 2014, the Company entered into a working capital loan agreement with Agricultural Bank of China to obtain short term financing. Under the terms of this agreement, the Company can borrow up to $9,774,376 (RMB60,000,000). The outstanding balance totaled $0 and $9,774,376 as of March 31, 2015 and December 31, 2014, respectively. This short term loan bears interest at a rate of 6.6% per annum, matured in March 2015 and was repaid, and is secured by the Airport International Auto Mall and related land use rights. | ||
In April 2014, the Company entered into a working capital loan agreement with Agricultural Bank of China to obtain short term financing. Under the terms of this agreement, the Company can borrow up to $4,887,187 (RMB30,000,000). The outstanding balance totaled $0 and $4,887,187 as of March 31, 2015 and December 31, 2014, respectively. This short term loan bears interest at a rate of 6.6% per annum, matured in March 2015 and was repaid, and is secured by the Airport International Auto Mall and related land use rights. | ||
In July 2014, the Company entered into a working capital loan agreement with Agricultural Bank of China to obtain short term financing. Under the terms of this agreement, the Company can borrow up to $8,184,512 (RMB50,000,000). The outstanding balance totaled $8,184,512 and $8,145,312 as of March 31, 2015 and December 31, 2014, respectively. This short term loan bears interest at a rate of 6.6% per annum, matures in July 2015, and is secured by the Airport International Auto Mall and related land use rights. | ||
In August 2014, the Company entered into a working capital loan agreement with Agricultural Bank of China to obtain short term financing. Under the terms of this agreement, the Company could borrow up to $6,547,609 (RMB40,000,000). The outstanding balance totaled $6,547,609 and $6,516,250 as of March 31, 2015 and December 31, 2014, respectively. This short term loan bears interest at a rate of 6.6% per annum, matures in August 2015, and is secured by the Airport International Auto Mall and related land use rights. | ||
In September 2014, the Company entered into two working capital loan agreements with Agricultural Bank of China to obtain short term financing. Under the terms of these agreements, the Company can borrow up to $10,639,865 (RMB65,000,000). The outstanding balances totaled $10,639,865 and $10,588,906 as of March 31, 2015 and December 31, 2014, respectively. These short term loans bear interest at a rate of 6.6% per annum, mature in September 2015, and are secured by the Airport International Auto Mall and related land use rights. | ||
In February 2015, the Company entered into three working capital loan agreements with Agricultural Bank of China to obtain short term financing. Under the terms of these agreements, the Company can borrow up to $ 14,732,121 (RMB90,000,000). The outstanding balances totaled $14,732,121 and $0 as of March 31, 2015 and December 31, 2014, respectively. These short term loans bear interest at a rate of 6.16% per annum, mature in February 2016, and are secured by the Airport International Auto Mall and related land use rights. | ||
China Zheshang Bank | ||
In July and August 2014, the Company entered into four loan agreements with China Zheshang Bank. Under the terms of these agreements, the Company borrowed an aggregate amount of $3,258,125 (RMB20,000,000). Borrowings under these loan agreements bear interest at a rate of 5.6% for a borrowing period of six months and are guaranteed by (i) Mr. Tong Shiping, the Company’s Chairman, President and CEO; (ii) Ms. Cheng Weihong, a Director and Senior Vice President of the Company; (iii) Tianjin Binhai International Automall Ltd. Co., a customer, (iv) Zhonghe, the Company’s subsidiary, and (v) Hezhong (Tianjin) International Development Ltd. Co., the former owner of Zhonghe. The total outstanding balance of these agreements was $3,258,125 as of December 31, 2014. These loans matured in January and February 2015 and were repaid during the three months ended March 31, 2015. | ||
In January 2015, the Company entered into three loan agreements with China Zheshang Bank. Under the terms of these agreements, the Company borrowed an aggregate amount of $3,273,804 (RMB20,000,000). Borrowings under these loan agreements bear interest at a rate of 5.6% for a borrowing period of six months and are guaranteed by (i) Mr. Tong Shiping, the Company’s Chairman, President and CEO; (ii) Ms. Cheng Weihong, a Director and Senior Vice President of the Company; (iii) Tianjin Binhai International Automall Ltd. Co., a customer, (iv) Zhonghe, the Company’s subsidiary, and (v) Hezhong (Tianjin) International Development Ltd. Co., the former owner of Zhonghe. The total outstanding balance of these agreements was $3,273,804 as of March 31, 2015. These loans mature in July 2015. | ||
Tianjin Binhai Rural Commercial Bank | ||
In December 2014, the Company entered into a loan agreement with Tianjin Binhai Rural Commercial Bank. Under the terms of this agreement, the Company borrowed a maximum amount of $25,863,057 (RMB158,000,000). Borrowings under this loan agreement bear interest at a rate of 8.12% and are guaranteed by (i) Mr. Tong Shiping, the Company’s Chairman, President and CEO; (ii) Ms. Cheng Weihong, a Director and Senior Vice President of the Company; (iii) Tianjin Binhai International Automall Ltd. Co., a customer, (iv) Mr. Zhou Xiao Guang, the former owner of the seller of Zhonghe (v) the wife of Mr. Zhou Xiao Guang, the former owner of the seller of Zhonghe, (vi) Tianjin Binhai Shisheng Trading Group Co., Ltd., the Company’s subsidiary, (vii) Xin Jiang Kai Li Xiang Kong Automobile Sales Service Co., Ltd., a potential customer, (viii) Xin Jiang Kai Yuan Heng Ji Real Estate Development Co., Ltd., a potential customer’s affiliate, (ix) Cheng Jun, shareholder of the Company’s supplier. The total outstanding balance of these agreements was $25,863,057 and $25,739,187 as of March 31, 2015 and December 31, 2014, respectively. This facility matures in September 2015. |
Notes_Payable_to_Suppliers
Notes Payable to Suppliers | 3 Months Ended | |
Mar. 31, 2015 | ||
Notes Payable to Suppliers [Abstract] | ||
Notes Payable to Suppliers | -10 | Notes Payable to Suppliers |
The Company issued certain notes payable to suppliers, which are guaranteed by the banks. The terms of these notes payable vary depending on the negotiations with the suppliers. Typical terms are in the range of three to six months. Prior to the expiration dates of the notes, the note holders can present these notes to the banks to draw on the note amounts, if the Company does not settle the outstanding payable to these suppliers. The Company is subject to a bank fee of 0.05% on notes payable amounts. | ||
China Zheshang Bank | ||
As of December 31, 2014, the Company had two outstanding notes payable to suppliers in an aggregate amount of $3,258,125 (RMB20,000,000), the payment of which was guaranteed by China Zheshang Bank for a period of six months. The notes matured in February 2015 and were not renewed. The Company was required to maintain approximately 100% of the note amounts, or $3,258,125 (RMB20,000,000) as guaranteed funds, which was classified as restricted cash as of December 31, 2014. | ||
As of March 31, 2015, the Company had two outstanding notes payable to suppliers in an aggregate amount of $3,273,805, respectively (RMB20,000,000), the payment of which was guaranteed by China Zheshang Bank for a period of six months. The notes mature in August 2015. The Company was required to maintain approximately 100% of the note amounts, or $3,273,805 (RMB20,000,000) as guaranteed funds, which was classified as restricted cash as of March 31, 2015. | ||
Bank of Jinzhou | ||
As of December 31, 2014, the Company had five outstanding notes payable to suppliers in an aggregate amount of $7,330,781 (RMB45,000,000), the payment of which was guaranteed by Bank of Jinzhou for a period of six months. The notes matured in January and February 2015 and were not renewed. The Company was required to maintain approximately 50% of the note amounts, or $3,668,920 (RMB22,521,665) as guaranteed funds, which was classified as restricted cash as of December 31, 2014. | ||
