Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2014 | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | FALSE |
Document Period End Date | 31-Dec-14 |
Document Fiscal Year Focus | 2014 |
Document Fiscal Period Focus | FY |
Trading Symbol | ATV |
Entity Registrant Name | ACORN INTERNATIONAL, INC. |
Entity Central Index Key | 1365742 |
Current Fiscal Year End Date | -19 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 83,049,791 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash and cash equivalents | $34,686,379 | $82,552,314 |
Restricted cash | 9,759,765 | 347,718 |
Accounts receivable, net of allowance for doubtful accounts | 7,089,542 | 6,097,658 |
Notes receivable | 122,452 | 0 |
Inventory | 12,781,741 | 16,647,060 |
Prepaid advertising expenses | 6,161,815 | 3,214,784 |
Other prepaid expenses and current assets, net of allowance for doubtful accounts | 9,325,400 | 6,901,302 |
Deferred tax assets, net | 953,395 | 847,696 |
Total current assets | 80,880,489 | 116,608,532 |
Prepaid land use right, net | 7,813,337 | 8,019,857 |
Property and equipment, net | 26,840,184 | 29,755,082 |
Acquired intangible assets, net | 1,178,667 | 1,480,363 |
Investments in affiliates | 7,941,850 | 8,202,374 |
Restricted cash | 0 | 9,677,049 |
Other long-term assets | 1,077,935 | 1,610,456 |
Total assets | 125,732,462 | 175,353,713 |
Current liabilities: | ||
Accounts payable | 10,405,413 | 13,368,777 |
Accrued expenses and other current liabilities | 11,824,586 | 13,107,760 |
Notes payable | 0 | 1,148,125 |
Income taxes payable | 1,801,842 | 1,308,616 |
Deferred revenue | 666,739 | 787,273 |
Current portion of long-term debt | 8,506,324 | 0 |
Total current liabilities | 33,204,904 | 29,720,551 |
Long-term debt | 0 | 8,502,198 |
Deferred tax liability | 855,709 | 858,811 |
Total liabilities | 34,060,613 | 39,081,560 |
Commitments and contingencies (Note 18) | ||
Acorn International, Inc. shareholders' equity: | ||
Ordinary shares ($0.01 par value; 100,000,000 shares authorized 94,937,174 and 95,237,174 shares issued and 82,449,791 and 82,749,791 shares outstanding as of December 31, 2013 and 2014, respectively) | 952,372 | 949,372 |
Additional paid-in capital | 161,924,810 | 161,499,810 |
Accumulated deficits | -86,190,592 | -41,861,680 |
Accumulated other comprehensive income | 34,584,804 | 35,284,912 |
Treasury stock, at cost (12,487,383 and 12,487,383 shares as of December 31, 2013 and 2014, respectively) | -20,109,451 | -20,109,451 |
Total Acorn International, Inc. shareholders' equity | 91,161,943 | 135,762,963 |
Noncontrolling interests | 509,906 | 509,190 |
Total equity | 91,671,849 | 136,272,153 |
Total liabilities and equity | 125,732,462 | 175,353,713 |
Variable Interest Entity, Primary Beneficiary | ||
Current assets: | ||
Cash and cash equivalents | 2,482,194 | 5,932,591 |
Restricted cash | 117,666 | 118,093 |
Accounts receivable, net of allowance for doubtful accounts | 1,199,717 | 3,311,055 |
Inventory | 1,027,639 | 1,230,441 |
Other prepaid expenses and current assets, net of allowance for doubtful accounts | 2,445,557 | 1,999,697 |
Deferred tax assets, net | 426,071 | 72,209 |
Total current assets | 7,698,844 | 12,664,086 |
Property and equipment, net | 6,439,167 | 7,083,690 |
Total assets | 14,138,011 | 19,747,776 |
Current liabilities: | ||
Accounts payable | 428,782 | 288,225 |
Accrued expenses and other current liabilities | 3,409,738 | 4,843,541 |
Income taxes payable | 426,071 | 0 |
Deferred revenue | 666,702 | 787,198 |
Total liabilities | $4,931,293 | $5,918,964 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts receivable, allowance for doubtful accounts | $3,127,348 | $3,508,859 |
Other prepaid expenses and current assets, allowance for doubtful accounts | 127,192 | 127,653 |
Ordinary shares, par value | $0.01 | $0.01 |
Ordinary shares, shares authorized | 100,000,000 | 100,000,000 |
Ordinary shares, shares issued | 95,237,174 | 94,937,174 |
Ordinary shares, shares outstanding | 82,749,791 | 82,449,791 |
Treasury stock, shares | 12,487,383 | 12,487,383 |
Variable Interest Entity, Primary Beneficiary | ||
Accounts receivable, allowance for doubtful accounts | $2,102,147 | $2,500,828 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues: | |||
Direct sales, net | $45,232,943 | $136,416,423 | $193,614,500 |
Distribution sales, net | 49,521,779 | 48,294,457 | 48,959,174 |
Total revenues, net | 94,754,722 | 184,710,880 | 242,573,674 |
Cost of revenues: | |||
Direct sales | 24,352,882 | 57,445,266 | 96,471,502 |
Distribution sales | 32,570,037 | 35,046,146 | 35,475,084 |
Total cost of revenues | 56,922,919 | 92,491,412 | 131,946,586 |
Gross profit | 37,831,803 | 92,219,468 | 110,627,088 |
Operating (expenses) income | |||
Advertising expenses | -16,232,840 | -51,730,624 | -58,337,710 |
Other selling and marketing expenses | -40,177,216 | -54,873,872 | -50,346,118 |
General and administrative expenses | -28,417,373 | -30,680,912 | -27,070,799 |
Other operating income, net | 2,121,208 | 2,614,561 | 3,276,753 |
Total operating expenses | -82,706,221 | -134,670,847 | -132,477,874 |
Loss from operations | -44,874,418 | -42,451,379 | -21,850,786 |
Interest expense | -189,863 | -152,931 | 0 |
Other income, net | 2,143,550 | 3,547,407 | 5,755,017 |
Income (loss) before income taxes and equity in losses of affiliates | -42,920,731 | -39,056,903 | -16,095,769 |
Income tax expenses | -1,170,517 | -645,763 | -1,822,626 |
Equity in losses of affiliates | -235,161 | -205,567 | 0 |
Net loss | -44,326,409 | -39,908,233 | -17,918,395 |
Net income (loss) attributable to noncontrolling interests | 2,503 | -12,355 | 7,679 |
Net loss attributable to Acorn International, Inc. shareholders | -44,328,912 | -39,895,878 | -17,926,074 |
Loss per ordinary share: | |||
Basic and diluted | ($0.54) | ($0.47) | ($0.20) |
Shares used in calculating loss per ordinary share: | |||
Basic and diluted | 82,690,613 | 84,115,169 | 89,965,979 |
Includes share-based compensation related to: | |||
Share-based compensation | 428,000 | 446,412 | 424,445 |
General and Administrative Expense | |||
Includes share-based compensation related to: | |||
Share-based compensation | $428,000 | $446,412 | $424,445 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Net loss | ($44,326,409) | ($39,908,233) | ($17,918,395) |
Other comprehensive income, net of tax | |||
Foreign currency translation adjustments | -701,895 | 4,578,301 | 400,568 |
Comprehensive loss | -45,028,304 | -35,329,932 | -17,517,827 |
Comprehensive income attributable to non-controlling interest | 716 | 1,737 | 8,400 |
Comprehensive loss attributable to Acorn International, Inc. | ($45,029,020) | ($35,331,669) | ($17,526,227) |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Equity (USD $) | Total | Ordinary shares | Additional paid-in capital | Retained earnings (Accumulated deficits) | Accumulated other comprehensive income | Treasury stock | Total | Noncontrolling interests |
Beginning Balance at Dec. 31, 2011 | $196,894,560 | $945,666 | $160,632,659 | $15,960,272 | $30,320,856 | ($11,463,946) | $196,395,507 | $499,053 |
Beginning Balance (in shares) at Dec. 31, 2011 | 94,566,617 | -4,627,833 | ||||||
Net income (loss) | -17,918,395 | 0 | 0 | -17,926,074 | 0 | 0 | -17,926,074 | 7,679 |
Foreign currency translation adjustments | 400,568 | 0 | 0 | 0 | 399,847 | 0 | 399,847 | 721 |
Exercise of restricted share units (in shares) | 50,892 | 0 | ||||||
Exercise of restricted share units | 0 | 509 | -509 | 0 | 0 | 0 | 0 | 0 |
Share-based compensation | 424,445 | 0 | 424,445 | 0 | 0 | 0 | 424,445 | 0 |
Ending Balance at Dec. 31, 2012 | 179,801,178 | 946,175 | 161,056,595 | -1,965,802 | 30,720,703 | -11,463,946 | 179,293,725 | 507,453 |
Ending Balance (in shares) at Dec. 31, 2012 | 94,617,509 | -4,627,833 | ||||||
Net income (loss) | -39,908,233 | 0 | 0 | -39,895,878 | 0 | 0 | -39,895,878 | -12,355 |
Foreign currency translation adjustments | 4,578,301 | 0 | 0 | 0 | 4,564,209 | 0 | 4,564,209 | 14,092 |
Repurchase of ordinary shares (in shares) | 0 | -7,859,550 | ||||||
Repurchase of ordinary shares | -8,645,505 | 0 | 0 | 0 | 0 | -8,645,505 | -8,645,505 | 0 |
Exercise of restricted share units (in shares) | 319,665 | 0 | ||||||
Exercise of restricted share units | 0 | 3,197 | -3,197 | 0 | 0 | 0 | 0 | 0 |
Share-based compensation | 446,412 | 0 | 446,412 | 0 | 0 | 0 | 446,412 | 0 |
Ending Balance at Dec. 31, 2013 | 136,272,153 | 949,372 | 161,499,810 | -41,861,680 | 35,284,912 | -20,109,451 | 135,762,963 | 509,190 |
Ending Balance (in shares) at Dec. 31, 2013 | 94,937,174 | 94,937,174 | -12,487,383 | |||||
Net income (loss) | -44,326,409 | 0 | 0 | -44,328,912 | 0 | 0 | -44,328,912 | 2,503 |
Foreign currency translation adjustments | -701,895 | 0 | 0 | 0 | -700,108 | 0 | -700,108 | -1,787 |
Exercise of restricted share units (in shares) | 300,000 | 0 | ||||||
Exercise of restricted share units | 0 | 3,000 | -3,000 | 0 | 0 | 0 | 0 | 0 |
Share-based compensation | 428,000 | 0 | 428,000 | 0 | 0 | 0 | 428,000 | 0 |
Ending Balance at Dec. 31, 2014 | $91,671,849 | $952,372 | $161,924,810 | ($86,190,592) | $34,584,804 | ($20,109,451) | $91,161,943 | $509,906 |
Ending Balance (in shares) at Dec. 31, 2014 | 95,237,174 | 95,237,174 | -12,487,383 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Operating activities: | |||
Net loss | ($44,326,409) | ($39,908,233) | ($17,918,395) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Share-based compensation | 428,000 | 446,412 | 424,445 |
Equity in losses of affiliates | 235,161 | 205,567 | 0 |
Capital gain upon dilution on CBG' shares | 0 | -85,629 | 0 |
Reversal of allowance for doubtful receivables | -381,972 | -615,258 | -50,746 |
Inventory write-downs | 936,126 | 3,856,608 | 270,902 |
Depreciation and amortization | 4,053,944 | 4,548,923 | 4,510,935 |
Losses from disposal of equipment and other long-term assets | 1,085,910 | 78,534 | 79,533 |
Deferred income tax expenses (benefits) | -109,664 | -555,133 | 3,182,139 |
Gains on trading securities | 0 | -222,532 | -601,793 |
Changes in operating assets and liabilities: | |||
Proceeds from sales of trading securities | 0 | 10,647,996 | 349,338 |
Accounts receivable | -610,373 | 8,801,068 | 2,443,987 |
Notes receivable | -122,452 | 127,859 | -127,859 |
Inventory | 2,929,193 | 2,116,206 | 9,997,869 |
Prepaid advertising expenses | -2,947,031 | 5,347,939 | 3,092,199 |
Other prepaid expenses and current assets | -1,425,279 | 4,961,785 | -2,043,307 |
Accounts payable | -2,963,364 | 2,231,482 | -9,886,512 |
Accrued expenses and other current liabilities | -1,468,911 | -564,627 | -5,338,524 |
Notes payable | -1,148,125 | 448,101 | -3,711,816 |
Income taxes payable | 493,226 | 859,190 | -3,154,387 |
Deferred revenue | -120,534 | -116,672 | 903,945 |
Net cash provided by (used in) operating activities | -45,632,724 | 2,467,551 | -17,578,047 |
Investing activities: | |||
Purchase of property and equipment | -1,360,682 | -3,421,032 | -2,530,606 |
Proceeds from disposal of equipment | 2,403 | 7,997 | 14,878 |
Purchase of other long-term assets | -620,985 | -560,584 | -390,807 |
Investments in an affiliate | 0 | 0 | -1,300,000 |
Decrease (increase) in restricted cash | 265,002 | -9,900,842 | 1,310,253 |
Net cash used in investing activities | -1,714,262 | -13,874,461 | -2,896,282 |
Financing activities: | |||
Increase in long-term debt | 0 | 8,450,000 | 0 |
Repurchase of ordinary shares | 0 | -8,645,505 | 0 |
Dividends paid | 0 | 0 | -467 |
Net cash used in financing activities | 0 | -195,505 | -467 |
Effect of exchange rate changes on cash and cash equivalents | -518,949 | 3,179,574 | 269,812 |
Net decrease in cash and cash equivalents | -47,865,935 | -8,422,841 | -20,204,984 |
Cash and cash equivalents at the beginning of the year | 82,552,314 | 90,975,155 | 111,180,139 |
Cash and cash equivalents at the end of the year | 34,686,379 | 82,552,314 | 90,975,155 |
Supplemental disclosure of cash flow information: | |||
Income taxes paid | 873,771 | 456,077 | 1,734,442 |
Interest paid | 185,737 | 100,733 | 0 |
Long-term Debt | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Accrued interests | 189,863 | 152,931 | 0 |
Restricted Cash | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Accrued interests | ($360,033) | ($294,966) | $0 |
Organization_and_principal_act
Organization and principal activities | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Organization and principal activities | 1. Organization and principal activities | ||||||||||||
Acorn International, Inc. (“Acorn International” or the “Company”) was incorporated in Cayman Islands on December 20, 2005. China DRTV, Inc. (“China DRTV”) was incorporated in the British Virgin Islands (“BVI”) on March 4, 2004. | |||||||||||||
Acorn International and its subsidiaries and variable interest entities (“VIEs”) (collectively, the “Group”) is an integrated multi-platform marketing company in China which develops, promotes and sells products. The Group’s two primary sales platforms are integrated direct sales and a nationwide distribution network. Direct sales platforms include TV direct sales, outbound calls, Internet sales, catalogs sales and direct sales through print media and radio. | |||||||||||||
Consolidated subsidiaries and changes to consolidated subsidiaries | |||||||||||||
As of December 31, 2014, the subsidiaries of Acorn International were as follows: | |||||||||||||
Name of subsidiaries | Percentage of | Date of incorporation | Place of incorporation | ||||||||||
ownership | |||||||||||||
China DRTV, Inc. (“China DRTV”) | 100 | % | 4-Mar-04 | BVI | |||||||||
Smooth Profit Limited (“Smooth Profit”) | 100 | % | September 18, 2007 | BVI | |||||||||
MK AND T Communications Limited (“MK AND T”) | 100 | % | 27-Oct-98 | Hong Kong | |||||||||
Bright Rainbow Investments Limited (“Bright Rainbow”) | 100 | % | 29-Oct-07 | Hong Kong | |||||||||
Shanghai Acorn Advertising Broadcasting Co., Ltd. (“Shanghai Advertising”) | 100 | % | 19-Aug-04 | PRC | |||||||||
Shanghai HJX Digital Technology Co., Ltd. (“Shanghai HJX”) | 100 | % | 23-Aug-04 | PRC | |||||||||
Acorn International Electronic Technology (Shanghai) Co., Ltd. (“Acorn Electronic”) | 100 | % | 23-Aug-04 | PRC | |||||||||
Acorn Information Technology (Shanghai) Co., Ltd. (“Acorn Information”) | 100 | % | 27-Aug-04 | PRC | |||||||||
Beijing Acorn Youngleda Oxygen Generating Co., Ltd. (“Beijing Youngleda”) | 100 | % | 20-Oct-04 | PRC | |||||||||
YiyangYukang Communication Equipment Co., Ltd. (“YiyangYukang”) | 100 | % | 29-Nov-05 | PRC | |||||||||
Zhuhai Sunrana Bio-tech Co., Ltd. (“Zhuhai Sunrana”) | 51 | % | 16-Jun-06 | PRC | |||||||||
Zhuhai Acorn Electronic Technology Co., Ltd. (“Zhuhai Acorn”) | 100 | % | 26-Sep-06 | PRC | |||||||||
Beijing HJZX Software Technology Development Co., Ltd. (“Beijing HJZX”) | 100 | % | 22-Jan-07 | PRC | |||||||||
ZhongshanMeijin Digital Technology Co., Ltd. (“ZhongshanMeijin”) | 75 | % | February 13, 2007 | PRC | |||||||||
Acorn Trade (Shanghai) Co., Ltd. (“Acorn Trade”) | 100 | % | December 13, 2007 | PRC | |||||||||
Shanghai Acorn HJX Software Technology Development Co., Ltd. (“HJX Software”) | 100 | % | 12-May-09 | PRC | |||||||||
Wuxi Acorn Enterprise Management Consulting Co., Ltd. (“Wuxi Acorn”) | 100 | % | 29-Jan-10 | PRC | |||||||||
Star Education & Technology Group Inc. | 100 | % | 8-Jan-14 | Cayman Island | |||||||||
Star Education & Technology Limited | 100 | % | 22-Jan-14 | BVI | |||||||||
HJX International Limited | 100 | % | 5-Mar-14 | Hong Kong | |||||||||
In January 2013, Shanghai Acorn Enterprise Management Consulting Co., Ltd. (“Acorn Consulting”), a previously consolidated subsidiary of the Group, was deregistered and the Group ceased to consolidate Acorn Consulting upon the completion of this deregistration. | |||||||||||||
In 2014, we established Star Education & Technology Group Inc. in the Cayman Islands, Star Education & Technology Limited in the British Virgin Islands and HJX International Limited in Hong Kong, respectively, with an aim to further expand our electronic learning product business in the future. | |||||||||||||
VIE Arrangements | |||||||||||||
As of December 31, 2014, the variable interest entities of Acorn International were as follows: | |||||||||||||
Name of variable interest entities | Date of incorporation | Place of incorporation | |||||||||||
Beijing Acorn Trade Co., Ltd. (“Beijing Acorn”) | March 19, 1998 | PRC | |||||||||||
Shanghai Acorn Network Technology Development Co., Ltd. (“Shanghai Network”) | November 2, 2004 | PRC | |||||||||||
Beijing HJX Technology Development Co., Ltd. (“Beijing HJX”) | September 16, 2013 | PRC | |||||||||||
Shanghai HJX Electronic Technology Co., Ltd. (“HJX Electronic”) | 3-Dec-13 | PRC | |||||||||||