As of March 31, 2015 and December 31, 2014, the Company had four outstanding notes payable to suppliers, maturing in June 2015, in an aggregate amount of $5,729,158 and $5,701,719, respectively (RMB35,000,000), the payment of which was guaranteed by Bank of Jinzhou for a period of six months. The Company was required to maintain approximately 50% of the note amounts, or $2,864,828 and $2,851,107 (RMB17,501,523) as guaranteed funds, which was classified as restricted cash as of March 31, 2015 and December 31, 2014, respectively. | ||
As of March 31, 2015, the Company had seventy-one outstanding notes payable to suppliers, maturing in July and August 2015, in an aggregate amount of $7,366,060, respectively (RMB45,000,000), the payment of which was guaranteed by Bank of Jinzhou for a period of six months. The Company was required to maintain approximately 50% of the note amounts, or $3,683,030 (RMB22,500,000) as guaranteed funds, which was classified as restricted cash as of March 31, 2015. | ||
Tianjin Binhai Rural Commercial Bank | ||
As of March 31, 2015, the Company had two outstanding notes payable to suppliers, maturing in September 2015, in an aggregate amount of $3,273,805 (RMB20,000,000), the payment of which was guaranteed by Tianjin Binhai Rural Commercial Bank for a period of six months. The Company was required to maintain approximately 60% of the note amounts, or $1,964,283 (RMB12,000,000) as guaranteed funds, which was classified as restricted cash as of March 31, 2015. | ||
The purpose of this arrangement is to provide additional time for the Company to remit payments while the suppliers do not bear any credit risk since the suppliers’ payments are guaranteed by the banks. |
Long_Term_Debt
Long Term Debt | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Long Term Debt [Abstract] | |||||
Long term debt | -11 | Long term debt | |||
The Company has outstanding debt due to the seller of Zhonghe, which was acquired by the Company on November 30, 2013. The debt carries interest at a rate of 6% per annum. The debt is due in three installment payments of approximately $19.6 million (RMB120,000,000) each, including interest, and is secured by the real estate property where the Airport International Auto Mall is located. | |||||
A summary of this debt follows: | |||||
Outstanding debt balance | $ | 35,994,155 | |||
Less current portion | (17,311,791 | ) | |||
Outstanding debt balance less current portion | $ | 18,682,364 |
Major_Customers_and_Suppliers
Major Customers and Suppliers | 3 Months Ended | |
Mar. 31, 2015 | ||
Major customers and suppliers [Abstract] | ||
Major Customers and Suppliers | -12 | Major Customers and Suppliers |
Two customers accounted for approximately 32% of the Company’s net revenue for the three months ended March 31, 2015. One customer accounted for 23% of the Company’s net revenue for the three months ended March 31, 2014. | ||
Two suppliers accounted for approximately 32% of the Company’s purchases during the three months ended March 31, 2015. One supplier accounted for 15% of the Company’s purchases during the three months ended March 31, 2014. |
Retained_Earnings
Retained Earnings | 3 Months Ended | |
Mar. 31, 2015 | ||
Retained Earnings Note Disclosure [Abstract] | ||
Retained Earnings | -13 | Retained earnings |
According to the Law of the PRC on Enterprises with Wholly-Owned Foreign Investment, the Company’s subsidiaries in the PRC are required to make appropriations from after-tax profits as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) to nondistributable reserves. These reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion reserve and (iii) a staff bonus and welfare fund. A wholly-owned PRC subsidiary is not required to make appropriations to the enterprise expansion reserve but annual appropriations to the general reserve are required to be made at 10% of the profit after tax as determined under PRC GAAP at each year-end, until such fund has reached 50% of its respective registered capital. The staff welfare and bonus reserve is determined by the board of directors. The general reserve is used to offset future losses. The subsidiary may, upon a resolution passed by the stockholder, convert the general reserve into capital. The staff welfare and bonus reserve are used for the collective welfare of the employees of the subsidiary. The enterprise expansion reserve is for the expansion of the subsidiary operations and can be converted to capital subject to approval by the relevant authorities. These reserves represent appropriations of the retained earnings determined in accordance with Chinese law. | ||
In addition to the general reserve, the Company’s PRC subsidiaries are required to obtain approval from the local PRC government prior to distributing any registered share capital. Accordingly, both the appropriations to general reserve and the registered share capital of the Company’s PRC subsidiary are considered as restricted net assets and are not distributable as cash dividends. As of March 31, 2015 and December 31, 2014, the Company’s statutory reserve fund was approximately $3,371,000 and $3,437,000, respectively. |
Related_Party_Balances_and_Tra
Related Party Balances and Transactions | 3 Months Ended | |
Mar. 31, 2015 | ||
Related Party Balances and Transactions [Abstract] | ||
Related Party Balances and Transactions | -14 | Related Party Balances and Transactions |
Ms. Cheng Weihong made non-interest bearing loans to the Company from time to time to meet working capital needs of the Company. Ms. Cheng Weihong is a Director and Senior Vice President of the Company. Ms. Cheng Weihong is the wife of the Company’s Chairman, President and Chief Executive Officer, Mr. Tong Shiping. As of March 31, 2015 and December 31, 2014, the outstanding balances due to Ms. Cheng Weihong were $481,383 and $457,628, respectively. | ||
The Company’s former shareholder, Sino Peace Limited, paid certain accrued expenses in the previous years on behalf of the Company. The amount of $2,213,280 was outstanding as payable related to prior years’ professional fees on the consolidated balance sheets as of December 31, 2014. On January 25, 2015, Sino Peace Limited assigned the outstanding loan balance to St. John’s International Limited, an unrelated party. As of March 31, 2015, the outstanding amount of $2,223,931 was classified as other payable. | ||
In January 2014, Zhonghe entered into an agreement with Car King Tianjin to rent approximately 9,927 square meters of the Airport International Auto Mall for a period of ten years through December 2023. Rent per the agreement for the three months ended March 31, 2015 and 2014 was approximately $244,000 and $326,000. The Company recognized rental income of $327,033 for the three months ended March 31, 2014 related to this lease. Due to the cumulative loss incurred by Car King Tianjin, the Company has not received any return on its investment in the Joint Venture (as defined below) since the inception of its operations. As a result, starting in the third quarter of 2014, the Company deferred recording the rental income related to the lease of the Airport International Auto Mall. | ||
Net balance due from Car King Tianjin was $1,762,847 and $1,803,706 as of March 31, 2015 and December 31, 2014, respectively. The Company fully reserved the balances due from Car King Tianjin as a result of the uncertainties of collecting these advances. | ||
The balances as discussed above as of March 31, 2015 and December 31, 2014 are interest-free, unsecured and have no fixed term of repayment. During the three months ended March 31, 2015 and 2014, there was no imputed interest charged in relation to these balances. |
Segment_Information
Segment Information | 3 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||
Segment Information [Abstract] | |||||||||||||||||||||||||||||||||
Segment Information | -15 | Segment Information | |||||||||||||||||||||||||||||||
The Company has five principal operating segments: (1) Sales of Automobiles, (2) Financing Services, (3) Web-based Advertising Services, (4) Automobile Value Added Services, and (5) Airport Auto Mall Automotive Services. Effective March 1, 2014, the Company ceased providing auto mall management services due to the expiration on February 28, 2014 of the Cooperation Agreement dated March 1, 2013, by and between the Company and Tianjin Prominent Hero International Logistics Co., Ltd, to manage the International Auto Mall in Tianjin, China. The Company’s operating segments are determined based on the nature of the services offered. Operating segments are defined as components of an enterprise for which separate financial information is available and that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company's chief executive officer and chief operating officer have been identified as the chief operating decision makers. The Company's chief operating decision makers direct the allocation of resources to operating segments based on the profitability and cash flows of each respective segment. | |||||||||||||||||||||||||||||||||
The Company evaluates performance based on several factors, including net revenue, cost of revenue, operating expenses, and income from operations. The following tables show the operations of the Company's operating segments: | |||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2015 | |||||||||||||||||||||||||||||||||
Web-based | Automobile | Airport Auto | Auto Mall | ||||||||||||||||||||||||||||||
Sales of | Financing | Advertising | Value Added | Mall Automotive | Management | ||||||||||||||||||||||||||||
Automobiles | Services | Services | Services | Services | Service | Corporate | Total | ||||||||||||||||||||||||||
Net revenue | $ | 86,213,871 | $ | 1,113,763 | $ | 22,528 | $ | - | $ | - | $ | - | $ | - | $ | 87,350,162 | |||||||||||||||||
Cost of revenue | 86,005,028 | 863,292 | - | - | - | - | - | 86,868,320 | |||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||
Selling and marketing | 77,466 | 77,466 | 19,366 | - | 19,366 | - | - | 193,664 | |||||||||||||||||||||||||
General and administrative | 52,868 | 52,870 | 31,722 | 21,148 | 634,439 | - | 264,352 | 1,057,399 | |||||||||||||||||||||||||
Total operating expenses | 130,334 | 130,336 | 51,088 | 21,148 | 653,805 | - | 264,352 | 1,251,063 | |||||||||||||||||||||||||
Income (loss) from | $ | 78,509 | $ | 120,135 | $ | (28,560 | ) | $ | (21,148 | ) | $ | (653,805 | ) | $ | - | $ | (264,352 | ) | $ | (769,221 | ) | ||||||||||||
operations | |||||||||||||||||||||||||||||||||
Depreciation and Amortization | $ | 45,786 | $ | 5,591 | $ | 4,355 | $ | 799 | $ | 455,378 | $ | - | $ | 105,654 | $ | 617,563 | |||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||||||||||||
Web-based | Automobile | Airport Auto | Auto Mall | ||||||||||||||||||||||||||||||
Sales of | Financing | Advertising | Value Added | Mall Automotive | Management | ||||||||||||||||||||||||||||
Automobiles | Services | Services | Services | Services | Service | Corporate | Total | ||||||||||||||||||||||||||
Net revenue | $ | 104,729,835 | $ | 1,543,169 | $ | 74,702 | $ | 125,110 | $ | 337,263 | $ | 164,971 | $ | - | $ | 106,975,050 | |||||||||||||||||
Cost of revenue | 104,554,142 | 980,735 | 5,943 | 8,097 | - | 2,336 | - | 105,551,253 | |||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||
Selling and marketing | 23,017 | 73,683 | 9,008 | 15,329 | 44,184 | 21,306 | - | 186,527 | |||||||||||||||||||||||||
General and administrative | 76,805 | 245,869 | 30,058 | 51,152 | 147,435 | 71,096 | 622,417 | 1,244,832 | |||||||||||||||||||||||||
Total operating expenses | 99,822 | 319,552 | 39,066 | 66,481 | 191,619 | 92,402 | 622,417 | 1,431,359 | |||||||||||||||||||||||||
Income (loss) from | $ | 75,871 | $ | 242,882 | $ | 29,693 | $ | 50,532 | $ | 145,644 | $ | 70,233 | $ | (622,417 | ) | $ | (7,562 | ) | |||||||||||||||
operations | |||||||||||||||||||||||||||||||||
Depreciation and Amortization | $ | 48,043 | $ | 6,735 | $ | 5,299 | $ | 962 | $ | 447,473 | $ | - | $ | 164,093 | $ | 672,605 | |||||||||||||||||
Following are total assets by segment: | |||||||||||||||||||||||||||||||||
Total Assets | Sales of | Financing | Web-based | Automobile | Airport Auto Mall Automotive Services | Auto Mall | Corporate | Total | |||||||||||||||||||||||||
Automobiles | Services | Advertising | Value | Management | |||||||||||||||||||||||||||||
Services | Added | Services | |||||||||||||||||||||||||||||||
Services | |||||||||||||||||||||||||||||||||
As of March 31, 2015 | $ | 126,858,736 | $ | 99,773,128 | $ | 385,733 | $ | 747,433 | $ | 48,287,720 | $ | - | $ | 11,366,134 | $ | 287,418,884 | |||||||||||||||||
As of December 31, 2014 | $ | 113,248,213 | $ | 111,720,132 | $ | 399,463 | $ | 979,003 | $ | 51,287,018 | $ | - | $ | 877,927 | $ | 278,511,756 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Summary Of Significant Accounting Policies [Abstract] | |
Organization, Nature of Business and Basis of Presentation | Organization, Nature of Business and Basis of Presentation |
China Auto Logistics Inc. (the “Company” or “China Auto”) operates through its wholly-owned subsidiary Ever Auspicious International Limited, a Hong Kong corporation (“HKCo.”), and its wholly-owned subsidiary Tianjin Seashore New District Shisheng Business Trading Group Co. Ltd. (“Shisheng”), a company established under the laws of the People’s Republic of China (“PRC”) and Shisheng’s wholly owned and majority owned subsidiaries, Tianjin Ganghui Information Technology Corp. (“Ganghui”), Tianjin Hengjia Port Logistics Corp. (“Hengjia”), Zhengji International Trading Corp. (“Zhengji”), and Tianjin Zhonghe Auto Sales Service Co., Ltd. (“Zhonghe”). The Company also has a 40% ownership interest in a joint venture between Zhonghe and Car King (China) Used Car Trading Co., Ltd. (“Car King Tianjin”). | |
The Company’s principal businesses include (i) sales of imported automobiles (“Sales of Automobiles”), (ii) financing services related to imported automobiles (“Financing Services”), (iii) automobile information websites and advertising services (“Web-based Advertising Services”), (iv) logistics services related to the automobile importing process and other automobile value added services, such as assistance with customs clearance, storage and nationwide delivery services (“Automobile Value Added Services”), and (v) airport auto mall automotive services including selling used cars through Car King Tianjin and leasing the Airport International Auto Mall facility in Tianjin, China (the “Airport International Auto Mall”) to Car King Tianjin and other tenants (“Airport Auto Mall Automotive Services”). The Cooperation Agreement dated March 1, 2013, by and between the Company and Tianjin Prominent Hero International Logistics Co., Ltd, to manage the International Auto Mall in Tianjin, China, expired according to its terms on February 28, 2014, and was not renewed. Therefore, as of March 1, 2014, the Company no longer provides auto mall management services. | |
The accompanying condensed consolidated balance sheet as of December 31, 2014, which has been derived from the audited consolidated financial statements and the accompanying unaudited condensed consolidated financial statements, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations and the Company believes that the disclosures made are adequate to make the information not misleading. | |
In the opinion of management, these condensed consolidated financial statements reflect all adjustments which are of a normal recurring nature and which are necessary to present fairly the financial position of China Auto as of March 31, 2015 and the results of its operations, and cash flows for the three-month periods ended March 31, 2015 and 2014. These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2014. The results of operations for the three-month period ended March 31, 2015 are not necessarily indicative of the results which may be expected for the entire fiscal year. | |
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Going Concern | Going Concern |
The Company incurred operating losses and had negative operating cash flows and may continue to generate negative cash flows as the Company implements its business plan for the remainder of 2015. There can be no assurance that the Company’s continuing efforts to execute its business plan will be successful and that the Company will be able to continue as a going concern. The accompanying interim condensed consolidated financial statements have been prepared in conformity with US GAAP, which contemplate the Company’s continuation as a going concern. The Company’s net loss attributable to shareholders for the three months ended March 31, 2015 was $2,666,441 as compared to $1,346,167 for the three months ended March 31, 2014. | |