Due to the complicated and lengthy approval process and uncertain position of the Ministry of Commerce of People’s Republic of China (“PRC”) towards approving investment in direct sale business by foreign investors under the Administrative Measures on Foreign Investment in Commercial Sector, Acorn International conducts its direct sales other than Ozing product direct sales through two VIEs (Beijing Acorn and Shanghai Network) which hold direct sales licenses. Beijing Acorn and Shanghai Network are owned 100% by two PRC nationals: Mr. Don Dongjie Yang, Acorn International’s co-founder, former Executive Chairman and Chief Executive Officer (“CEO”), and Mr. Weiguo Ge, the former assistant general managers of the Group’s finance department (who resigned effective March 31, 2015). Mr. Don Dongjie Yang and Mr. Weiguo Ge collectively hold 12.64% of Acorn International as of the date of the financial statements. Acorn Information Technology (Shanghai) Co., Ltd. (“Acorn Information”), a wholly-owned subsidiary of Acorn International, entered into various agreements with each of Beijing Acorn and Shanghai Network and their shareholders, Mr. Don Dongjie Yang and Mr. Weiguo Ge, including (i) Irrevocable Powers of Attorney, under which each of the two shareholders of the VIEs granted to designees of Acorn Information the power to exercise all voting rights as a shareholder of these VIEs, (ii) Loan Agreement, under which Acorn Information made interest-free loans to the shareholders of these VIEs in an aggregate amount of approximately RMB162.5 million (equivalent to US$26.7 million) and agreed to make additional interest-free loans not exceeding approximately RMB30.4 million (equivalent to US$5.0 million) for capital contributions by the shareholders in these VIEs, (iii) Operation and Management Agreements, under which the parties thereto agreed that Acorn Information directs the day-to-day operational and financial activities of these VIEs, each of the directors, general managers and other senior management personnel of these affiliated entities will be appointed as nominated by Acorn Information, and that these VIEs do not conduct any transactions which might substantially affect their assets, obligations, rights and business operations without the prior written consent of Acorn Information, (iv) Equity Pledge Agreements, under which the shareholders of these VIEs pledged all of their equity interests in these VIEs to Acorn Information as collateral to guarantee the performance of these VIEs under the Operation and Management Agreements and the Technical Services Agreements as described below, as well as their personal obligations under the Loan Agreement, (v) Exclusive Purchase Agreements, under which the shareholders of these VIEs irrevocably granted Acorn Information or its designees an exclusive option to purchase at any time if and when permitted under PRC law, all or any portion of their equity interests in these VIEs for a price that is the minimum amount permitted by PRC law, (vi) Technical Service Agreements, under which Acorn Information became the exclusive provider of technical support and consulting services to these VIEs in exchange for service fees, and (vii) Spouse Consent Letters, pursuant to which the spouse of each of the shareholders of these two affiliated entities acknowledges that she is aware of, and consents to, the execution by her spouse of irrevocable powers of attorney, equity pledge agreements and the exclusive purchase agreements described above and, with respect to establishment, grant and performance of the above irrevocable powers of attorney, equity pledge and the exclusive purchase, each spouse further agrees that, whether at present or in the future, she will not take any actions or raise any claims or objection. | |||||||||||||
Through the above arrangements, Acorn Information holds all the variable interests of Beijing Acorn and Shanghai Network and has power to direct the activities that most significantly impact the economic success of Beijing Acorn and Shanghai Network and absorbs the majority of the economic risks and rewards of Beijing Acorn and Shanghai Network through service fees. The nominal shareholders lack the ability to make decisions that have a significant effect on the operations of Beijing Acorn and Shanghai Network and do not absorb the expected losses because the capital of Beijing Acorn and Shanghai Network were funded using loans borrowed from Acorn Information. Therefore, Acorn International is the primary beneficiary of these two VIEs and accordingly, the financial statements of Beijing Acorn and Shanghai Network have been consolidated with Acorn International as its subsidiaries since VIE structure were established. | |||||||||||||
Due to the aforesaid complicated and lengthy approval process and uncertain position of the Ministry of Commerce of PRC towards approving investment in direct sale business by foreign investors as well as certain restrictions or prohibitions on foreign ownership of companies that engage in internet and other related businesses imposed by current PRC laws and regulations, including the provision of internet content, in 2013, Acorn International set up two new VIEs, Beijing HJX and HJX Electronic, and began to conduct its internet interactive service through Beijing HJX which hold the service license of telecommunication and information operation, and its Ozing product direct sales through HJX Electronic. Like Beijing Acorn and Shanghai Network, Beijing HJX and HJX Electronic are each also owned 100% by Mr. Don Dongjie Yang and Mr. Weiguo Ge. Shanghai HJX, a wholly-owned subsidiary of Acorn International, entered into various agreements with each of Beijing HJX and HJX Electronic and their shareholders, Mr. Don Dongjie Yang and Mr. Weiguo Ge, including (i) Irrevocable Powers of Attorney, under which each of the two shareholders of these VIEs granted to designees of Shanghai HJX the power to exercise all voting rights as a shareholder of these VIEs, (ii) Loan Agreement, under which Shanghai HJX made interest-free loans to the shareholders of these VIEs in an aggregate amount of approximately RMB53.0 million (equivalent to US$8.7 million) for capital contributions by the shareholders in these VIEs, (iii) Operation and Management Agreements, under which the parties thereto agreed that Shanghai HJX directs the day-to-day operational and financial activities of these VIEs, each of the directors, general managers and other senior management personnel of these affiliated entities will be appointed as nominated by Shanghai HJX, and that these VIEs do not conduct any transactions which might substantially affect their assets, obligations, rights and business operations without the prior written consent of Shanghai HJX, (iv) Equity Pledge Agreements, under which the shareholders of the VIEs pledged all of their equity interests in these VIEs to Shanghai HJX as collateral to guarantee the performance of these VIEs under the Operation and Management Agreements and the Technical Services Agreements as described below, as well as their personal obligations under the Loan Agreement, (v) Exclusive Purchase Agreements, under which the shareholders of these VIEs irrevocably granted Shanghai HJX or its designees an exclusive option to purchase at any time if and when permitted under PRC law, all or any portion of their equity interests in these VIEs for a price that is the minimum amount permitted by PRC law, (vi) Technical Service Agreements, under which Shanghai HJX became the exclusive provider of technical support and consulting services to these VIEs in exchange for service fees, and (vii) Spouse Consent Letters, pursuant to which the spouse of each of the shareholders of these two affiliated entities acknowledges that she is aware of, and consents to, the execution by her spouse of irrevocable powers of attorney, equity pledge agreements and the exclusive purchase agreements described above and with respect to establishment, grant and performance of the above irrevocable powers of attorney, equity pledge and the exclusive purchase, each spouse further agrees that, whether at present or in the future, she will not take any actions or raise any claims or objection. | |||||||||||||
Through the above arrangements, Shanghai HJX holds all the variable interests of Beijing HJX and HJX Electronic and has power to direct the activities that most significantly impact the economic success of Beijing HJX and HJX Electronic and absorbs the majority of the economic risks and rewards of Beijing HJX and HJX Electronic through service fees. The nominal shareholders lack the ability to make decisions that have a significant effect on the operations of Beijing HJX and HJX Electronic and do not absorb the expected losses because the capital of Beijing HJX and HJX Electronic were funded using loans borrowed from Shanghai HJX. Therefore, Acorn International is the primary beneficiary of these two VIEs and accordingly, the financial statements of Beijing HJX and HJX Electronic have been consolidated with Acorn International as its subsidiaries since the VIE structure were established. | |||||||||||||
The Group believes that its current ownership structure, and the contractual arrangements that Acorn Information and Shanghai HJX entered into with the consolidated VIEs and their equity owners are in compliance with existing PRC laws and regulations according to the opinions of the Group’s PRC legal counsel. The contractual arrangements among Acorn Information and each of Beijing Acorn and Shanghai Network and their shareholders, Shanghai HJX and each of Beijing HJX and HJX Electronic and their shareholders are valid, binding and enforceable. However, there are uncertainties regarding the interpretation and application of current and future PRC laws and regulations. The PRC competent regulatory authorities may take a view in the future that is contrary to the above opinions of the Group’s PRC legal counsel. If the current agreements that establish the structure for conducting the Group’s PRC direct sales business and internet interactive service were found to be in violation of existing or future PRC laws or regulations, the Group may be required to restructure its ownership structure and direct sales and internet interactive service operations in the PRC to comply with PRC laws and regulations, which may affect the Group’s financial position and cash flows related to these VIE structures. In addition, there are uncertainties in the PRC legal system that could limit the Group’s ability to enforce these contractual agreements in the event that the consolidated VIEs or their shareholders fail to meet their contractual obligations. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could: | |||||||||||||
• | revoke the business and operating licenses of the Group’s PRC subsidiaries and VIEs; | ||||||||||||
• | discontinue or restrict the operations of any related-party transactions among the Group’s PRC subsidiaries and VIEs; | ||||||||||||
• | limit the Group’s business expansion in China by way of entering into contractual arrangements; | ||||||||||||
• | impose fines or other requirements with which the Group’s PRC subsidiaries may not be able to comply; | ||||||||||||
• | require the Group or the Group’s PRC subsidiaries to restructure the relevant ownership structure or operations; or | ||||||||||||
Restrict or prohibit the Group’s use of the proceeds of the additional public offering to finance the Group’s business and operations in China. The Group’s ability to conduct its business may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Group may not be able to consolidate the VIEs in its consolidated financial statements as it may lose the ability to exert effective control over the VIEs and its shareholder, and it may lose the ability to receive economic benefits from the VIEs. The Group, however, does not believe such actions would result in the liquidation or dissolution of the Group or the VIEs. | |||||||||||||
The interests of Mr. Don Dongjie Yang and Mr. Weiguo Ge as shareholders of the VIEs may differ from the interests of the Group as a whole, as what is in the best interests of the VIEs may not be in the best interests of the Groupy. Mr. Don Dongjie Yang and Mr. Weiguo Ge together hold approximately 12.64% of the total ordinary shares of Acorn International outstanding as of the date of the financial statements. The Group cannot assure that when conflicts of interest arise, Mr. Don Dongjie Yang and Mr. Weiguo Ge will act in the best interests of the Group or that conflicts of interests will be resolved in the Group’s favor. In addition, these individuals may breach or cause the VIEs and their subsidiaries to breach or refuse to renew the existing contractual arrangements with the Group. Currently, the Group does not have existing arrangements to address potential conflicts of interest Mr. Don Dongjie Yang and Mr. Weiguo Ge may encounter in their capacity as beneficial owners, director and officer of the VIEs, on the one hand, and as beneficial owners of Acorn International, on the other hand. However, the Exclusive Purchase Agreements provides the Group with a mechanism to remove each of Mr. Don Dongjie Yang and Mr. Weiguo Ge as beneficial shareholders of the VIEs should he act to the detriment of the Group. The Group relies on Mr. Don Dongjie Yang and Mr. Weiguo Ge to abide by laws of the PRC and Cayman Islands and act in the best interest of the Group. | |||||||||||||
Mr. Weiguo Ge resigned from his position as assistant general manager of the Group’s finance department, effective March 31, 2015. Prior to his resignation, Mr. Weiguo Ge agreed to cooperate with the board of directors of Acorn International to transfer his 25% equity interest in each of the four VIEs as well as his rights and obligations under the various contractual arrangements to which he is a party relating to the Group’s control over the four VIEs, to one or more individuals selected by the board of directors of Acorn International. This transfer has not yet been effected as of the date of the financial statements. Effective May 4, 2015, Mr. Don Dongjie Yang no longer served as Executive Chairman or CEO, the Group is aware that it will rely on Mr. Don Dongjie Yang’s cooperation to transfer his 75% equity interest in each of the VIEs, as well as his rights and obligations under each of the various contractual arrangements to which he is a party relating to the Group’s control over the four VIEs, to one or more individuals selected by the board of directors of Acorn International. | |||||||||||||
However, the legal frameworks of the PRC and Cayman Islands do not provide guidance on how to resolve conflicts in the event of a conflict with another corporate governance regime. If the Group cannot resolve any conflicts of interest or disputes between the Group and Mr. Don Dongjie Yang and Mr. Weiguo Ge, the Group would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings. | |||||||||||||
The Group believes that its ability to direct the activities of the four VIEs that most significantly impact the VIEs’ economic performance is not affected by the above uncertainties in the PRC legal system. Accordingly, the four VIEs continue to be consolidated VIEs of the Group. | |||||||||||||
Summary financial information of the Group’s four VIEs included in the accompanying consolidated financial statements is as follows: | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Net revenues | $ | 190,302,130 | $ | 137,947,971 | $ | 44,907,449 | |||||||
Net income (loss) | $ | 1,765,918 | $ | 18,873,242 | $ | (8,282,712 | ) | ||||||
The VIEs contributed an aggregate of 78.5%, 74.7% and 47.4% of the consolidated net revenues for the years ended December 31, 2012, 2013 and 2014, respectively. The Group’s operations not conducted through contractual arrangements with the VIE primarily consist of its distribution sales business. As of the fiscal years ended December 31, 2013 and 2014, the VIEs accounted for an aggregate of 11.3% and 11.2%, respectively, of the consolidated total assets, and 15.1% and 14.5%, respectively, of the consolidated total liabilities. The assets not associated with the VIEs primarily consist of cash and cash equivalents, inventory, prepaid land use right and property and equipment, net. | |||||||||||||
There are no consolidated VIEs’ assets that are collateral for the VIEs’ obligations and can only be used to settle the VIEs’ obligations. There are no creditors (or beneficial interest holders) of the VIEs that have recourse to the general credit of the Group or any of its consolidated subsidiaries. Should the VIEs require financial support, the Group or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholders of the VIEs or entrustment loans to the VIEs. | |||||||||||||
Relevant PRC laws and regulations restrict the VIEs from transferring a portion of its net assets, equivalent to the balance of its statutory reserve and its share capital, to the Group in the form of loans and advances or cash dividends. |
Summary_of_principal_accountin
Summary of principal accounting policies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Summary of principal accounting policies | 2. Summary of principal accounting policies | |||
(a) Basis of presentation | ||||
The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). | ||||
(b) Basis of consolidation | ||||
The consolidated financial statements include the financial statements of Acorn International, its majority-owned subsidiaries and consolidated VIEs. All intercompany transactions and balances are eliminated upon consolidation. | ||||
Net income or loss of a subsidiary is attributed to the Group and to the noncontrolling interests even if this results in the noncontrolling interests having a deficit balance. Noncontrolling interests in subsidiaries are presented separately from the Group’s equity therein. | ||||
(c) Use of estimates | ||||
The preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting estimates reflected in the Group’s financial statements include allowance for doubtful accounts, inventory valuation, assumptions related to the valuation of available-for-sale debt securities and embedded derivative, impairment of long-lived assets, and valuation allowance on deferred tax assets and provision for uncertain tax positions. | ||||
(d) Going concern | ||||
The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a going concern. During the year ended December 31, 2014, the Group incurred a loss from operations of $44,328,912. At December 31, 2014, the Group had an accumulated deficit of $86,190,592 and had experienced negative cash flows from operating activities in the amount of $45,632,724. In addition, the Group’s cash and cash equivalents balance was reduced to $34,686,379 as of December 31, 2014. | ||||
These circumstances raise substantial doubt as to the ability of the Group to meet its obligations as they come due and, accordingly, the use of accounting principles applicable to a going concern may not be appropriate. The Group will need to obtain additional funding in the future in order to finance the Group’s business strategy, operations and growth. If the Group is unable to arrange for sufficient funding on a timely basis, it may be required to significantly curtail its business activities until it can obtain adequate financing. | ||||