As of March 31, 2015, the Company had a working capital deficit of $9,194,698, including $69,240,968 in current liabilities for short-term borrowings which are due during the period between July 2015 and February 2016, and $17,311,791 in current liabilities payable to Hezhong related to the Company’s acquisition of Zhonghe (the “Zhonghe Acquisition”), which is due in November in 2015, and for which the Company does not currently have the necessary capital to re-pay. Net cash used in operations during the three months ended March 31, 2015 was $2,785,883. These factors raise substantial doubt about the Company’s ability to continue as a going concern. | |
The Company invested heavily in Car King Tianjin through cash investment, advances, and leasing a portion of the Airport International Auto Mall to Car King Tianjin to operate a used car business. The Company believes that there is a strong market for used car sales in China and Car King Tianjin will provide us with opportunities for long-term growth. However, the Company cannot precisely predict the extent of the growth and whether such growth will convert into substantial profits in the future. | |
The Company does not currently have sufficient cash or commitments for financing to sustain its operations for the next twelve months. The Company’s plan continues to be to develop new customer relationships and substantially increase our cash flows from operations and revenue derived from our products/services. If the Company’s revenues do not reach the level anticipated in our plan, the Company may require additional financing in order to execute our operating plan. If additional financing is required, the Company cannot predict whether this additional financing will be in the form of equity, debt, or another form, and the Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In the event that financing sources are not available, or that the Company is unsuccessful in increasing its revenues and profits, the Company may be unable to implement its current plans for expansion, repay our debt obligations or respond to competitive pressures, any of which would have a material adverse effect on its business, prospects, financial condition and results of operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |
Principles of Consolidation | Principles of Consolidation |
The condensed consolidated financial statements include the financial statements of China Auto and its wholly-owned and majority-owned subsidiaries. All inter-company transactions and balances have been eliminated in the preparation of the condensed consolidated financial statements. | |
Currency Reporting | Currency Reporting |
The Company’s operations in the PRC use the local currency, Renminbi (“RMB”), as their functional currency, whereas amounts reported in the accompanying condensed consolidated financial statements and disclosures are stated in U.S. dollars, the reporting currency of the Company, unless stated otherwise. As such, the condensed consolidated balance sheets of the Company have been translated into U.S. dollars at the current rates as of March 31, 2015 and December 31, 2014 and the condensed consolidated statements of income have been translated into U.S. dollars at the weighted average rates during the periods the transactions were recognized. | |
The resulting foreign currency translation adjustments are recorded in determining other comprehensive income in the condensed consolidated statements of comprehensive income and as a separate component of equity in the condensed consolidated balance sheets. | |
Revenue Recognition | Revenue Recognition |
The Company’s main source of income was generated through (1) Sales of Automobiles, (2) Financing Services (3) Web-based Advertising Services including fees from (i) displaying graphical advertisements on the Company websites and (ii) web-based listing services that allow customers to place automobile related information on the Company’s websites, (4) Automobile Value Added Services, and (5) Airport Auto Mall Automotive Services. As indicated above, as of March 1, 2014, the Company no longer performs auto mall management services, and therefore, it will no longer recognize revenue related to such services. | |
The Company recognizes revenue when there is persuasive evidence of an arrangement, delivery has occurred upon shipment or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectibility is reasonably assured. | |
The Company recognizes Sales of Automobiles upon delivery and acceptance by the customers and where collectibility is reasonably assured. | |
Service revenue related to Financing Services is recognized ratably over the financing period. | |
Service fees for graphical advertisements on the Company’s websites are charged on a fixed fee basis. The Company recognizes the advertising revenue when the service is performed over the service term. The Company charges a monthly fee for listing services and recognizes the revenue when services are performed. The Company offers sales incentives to its customers in the form of (i) subscription exemption; (ii) discounted prices and (iii) free advertisements. The Company classifies sales incentives as a reduction of net revenues. Revenues, net of discounts and allowances, are recognized ratably over the service periods. | |
The Company recognizes revenue from Automobile Value Added Services when such services are performed. | |
Airport Auto Mall Automotive Services include (i) the rental of the Airport International Auto Mall, and (ii) equity income (loss) derived from Car King Tianjin. Rental income from the Airport International Auto Mall is recognized over the lease term on a straight-line basis. The Company’s lease agreement, entered into with Car King Tianjin in January 2014 (the “Rental Agreement”), contains a contingent rental arrangement for fiscal years 2016, 2017 and 2018, under which rental income is determined based on a percentage of Car King Tianjin’s gross profit. Notwithstanding this arrangement, the Rental Agreement contains both a minimum and a maximum annual rental amount. Contingent rental income is recognized when specified targets are met. The equity income (loss) derived from Car King Tianjin is recognized based on the Company’s ownership share in Car King Tianjin’s net income (loss) | |
Value added taxes (“VAT”) represent amounts collected on behalf of specific regulatory agencies that require remittance by a specified date. These amounts are collected at the time of sales and are detailed on invoices provided to customers. The Company accounts for VAT on a net basis. The Company recorded and paid business taxes based on a percentage of the net service revenues and reported the service revenue net of the business taxes and other sales related taxes. | |
Receivables Related to Financing Services | Receivables Related to Financing Services |
The Company records receivables related to Financing Services when cash is loaned to customers to finance their purchases of automobiles. Upon repayment by customers, the Company records the amounts as reductions of receivables related to Financing Services. Receivables related to Financing Services represent the aggregate outstanding balance of loans from customers related to their purchases of automobiles and are considered receivables held for investment. The Company charges a fee for providing loan services and such fees are prepaid by customers. The Company amortizes these fees over the receivable term, which is typically 90 days, using the straight-line method. The Company records such amortized amounts as financing fee income and the unamortized amount is classified as deferred revenue on the Company’s condensed consolidated balance sheets. | |
The Company evaluates the collectibility of outstanding receivables at the end of each of the reporting periods and makes estimates for potential credit losses. The Company has not experienced any losses on its receivables related to Financing Services historically and accordingly did not record any allowance for credit losses as of March 31, 2015 and December 31, 2014. | |