In order to respond the significant negative impact on the Group’s liquidity position during 2014, it has taken, or is in the process of taking, various actions to reduce its losses, generate additional cash flows and identify potential borrowing sources to further increase its liquidity in 2015, including: | ||||
• | in the first quarter of 2015, the Group decided to stop purchasing TV advertising time—historically the largest component of total advertising expenses and totaled $16.2 million in 2014; | |||
• | in the first quarter of 2015, the Group terminated arrangements with various media companies and is pursuing a refund of prepaid advertising time, which amounted to $6.2 million as of December 31, 2014; | |||
• | the Group has continued to reduce headcount across all of business divisions and is evaluating additional reductions in force which are expected to further reduce labor cost by approximately $0.3 million per month; | |||
• | in the first quarter of 2015, the Group subleased various excess office and warehouse-space-reducing related costs and generating additional cash flows; | |||
• | in the first quarter of 2015, the Group repaid $8.45 million loan previously outstanding under its credit facility (which is no longer available). The Group is in preliminarily discussions with a PRC commercial bank to secure a borrowing facility of approximately RMB100 million ($16.1 million) utilizing its facilities, including its office space, call center and warehouse located in Shanghai, China, as collateral. | |||
• | the Group is evaluating the sales of other non-core assets and securities. | |||
These financial statements do not reflect the potentially material adjustments in the carrying values of assets and liabilities, the reported expenses, and the balance sheet classifications used, that would be necessary if the going concern assumption were not appropriate. | ||||
(e) Fair value of financial instruments | ||||
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (also referred to as an exit price) and expands disclosure requirements about assets and liabilities measured at fair value. The guidance establishes a hierarchy for inputs used in measuring fair value that gives the highest priority to observable inputs and the lowest priority to unobservable inputs as follows: | ||||
• | Level 1—Observable unadjusted quoted prices in active markets for identical assets or liabilities. | |||
• | Level 2—Observable inputs other than quoted prices in active markets for identical assets or liabilities, for which all significant inputs are observable, either directly or indirectly. | |||
• | Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. | |||
When available, the Group measures the fair value of financial instruments based on quoted market prices in active markets, valuation techniques that use observable market-based inputs or unobservable inputs that are corroborated by market data. The Group uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities measured at fair value are classified in the categories of Level 1, Level 2, and Level 3 based on the lowest level input that is significant to the fair value measurement in its entirety. Pricing information the Group obtains from third parties is internally validated for reasonableness prior to use in the consolidated financial statements. When observable market prices are not readily available, the Group generally estimates the fair value using valuation techniques that rely on alternate market data or inputs that are generally less readily observable from objective sources and are estimated based on pertinent information available at the time of the applicable reporting periods. In certain cases, fair values are not subject to precise quantification or verification and may fluctuate as economic and market factors vary and the Group’s evaluation of those factors changes. Although the Group uses its best judgment in estimating the fair value of these financial instruments, there are inherent limitations in any estimation technique. In these cases, a minor change in an assumption could result in a significant change in its estimate of fair value, thereby increasing or decreasing the amounts of the Group’s consolidated assets, liabilities, equity and net income or loss. | ||||
The Group’s financial instruments consist of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, notes receivable, accounts payable, notes payable and long-term debt. For cash and cash equivalents, restricted cash, accounts receivable, notes receivable, accounts payable and notes payable, the carrying amounts of these financial instruments as of December 31, 2013 and 2014 were considered representative of their fair values due to their short-term nature. The carrying value of long-term debt approximates its fair value as the impact to discount the long-term debt with a market based interest rate is insignificant. | ||||
(f) Cash and cash equivalents | ||||
Cash and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. | ||||
Cash balances of the Group that are included in the cash and cash equivalents of the consolidated balance sheets, including those denominated in RMB, may be withdrawn and used for the Group’s general operations without prior notice or penalty. The PRC government imposes certain controls on the convertibility of the RMB into foreign currencies, and in certain cases, the remittance of currency out of China. However, the Group does not consider the process for converting RMB into foreign currency in compliance with these controls to be a usage restriction and such process is not expected to result in any penalties provided that the Group complies with all above-mentioned processes as required. | ||||
The RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in China’s foreign exchange trading system market. The Group’s aggregate amount of cash and cash equivalents and restricted cash denominated in RMB amounted to RMB542,037,027 ($88,903,710) and RMB 241,610,810 ($39,485,342) as of December 31, 2013 and 2014, respectively. | ||||
(g) Restricted cash | ||||
Under the notes payable, third-party bank channel sales arrangements and long-term debt with the banks, the Group is required to maintain certain cash balances in the banks based on the amounts of notes payable and long-term debt granted. These balances related to the notes payable and third-party bank channel sales arrangements were reflected as restricted cash in the balance sheet and amounted to $347,718 and $117,666 as of December 31, 2013 and 2014, respectively. The balance related to the long-term debt were reflected as restricted cash in the balance sheet and amounted to $ 9,677,049 and 9,642,098 as of December 31, 2013 and 2014, respectively. | ||||
(h) Short-term investments | ||||
The Group’s short-term investments consist of trading securities. | ||||
Securities that the Group buys and holds principally for the purpose of selling them in the near term are classified as trading securities. Trading securities are recorded at fair value, with unrealized gains and losses recognized in other income (expense) in the consolidated statements of operations. | ||||
(i) Inventory | ||||
The cost of inventory comprises all costs of purchase, costs of conversion, and other costs incurred to bring inventory to its present location and condition. The cost of inventory is calculated using the weighted-average method. | ||||
The inventory is stated at the lower of cost or market value. Adjustments are recorded to write down the inventory to the estimated net realizable value. The Group estimates excess and slow-moving inventory based upon assumptions of future demands and market conditions. If actual market conditions are less favorable than projected by management, additional inventory write-downs may be required. | ||||
(j) Prepaid land use right | ||||
Prepaid land use right is valued at the cost to obtain the right less accumulated amortization. Amortization is computed on a straight-line basis over 50 years’ useful life of the right. | ||||
(k) Property and equipment, net | ||||
Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line method over the following estimated useful lives: | ||||
Estimated useful lives | ||||
Buildings | 20 years | |||
Leasehold improvements | Lesser of the term of the lease or the estimated useful lives of the assets | |||
Machinery | 10 years | |||
Information Technology equipment | 5 years | |||
Computers and office equipment | 3-5 years | |||
Vehicles | 4 years | |||
(l) Acquired intangible assets, net | ||||
Acquired intangible assets, which consist primarily of distribution networks and trademarks, are valued at cost less accumulated amortization. Amortization is computed using the straight-line method over their expected useful lives of 5 to 15 years. | ||||
(m) Impairment of long-lived assets | ||||
The Group evaluates its long-lived assets and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the future undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss equal to the excess of the carrying amount over the fair value of the assets. | ||||
(n) Investment in affiliates | ||||
The affiliated companies, in which the Group does not have significant influence, are accounted for using the cost method of accounting. Dividends received that are distributed from the net accumulated earnings of the investee are recognized in the Group’s consolidated statements of operations. Dividends received in excess of earnings are recorded as reductions of cost of the investment. The Group evaluates each cost method investment separately for impairment indicators and whether any decrease in value of the investment has occurred which is other-than-temporary. If the fair value of the investment is less than its cost and the impairment is other-than-temporary, then the Group would recognize an impairment loss equal to the excess of the carrying amount over the fair value of the investment. The Group accounts for the retained 18.0% equity interests in Shanghai Yimeng using the cost method of accounting. In 2011, the Group’s interests in Shanghai Yimeng further decreased to 12.9% as a result of the dilution due to issuance of additional shares to a new investor. | ||||
The affiliated companies in which the Group has significant influence are accounted for using equity method of accounting. The share of earnings or losses of the investee are recognized in the Group’s consolidated statements of operations and adjusts the carrying amount of the investment. Dividends received reduce the carrying amount of the investment. The Group evaluates each equity method investment separately for impairment indicators and whether any decrease in value of the investment has occurred which is other-than-temporary. If the fair value of the investment is less than its cost and the impairment is other-than-temporary, then the Group would recognize an impairment loss equal to the excess of the carrying amount over the fair value of the investment. | ||||
(o) Revenue recognition | ||||
Direct sales, net | ||||
The Group’s direct sales net revenues primarily represent product sales through the Group’s TV direct sales and other direct sales platforms, such as internet sales, outbound calls, catalog sales and direct sales through print media and radio. The Group recognizes net revenues for products sold through its direct sales platforms once the products are delivered to and accepted by the customers (“F.O.B. Destination”). | ||||
The Group relies on China Express Mail Service Corporation (“EMS”) and local delivery companies to provide the Group data as to their successful deliveries for the Group’s direct sales products. EMS and local delivery companies regularly report product delivery information. In 2012, 2013 and 2014, direct sales net revenues were adjusted in the current accounting period based on actual unsuccessful product deliveries experience reported by EMS and local delivery companies. For unsuccessful deliveries, EMS and local delivery companies are required to return the undelivered products to the Group. It generally takes two to three weeks for EMS to return the undelivered products to the Group whereas it generally takes approximately seven days for local delivery companies to do so. | ||||
Distribution sales, net | ||||
The Group’s distribution sales net revenues represent product sales to the distributors comprising the Group’s nationwide distribution networks. The distributor agreements do not provide discounts, chargeback, price protection or stock rotation rights. The Group recognizes net revenues for products sold through its nationwide distribution networks when the products are delivered to and accepted by the distributors (e.g. “F.O.B. Destination”). In most cases, the distributors are required to pay in advance for the Group’s products. Some distributors are given customary credit terms based on the creditworthiness. | ||||
Sales taxes | ||||
The Group presents revenues net of sales taxes incurred. The sales taxes amounted to $706,540, $439,144 and $199,721 for the years ended December 31, 2012, 2013 and 2014, respectively. Before subtracting sales taxes, gross direct sales revenues were $194,220,344, $136,810,535 and $ 45,361,639 and gross distribution sales revenues were $49,059,870, $48,339,489 and $ 49,592,804 for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||
(p) Advertising expenses | ||||
The Group records cash advances paid to advertising companies as prepaid advertising expenses in the consolidated balance sheets. The Group then expenses the prepaid advertising expenses as the advertisement is shown. | ||||
(q) Shipping and handling costs | ||||
The Group records costs incurred for shipping and handling as part of other selling and marketing expenses in the consolidated statements of operations. Shipping and handling costs were $15,222,530, $12,351,337 and $4,902,307 for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||
(r) Operating leases | ||||
Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases are charged to the consolidated statements of operations on a straight-line basis over the lease periods. | ||||
(s) Government subsidies | ||||
The Group receives unrestricted government subsidies from local government agencies. The government agencies use their discretion to determine the amount of the subsidies with reference to certain taxes paid by the Group, including value-added, business and income taxes. The Group records unrestricted government subsidies as other operating income in the consolidated statements of operations. | ||||
The government subsidies in 2012, 2013 and 2014 were $2,997,096, $2,130,623 and $829,238, respectively. | ||||
(t) Income taxes | ||||
Current income taxes are provided for in accordance with the relevant statutory tax laws and regulations. | ||||
Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. Net operating losses are carried forward and credited by applying enacted statutory tax rates applicable to future years. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on the characteristics of the underlying assets and liabilities, or the expected timing of their use when they do not relate to a specific asset or liability. | ||||
The Group recognizes the impact of an uncertain income tax position at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. The Group classifies interests and penalties related to income tax matters in income tax expense. | ||||
(u) Foreign currency translation | ||||
The functional currency and reporting currency of Acorn International, China DRTV, Smooth Profit, MK AND T, and Bright Rainbow are the United States dollar (“US dollar”). Monetary assets and liabilities denominated in currencies other than the US dollar are translated into the US dollar at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the US dollar during the year are converted into US dollar at the applicable rates of exchange prevailing on the first day of the month in which the transactions occurred. Transaction gains and losses are recognized in the consolidated statements of operations as general and administrative expenses. | ||||
The financial records of the Group’s PRC subsidiaries and VIEs are denominated in its local currency, the Renminbi (“RMB”), which is the functional currency. Assets and liabilities are translated at the exchange rates at the balance sheet date. Equity accounts are translated at historical exchange rates. Revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments are reported as component of comprehensive income in the consolidated statements of comprehensive income (loss). | ||||
The aggregated gains (losses) through foreign currency transactions in 2012, 2013 and 2014 were $(20,498), $184,157 and $(31,847), respectively. | ||||
(v) Concentration of credit risk | ||||
Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, available-for-sale securities, accounts receivable and notes receivable. All of the Group’s cash and cash equivalents and restricted cash are held with large state-owned financial institutions. The Group engages delivery companies, mainly EMSexpress, to deliver products to customers and to collect cash from the customers for direct sales gross revenues through direct sales platforms. The Group conducts credit evaluations of delivery companies and generally does not require collateral or other security from its delivery companies. The Group establishes an allowance for doubtful accounts primarily based on the age of the receivables and factors surrounding the credit risk of specific customers. | ||||
As of December 31, 2013 accounts receivables from EMS was $1,140,368, 18.7% of the total accounts receivables. As of December 31, 2014, no accounts receivables from a single delivery company were more than 10% of the total accounts receivables. | ||||
(w) Share-based compensation | ||||
Share-based compensation cost is measured at grant date, based on the fair value of the award, and recognized in expense over the requisite service period. The Group has made an estimate of expected forfeitures and is recognizing compensation costs only for those equity awards expected to vest. | ||||
(x) Income (loss) per share | ||||
Basic income (loss) per share is computed by dividing income attributable to the Group’s shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted income (loss) per ordinary share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares and is calculated using the treasury stock method for stock options and unvested shares. Common equivalent shares for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on income per share and, accordingly, are excluded from the calculation. Common equivalent shares are also excluded from the calculation in loss periods as their effects would be anti-dilutive. | ||||
(y) Noncontrolling interest | ||||
A noncontrolling interest in a subsidiary of the Group represents the portion of the equity (net assets) in the subsidiary not directly or indirectly attributable to the Group. Noncontrolling interests are presented as a separate component of equity in the consolidated balance sheet and earnings and other comprehensive income are attributed to controlling and noncontrolling interests. | ||||
(z) Recently issued accounting pronouncements | ||||
In May 2014, the FASB and International Accounting Standards Board (“IASB”) issued their converged standard on revenue recognition. The objective of the revenue standard ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. For public companies, the revenue standard is effective for the first interim period within annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. The Group is in the process of evaluating the impact of the standard on its consolidated financial statements. | ||||
On August 27, 2014, the FASB issued ASU 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The ASU shall be applied at the effective date, and the Group is in the process of evaluating the impact of the standard on its consolidated financial statements. | ||||
In November 2014, the FASB issued a new pronouncement which provides guidance on determining whether the host contract in a hybrid financial instrument issued in the form of a share is more akin to debt or to equity. The new standard requires management to determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption, including adoption in an interim period, is permitted. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. The Group is assessing the effect of adoption of this guidance on the Group’s consolidated financial states. |
Shortterm_investments
Short-term investments | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Short-term investments | 3. Short-term investments | ||||||||
Trading securities | |||||||||
Investments in trading securities consist of marketable bond funds which are measured using the closing prices from the exchange market as of the measurement date on a recurring basis; as such, they are classified within Level 1 measurements. We obtain the majority of the prices used in this valuation from quoted market value. | |||||||||
In 2013, the Group disposed all its trading securities, and the Group has no trading securities as of December 31, 2013 and 2014 respectively. | |||||||||
Investment gains of trading securities for the years ended December 31, 2012 and 2013 consisted of the following and was included in the other income in the consolidated statements of operations: | |||||||||
For the years ended | |||||||||
December 31 | |||||||||
2012 | 2013 | ||||||||
Realized gains from sales of trading securities | $ | 349,338 | $ | 222,532 | |||||
Unrealized holding gains (losses) | 252,455 | — | |||||||
$ | 601,793 | $ | 222,532 | ||||||
Accounts_receivable
Accounts receivable | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounts receivable | 4. Accounts receivable | ||||||||||||
An analysis of allowance for doubtful accounts for the years ended December 31, 2012, 2013 and 2014 was as follows: | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Balance at beginning of the year | $ | 4,157,614 | $ | 4,127,947 | $ | 3,508,859 | |||||||
Charged to (Reduce from) expenses | 1,064,477 | (16,491 | ) | (180,039 | ) | ||||||||
Charges taken against allowance | (1,094,144 | ) | (602,597 | ) | (201,472 | ) | |||||||
Balance at end of the year | $ | 4,127,947 | $ | 3,508,859 | $ | 3,127,348 | |||||||
In 2012, the Group made additional bad debt provision related to the transition of certain local delivery companies used to fulfill the direct sales orders to improve the successful goods delivery rate. In 2013 and 2014, the Group wrote off certain bad debt provision resulted from settlement agreed between the delivery companies. |
Inventory
Inventory | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory | 5. Inventory | ||||||||
Inventory consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Raw materials and work in progress | $ | 3,310,501 | $ | 1,272,379 | |||||
Finished goods and merchandise goods | 13,336,559 | 11,509,362 | |||||||
$ | 16,647,060 | $ | 12,781,741 | ||||||
As of December 31, 2013 and 2014, a portion of finished goods and merchandise goods and certain raw materials and work in process inventory were in excess of the Group’s current requirements based on the recent level of sales. The Group recorded inventory write-downs of $270,902, $3,856,608 and $936,126 for the years ended December 31, 2012, 2013 and 2014, respectively. |
Other_prepaid_expenses_and_cur
Other prepaid expenses and current assets | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other prepaid expenses and current assets | 6. Other prepaid expenses and current assets | ||||||||
Other prepaid expenses and current assets consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Value-added tax recoverable | $ | 1,902,630 | $ | 1,580,141 | |||||
Advances to suppliers | 1,510,128 | 2,814,648 | |||||||
Interest receivable | — | 656,785 | |||||||
Prepaid income tax | 140,365 | 28,394 | |||||||
Other prepaid expenses | 3,348,179 | 4,245,432 | |||||||
$ | 6,901,302 | $ | 9,325,400 | ||||||
Property_and_equipment_net
Property and equipment, net | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property and equipment, net | 7. Property and equipment, net | ||||||||
Property and equipment, net consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Buildings | $ | 27,961,937 | $ | 27,644,891 | |||||
Computers and office equipment | 12,188,023 | 12,820,490 | |||||||
Leasehold improvements | 2,780,058 | 869,130 | |||||||
Vehicles | 916,226 | 872,860 | |||||||
Information Technology equipment | 845,512 | 839,068 | |||||||
Machinery | 640,580 | 644,474 | |||||||
$ | 45,332,336 | $ | 43,690,913 | ||||||
Less: accumulated depreciation and amortization | (16,286,927 | ) | (16,861,205 | ) | |||||
$ | 29,045,409 | $ | 26,829,708 | ||||||
Construction in progress | 709,673 | 10,476 | |||||||
$ | 29,755,082 | $ | 26,840,184 | ||||||
Depreciation and amortization expenses for property and equipment were $3,307,549, $3,470,338 and $3,066,565 for the years ended December 31, 2012, 2013 and 2014, respectively. In 2014, the Group early terminated a lease on one of its offices, and wrote-off the related leasehold improvement with the carrying amount of $529,187 and recognized a loss on disposal of $529,187. |
Acquired_intangible_assets_net
Acquired intangible assets, net | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Acquired intangible assets, net | 8. Acquired intangible assets, net | ||||||||
Acquired intangible assets, net consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Distribution networks | $ | 2,329,849 | $ | 2,329,849 | |||||
Trademarks | 2,928,365 | 2,925,453 | |||||||
$ | 5,258,214 | $ | 5,255,302 | ||||||
Less: accumulated amortization | (3,777,851 | ) | (4,076,635 | ) | |||||
$ | 1,480,363 | $ | 1,178,667 | ||||||
The Group recorded amortization expenses of $330,220, $316,121 and $301,697 for the years ended December 31, 2012, 2013 and 2014, respectively. The amortization expenses of the above intangible assets will be approximately $301,669, $301,699, $221,584, $141,470 and $141,470 for 2015, 2016, 2017, 2018 and 2019, respectively. |
Investments_in_affiliates
Investments in affiliates | 12 Months Ended |
Dec. 31, 2014 | |
Investments in affiliates | 9. Investments in affiliates |
Investments accounted for under the equity method of accounting | |
In January 2010, Shanghai An-Nai-Chi, a company which previously was a 51.0% equity-owned consolidated subsidiary of the Group, received a cash injection of $1.5 million from a third party of the Group. After the cash injection, the Group retained 33.2% equity interests in Shanghai An-Nai-Chi and no longer had control in Shanghai An-Nai-Chi. As the Group holds one out of five board seats on the Board of Shanghai An-Nai-Chi and has significant influence over financial and operating decision-making after deconsolidation, the Group accounts for the retained 33.2% equity interests using the equity method of accounting. The retained investment was re-measured at fair value of $1.1 million on the date the Group deconsolidated Shanghai An-Nai-Chi. The Group’s equity in losses of Shanghai An-Nai-Chi in 2011 was $743,153 and were recognized in equity in losses of affiliates in the consolidated statement of operations. The carrying amount of the investment in Shanghai An-Nai-Chi has been reduced to zero as of December 31, 2011. The Group did not recognize any equity in losses of Shanghai An-Nai-Chi through 2012 and 2014 as the Group has no obligation to fund additional losses. | |
On December 31, 2012, the Group acquired 9.3% of the equity interests in China Branding Company Limited (“CBG”) for cash of $1.3 million. Mr. Robert W. Roche, Acorn’s co-founder and current executive chairman and CEO, individually holds an additional 7.6% equity interests in CBG and holds one out of five board seats of CBG and accordingly, Mr. Roche is able to exercise significant influence through his participation on the Board of Directors. As such, management believes that it can exercise significant influence over CBG through the Group’s direct equity investment, the Group’s indirect investment through Mr. Roche’s equity interest, and Mr. Roche’s significant influence over CBG. Therefore, the Group accounts for this investment using the equity method of accounting. In February 2013, the Group’s investment in CBG decreased from 9.3% to 8.7% as a result of dilution due to issuance of additional shares by CBG to a new investor, which was accounted for as if the Group sold 0.6% equity interests in CBG, and the gains from this dilution was immaterial. The Group’s equity in losses of CBG in 2013 and 2014 were $205,567 and $235,161 and were recognized in equity in losses of affiliates in the consolidated statements of operation. |
Accrued_Expenses_and_Other_Cur
Accrued Expenses and Other Current Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Expenses and Other Current Liabilities | 10. Accrued expenses and other current liabilities | ||||||||
Accrued expenses and other current liabilities consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Other taxes payable | $ | 1,923,070 | $ | 1,303,688 | |||||
Accrued employee payroll and welfare | 3,402,678 | 2,919,888 | |||||||
Other payable | 4,910,720 | 2,889,184 | |||||||
Accrued expenses | 2,580,340 | 4,114,212 | |||||||
Advances from customers | 290,952 | 597,614 | |||||||
$ | 13,107,760 | $ | 11,824,586 | ||||||
Other taxes payable mainly consist of value-added tax payable and sales taxes payable. The Group’s PRC subsidiaries are subject to value-added tax at a rate of 17% on product purchases and sales amount. Value-added tax payable on sales is computed net of value-added tax paid on purchases. The Group’s PRC subsidiaries are also subject to business tax at a rate of 5% on sales related to services rendered. |
Debt
Debt | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt | 11. Debt | ||||||||
The Group’s debt consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Long-term debt, current portion | — | 8,506,324 | |||||||
Total debt, current | — | 8,506,324 | |||||||
Long-term debt | 8,502,198 | — | |||||||
Total | $ | 8,502,198 | $ | 8,506,324 | |||||
The Group entered into a two-year loan agreement with Bank of Communications of China on March 13, 2013 with a borrowing amount of $8.45 million. The loan bears an interest rate of USD 6-month Libor+1.80% (the effective interest rate for 2014 was about 2.2459%) with a maturity date of February 10, 2015. The loan has been repaid in full in February 2015. |
Sharebased_compensation
Share-based compensation | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Share-based compensation | 12. Share-based compensation | ||||||||||||||||
In May 2006, the Group adopted the 2006 Equity Incentive Plan (the “2006 Option Plan”) which allows the Group to offer a variety of incentive awards to employees, officers, directors or individual consultants or advisors who render services to the Group and authorized the issuance of 24,133,000 ordinary shares. Under the 2006 Option Plan, the share options and stock appreciation rights (“SARs”) are generally granted with an exercise price equal to the fair market value of the underlying shares, as determined by the Group’s board of directors at the date of grant and expire after ten years and six years, respectively, with vesting occurring 25% upon grant and the remaining 75% vesting ratably over three years. Certain share options and SARs granted vest immediately upon grant, and certain share options and SARs granted vest upon the satisfaction of certain performance targets. The proceeds from the exercise of the SARs by the grantee will be equity settled by delivery of equivalent fair value of ordinary shares of the Group. | |||||||||||||||||
In 2010, the Group granted restricted share units (“RSUs”) to its employees that require no exercise price with one-twelfth to vest on the last day of each three-month period during the three years following the grant date. The holders of the RSUs are not entitled to voting but have the right to receive dividend equivalents with respect to any unpaid RSUs they hold as of the applicable record date for any dividend payment if Acorn International declares a cash dividend on its outstanding ordinary shares. The dividend equivalents are subject to the same vesting and other terms as the original RSUs to which they relate. | |||||||||||||||||
In 2012, the Group granted RSUs to an officer of the Group that requires no exercise price. One-half of the RSUs granted are time-based shares which will vest one-third on the last day of each year during the three years following the grant date. The other half of the RSUs granted are performance-based which will vest upon the satisfaction of certain performance targets. The holders of the RSUs are not entitled to voting but have the right to receive dividend equivalents with respect to any unpaid RSUs they hold as of the applicable record date for any dividend payment if Acorn International declares a cash dividend on its outstanding ordinary shares. The dividend equivalents are subject to the same vesting and other terms as the original RSUs to which they relate. | |||||||||||||||||
The Group recorded compensation expense of $424,445, $446,412 and $428,000 for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||||||||
The fair value of each RSU granted in 2010 and 2012 were based on quoted market price of the Group’s ordinary share on the grant date. | |||||||||||||||||
A summary of the share options and SARs activities for the year ended December 31, 2014 and the information regarding the share options and SARs outstanding as of December 31, 2014 were as follows: | |||||||||||||||||
Number of | Weighted average | Weighted | Aggregate | ||||||||||||||
share | exercise price | average | intrinsic | ||||||||||||||
options/ | remaining | value | |||||||||||||||
SARs | contract | ||||||||||||||||
terms | |||||||||||||||||
Share options/SARs outstanding at January 1, 2014 | 2,335,482 | $ | 1.78 | ||||||||||||||
Granted | — | $ | — | ||||||||||||||
Forfeited | — | $ | — | ||||||||||||||
Expired | — | $ | — | ||||||||||||||
Exercised | — | $ | — | ||||||||||||||
Share options/SARs outstanding at December 31, 2014 | 2,335,482 | $ | 1.78 | 0.31 years | $ | — | |||||||||||
Share options/SARs vested or expected to vest at December 31, 2014 | 2,335,482 | $ | 1.78 | 0.31 years | $ | — | |||||||||||
Share options/SAR exercisable at December 31, 2014 | 2,335,482 | $ | 1.78 | 0.31 years | $ | — | |||||||||||
The weighted-average fair value of share options and SARs granted in 2012, 2013 and 2014 was nil, nil and nil, respectively. The total fair value of options and SARs vested in 2012, 2013 and 2014 was nil, nil and nil. Due to the fact that market price is lower than weighted-average exercise price, the aggregate intrinsic value of share options and SARs was nil as of December 31, 2014. | |||||||||||||||||
A summary of the RSUs activities for the year ended December 31, 2014 was as follows: | |||||||||||||||||
Number of RSUs | Weighted average | ||||||||||||||||
grant date fair value | |||||||||||||||||
Nonvested at January 1, 2014 | 900,000 | $ | 1.43 | ||||||||||||||
Granted | — | $ | 1.43 | ||||||||||||||
Forfeited | (300,000 | ) | $ | 1.43 | |||||||||||||
Vested | (300,000 | ) | $ | 1.43 | |||||||||||||
Nonvested at December 31, 2014 | 300,000 | $ | 1.43 | ||||||||||||||
As of December 31, 2014, there was $71,333 in total unrecognized compensation expense related to unvested share-based compensation arrangements granted under the 2006 Option Plan, which is expected to be recognized over a weighted-average period of 0.16 years. |
Taxation