Basic and Diluted Earnings (Loss) Per Share | Basic and Diluted Earnings (Loss) Per Share |
Basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per common share is computed similarly to basic earnings per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of March 31, 2015 and 2014, the Company did not have any common stock equivalents, therefore, the basic earnings (loss) per share is the same as the diluted earnings (loss) per share. | |
New Accounting Standards | New Accounting Standards |
The Company is not aware of any recently issued accounting pronouncements that, when adopted, will have a material effect on the Company’s financial position, results of operations or cash flows. | |
Restricted_Cash_Tables
Restricted Cash (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Restricted Cash [Abstract] | |||||||||
Summary of restricted cash | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Collateral for bank’s issuance of letters of credit to the Company’s customers | $ | 5,906,681 | $ | 2,393,338 | |||||
Collateral for notes payable to suppliers | 11,785,946 | 9,778,152 | |||||||
$ | 17,692,627 | $ | 12,171,490 |
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property and Equipment Net [Abstract] | |||||||||
Summary of property and equipment | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Buildings and land use rights, net of impairment loss of $3,020,576 as of March 31, 2015 and $3,006,109 as of December 31, 2014 | 69,821,578 | 69,487,171 | |||||||
Computers | 228,470 | 227,377 | |||||||
Office equipment, furniture and fixtures | 110,347 | 109,818 | |||||||
Leasehold improvements | 34,375 | 34,210 | |||||||
Automobiles | 1,094,490 | 1,089,248 | |||||||
71,289,260 | 70,947,824 | ||||||||
Less: Accumulated depreciation and amortization | (4,432,651 | ) | (3,821,822 | ) | |||||
$ | 66,856,609 | $ | 67,126,002 |
Goodwill_Tables
Goodwill (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Intangible Assets, Net\Goodwill [Abstract] | |||||||||||||
Summary of changes in carrying amount of goodwill | Reporting Segments | ||||||||||||
Sales of Automobiles | Airport Auto Mall Automotive Services | Total | |||||||||||
Balance as of December 31, 2013 | 4,031,873 | 16,127,492 | 20,159,365 | ||||||||||
Impairment loss | - | (16,041,383 | ) | (16,041,383 | ) | ||||||||
Translation adjustment | (18,457 | ) | (86,109 | ) | (104,566 | ) | |||||||
Balance as of December 31, 2014 | 4,013,416 | - | 4,013,416 | ||||||||||
Translation adjustment | 19,315 | - | 19,315 | ||||||||||
Balance as of March 31, 2015 | $ | 4,032,731 | $ | - | $ | 4,032,731 |
Intangible_Assets_Net_Tables
Intangible Assets, Net (Tables) | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
Intangible Assets, Net\Goodwill [Abstract] | |||||||||||||||||||||||
Summary of intangible assets | Life | Cost | Foreign currency translation adjustments | Less: Accumulated Impairment | Less: Accumulated Amortization | Net Carrying Amount | |||||||||||||||||
Intangible assets subject to amortization – Customer Relations | |||||||||||||||||||||||
As of March 31, 2015 | 5 years | $ | 555,002 | $ | 1,545 | $ | - | $ | (148,413 | ) | $ | 408,134 | |||||||||||
As of December 31, 2014 | 5 years | $ | 555,002 | $ | (1,120 | ) | $ | - | $ | (120,008 | ) | $ | 433,874 |
Equity_Investment_in_Car_King_1
Equity Investment in Car King Tianjin (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Equity Investment in Car King Tianjin [Abstract] | |||||||||
The results of operations of the equity basis investments | Condensed statements of operations information: | Three Months Ended | Three Months Ended | ||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Net sales | $ | 1,795,160 | $ | 604,766 | |||||
Gross profit | 576,687 | 156,784 | |||||||
Net loss | (734,477 | ) | (738,160 | ) | |||||
The Company’s equity in net loss of Car King Tianjin | $ | (293,791 | ) | $ | (295,264 | ) | |||
The results of financial postion of the equity basis investments | Condensed balance sheet information: | As of | As of | ||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Current assets | $ | 4,309,869 | $ | 1,462,036 | |||||
Non current assets | 1,006,011 | 1,039,338 | |||||||
Total assets | $ | 5,315,880 | $ | 2,501,374 | |||||
Current liabilities | $ | 6,269,618 | $ | 2,716,389 | |||||
Deficit | (953,738 | ) | (215,015 | ) | |||||
Current liabilities and deficit | $ | 5,315,880 | $ | 2,501,374 |
Long_Term_Debt_Tables
Long Term Debt (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Long Term Debt [Abstract] | |||||
Summary of debt | Outstanding debt balance | $ | 35,994,155 | ||
Less current portion | (17,311,791 | ) | |||
Outstanding debt balance less current portion | $ | 18,682,364 |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||
Segment Information [Abstract] | |||||||||||||||||||||||||||||||||
Operations of Company's operating segments | Web-based | Automobile | Airport Auto | Auto Mall | |||||||||||||||||||||||||||||
Sales of | Financing | Advertising | Value Added | Mall Automotive | Management | ||||||||||||||||||||||||||||
Automobiles | Services | Services | Services | Services | Service | Corporate | Total | ||||||||||||||||||||||||||
Net revenue | $ | 86,213,871 | $ | 1,113,763 | $ | 22,528 | $ | - | $ | - | $ | - | $ | - | $ | 87,350,162 | |||||||||||||||||
Cost of revenue | 86,005,028 | 863,292 | - | - | - | - | - | 86,868,320 | |||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||
Selling and marketing | 77,466 | 77,466 | 19,366 | - | 19,366 | - | - | 193,664 | |||||||||||||||||||||||||
General and administrative | 52,868 | 52,870 | 31,722 | 21,148 | 634,439 | - | 264,352 | 1,057,399 | |||||||||||||||||||||||||
Total operating expenses | 130,334 | 130,336 | 51,088 | 21,148 | 653,805 | - | 264,352 | 1,251,063 | |||||||||||||||||||||||||
Income (loss) from | $ | 78,509 | $ | 120,135 | $ | (28,560 | ) | $ | (21,148 | ) | $ | (653,805 | ) | $ | - | $ | (264,352 | ) | $ | (769,221 | ) | ||||||||||||
operations | |||||||||||||||||||||||||||||||||
Depreciation and Amortization | $ | 45,786 | $ | 5,591 | $ | 4,355 | $ | 799 | $ | 455,378 | $ | - | $ | 105,654 | $ | 617,563 | |||||||||||||||||
Web-based | Automobile | Airport Auto | Auto Mall | ||||||||||||||||||||||||||||||
Sales of | Financing | Advertising | Value Added | Mall Automotive | Management | ||||||||||||||||||||||||||||
Automobiles | Services | Services | Services | Services | Service | Corporate | Total | ||||||||||||||||||||||||||
Net revenue | $ | 104,729,835 | $ | 1,543,169 | $ | 74,702 | $ | 125,110 | $ | 337,263 | $ | 164,971 | $ | - | $ | 106,975,050 | |||||||||||||||||
Cost of revenue | 104,554,142 | 980,735 | 5,943 | 8,097 | - | 2,336 | - | 105,551,253 | |||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||
Selling and marketing | 23,017 | 73,683 | 9,008 | 15,329 | 44,184 | 21,306 | - | 186,527 | |||||||||||||||||||||||||
General and administrative | 76,805 | 245,869 | 30,058 | 51,152 | 147,435 | 71,096 | 622,417 | 1,244,832 | |||||||||||||||||||||||||
Total operating expenses | 99,822 | 319,552 | 39,066 | 66,481 | 191,619 | 92,402 | 622,417 | 1,431,359 | |||||||||||||||||||||||||
Income (loss) from | $ | 75,871 | $ | 242,882 | $ | 29,693 | $ | 50,532 | $ | 145,644 | $ | 70,233 | $ | (622,417 | ) | $ | (7,562 | ) | |||||||||||||||
operations | |||||||||||||||||||||||||||||||||
Depreciation and Amortization | $ | 48,043 | $ | 6,735 | $ | 5,299 | $ | 962 | $ | 447,473 | $ | - | $ | 164,093 | $ | 672,605 | |||||||||||||||||
Summary o total assets by segment | Total Assets | Sales of | Financing | Web-based | Automobile | Airport Auto Mall Automotive Services | Auto Mall | Corporate | Total | ||||||||||||||||||||||||
Automobiles | Services | Advertising | Value | Management | |||||||||||||||||||||||||||||
Services | Added | Services | |||||||||||||||||||||||||||||||
Services | |||||||||||||||||||||||||||||||||
As of March 31, 2015 | $ | 126,858,736 | $ | 99,773,128 | $ | 385,733 | $ | 747,433 | $ | 48,287,720 | $ | - | $ | 11,366,134 | $ | 287,418,884 | |||||||||||||||||
As of December 31, 2014 | $ | 113,248,213 | $ | 111,720,132 | $ | 399,463 | $ | 979,003 | $ | 51,287,018 | $ | - | $ | 877,927 | $ | 278,511,756 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies (Textual) | |||
Net cash provided by (used in) operating activities | ($2,785,883) | ($12,773,790) | |