Taxation | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Taxation | 13. Taxation | ||||||||||||
Acorn International and Star Education & Technology Group Inc. are incorporated in the Cayman Islands and is not subject to tax in this jurisdiction. | |||||||||||||
China DRTV, Smooth Profit and Star Education & Technology Limited are incorporated in the British Virgin Islands and are not subject to tax in this jurisdiction. | |||||||||||||
The Group’s Hong Kong subsidiaries, MK AND T, Bright Rainbow, and HJX International Limited, are subject to Hong Kong statutory income tax on their Hong Kong sourced income. | |||||||||||||
On March 16, 2007, the PRC government promulgated Law of the People’s Republic of China on Enterprise Income Tax (“New EIT Law”), which was effective from January 1, 2008. Under the New EIT Law, domestically-owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%. While the New EIT Law equalizes the tax rates for domestically-owned and foreign-invested companies, preferential tax treatment would continue to be given to companies in certain encouraged sectors and to enterprises classified as high and new technology companies, whether domestically-owned or foreign-invested enterprises. The New EIT Law also provides a five-year transition period starting from its effective date for those enterprises which were established before the promulgation date of the New EIT Tax Law and which were entitled to a preferential tax treatment such as a reduced tax rate or a tax holiday. The tax rate of such enterprises will transit to the uniform tax rate of 25% within a five-year transition period and the tax holiday, which has been enjoyed by such enterprises before the effective date of the New EIT Law, may continue to be enjoyed until the end of the holiday. | |||||||||||||
Shanghai HJX, Acorn Electronic, Beijing Youngleda, YiyangYukang and Zhuhai Acorn, as foreign-invested manufacturing enterprises which are scheduled to operate for at least ten years, are entitled to a two-year exemption and three-year 50% reduction starting from the first profit making year after absorbing all prior years’ tax losses, which can be carried forward for five years (the “Tax Holiday”). Under the New EIT Law, enterprises not generating profits before 2008 are required to commence the Tax Holiday beginning January 1, 2008. HJX Software, as a recognized software company, is eligible for the Tax Holiday from 2009. | |||||||||||||
The Group’s remaining PRC subsidiaries are subject to the statutory rate of 25% in 2012, 2013 and 2014 in accordance with the New EIT Law. | |||||||||||||
The aggregate dollar effect of tax holidays on income tax expense for the period amounted to $49,642, $204,884 and nil in 2012, 2013 and 2014, respectively (representing an increase in basic and diluted loss per ordinary share from operations of nil, nil and nil in 2012, 2013 and 2014, respectively). | |||||||||||||
Under the New EIT Law and implementation regulations issued by the PRC State Council, income tax at the rate of 10% is applicable to interest and dividends payable to investors that are “non-resident enterprises”, which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such interest or dividends have their sources within the PRC. Undistributed earnings of the Group’s PRC subsidiaries are considered to be indefinitely reinvested and, accordingly, no provision for PRC dividend withholding tax has been provided thereon. Upon distribution of these earnings in the form of dividends or otherwise in the future, the Group would be subject to PRC withholding tax at 10% or a lower treaty rate. | |||||||||||||
A deferred tax liability should be recorded for the VIEs to the extent of their accumulated profit. As the VIEs have accumulated losses, no deferred tax liability has been provided by the Group. | |||||||||||||
The Group has made its assessment of each tax position (including the potential application of interests and penalties) based solely on the technical merits of the position, and has measured the unrecognized benefits associated with the tax positions. As of December 31, 2012, 2013 and 2014, the Group had unrecognized tax benefits of approximately nil million, $0.7 and $1.8 million, respectively. During 2013 and 2014, the Group recorded uncertain tax benefits of $0.7 million and $1.1 million associated with intercompany transfer pricing results falling below the median of the inter-quartile range of comparable companies. The unrecognized tax benefits would impact the effective income tax if recognized. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2012, 2013 and 2014 was as follows: | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
(in million) | (in million) | (in million) | |||||||||||
Unrecognized tax benefits at beginning of the year | $ | 2.5 | $ | — | $ | 0.7 | |||||||
Additions in current year | — | 0.7 | 1.1 | ||||||||||
Lapse of statute of limitation | (2.5 | ) | — | — | |||||||||
Unrecognized tax benefits at end of the year | $ | — | $ | 0.7 | $ | 1.8 | |||||||
As of December 31, 2012, 2013 and 2014, the amount of interests and penalties related to uncertain tax positions was immaterial. | |||||||||||||
According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of income taxes is due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of income tax liability exceeding RMB100,000 (approximately $15,000) is specifically listed as a special circumstance. In the case of a transfer pricing related adjustment, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. The Group’s PRC subsidiaries are therefore subject to examination by the PRC tax authorities from 2010 through 2014 on non-transfer pricing matters, and from 2004 through 2014 on transfer pricing matters. | |||||||||||||
The current and deferred portion of income tax (expenses) benefits included in the consolidated statements of operations were as follows: | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Current income tax (expenses) benefits | $ | 1,359,513 | $ | (1,200,896 | ) | $ | (1,280,181 | ) | |||||
Deferred income tax (expenses) benefits | (3,182,139 | ) | 555,133 | 109,664 | |||||||||
(1,822,626 | ) | (645,763 | ) | (1,170,517 | ) | ||||||||
Reconciliation between the effective income tax rate and the PRC statutory income tax rate was as follows: | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
PRC statutory tax rate | 25 | % | 25 | % | 25 | % | |||||||
Expenses not deductible for tax purposes | (1 | )% | (2 | )% | 1 | % | |||||||
Effect of different tax rate of subsidiary operations in other jurisdiction | (3 | )% | (1 | )% | (1 | )% | |||||||
Change in valuation allowance | (47 | )% | (23 | )% | (24 | )% | |||||||
Effect of change in tax rate on deferred tax assets/liabilities | — | 1 | % | (1 | )% | ||||||||
Recognition of the unrecognized tax benefit | 15 | % | (2 | )% | (3 | )% | |||||||
Effective tax rate | (11 | )% | (2 | )% | (3 | )% | |||||||
The principal components of the Group’s deferred income tax assets and liabilities as of December 31, 2013 and 2014 were as follows: | |||||||||||||
December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Deferred tax assets: | |||||||||||||
Allowance and reserves | $ | 2,635,126 | $ | 2,807,768 | |||||||||
Accrued expenses | 1,254,642 | 1,683,185 | |||||||||||
Revenue recognition difference | 432,911 | 343,377 | |||||||||||
Advertising expenses | 4,707,264 | 4,420,265 | |||||||||||
YiyangYukang long-term assets reduction | 815 | 812 | |||||||||||
Net operating losses | 11,987,650 | 21,985,889 | |||||||||||
$ | 21,018,408 | $ | 31,241,296 | ||||||||||
Less: valuation allowance | (20,170,712 | ) | (30,287,901 | ) | |||||||||
$ | 847,696 | $ | 953,395 | ||||||||||
Deferred tax liabilities: | |||||||||||||
Fair value step up of retained investment in Shanghai Yimeng | (858,811 | ) | (855,709 | ) | |||||||||
$ | (858,811 | ) | $ | (855,709 | ) | ||||||||
$ | (11,115 | ) | $ | 97,686 | |||||||||
Deferred tax assets were analyzed as: | |||||||||||||
Current | $ | 847,696 | $ | 953,395 | |||||||||
Deferred tax liabilities were analyzed as: | |||||||||||||
Non-current | (858,811 | ) | (855,709 | ) | |||||||||
$ | (858,811 | ) | $ | (855,709 | ) | ||||||||
$ | (11,115 | ) | $ | 97,686 | |||||||||
As of December 31, 2014, the Group had tax losses carrying forward of $ 88,694,725. The tax losses will expire between 2015 and 2019 if they are not utilized. | |||||||||||||
The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, the Group believes it is not more-likely-than-not that the Group will realize the benefits of these deductible differences, thus an additional valuation allowance for approximately $7.6 million, $9.2 million and $10.1 million were recognized in 2012, 2013 and 2014, respectively. The remainder amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward periods are reduced. |
Other_income_net
Other income net | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other income net | 14. Other income net | ||||||||||||
Other income (expenses) consisted of the following: | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Interest income | $ | 3,302,882 | $ | 3,298,083 | $ | 2,599,279 | |||||||
Sale of E-Roda trademark | 1,942,682 | — | — | ||||||||||
Investment gain | 601,793 | 308,160 | — | ||||||||||
Others | (92,340 | ) | (58,836 | ) | (455,729 | ) | |||||||
$ | 5,755,017 | $ | 3,547,407 | $ | 2,143,550 | ||||||||
Loss_per_share
Loss per share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Loss per share | 15. Loss per share | ||||||||||||
The computation of basic and diluted loss per ordinary share from operations for the years ended December 31, 2012, 2013 and 2014 was as follows: | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Numerator: | |||||||||||||
Net loss attributable to Acorn International, Inc. shareholders from operations—basic and diluted | $ | (17,926,074 | ) | $ | (39,895,878 | ) | $ | (44,328,912 | ) | ||||
Denominator: | |||||||||||||
Weighted average ordinary shares outstanding—basic and diluted | 89,965,979 | 84,115,169 | 82,690,613 | ||||||||||
loss per ordinary share: | |||||||||||||
Basic and diluted | $ | (0.20 | ) | $ | (0.47 | ) | $ | (0.54 | ) | ||||
The Group had 4,443,648, 3,235,482 and 2,635,482 outstanding stock options, SARs and RSUs outstanding in 2012, 2013 and 2014, respectively, which could have potentially diluted income per share in the future, but were excluded in the computation of diluted loss per share in 2012, 2013 and 2014, as the Group had net loss attributable to shareholders from operations in those periods. |
Share_repurchase_program
Share repurchase program | 12 Months Ended |
Dec. 31, 2014 | |
Share repurchase program | 16. Share repurchase program |
In November 2012, the Group’s Board authorized a share repurchase program to repurchase a total of 7,859,550 ordinary shares (equivalent to 2,619,850 American Depositary Shares (“ADSs”)) in the form of ordinary shares and ADSs from a limited number of former company employees and their affiliates, representing the entire shareholdings in the Group held by such individuals. The purchase price is $1.1 per ordinary share (equivalent to $3.3 per ADS) was established based on, among other factors, a discount of 15.2% to the Group’s cash assets value per share as of September 30, 2012. The Group does not believe that this agreement represents a firm commitment, as there is no disincentive for performance. As such, the Group has not recorded any commitments or contingencies on the balance sheet as of December 31, 2012. The transaction was closed in March 2013 and the ordinary shares repurchased were recognized in treasury stock, at cost. |
Mainland_China_Contribution_Pl
Mainland China Contribution Plan and Profit Appropriation | 12 Months Ended |
Dec. 31, 2014 | |
Mainland China Contribution Plan and Profit Appropriation | 17. Mainland China contribution plan and profit appropriation |
Employees of the Group in the PRC are entitled to retirement benefits calculated with reference to their salary basis upon retirement and their length of service in accordance with a PRC government-managed retirement plan. The PRC government is directly responsible for the payments of the benefits to these retired employees. The Group is required to make contributions to the government-managed retirement plan based on certain percentages of the employees’ monthly salaries. The amounts contributed by the Group were $1,952,704, $2,671,372 and $1,952,480 for the years ended December 31, 2012, 2013 and 2014, respectively. | |
In addition, the Group is required by law to contribute medical, unemployment, housing and other statutory benefits based on certain percentages of the employees’ monthly salaries. The PRC government is directly responsible for the payments of the benefits to these employees. The amounts contributed by the Group were $2,036,029, $2,610,731 and $1,968,199 for the years ended December 31, 2012, 2013 and 2014, respectively. | |
In accordance with relevant PRC Company Law and regulations and the Group’s Articles of Association, the Group’s PRC subsidiaries were required to appropriate 10% of their respective profit after taxation reported in their statutory financial statements prepared under the PRC GAAP to the statutory surplus reserve. The Group has statutory reserve balance of $7,648,288 and $7,674,602 as of December 31, 2013 and 2014, respectively. The appropriation of statutory surplus reserve will cease upon the balance of the statutory surplus reserve reaching 50% of the companies’ registered capital. The statutory surplus reserves may be used to make up losses or for conversion into the shareholders’ equity. |
Commitments_and_contingencies
Commitments and contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and contingencies | 18. Commitments and contingencies | ||||
(A) Leases commitments | |||||
The Group leases certain office premises and buildings under non-cancelable leases. Rental expenses under operating leases for 2012, 2013 and 2014 were $2,216,502, $2,753,740 and $2,908,304, respectively. | |||||
As of December 31, 2014, future minimum lease payments under non-cancelable operating leases agreements were as follows: | |||||
2015 | $ | 1,387,765 | |||
2016 | 1,110,661 | ||||
2017 | 398,570 | ||||
2018 | 86,452 | ||||
2019 and thereafter | 211,213 | ||||
$ | 3,194,661 | ||||
(B) Advertising commitments | |||||
As of December 31, 2014, the commitments for the advertising contracts signed by the Group were as follows: | |||||
2014 | $ | 16,737,049 | |||
Of the total commitments, $6,111,611 was prepaid as of December 31, 2014. | |||||
(C) Legal matters | |||||
The Group is a party to legal matters and claims that are normal in the course of its operations. While the Group believes that the ultimate outcome of these matters will not have a material adverse effect on its financial position, results of operations and cash flows, the outcome of these matters is not determinable with certainty and negative outcomes may adversely affect the Group. |
Segment_and_geographic_informa
Segment and geographic information | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment and geographic information | 19. Segment and geographic information | ||||||||||||
The Group engages primarily in direct sales, including TV direct sales, outbound calls, Internet sales, catalogs sales and direct sales through print media and radio, and distribution sales through its nationwide distribution network in the PRC. | |||||||||||||
The Group’s chief operating decision maker has been identified as the chairman of the Board of Directors and the CEO. The Group uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision makers for making decisions, allocating resources and assessing performance. Based on this assessment, the Group has determined that it has two operating and reportable segments, which are direct sales, net and distribution sales, net. | |||||||||||||
The Group’s chief operating decision maker evaluates segment performance based on revenues, cost of revenues and gross profit. Accordingly, all expenses are considered corporate level activities and are not allocated to segments. Therefore, it is not practical to show profit or loss by reportable segments. Also, the Group’s chief decision maker does not assign assets to these segments. | |||||||||||||
The Group’s revenues are all generated from direct sales platform and nationwide distribution networks in the PRC. The revenues by each group of similar products are as follows: | |||||||||||||
For the years ended December 31, | |||||||||||||
Product | 2012 | 2013 | 2014 | ||||||||||
Electronic learning products | $ | 41,345,071 | $ | 40,902,630 | $ | 44,137,557 | |||||||
Collectible products | 20,427,475 | 29,642,629 | 15,413,624 | ||||||||||
Health products | 10,691,723 | 10,098,466 | 9,876,415 | ||||||||||
Kitchen and household | 2,842,536 | 27,008,095 | 9,809,998 | ||||||||||
Mobile phones | 64,712,559 | 25,923,877 | 6,000,241 | ||||||||||
Fitness products | 62,629,956 | 38,427,278 | 4,554,072 | ||||||||||
Cosmetics products | 7,089,145 | 2,311,099 | 853,133 | ||||||||||
Auto products | 452,282 | 323,920 | 191,314 | ||||||||||
Consumer electronics products | 8,489,927 | 807,764 | 61,161 | ||||||||||
Other products | 24,599,540 | 9,704,266 | 4,056,928 | ||||||||||
Total gross revenues | $ | 243,280,214 | $ | 185,150,024 | $ | 94,954,443 | |||||||
Less: sales taxes | (706,540 | ) | (439,144 | ) | (199,721 | ) | |||||||
Total revenues, net | $ | 242,573,674 | $ | 184,710,880 | $ | 94,754,722 | |||||||
The gross profit by segments is as follows: | |||||||||||||
Year ended December 31, 2012 | Direct sales | Distribution sales | Total | ||||||||||
Revenue, net | $ | 193,614,500 | $ | 48,959,174 | $ | 242,573,674 | |||||||
Cost of revenue | 96,471,502 | 35,475,084 | 131,946,586 | ||||||||||
Gross profit | $ | 97,142,998 | $ | 13,484,090 | $ | 110,627,088 | |||||||
Year ended December 31, 2013 | Direct sales | Distribution sales | Total | ||||||||||