Payable related to Zhonghe Acquisition - current portion, net | 17,311,791 | 16,900,426 | |
Short term borrowings | 69,240,968 | 68,909,343 | |
Amortization fees receivable period under straight line method | 90 days | ||
Net income | -2,666,441 | -1,346,167 | |
working capital deficit | $9,194,698 | ||
Ownership percentage | 40.00% |
Restricted_Cash_Details
Restricted Cash (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Summary of restricted cash | ||
Collateral for bank's issuance of letters of credit to the Company's customers | $5,906,681 | $2,393,338 |
Collateral for notes payable to suppliers | 11,785,946 | 9,778,152 |
Restricted cash | $17,692,627 | $12,171,490 |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Summary of property and equipment | ||
Property and equipment, gross | $71,289,260 | $70,947,824 |
Less: Accumulated depreciation and amortization | -4,432,651 | -3,821,822 |
Property and equipment, net | 66,856,609 | 67,126,002 |
Buildings and land use rights [Member] | ||
Summary of property and equipment | ||
Property and equipment, gross | 69,821,578 | 69,487,171 |
Computers [Member] | ||
Summary of property and equipment | ||
Property and equipment, gross | 228,470 | 227,377 |
Office equipment, furniture and fixtures [Member] | ||
Summary of property and equipment | ||
Property and equipment, gross | 110,347 | 109,818 |
Leasehold improvements [Member] | ||
Summary of property and equipment | ||
Property and equipment, gross | 34,375 | 34,210 |
Automobiles [Member] | ||
Summary of property and equipment | ||
Property and equipment, gross | $1,094,490 | $1,089,248 |
Property_and_Equipment_Net_Det1
Property and Equipment, Net (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Property and Equipment, Net (Textual) | |||
Depreciation and amortization expense for property and equipment | $589,857 | $644,807 | |
Asset Impairment Charges | $3,020,576 | $3,006,109 |
Goodwill_Details
Goodwill (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | $4,013,416 | $20,159,365 |
Impairment loss | -16,041,383 | |
Translation adjustment | 19,315 | -104,566 |
Goodwill, Ending Balance | 4,032,731 | 4,013,416 |
Sales of Automobiles [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | 4,013,416 | 4,031,873 |
Impairment loss | ||
Translation adjustment | 19,315 | -18,457 |
Goodwill, Ending Balance | 4,032,731 | 4,013,416 |
Airport Auto Mall Automotive Services [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | 16,127,492 | |
Impairment loss | -16,041,383 | |
Translation adjustment | -86,109 | |
Goodwill, Ending Balance |
Intangible_Assets_Net_Details
Intangible Assets, Net (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Intangible assets subject to amortization: | ||
Intangible assets, Net Carrying Amount | $408,134 | $433,874 |
Customer relations [Member] | ||
Intangible assets subject to amortization: | ||
Intangible Asset, Life | 5 years | 5 years |
Intangible assets, cost | 555,002 | 555,002 |
Intangible assets, Foreign currency translation adjustments | 1,545 | -1,120 |
Intangible assets, Less Accumulated Impairment | ||
Intangible assets, Less Accumulated Amortization | -148,413 | -120,008 |
Intangible assets, Net Carrying Amount | $408,134 | $433,874 |
Intangible_Assets_Net_Details_
Intangible Assets, Net (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Intangible Assets, Net (Textual) | ||
Amortization expenses | $27,706 | $27,798 |
Equity_Investment_in_Car_King_2
Equity Investment in Car King Tianjin (Details) (Car King Tianjin [Member], USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Car King Tianjin [Member] | ||
Condensed income statement information: | ||
Net sales | $1,795,160 | $604,766 |
Gross profit | 576,687 | 156,784 |
Net loss | -734,477 | -738,160 |
The Company's equity in net loss of Car King Tianjin | ($293,791) | ($295,264) |
Equity_Investment_in_Car_King_3
Equity Investment in Car King Tianjin (Details 1) (Car King Tianjin [Member], USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Car King Tianjin [Member] | ||
Condensed balance sheet information: | ||
Current assets | $4,309,869 | $1,462,036 |
Non current assets | 1,006,011 | 1,039,338 |
Total assets | 5,315,880 | 2,501,374 |
Current liabilities | 6,269,618 | 2,716,389 |
Deficit | -953,738 | -215,015 |
Current liabilities and deficit | $5,315,880 | $2,501,374 |
Equity_Investment_in_Car_King_4
Equity Investment in Car King Tianjin (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Equity Method Investments (Textual) | ||
Equity investment balance | ||
Car King Tianjin [Member] | ||
Equity Method Investments (Textual) | ||
Net profit or loss | 40.00% | |
Cumulative loss of equity method investment amount due | 381,495 | 86,007 |
Net balance | 1,762,847 | 1,803,706 |
Amount of cumulative loss incurred | $1,762,847 | $1,803,706 |
Bank_Overdraft_Details
Bank Overdraft (Details) | Mar. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2015 | Jan. 31, 2015 | Jan. 31, 2014 | Jan. 31, 2014 |
USD ($) | USD ($) | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | |
USD ($) | CNY | USD ($) | CNY | |||
Bank Overdraft Textual [Abstract] | ||||||
Bank overdrafts | $2,406,503 | $2,423,015 | $2,455,353 | 15,000,000 | $2,455,353 | 15,000,000 |
Bank overdraft annual interest rate | 6.72% | 6.72% | 6.72% | 6.72% | ||
Bank overdraft maximum period | 89 days | 89 days | 89 days | 89 days | ||
Bank overdraft maturity date | Dec-15 | Dec-15 | Dec-14 | Dec-14 |
Lines_of_Credit_Related_to_Fin1
Lines of Credit Related to Financing Services (Details) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2015 | Jan. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Aug. 31, 2014 | Aug. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | |
USD ($) | USD ($) | China Merchants Bank [Member] | China Merchants Bank [Member] | China Merchants Bank [Member] | China Merchants Bank [Member] | China Merchants Bank [Member] | China Merchants Bank [Member] | China Merchants Bank [Member] | China Merchants Bank [Member] | China Merchants Bank [Member] | China Merchants Bank [Member] | China Merchants Bank [Member] | Agricultural Bank of China [Member] | Agricultural Bank of China [Member] | Agricultural Bank of China [Member] | Agricultural Bank of China [Member] | Agricultural Bank of China [Member] | Agricultural Bank of China [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | PuDong Development Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | Industrial and Commercial Bank of China [Member] | Industrial and Commercial Bank of China [Member] | Industrial and Commercial Bank of China [Member] | Industrial and Commercial Bank of China [Member] | Industrial and Commercial Bank of China [Member] | Industrial and Commercial Bank of China [Member] | China Minsheng Bank [Member] | China Minsheng Bank [Member] | China Minsheng Bank [Member] | China Minsheng Bank [Member] | China Minsheng Bank [Member] | China Minsheng Bank [Member] | Shengjing Bank [Member] | Shengjing Bank [Member] | Shengjing Bank [Member] | Shengjing Bank [Member] | Shengjing Bank [Member] | |
Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line Of Credit 1 [Member] | Line Of Credit 1 [Member] | Line Of Credit 1 [Member] | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Minimum [Member] | Maximum [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line Of Credit 1 [Member] | Line Of Credit 1 [Member] | Line Of Credit 1 [Member] | Line Of Credit 1 [Member] | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Minimum [Member] | Maximum [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Minimum [Member] | Maximum [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Minimum [Member] | Maximum [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Minimum [Member] | Maximum [Member] | |||
USD ($) | USD ($) | USD ($) | CNY | USD ($) | USD ($) | CNY | Line of Credit [Member] | Line Of Credit 1 [Member] | Line of Credit [Member] | Line Of Credit 1 [Member] | USD ($) | CNY | USD ($) | USD ($) | Line of Credit [Member] | Line of Credit [Member] | USD ($) | USD ($) | USD ($) | CNY | USD ($) | USD ($) | USD ($) | CNY | Line of Credit [Member] | Line Of Credit 1 [Member] | Line of Credit [Member] | Line Of Credit 1 [Member] | USD ($) | USD ($) | USD ($) | CNY | Line of Credit [Member] | Line of Credit [Member] | USD ($) | USD ($) | USD ($) | CNY | Line of Credit [Member] | Line of Credit [Member] | USD ($) | USD ($) | USD ($) | CNY | Line of Credit [Member] | Line of Credit [Member] | USD ($) | USD ($) | CNY | Line of Credit [Member] | Line of Credit [Member] | |||