Revenue, net | $ | 136,416,423 | $ | 48,294,457 | $ | 184,710,880 | |||||||
Cost of revenue | 57,445,266 | 35,046,146 | 92,491,412 | ||||||||||
Gross profit | $ | 78,971,157 | $ | 13,248,311 | $ | 92,219,468 | |||||||
Year ended December 31, 2014 | Direct sales | Distribution sales | Total | ||||||||||
Revenue, net | $ | 45,232,943 | $ | 49,521,779 | $ | 94,754,722 | |||||||
Cost of revenue | 24,352,882 | 32,570,037 | 56,922,919 | ||||||||||
Gross profit | $ | 20,880,061 | $ | 16,951,742 | $ | 37,831,803 | |||||||
Geographic information | |||||||||||||
The Group operates in the PRC and all of the Group’s long-lived assets are located in the PRC. | |||||||||||||
In 2012, 2013 and 2014, no customer accounted for 10% or more of the Group’s net revenues. |
Related_party_transactions
Related party transactions | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Related party transactions | 20. Related party transactions | ||||||||||||
In 2014, the Group entered into a series of business cooperation with certain entities in which Mr. Robert W. Roche, a major shareholder, a director the executive chairman and CEO of Acorn International, owns significant equity interests. Details of the transactions for the years ended December 31 2014 were as follows: | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Software purchase | $ | — | $ | — | $ | 1,187,922 | |||||||
Service rendered | $ | — | $ | — | $ | 391,800 | |||||||
Goods purchase | $ | — | $ | — | $ | 309,473 | |||||||
The Group paid $1.2 million as a setup-fee and trial fee for the dialing software and call center management system. The Group terminated all business relations with this related party in 2014, and did not put the software into continued usage and the paid amount was booked in General and administrative expenses. The Group received advertising production, celebrity endorsement service and purchased fashion accessories such as shoes and handbags for Internet sales. | |||||||||||||
Furthermore, the Group leased out our vacant premises to CBG and provided administrative and human resources services to CBG. Details of the transactions and balances for the years ended December 31, 2014 were as follows: | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Lease income | $ | — | $ | — | $ | 97,635 | |||||||
Service income | $ | — | $ | — | $ | 48,818 | |||||||
December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Other receivable | $ | 21,850 | $ | 168,303 | |||||||||
On July 4, 2013, the Group provided a related party loan of $21,850 bearing interest at a rate of 7% per annum to CBG. The loan is still outstanding as of December 31, 2014. The other receivable balance is related to lease and service income. |
Restricted_Net_Assets
Restricted Net Assets | 12 Months Ended |
Dec. 31, 2014 | |
Restricted Net Assets | 21. Restricted net assets |
Relevant PRC laws and regulations permit payments of dividends by the Group’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. As a result of these PRC laws and regulations, the Group’s PRC subsidiaries are restricted in their abilities to transfer a portion of their net assets either in the form of dividends, loans or advances, which restricted portion amounted to $4,497,180 as of December 31, 2014. This amount is made up of the registered equity of the Group’s PRC subsidiaries and the statutory reserves disclosed in Note 16. In addition, as a result of the Group’s restructuring effective January 1, 2005, retained earnings of $20,336,734 related to the pre-restructuring companies was unavailable for distribution as a normal dividend to Acorn International in accordance with relevant PRC laws and regulations. |
ADDITIONAL_INFORMATIONFINANCIA
ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I | ADDITIONAL INFORMATION—FINANCIAL STATEMENT SCHEDULE I | ||||||||||||
ACORN INTERNATIONAL, INC. | |||||||||||||
These financial statements have been prepared in conformity with accounting principles generally accepted in the United States. | |||||||||||||
FINANCIAL INFORMATION OF PARENT COMPANY | |||||||||||||
BALANCE SHEETS | |||||||||||||
(In US dollars, except share data) | |||||||||||||
December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Assets | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 2,708,804 | $ | 4,928,041 | |||||||||
Other current assets | 69,153 | 88,420 | |||||||||||
Amounts due from subsidiaries | 8,909,203 | 8,881,560 | |||||||||||
Total current assets | 11,687,160 | 13,898,021 | |||||||||||
Investments in subsidiaries | 111,453,643 | 65,447,106 | |||||||||||
Total assets | $ | 123,140,803 | $ | 79,345,127 | |||||||||
Liabilities and equity | |||||||||||||
Current liabilities: | |||||||||||||
Other current liabilities | $ | 254,980 | $ | 206,414 | |||||||||
Amount due to subsidiaries | — | 849,784 | |||||||||||
Current portion of long-term debt | — | 8,506,324 | |||||||||||
Total current liabilities | 254,980 | 9,562,522 | |||||||||||
Long-term debt | 8,502,198 | — | |||||||||||
Total liabilities | 8,757,178 | 9,562,522 | |||||||||||
Equity: | |||||||||||||
Ordinary shares ($0.01 par value; 100,000,000 shares authorized, 94,937,174 and 95,237,174 shares issued and 82,449,791 and 82,749,791 shares outstanding as of December 31, 2013 and 2014, respectively) | 949,372 | 952,372 | |||||||||||
Additional paid-in capital | 158,962,286 | 159,387,286 | |||||||||||
Accumulated deficits | (60,703,494 | ) | (105,032,406 | ) | |||||||||
Accumulated other comprehensive income | 35,284,912 | 34,584,804 | |||||||||||
Treasury stock, at cost (12,487,383 and 12,487,383 shares as of December 31, 2013 and 2014, respectively) | (20,109,451 | ) | (20,109,451 | ) | |||||||||
Total equity | 114,383,625 | 69,782,605 | |||||||||||
Total liabilities and equity | $ | 123,140,803 | $ | 79,345,127 | |||||||||
FINANCIAL INFORMATION OF PARENT COMPANY | |||||||||||||
STATEMENTS OF OPERATIONS | |||||||||||||
(In US dollars) | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Operating expenses: | |||||||||||||
Other selling and marketing expenses | $ | — | $ | 640 | $ | 357 | |||||||
General and administrative expenses | 1,479,363 | 1,131,520 | 1,888,954 | ||||||||||
Total operating expenses | 1,479,363 | 1,132,160 | 1,889,311 | ||||||||||
Loss from operations | (1,479,363 | ) | (1,132,160 | ) | (1,889,311 | ) | |||||||
Equity in losses of subsidiaries | (16,446,388 | ) | (38,650,417 | ) | (42,249,948 | ) | |||||||
Other expenses | (323 | ) | (113,301 | ) | (189,653 | ) | |||||||
Loss before income taxes | (17,926,074 | ) | (39,895,878 | ) | (44,328,912 | ) | |||||||
Income taxes | — | — | — | ||||||||||
Net loss of Acorn International, Inc. shareholders | $ | (17,926,074 | ) | $ | (39,895,878 | ) | $ | (44,328,912 | ) | ||||
FINANCIAL INFORMATION OF PARENT COMPANY | |||||||||||||
STATEMENTS OF COMPREHENSIVE LOSS | |||||||||||||
(In US dollars, except share data) | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Net loss | $ | (17,926,074 | ) | $ | (39,895,878 | ) | $ | (44,328,912 | ) | ||||
Other comprehensive income, net of tax | |||||||||||||
Foreign currency translation adjustments | 399,847 | 4,564,209 | (700,108 | ) | |||||||||
Comprehensive loss of Acorn International, Inc. | (17,526,227 | ) | (35,331,669 | ) | (45,029,020 | ) | |||||||
FINANCIAL INFORMATION OF PARENT COMPANY | |||||||||||||
STATEMENTS OF CASH FLOWS | |||||||||||||
(In US dollars) | |||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Operating activities: | |||||||||||||
Net loss attributable to Acorn International, Inc. shareholders | $ | (17,926,074 | ) | $ | (39,895,878 | ) | $ | (44,328,912 | ) | ||||
Share-based compensation | 424,445 | 446,412 | 428,000 | ||||||||||
Equity in (earnings) losses of subsidiaries | 16,446,388 | 38,650,417 | 42,249,948 | ||||||||||
Accrued interests on long-term debt | — | 152,931 | 4,126 | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||
Other current assets | 10,432 | 19,260 | (19,267 | ) | |||||||||
Amounts due from subsidiaries | 559,832 | — | 27,643 | ||||||||||
Amounts due to subsidiaries | 849,784 | ||||||||||||
Other current liabilities | (27,729 | ) | (72,509 | ) | (48,564 | ) | |||||||
Net cash used in operating activities | $ | (512,706 | ) | $ | (699,367 | ) | $ | (837,242 | ) | ||||
Investing activities: | |||||||||||||
Cash received from capital deduction of YiyangYukang | — | — | 3,056,479 | ||||||||||
Net cash provided by investing activities | $ | — | $ | — | $ | 3,056,479 | |||||||
Financing activities: | |||||||||||||
Increase in long-term debt | — | 8,450,000 | — | ||||||||||
Repurchase of ordinary shares | — | (8,645,505 | ) | — | |||||||||
Dividends paid | (467 | ) | — | — | |||||||||
Net cash used in financing activities | $ | (467 | ) | $ | (195,505 | ) | $ | — | |||||
Net increase (decrease) in cash and cash equivalents | $ | (513,173 | ) | $ | (894,872 | ) | $ | 2,219,237 | |||||
Cash and cash equivalents at the beginning of the year | 4,116,849 | 3,603,676 | 2,708,804 | ||||||||||
Cash and cash equivalents at the end of the year | $ | 3,603,676 | $ | 2,708,804 | $ | 4,928,041 | |||||||
FINANCIAL INFORMATION OF PARENT COMPANY | |||||||||||||
Note to Schedule I | |||||||||||||
Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 5-04(c) of Regulation S-X, which require condensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. |
Summary_of_principal_accountin1
Summary of principal accounting policies (Policies) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Basis of Presentation | (a) Basis of presentation | |||
The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). | ||||
Basis of Consolidation | (b) Basis of consolidation | |||
The consolidated financial statements include the financial statements of Acorn International, its majority-owned subsidiaries and consolidated VIEs. All intercompany transactions and balances are eliminated upon consolidation. | ||||
Net income or loss of a subsidiary is attributed to the Group and to the noncontrolling interests even if this results in the noncontrolling interests having a deficit balance. Noncontrolling interests in subsidiaries are presented separately from the Group’s equity therein. | ||||
Use of Estimates | (c) Use of estimates | |||
The preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting estimates reflected in the Group’s financial statements include allowance for doubtful accounts, inventory valuation, assumptions related to the valuation of available-for-sale debt securities and embedded derivative, impairment of long-lived assets, and valuation allowance on deferred tax assets and provision for uncertain tax positions. | ||||
Going concern | (d) Going concern | |||
The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a going concern. During the year ended December 31, 2014, the Group incurred a loss from operations of $44,328,912. At December 31, 2014, the Group had an accumulated deficit of $86,190,592 and had experienced negative cash flows from operating activities in the amount of $45,632,724. In addition, the Group’s cash and cash equivalents balance was reduced to $34,686,379 as of December 31, 2014. | ||||
These circumstances raise substantial doubt as to the ability of the Group to meet its obligations as they come due and, accordingly, the use of accounting principles applicable to a going concern may not be appropriate. The Group will need to obtain additional funding in the future in order to finance the Group’s business strategy, operations and growth. If the Group is unable to arrange for sufficient funding on a timely basis, it may be required to significantly curtail its business activities until it can obtain adequate financing. | ||||
In order to respond the significant negative impact on the Group’s liquidity position during 2014, it has taken, or is in the process of taking, various actions to reduce its losses, generate additional cash flows and identify potential borrowing sources to further increase its liquidity in 2015, including: | ||||
• | in the first quarter of 2015, the Group decided to stop purchasing TV advertising time—historically the largest component of total advertising expenses and totaled $16.2 million in 2014; | |||
• | in the first quarter of 2015, the Group terminated arrangements with various media companies and is pursuing a refund of prepaid advertising time, which amounted to $6.2 million as of December 31, 2014; | |||
• | the Group has continued to reduce headcount across all of business divisions and is evaluating additional reductions in force which are expected to further reduce labor cost by approximately $0.3 million per month; | |||
• | in the first quarter of 2015, the Group subleased various excess office and warehouse-space-reducing related costs and generating additional cash flows; | |||
• | in the first quarter of 2015, the Group repaid $8.45 million loan previously outstanding under its credit facility (which is no longer available). The Group is in preliminarily discussions with a PRC commercial bank to secure a borrowing facility of approximately RMB100 million ($16.1 million) utilizing its facilities, including its office space, call center and warehouse located in Shanghai, China, as collateral. | |||
• | the Group is evaluating the sales of other non-core assets and securities. | |||
These financial statements do not reflect the potentially material adjustments in the carrying values of assets and liabilities, the reported expenses, and the balance sheet classifications used, that would be necessary if the going concern assumption were not appropriate. | ||||
Fair Value of Financial Instruments | (e) Fair value of financial instruments | |||
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (also referred to as an exit price) and expands disclosure requirements about assets and liabilities measured at fair value. The guidance establishes a hierarchy for inputs used in measuring fair value that gives the highest priority to observable inputs and the lowest priority to unobservable inputs as follows: | ||||
• | Level 1—Observable unadjusted quoted prices in active markets for identical assets or liabilities. | |||
• | Level 2—Observable inputs other than quoted prices in active markets for identical assets or liabilities, for which all significant inputs are observable, either directly or indirectly. | |||
• | Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. | |||
When available, the Group measures the fair value of financial instruments based on quoted market prices in active markets, valuation techniques that use observable market-based inputs or unobservable inputs that are corroborated by market data. The Group uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities measured at fair value are classified in the categories of Level 1, Level 2, and Level 3 based on the lowest level input that is significant to the fair value measurement in its entirety. Pricing information the Group obtains from third parties is internally validated for reasonableness prior to use in the consolidated financial statements. When observable market prices are not readily available, the Group generally estimates the fair value using valuation techniques that rely on alternate market data or inputs that are generally less readily observable from objective sources and are estimated based on pertinent information available at the time of the applicable reporting periods. In certain cases, fair values are not subject to precise quantification or verification and may fluctuate as economic and market factors vary and the Group’s evaluation of those factors changes. Although the Group uses its best judgment in estimating the fair value of these financial instruments, there are inherent limitations in any estimation technique. In these cases, a minor change in an assumption could result in a significant change in its estimate of fair value, thereby increasing or decreasing the amounts of the Group’s consolidated assets, liabilities, equity and net income or loss. | ||||
The Group’s financial instruments consist of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, notes receivable, accounts payable, notes payable and long-term debt. For cash and cash equivalents, restricted cash, accounts receivable, notes receivable, accounts payable and notes payable, the carrying amounts of these financial instruments as of December 31, 2013 and 2014 were considered representative of their fair values due to their short-term nature. The carrying value of long-term debt approximates its fair value as the impact to discount the long-term debt with a market based interest rate is insignificant. | ||||
Cash and Cash Equivalents | (f) Cash and cash equivalents | |||
Cash and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. | ||||
Cash balances of the Group that are included in the cash and cash equivalents of the consolidated balance sheets, including those denominated in RMB, may be withdrawn and used for the Group’s general operations without prior notice or penalty. The PRC government imposes certain controls on the convertibility of the RMB into foreign currencies, and in certain cases, the remittance of currency out of China. However, the Group does not consider the process for converting RMB into foreign currency in compliance with these controls to be a usage restriction and such process is not expected to result in any penalties provided that the Group complies with all above-mentioned processes as required. | ||||
The RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in China’s foreign exchange trading system market. The Group’s aggregate amount of cash and cash equivalents and restricted cash denominated in RMB amounted to RMB542,037,027 ($88,903,710) and RMB 241,610,810 ($39,485,342) as of December 31, 2013 and 2014, respectively. | ||||
Restricted Cash | (g) Restricted cash | |||
Under the notes payable, third-party bank channel sales arrangements and long-term debt with the banks, the Group is required to maintain certain cash balances in the banks based on the amounts of notes payable and long-term debt granted. These balances related to the notes payable and third-party bank channel sales arrangements were reflected as restricted cash in the balance sheet and amounted to $347,718 and $117,666 as of December 31, 2013 and 2014, respectively. The balance related to the long-term debt were reflected as restricted cash in the balance sheet and amounted to $ 9,677,049 and 9,642,098 as of December 31, 2013 and 2014, respectively. | ||||
Short-term investments | (h) Short-term investments | |||
The Group’s short-term investments consist of trading securities. | ||||
Securities that the Group buys and holds principally for the purpose of selling them in the near term are classified as trading securities. Trading securities are recorded at fair value, with unrealized gains and losses recognized in other income (expense) in the consolidated statements of operations. | ||||
Inventory | (i) Inventory | |||
The cost of inventory comprises all costs of purchase, costs of conversion, and other costs incurred to bring inventory to its present location and condition. The cost of inventory is calculated using the weighted-average method. | ||||
The inventory is stated at the lower of cost or market value. Adjustments are recorded to write down the inventory to the estimated net realizable value. The Group estimates excess and slow-moving inventory based upon assumptions of future demands and market conditions. If actual market conditions are less favorable than projected by management, additional inventory write-downs may be required. | ||||
Prepaid Land Use Right | (j) Prepaid land use right | |||
Prepaid land use right is valued at the cost to obtain the right less accumulated amortization. Amortization is computed on a straight-line basis over 50 years’ useful life of the right. | ||||
Property and Equipment, Net | (k) Property and equipment, net | |||
Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line method over the following estimated useful lives: | ||||
Estimated useful lives | ||||
Buildings | 20 years | |||
Leasehold improvements | Lesser of the term of the lease or the estimated useful lives of the assets | |||
Machinery | 10 years | |||
Information Technology equipment | 5 years | |||
Computers and office equipment | 3-5 years | |||
Vehicles | 4 years | |||
Acquired Intangible Assets, Net | (l) Acquired intangible assets, net | |||
Acquired intangible assets, which consist primarily of distribution networks and trademarks, are valued at cost less accumulated amortization. Amortization is computed using the straight-line method over their expected useful lives of 5 to 15 years. | ||||
Impairment of Long-Lived Assets | (m) Impairment of long-lived assets | |||
The Group evaluates its long-lived assets and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the future undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss equal to the excess of the carrying amount over the fair value of the assets. | ||||
Investment in Affiliates | (n) Investment in affiliates | |||
The affiliated companies, in which the Group does not have significant influence, are accounted for using the cost method of accounting. Dividends received that are distributed from the net accumulated earnings of the investee are recognized in the Group’s consolidated statements of operations. Dividends received in excess of earnings are recorded as reductions of cost of the investment. The Group evaluates each cost method investment separately for impairment indicators and whether any decrease in value of the investment has occurred which is other-than-temporary. If the fair value of the investment is less than its cost and the impairment is other-than-temporary, then the Group would recognize an impairment loss equal to the excess of the carrying amount over the fair value of the investment. The Group accounts for the retained 18.0% equity interests in Shanghai Yimeng using the cost method of accounting. In 2011, the Group’s interests in Shanghai Yimeng further decreased to 12.9% as a result of the dilution due to issuance of additional shares to a new investor. | ||||
The affiliated companies in which the Group has significant influence are accounted for using equity method of accounting. The share of earnings or losses of the investee are recognized in the Group’s consolidated statements of operations and adjusts the carrying amount of the investment. Dividends received reduce the carrying amount of the investment. The Group evaluates each equity method investment separately for impairment indicators and whether any decrease in value of the investment has occurred which is other-than-temporary. If the fair value of the investment is less than its cost and the impairment is other-than-temporary, then the Group would recognize an impairment loss equal to the excess of the carrying amount over the fair value of the investment. | ||||
Revenue Recognition | (o) Revenue recognition | |||
Direct sales, net | ||||
The Group’s direct sales net revenues primarily represent product sales through the Group’s TV direct sales and other direct sales platforms, such as internet sales, outbound calls, catalog sales and direct sales through print media and radio. The Group recognizes net revenues for products sold through its direct sales platforms once the products are delivered to and accepted by the customers (“F.O.B. Destination”). | ||||
The Group relies on China Express Mail Service Corporation (“EMS”) and local delivery companies to provide the Group data as to their successful deliveries for the Group’s direct sales products. EMS and local delivery companies regularly report product delivery information. In 2012, 2013 and 2014, direct sales net revenues were adjusted in the current accounting period based on actual unsuccessful product deliveries experience reported by EMS and local delivery companies. For unsuccessful deliveries, EMS and local delivery companies are required to return the undelivered products to the Group. It generally takes two to three weeks for EMS to return the undelivered products to the Group whereas it generally takes approximately seven days for local delivery companies to do so. | ||||
Distribution sales, net | ||||
The Group’s distribution sales net revenues represent product sales to the distributors comprising the Group’s nationwide distribution networks. The distributor agreements do not provide discounts, chargeback, price protection or stock rotation rights. The Group recognizes net revenues for products sold through its nationwide distribution networks when the products are delivered to and accepted by the distributors (e.g. “F.O.B. Destination”). In most cases, the distributors are required to pay in advance for the Group’s products. Some distributors are given customary credit terms based on the creditworthiness. | ||||
Sales taxes | ||||
The Group presents revenues net of sales taxes incurred. The sales taxes amounted to $706,540, $439,144 and $199,721 for the years ended December 31, 2012, 2013 and 2014, respectively. Before subtracting sales taxes, gross direct sales revenues were $194,220,344, $136,810,535 and $ 45,361,639 and gross distribution sales revenues were $49,059,870, $48,339,489 and $ 49,592,804 for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||
Advertising Expenses | (p) Advertising expenses | |||
The Group records cash advances paid to advertising companies as prepaid advertising expenses in the consolidated balance sheets. The Group then expenses the prepaid advertising expenses as the advertisement is shown. | ||||
Shipping and Handling Costs | (q) Shipping and handling costs | |||
The Group records costs incurred for shipping and handling as part of other selling and marketing expenses in the consolidated statements of operations. Shipping and handling costs were $15,222,530, $12,351,337 and $4,902,307 for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||
Operating Leases | (r) Operating leases | |||
Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases are charged to the consolidated statements of operations on a straight-line basis over the lease periods. | ||||
Government Subsidies | (s) Government subsidies | |||
The Group receives unrestricted government subsidies from local government agencies. The government agencies use their discretion to determine the amount of the subsidies with reference to certain taxes paid by the Group, including value-added, business and income taxes. The Group records unrestricted government subsidies as other operating income in the consolidated statements of operations. | ||||
The government subsidies in 2012, 2013 and 2014 were $2,997,096, $2,130,623 and $829,238, respectively. | ||||
Income Taxes | (t) Income taxes | |||
Current income taxes are provided for in accordance with the relevant statutory tax laws and regulations. | ||||
Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. Net operating losses are carried forward and credited by applying enacted statutory tax rates applicable to future years. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on the characteristics of the underlying assets and liabilities, or the expected timing of their use when they do not relate to a specific asset or liability. | ||||
The Group recognizes the impact of an uncertain income tax position at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. The Group classifies interests and penalties related to income tax matters in income tax expense. | ||||
Foreign Currency Translation | (u) Foreign currency translation | |||
The functional currency and reporting currency of Acorn International, China DRTV, Smooth Profit, MK AND T, and Bright Rainbow are the United States dollar (“US dollar”). Monetary assets and liabilities denominated in currencies other than the US dollar are translated into the US dollar at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the US dollar during the year are converted into US dollar at the applicable rates of exchange prevailing on the first day of the month in which the transactions occurred. Transaction gains and losses are recognized in the consolidated statements of operations as general and administrative expenses. | ||||
The financial records of the Group’s PRC subsidiaries and VIEs are denominated in its local currency, the Renminbi (“RMB”), which is the functional currency. Assets and liabilities are translated at the exchange rates at the balance sheet date. Equity accounts are translated at historical exchange rates. Revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments are reported as component of comprehensive income in the consolidated statements of comprehensive income (loss). | ||||
The aggregated gains (losses) through foreign currency transactions in 2012, 2013 and 2014 were $(20,498), $184,157 and $(31,847), respectively. | ||||
Concentration of Credit Risk | (v) Concentration of credit risk | |||
Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, available-for-sale securities, accounts receivable and notes receivable. All of the Group’s cash and cash equivalents and restricted cash are held with large state-owned financial institutions. The Group engages delivery companies, mainly EMSexpress, to deliver products to customers and to collect cash from the customers for direct sales gross revenues through direct sales platforms. The Group conducts credit evaluations of delivery companies and generally does not require collateral or other security from its delivery companies. The Group establishes an allowance for doubtful accounts primarily based on the age of the receivables and factors surrounding the credit risk of specific customers. | ||||
As of December 31, 2013 accounts receivables from EMS was $1,140,368, 18.7% of the total accounts receivables. As of December 31, 2014, no accounts receivables from a single delivery company were more than 10% of the total accounts receivables. | ||||
Share-Based Compensation | (w) Share-based compensation | |||
Share-based compensation cost is measured at grant date, based on the fair value of the award, and recognized in expense over the requisite service period. The Group has made an estimate of expected forfeitures and is recognizing compensation costs only for those equity awards expected to vest. | ||||
Income (Loss) Per Share | (x) Income (loss) per share | |||
Basic income (loss) per share is computed by dividing income attributable to the Group’s shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted income (loss) per ordinary share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares and is calculated using the treasury stock method for stock options and unvested shares. Common equivalent shares for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on income per share and, accordingly, are excluded from the calculation. Common equivalent shares are also excluded from the calculation in loss periods as their effects would be anti-dilutive. | ||||
Noncontrolling Interest | (y) Noncontrolling interest | |||
A noncontrolling interest in a subsidiary of the Group represents the portion of the equity (net assets) in the subsidiary not directly or indirectly attributable to the Group. Noncontrolling interests are presented as a separate component of equity in the consolidated balance sheet and earnings and other comprehensive income are attributed to controlling and noncontrolling interests. | ||||
Recently Issued Accounting Pronouncements | (z) Recently issued accounting pronouncements | |||
In May 2014, the FASB and International Accounting Standards Board (“IASB”) issued their converged standard on revenue recognition. The objective of the revenue standard ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. For public companies, the revenue standard is effective for the first interim period within annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. The Group is in the process of evaluating the impact of the standard on its consolidated financial statements. | ||||
On August 27, 2014, the FASB issued ASU 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The ASU shall be applied at the effective date, and the Group is in the process of evaluating the impact of the standard on its consolidated financial statements. | ||||
In November 2014, the FASB issued a new pronouncement which provides guidance on determining whether the host contract in a hybrid financial instrument issued in the form of a share is more akin to debt or to equity. The new standard requires management to determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption, including adoption in an interim period, is permitted. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. The Group is assessing the effect of adoption of this guidance on the Group’s consolidated financial states. |
Organization_and_principal_act1
Organization and principal activities (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Subsidiaries and Variable Interest Entities of Acorn International | As of December 31, 2014, the subsidiaries of Acorn International were as follows: | ||||||||||||
Name of subsidiaries | Percentage of | Date of incorporation | Place of incorporation | ||||||||||
ownership | |||||||||||||
China DRTV, Inc. (“China DRTV”) | 100 | % | 4-Mar-04 | BVI | |||||||||
Smooth Profit Limited (“Smooth Profit”) | 100 | % | September 18, 2007 | BVI | |||||||||
MK AND T Communications Limited (“MK AND T”) | 100 | % | 27-Oct-98 | Hong Kong | |||||||||
Bright Rainbow Investments Limited (“Bright Rainbow”) | 100 | % | 29-Oct-07 | Hong Kong | |||||||||
Shanghai Acorn Advertising Broadcasting Co., Ltd. (“Shanghai Advertising”) | 100 | % | 19-Aug-04 | PRC | |||||||||
Shanghai HJX Digital Technology Co., Ltd. (“Shanghai HJX”) | 100 | % | 23-Aug-04 | PRC | |||||||||
Acorn International Electronic Technology (Shanghai) Co., Ltd. (“Acorn Electronic”) | 100 | % | 23-Aug-04 | PRC | |||||||||
Acorn Information Technology (Shanghai) Co., Ltd. (“Acorn Information”) | 100 | % | 27-Aug-04 | PRC | |||||||||
Beijing Acorn Youngleda Oxygen Generating Co., Ltd. (“Beijing Youngleda”) | 100 | % | 20-Oct-04 | PRC | |||||||||
YiyangYukang Communication Equipment Co., Ltd. (“YiyangYukang”) | 100 | % | 29-Nov-05 | PRC | |||||||||
Zhuhai Sunrana Bio-tech Co., Ltd. (“Zhuhai Sunrana”) | 51 | % | 16-Jun-06 | PRC | |||||||||
Zhuhai Acorn Electronic Technology Co., Ltd. (“Zhuhai Acorn”) | 100 | % | 26-Sep-06 | PRC | |||||||||
Beijing HJZX Software Technology Development Co., Ltd. (“Beijing HJZX”) | 100 | % | 22-Jan-07 | PRC | |||||||||
ZhongshanMeijin Digital Technology Co., Ltd. (“ZhongshanMeijin”) | 75 | % | February 13, 2007 | PRC | |||||||||
Acorn Trade (Shanghai) Co., Ltd. (“Acorn Trade”) | 100 | % | December 13, 2007 | PRC | |||||||||
Shanghai Acorn HJX Software Technology Development Co., Ltd. (“HJX Software”) | 100 | % | 12-May-09 | PRC | |||||||||
Wuxi Acorn Enterprise Management Consulting Co., Ltd. (“Wuxi Acorn”) | 100 | % | 29-Jan-10 | PRC | |||||||||
Star Education & Technology Group Inc. | 100 | % | 8-Jan-14 | Cayman Island | |||||||||
Star Education & Technology Limited | 100 | % | 22-Jan-14 | BVI | |||||||||
HJX International Limited | 100 | % | 5-Mar-14 | Hong Kong | |||||||||
Summary of Financial Information of Group's Four Variable Interest Entities | Summary financial information of the Group’s four VIEs included in the accompanying consolidated financial statements is as follows: | ||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Net revenues | $ | 190,302,130 | $ | 137,947,971 | $ | 44,907,449 | |||||||
Net income (loss) | $ | 1,765,918 | $ | 18,873,242 | $ | (8,282,712 | ) | ||||||
Variable Interest Entity, Primary Beneficiary | |||||||||||||
Subsidiaries and Variable Interest Entities of Acorn International | As of December 31, 2014, the variable interest entities of Acorn International were as follows: | ||||||||||||
Name of variable interest entities | Date of incorporation | Place of incorporation | |||||||||||