Entities | Entities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Lines of Credit Related to Financing Services (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum borrowing amount | $11,458,316 | 70,000,000 | $11,458,316 | 70,000,000 | $85,118,921 | 520,000,000 | $19,642,828 | 120,000,000 | $19,642,828 | 120,000,000 | $29,464,242 | 180,000,000 | $16,369,023 | 100,000,000 | $13,095,219 | 80,000,000 | $8,184,512 | 50,000,000 | ||||||||||||||||||||||||||||||||||||
Interest rates | 3.73% | 3.51% | 4.79% | 4.79% | 4.23% | 6.29% | 5.03% | 4.82% | 5.43% | 5.67% | 3.65% | 5.50% | 3.65% | 3.83% | 1.56% | 1.96% | 4.20% | 5.20% | ||||||||||||||||||||||||||||||||||||
Lines of credit facility repayment period | Repayable within 3 months from the dates of drawing. | Repayable within 3 months from the dates of drawing. | Repayable within 3 months from the dates of drawing. | |||||||||||||||||||||||||||||||||||||||||||||||||||
Line of credit facility, amount outstanding | 0 | 3,661,523 | 2,390,966 | 0 | 44,609,149 | 49,414,953 | 0 | 3,546,934 | 8,774,867 | 0 | 2,288,985 | 831,215 | 212,268 | 4,761,227 | 3,595,954 | 891,107 | 754,328 | 0 | ||||||||||||||||||||||||||||||||||||
Guarantors under line of credit facility, Description | This facility line of credit is guaranteed by Ms. Cheng Weihong, a Director and Senior Vice President of the Company, and a non-related entity which is a supplier of the Company. | This facility line of credit is guaranteed by Ms. Cheng Weihong, a Director and Senior Vice President of the Company. | This facility line of credit is guaranteed by five non-related entities, which are customers, suppliers or both. | This facility line of credit. This facility line of credit is guaranteed by Ms. Cheng Weihong, a Director and Senior Vice President of the Company, and a non-related entity, which is a supplier of the Company. | This facility line of credit is guaranteed by Ms. Cheng Weihong, a Director and Senior Vice President of the Company, and a non-related entity, which is a supplier of the Company. | This facility line of credit is guaranteed by (i) Mr. Tong Shiping, the Company's Chairman, President and CEO, (ii) Ms. Cheng Weihong, a Director and Senior Vice President of the Company, (iii) Tianjin Binhai International Automall Ltd. Co., a customer, (iv) Zhonghe, the Company's subsidiary, and (v) Hezhong (Tianjin) International Development Ltd. Co., the former owner of Zhonghe. | This facility line of credit is guaranteed by Zhonghe, the Company's subsidiary. | This facility line of credit is guaranteed by (i) Mr. Tong Shiping, the Company's Chairman, President and CEO, (ii) Ms. Cheng Weihong, a Director and Senior Vice President of the Company, (iii) Tianjin Binhai International Automall Ltd. Co., a customer, and (iv) Zhonghe, the Company's subsidiary. | This facility line of credit is guaranteed by (i) Mr. Tong Shiping, the Company's Chairman, President and CEO, (ii) Ms. Cheng Weihong, a Director and Senior Vice President of the Company, (iii) Tianjin Ning Chuan International Trading co., Ltd., a supplier. | |||||||||||||||||||||||||||||||||||||||||||||
Number of unrelated entities | 5 | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date of line of credit | Matured in February 2015 | Matures in March 2016. | This facility matured in September 2015. | Matured in December 2014. | Matures in December 2015. | This facility matures in August 2015. | This facility matured in February 2015 and was not renewed. | This facility matured in April 2015 and was renewed with substantially the same terms. | This facility matures in November 2015. | |||||||||||||||||||||||||||||||||||||||||||||
Minimum range of deposit in purchase price | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum range of deposit in purchase price | 15.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Lines of credit, interest expense | $700,314 | $972,638 |
Short_Term_Borrowings_Details
Short Term Borrowings (Details) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Aug. 31, 2014 | Aug. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Feb. 28, 2015 | Feb. 28, 2015 | Dec. 31, 2014 | Jan. 31, 2015 | Jan. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 |
USD ($) | USD ($) | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | Agricultural Bank Of China [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | Tianjin Binhai Rural Commercial Bank [Member] | Tianjin Binhai Rural Commercial Bank [Member] | Tianjin Binhai Rural Commercial Bank [Member] | |
Working capital loan agreement [Member] | Working capital loan agreement [Member] | Working capital loan agreement [Member] | Working capital loan agreement [Member] | Working capital loan agreement [Member] | Working capital loan agreement [Member] | Working capital loan agreement [Member] | Working capital loan agreement [Member] | Working capital loan agreement [Member] | Working capital loan agreement [Member] | Working capital loan agreement [Member] | Working capital loan agreement [Member] | Working capital loan agreement one [Member] | Working capital loan agreement one [Member] | Working capital loan agreement two [Member] | Working capital loan agreement two [Member] | Working capital loan agreement three [Member] | Working capital loan agreement three [Member] | Working capital loan agreement four [Member] | Working capital loan agreement four [Member] | Working capital loan agreement five [Member] | Working capital loan agreement five [Member] | Working capital loan agreement five [Member] | Working capital loan agreement five [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | |||
USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | CNY | USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | USD ($) | USD ($) | USD ($) | CNY | |||
Agreement | Agreement | Agreement | Agreement | Agreement | Agreement | ||||||||||||||||||||||||||||||||
Short term borrowings (Textual) | |||||||||||||||||||||||||||||||||||||
Outstanding balances of short term borrowings | $69,240,968 | $68,909,343 | $0 | $9,774,376 | $0 | $4,887,187 | $8,184,512 | $8,145,312 | $6,547,609 | $6,516,250 | $10,639,865 | $10,588,906 | $14,732,121 | $0 | $3,258,125 | $3,258,125 | $3,273,804 | $3,258,125 | $25,863,057 | $25,739,187 | |||||||||||||||||
Interest rate per annum | 6.60% | 6.60% | 6.60% | 6.60% | 6.60% | 6.60% | 6.60% | 6.60% | 6.60% | 6.60% | 6.16% | 6.16% | 5.60% | 5.60% | 5.60% | 5.60% | 5.60% | 5.60% | 8.12% | 8.12% | |||||||||||||||||
Maximum borrowing capacity | $10,639,865 | 65,000,000 | $6,547,609 | 40,000,000 | $8,184,312 | 50,000,000 | $4,887,187 | 30,000,000 | $9,774,376 | 60,000,000 | $14,732,121 | 90,000,000 | $3,273,804 | 20,000,000 | $3,258,125 | 20,000,000 | $3,258,125 | 20,000,000 | $25,863,057 | 158,000,000 | |||||||||||||||||
Period for short term agreements | 6 months | 6 months | 6 months | 6 months | 6 months | 6 months | |||||||||||||||||||||||||||||||
Number of agreements | 3 | 3 | 4 | 4 | 4 | 4 |
Notes_Payable_to_Suppliers_Det
Notes Payable to Suppliers (Details) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||||||||
Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | |
USD ($) | USD ($) | Bank Of Jinzhou [Member] | Bank Of Jinzhou [Member] | Bank Of Jinzhou [Member] | Bank Of Jinzhou [Member] | Bank Of Jinzhou [Member] | Bank Of Jinzhou [Member] | Bank Of Jinzhou [Member] | Bank Of Jinzhou [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | China Zheshang Bank [Member] | Tianjin Binhai Rural Commercial Bank [Member] | Tianjin Binhai Rural Commercial Bank [Member] | |
Five Notes Payable [Member] | Five Notes Payable [Member] | Four Notes Payable [Member] | Four Notes Payable [Member] | Four Notes Payable [Member] | Four Notes Payable [Member] | Seventy one notes payable [Member] | Seventy one notes payable [Member] | Two Notes Payable [Member] | Two Notes Payable [Member] | Two Notes Payable [Member] | Two Notes Payable [Member] | Two Notes Payable [Member] | Two Notes Payable [Member] | |||
USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | |||
Notes Payable to Suppliers (Textual) | ||||||||||||||||
Percentage of bank fee on notes payable amounts | 0.05% | |||||||||||||||
Outstanding notes payable | $19,642,828 | $16,290,625 | $7,330,781 | 45,000,000 | $5,729,158 | 35,000,000 | $5,701,719 | 35,000,000 | $7,366,060 | 45,000,000 | $3,273,805 | 20,000,000 | $3,258,125 | 20,000,000 | $3,273,805 | 20,000,000 |
Term of guarantee payments to suppliers | 6 months | 6 months | 6 months | 6 months | 6 months | 6 months | 6 months | 6 months | 6 months | 6 months | 6 months | 6 months | 6 months | 6 months | ||
Required percentage of the notes amounts | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 100.00% | 100.00% | 100.00% | 100.00% | 60.00% | 60.00% | ||
Guaranteed funds classified as restricted cash | $3,668,920 | 22,521,665 | $2,864,828 | 17,501,523 | $2,851,107 | 17,501,523 | $3,683,030 | 22,500,000 | $3,273,805 | 20,000,000 | $3,258,125 | 20,000,000 | $1,964,283 | 12,000,000 | ||
Range of term of notes payable | Three to six months. | |||||||||||||||
Description of notes payable maturity period | The notes matured in January and February 2015 and were not renewed. | The notes matured in January and February 2015 and were not renewed. | Maturing in June 2015 | Maturing in June 2015 | Maturing in June 2015 | Maturing in June 2015 | Maturing in July and August 2015. | Maturing in July and August 2015. | The notes mature in August 2015 | The notes mature in August 2015 | The notes matured in February 2015 and were not renewed. | The notes matured in February 2015 and were not renewed. | Maturing in September 2015. | Maturing in September 2015. |
Long_Term_Debt_Details
Long Term Debt (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Long Term Debt [Abstract] | ||
Outstanding debt balance | $35,994,155 | |
Less current portion | -17,311,791 | |
Outstanding debt balance less current portion | $18,682,364 | $18,244,177 |
Long_Term_Debt_Details_Textual
Long Term Debt (Details Textual) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2015 | |
USD ($) | CNY | |
Installments | Installments | |
Long Term Debt (Textual) | ||
Debt due in installment payment | $19,600,000 | 120,000,000 |
Debt interest rate | 6.00% | 6.00% |
Number of installments | 3 | 3 |
Major_Customers_and_Suppliers_
Major Customers and Suppliers (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Customer | Customer | |
Revenue [Member] | Customer [Member] | ||
Concentration Risk [Line Items] | ||
Number of customers | 2 | 1 |
Concentration Risk, Percentage | 32.00% | 23.00% |
Purchases [Member] | Supplier [Member] | ||
Concentration Risk [Line Items] | ||
Number of supplier | 2 | 1 |
Concentration Risk, Percentage | 32.00% | 15.00% |
Retained_Earnings_Details
Retained Earnings (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Retained Earnings (Textual) | ||
Annual general reserve of profit after tax as determined under PRC GAAP, (in percentage) | 10.00% | |
Limit of annual appropriation to general reserve maximum | 50.00% | |
Company's statutory reserve fund | $3,371,000 | $3,437,000 |
Related_Party_Balances_and_Tra1
Related Party Balances and Transactions (Details) (USD $) | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
sqft | ||||
Related Party Balances and Transactions (Textual) | ||||
Other payable | $2,223,931 | |||
Ms. Cheng Weihong [Member] | ||||
Related Party Balances and Transactions (Textual) | ||||
Due to related parties | 481,383 | 457,628 | ||
Shareholder (Sino Peace Limited) [Member] | ||||
Related Party Balances and Transactions (Textual) | ||||
Due to related parties | 2,213,280 | |||
Car King Tianjin [Member] | ||||
Related Party Balances and Transactions (Textual) | ||||
Due from related parties | 1,762,847 | 1,803,706 | ||
Rentable area | 9,927 | |||
Lease expiration period | Period of ten years through December 2023. | |||
Rental income | 327,033 | |||
Rent per agreement | $244,000 | $326,000 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Operations of Company's operating segments | ||
Net revenue | $87,350,162 | $106,975,050 |
Cost of revenue | 86,868,320 | 105,551,253 |
Operating expenses | ||
Selling and marketing | 193,664 | 186,527 |
General and administrative | 1,057,399 | 1,244,832 |
Total operating expenses | 1,251,063 | 1,431,359 |
Income (loss) from operations | -769,221 | -7,562 |
Depreciation and amortization | 617,563 | 672,605 |
Sales of Automobiles [Member] | ||
Operations of Company's operating segments | ||
Net revenue | 86,213,871 | 104,729,835 |
Cost of revenue | 86,005,028 | 104,554,142 |
Operating expenses | ||
Selling and marketing | 77,466 | 23,017 |
General and administrative | 52,868 | 76,805 |
Total operating expenses | 130,334 | 99,822 |
Income (loss) from operations | 78,509 | 75,871 |
Depreciation and amortization | 45,786 | 48,043 |
Financing Services [Member] | ||
Operations of Company's operating segments | ||
Net revenue | 1,113,763 | 1,543,169 |
Cost of revenue | 863,292 | 980,735 |
Operating expenses | ||
Selling and marketing | 77,466 | 73,683 |
General and administrative | 52,870 | 245,869 |
Total operating expenses | 130,336 | 319,552 |
Income (loss) from operations | 120,135 | 242,882 |
Depreciation and amortization | 5,591 | 6,735 |
Web-based Advertising Services [Member] | ||
Operations of Company's operating segments | ||
Net revenue | 22,528 | 74,702 |
Cost of revenue | 5,943 | |
Operating expenses | ||
Selling and marketing | 19,366 | 9,008 |
General and administrative | 31,722 | 30,058 |
Total operating expenses | 51,088 | 39,066 |
Income (loss) from operations | -28,560 | 29,693 |
Depreciation and amortization | 4,355 | 5,299 |
Automobile Value Added Services [Member] | ||
Operations of Company's operating segments | ||
Net revenue | 125,110 | |
Cost of revenue | 8,097 | |
Operating expenses | ||
Selling and marketing | 15,329 | |
General and administrative | 21,148 | 51,152 |
Total operating expenses | 21,148 | 66,481 |
Income (loss) from operations | -21,148 | 50,532 |
Depreciation and amortization | 799 | 962 |
Airport Auto Mall Automotive Services [Member] | ||
Operations of Company's operating segments | ||
Net revenue | 337,263 | |
Cost of revenue | ||
Operating expenses | ||
Selling and marketing | 19,366 | 44,184 |
General and administrative | 634,439 | 147,435 |
Total operating expenses | 653,805 | 191,619 |
Income (loss) from operations | -653,805 | 145,644 |
Depreciation and amortization | 455,378 | 447,473 |
Auto Mall Management Services [Member] | ||
Operations of Company's operating segments | ||
Net revenue | 164,971 | |
Cost of revenue | 2,336 | |
Operating expenses | ||
Selling and marketing | 21,306 | |
General and administrative | 71,096 | |
Total operating expenses | 92,402 | |
Income (loss) from operations | 70,233 | |
Depreciation and amortization | ||
Corporate [Member] | ||
Operations of Company's operating segments | ||
Net revenue | ||
Cost of revenue | ||
Operating expenses | ||
Selling and marketing | ||
General and administrative | 264,352 | 622,417 |
Total operating expenses | 264,352 | 622,417 |
Income (loss) from operations | -264,352 | -622,417 |
Depreciation and amortization | $105,654 | $164,093 |
Segment_Information_Details_1
Segment Information (Details 1) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Total assets by segment | ||
Total assets | $287,418,884 | $278,511,756 |
Sales of Automobiles [Member] | ||
Total assets by segment | ||
Total assets | 126,858,736 | 113,248,213 |
Financing Services [Member] | ||
Total assets by segment | ||
Total assets | 99,773,128 | 111,720,132 |
Web-based Advertising Services [Member] | ||
Total assets by segment | ||
Total assets | 385,733 | 399,463 |
Automobile Value Added Services [Member] | ||
Total assets by segment | ||
Total assets | 747,433 | 979,003 |
Airport Auto Mall Automotive Services [Member] | ||
Total assets by segment | ||
Total assets | 48,287,720 | 51,287,018 |
Auto Mall Management Services [Member] | ||
Total assets by segment | ||
Total assets | ||
Corporate [Member] | ||
Total assets by segment | ||
Total assets | $11,366,134 | $877,927 |
Segment_Information_Details_Te
Segment Information (Details Textual) | 3 Months Ended |
Mar. 31, 2015 | |
Segment | |
Segment Information (Textual) | |
Number of operating segment | 5 |