Beijing Acorn Trade Co., Ltd. (“Beijing Acorn”) | March 19, 1998 | PRC | |||||||||||
Shanghai Acorn Network Technology Development Co., Ltd. (“Shanghai Network”) | November 2, 2004 | PRC | |||||||||||
Beijing HJX Technology Development Co., Ltd. (“Beijing HJX”) | September 16, 2013 | PRC | |||||||||||
Shanghai HJX Electronic Technology Co., Ltd. (“HJX Electronic”) | 3-Dec-13 | PRC |
Summary_of_principal_accountin2
Summary of principal accounting policies (Tables) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Estimated Useful Lives of Property and Equipment | Depreciation and amortization are calculated on a straight-line method over the following estimated useful lives: | ||
Estimated useful lives | |||
Buildings | 20 years | ||
Leasehold improvements | Lesser of the term of the lease or the estimated useful lives of the assets | ||
Machinery | 10 years | ||
Information Technology equipment | 5 years | ||
Computers and office equipment | 3-5 years | ||
Vehicles | 4 years |
Shortterm_investments_Tables
Short-term investments (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Investment Gain (Loss) of Trading Securities | Investment gains of trading securities for the years ended December 31, 2012 and 2013 consisted of the following and was included in the other income in the consolidated statements of operations: | ||||||||
For the years ended | |||||||||
December 31 | |||||||||
2012 | 2013 | ||||||||
Realized gains from sales of trading securities | $ | 349,338 | $ | 222,532 | |||||
Unrealized holding gains (losses) | 252,455 | — | |||||||
$ | 601,793 | $ | 222,532 | ||||||
Accounts_receivable_Tables
Accounts receivable (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Analysis of Allowance for Doubtful Accounts | An analysis of allowance for doubtful accounts for the years ended December 31, 2012, 2013 and 2014 was as follows: | ||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Balance at beginning of the year | $ | 4,157,614 | $ | 4,127,947 | $ | 3,508,859 | |||||||
Charged to (Reduce from) expenses | 1,064,477 | (16,491 | ) | (180,039 | ) | ||||||||
Charges taken against allowance | (1,094,144 | ) | (602,597 | ) | (201,472 | ) | |||||||
Balance at end of the year | $ | 4,127,947 | $ | 3,508,859 | $ | 3,127,348 | |||||||
Inventory_Tables
Inventory (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory | Inventory consisted of the following: | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Raw materials and work in progress | $ | 3,310,501 | $ | 1,272,379 | |||||
Finished goods and merchandise goods | 13,336,559 | 11,509,362 | |||||||
$ | 16,647,060 | $ | 12,781,741 | ||||||
Other_prepaid_expenses_and_cur1
Other prepaid expenses and current assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Prepaid Expenses and Current Assets | Other prepaid expenses and current assets consisted of the following: | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Value-added tax recoverable | $ | 1,902,630 | $ | 1,580,141 | |||||
Advances to suppliers | 1,510,128 | 2,814,648 | |||||||
Interest receivable | — | 656,785 | |||||||
Prepaid income tax | 140,365 | 28,394 | |||||||
Other prepaid expenses | 3,348,179 | 4,245,432 | |||||||
$ | 6,901,302 | $ | 9,325,400 | ||||||
Property_and_equipment_net_Tab
Property and equipment, net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property and equipment, net | Property and equipment, net consisted of the following: | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Buildings | $ | 27,961,937 | $ | 27,644,891 | |||||
Computers and office equipment | 12,188,023 | 12,820,490 | |||||||
Leasehold improvements | 2,780,058 | 869,130 | |||||||
Vehicles | 916,226 | 872,860 | |||||||
Information Technology equipment | 845,512 | 839,068 | |||||||
Machinery | 640,580 | 644,474 | |||||||
$ | 45,332,336 | $ | 43,690,913 | ||||||
Less: accumulated depreciation and amortization | (16,286,927 | ) | (16,861,205 | ) | |||||
$ | 29,045,409 | $ | 26,829,708 | ||||||
Construction in progress | 709,673 | 10,476 | |||||||
$ | 29,755,082 | $ | 26,840,184 | ||||||
Acquired_intangible_assets_net1
Acquired intangible assets, net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Acquired Intangible Assets, Net | Acquired intangible assets, net consisted of the following: | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Distribution networks | $ | 2,329,849 | $ | 2,329,849 | |||||
Trademarks | 2,928,365 | 2,925,453 | |||||||
$ | 5,258,214 | $ | 5,255,302 | ||||||
Less: accumulated amortization | (3,777,851 | ) | (4,076,635 | ) | |||||
$ | 1,480,363 | $ | 1,178,667 | ||||||
Accrued_Expenses_and_Other_Cur1
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Other taxes payable | $ | 1,923,070 | $ | 1,303,688 | |||||
Accrued employee payroll and welfare | 3,402,678 | 2,919,888 | |||||||
Other payable | 4,910,720 | 2,889,184 | |||||||
Accrued expenses | 2,580,340 | 4,114,212 | |||||||
Advances from customers | 290,952 | 597,614 | |||||||
$ | 13,107,760 | $ | 11,824,586 | ||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt | The Group’s debt consisted of the following: | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Long-term debt, current portion | — | 8,506,324 | |||||||
Total debt, current | — | 8,506,324 | |||||||
Long-term debt | 8,502,198 | — | |||||||
Total | $ | 8,502,198 | $ | 8,506,324 | |||||
Sharebased_compensation_Tables
Share-based compensation (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Share Options and Stock Appreciation Rights Activities | A summary of the share options and SARs activities for the year ended December 31, 2014 and the information regarding the share options and SARs outstanding as of December 31, 2014 were as follows: | ||||||||||||||||
Number of | Weighted average | Weighted | Aggregate | ||||||||||||||
share | exercise price | average | intrinsic | ||||||||||||||
options/ | remaining | value | |||||||||||||||
SARs | contract | ||||||||||||||||
terms | |||||||||||||||||
Share options/SARs outstanding at January 1, 2014 | 2,335,482 | $ | 1.78 | ||||||||||||||
Granted | — | $ | — | ||||||||||||||
Forfeited | — | $ | — | ||||||||||||||
Expired | — | $ | — | ||||||||||||||
Exercised | — | $ | — | ||||||||||||||
Share options/SARs outstanding at December 31, 2014 | 2,335,482 | $ | 1.78 | 0.31 years | $ | — | |||||||||||
Share options/SARs vested or expected to vest at December 31, 2014 | 2,335,482 | $ | 1.78 | 0.31 years | $ | — | |||||||||||
Share options/SAR exercisable at December 31, 2014 | 2,335,482 | $ | 1.78 | 0.31 years | $ | — | |||||||||||
Summary of Restricted Stock Units Activities | A summary of the RSUs activities for the year ended December 31, 2014 was as follows: | ||||||||||||||||
Number of RSUs | Weighted average | ||||||||||||||||
grant date fair value | |||||||||||||||||
Nonvested at January 1, 2014 | 900,000 | $ | 1.43 | ||||||||||||||
Granted | — | $ | 1.43 | ||||||||||||||
Forfeited | (300,000 | ) | $ | 1.43 | |||||||||||||
Vested | (300,000 | ) | $ | 1.43 | |||||||||||||
Nonvested at December 31, 2014 | 300,000 | $ | 1.43 | ||||||||||||||
Taxation_Tables
Taxation (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2012, 2013 and 2014 was as follows: | ||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
(in million) | (in million) | (in million) | |||||||||||
Unrecognized tax benefits at beginning of the year | $ | 2.5 | $ | — | $ | 0.7 | |||||||
Additions in current year | — | 0.7 | 1.1 | ||||||||||
Lapse of statute of limitation | (2.5 | ) | — | — | |||||||||
Unrecognized tax benefits at end of the year | $ | — | $ | 0.7 | $ | 1.8 | |||||||
Current and Deferred Portion of Income Tax | The current and deferred portion of income tax (expenses) benefits included in the consolidated statements of operations were as follows: | ||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Current income tax (expenses) benefits | $ | 1,359,513 | $ | (1,200,896 | ) | $ | (1,280,181 | ) | |||||
Deferred income tax (expenses) benefits | (3,182,139 | ) | 555,133 | 109,664 | |||||||||
(1,822,626 | ) | (645,763 | ) | (1,170,517 | ) | ||||||||
Reconciliation between Effective Income Tax Rate and Statutory Income Tax Rate | Reconciliation between the effective income tax rate and the PRC statutory income tax rate was as follows: | ||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
PRC statutory tax rate | 25 | % | 25 | % | 25 | % | |||||||
Expenses not deductible for tax purposes | (1 | )% | (2 | )% | 1 | % | |||||||
Effect of different tax rate of subsidiary operations in other jurisdiction | (3 | )% | (1 | )% | (1 | )% | |||||||
Change in valuation allowance | (47 | )% | (23 | )% | (24 | )% | |||||||
Effect of change in tax rate on deferred tax assets/liabilities | — | 1 | % | (1 | )% | ||||||||
Recognition of the unrecognized tax benefit | 15 | % | (2 | )% | (3 | )% | |||||||
Effective tax rate | (11 | )% | (2 | )% | (3 | )% | |||||||
Components of Deferred Income Tax Assets and Liabilities | The principal components of the Group’s deferred income tax assets and liabilities as of December 31, 2013 and 2014 were as follows: | ||||||||||||
December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Deferred tax assets: | |||||||||||||
Allowance and reserves | $ | 2,635,126 | $ | 2,807,768 | |||||||||
Accrued expenses | 1,254,642 | 1,683,185 | |||||||||||
Revenue recognition difference | 432,911 | 343,377 | |||||||||||
Advertising expenses | 4,707,264 | 4,420,265 | |||||||||||
YiyangYukang long-term assets reduction | 815 | 812 | |||||||||||
Net operating losses | 11,987,650 | 21,985,889 | |||||||||||
$ | 21,018,408 | $ | 31,241,296 | ||||||||||
Less: valuation allowance | (20,170,712 | ) | (30,287,901 | ) | |||||||||
$ | 847,696 | $ | 953,395 | ||||||||||
Deferred tax liabilities: | |||||||||||||
Fair value step up of retained investment in Shanghai Yimeng | (858,811 | ) | (855,709 | ) | |||||||||
$ | (858,811 | ) | $ | (855,709 | ) | ||||||||
$ | (11,115 | ) | $ | 97,686 | |||||||||
Deferred tax assets were analyzed as: | |||||||||||||
Current | $ | 847,696 | $ | 953,395 | |||||||||
Deferred tax liabilities were analyzed as: | |||||||||||||
Non-current | (858,811 | ) | (855,709 | ) | |||||||||
$ | (858,811 | ) | $ | (855,709 | ) | ||||||||
$ | (11,115 | ) | $ | 97,686 | |||||||||
Other_income_net_Tables
Other income net (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Income (Expenses) | Other income (expenses) consisted of the following: | ||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Interest income | $ | 3,302,882 | $ | 3,298,083 | $ | 2,599,279 | |||||||
Sale of E-Roda trademark | 1,942,682 | — | — | ||||||||||
Investment gain | 601,793 | 308,160 | — | ||||||||||
Others | (92,340 | ) | (58,836 | ) | (455,729 | ) | |||||||
$ | 5,755,017 | $ | 3,547,407 | $ | 2,143,550 | ||||||||
Loss_per_share_Tables
Loss per share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Computation of Basic and Diluted Loss Per Ordinary Share | The computation of basic and diluted loss per ordinary share from operations for the years ended December 31, 2012, 2013 and 2014 was as follows: | ||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Numerator: | |||||||||||||
Net loss attributable to Acorn International, Inc. shareholders from operations—basic and diluted | $ | (17,926,074 | ) | $ | (39,895,878 | ) | $ | (44,328,912 | ) | ||||
Denominator: | |||||||||||||
Weighted average ordinary shares outstanding—basic and diluted | 89,965,979 | 84,115,169 | 82,690,613 | ||||||||||
loss per ordinary share: | |||||||||||||
Basic and diluted | $ | (0.20 | ) | $ | (0.47 | ) | $ | (0.54 | ) | ||||
Commitments_and_contingencies_
Commitments and contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Future Minimum Lease Payments under Non-cancelable Operating Leases Agreements | As of December 31, 2014, future minimum lease payments under non-cancelable operating leases agreements were as follows: | ||||
2015 | $ | 1,387,765 | |||
2016 | 1,110,661 | ||||
2017 | 398,570 | ||||
2018 | 86,452 | ||||
2019 and thereafter | 211,213 | ||||
$ | 3,194,661 | ||||
Commitments for Advertising Contracts | As of December 31, 2014, the commitments for the advertising contracts signed by the Group were as follows: | ||||
2014 | $ | 16,737,049 | |||
Segment_and_geographic_informa1
Segment and geographic information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Revenues by Each Group of Similar Products | The Group’s revenues are all generated from direct sales platform and nationwide distribution networks in the PRC. The revenues by each group of similar products are as follows: | ||||||||||||
For the years ended December 31, | |||||||||||||
Product | 2012 | 2013 | 2014 | ||||||||||
Electronic learning products | $ | 41,345,071 | $ | 40,902,630 | $ | 44,137,557 | |||||||
Collectible products | 20,427,475 | 29,642,629 | 15,413,624 | ||||||||||
Health products | 10,691,723 | 10,098,466 | 9,876,415 | ||||||||||
Kitchen and household | 2,842,536 | 27,008,095 | 9,809,998 | ||||||||||
Mobile phones | 64,712,559 | 25,923,877 | 6,000,241 | ||||||||||
Fitness products | 62,629,956 | 38,427,278 | 4,554,072 | ||||||||||
Cosmetics products | 7,089,145 | 2,311,099 | 853,133 | ||||||||||
Auto products | 452,282 | 323,920 | 191,314 | ||||||||||
Consumer electronics products | 8,489,927 | 807,764 | 61,161 | ||||||||||
Other products | 24,599,540 | 9,704,266 | 4,056,928 | ||||||||||
Total gross revenues | $ | 243,280,214 | $ | 185,150,024 | $ | 94,954,443 | |||||||
Less: sales taxes | (706,540 | ) | (439,144 | ) | (199,721 | ) | |||||||
Total revenues, net | $ | 242,573,674 | $ | 184,710,880 | $ | 94,754,722 | |||||||
Gross Profit by Segments | The gross profit by segments is as follows: | ||||||||||||
Year ended December 31, 2012 | Direct sales | Distribution sales | Total | ||||||||||
Revenue, net | $ | 193,614,500 | $ | 48,959,174 | $ | 242,573,674 | |||||||
Cost of revenue | 96,471,502 | 35,475,084 | 131,946,586 | ||||||||||
Gross profit | $ | 97,142,998 | $ | 13,484,090 | $ | 110,627,088 | |||||||
Year ended December 31, 2013 | Direct sales | Distribution sales | Total | ||||||||||
Revenue, net | $ | 136,416,423 | $ | 48,294,457 | $ | 184,710,880 | |||||||
Cost of revenue | 57,445,266 | 35,046,146 | 92,491,412 | ||||||||||
Gross profit | $ | 78,971,157 | $ | 13,248,311 | $ | 92,219,468 | |||||||
Year ended December 31, 2014 | Direct sales | Distribution sales | Total | ||||||||||
Revenue, net | $ | 45,232,943 | $ | 49,521,779 | $ | 94,754,722 | |||||||
Cost of revenue | 24,352,882 | 32,570,037 | 56,922,919 | ||||||||||
Gross profit | $ | 20,880,061 | $ | 16,951,742 | $ | 37,831,803 | |||||||
Related_party_transactions_Tab
Related party transactions (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
China Branding Company Limited | |||||||||||||
Related Party Transactions | Furthermore, the Group leased out our vacant premises to CBG and provided administrative and human resources services to CBG. Details of the transactions and balances for the years ended December 31, 2014 were as follows: | ||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Lease income | $ | — | $ | — | $ | 97,635 | |||||||
Service income | $ | — | $ | — | $ | 48,818 | |||||||
December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Other receivable | $ | 21,850 | $ | 168,303 | |||||||||
Board of Directors Chairman | |||||||||||||
Related Party Transactions | In 2014, the Group entered into a series of business cooperation with certain entities in which Mr. Robert W. Roche, a major shareholder, a director the executive chairman and CEO of Acorn International, owns significant equity interests. Details of the transactions for the years ended December 31 2014 were as follows: | ||||||||||||
For the years ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Software purchase | $ | — | $ | — | $ | 1,187,922 | |||||||
Service rendered | $ | — | $ | — | $ | 391,800 | |||||||
Goods purchase | $ | — | $ | — | $ | 309,473 |
Recovered_Sheet1
Organization and Principal Activities - Additional Information (Detail) | 12 Months Ended | 12 Months Ended | |||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 |
Mr. Weiguo Ge | Mr. Don Dongjie Yang | Variable Interest Entity, Primary Beneficiary | Variable Interest Entity, Primary Beneficiary | Variable Interest Entity, Primary Beneficiary | Acorn International | Acorn Information Technology (Shanghai) Co., Ltd. ("Acorn Information") | Acorn Information Technology (Shanghai) Co., Ltd. ("Acorn Information") | Acorn Information Technology (Shanghai) Co., Ltd. ("Acorn Information") | Acorn Information Technology (Shanghai) Co., Ltd. ("Acorn Information") | Beijing Acorn Trade Co., Ltd. ("Beijing Acorn") and Shanghai Acorn Network Technology Development Co., Ltd. ("Shanghai Network") | Beijing HJX Technology Development Co., Ltd. ("Beijing HJX") and Shanghai HJX Electronic Technology Co., Ltd. ("HJX Electronic") | Shanghai HJX Digital Technology Co., Ltd. ("Shanghai HJX") | Shanghai HJX Digital Technology Co., Ltd. ("Shanghai HJX") | Shanghai HJX Digital Technology Co., Ltd. ("Shanghai HJX") | |
Entity | Entity | USD ($) | CNY | Maximum | Maximum | Entity | Entity | USD ($) | CNY | ||||||
USD ($) | CNY | Shareholder | Shareholder | ||||||||||||
Organization and Principal Activities [Line Items] | |||||||||||||||
Date of incorporation | 20-Dec-05 | 27-Aug-04 | 27-Aug-04 | 23-Aug-04 | |||||||||||
Number of VIEs which hold direct sales licenses | 2 | 2 | |||||||||||||
Variable interest entity, ownership percentage | 25.00% | 75.00% | 100.00% | 100.00% | |||||||||||
Number of shareholders | 2 | 2 | |||||||||||||
Approximate interest-free loans to the shareholders of the VIEs | $26.70 | 162.5 | $8.70 | 53 | |||||||||||
Approximate additional interest-free loans to the shareholders of the VIEs | $5 | 30.4 | |||||||||||||
Percentage of total ordinary shares outstanding hold by two shareholders | 12.64% | ||||||||||||||
Variable interest entity, number of entities | 4 | 4 | |||||||||||||
Percentage contribution of VIEs, consolidated net revenues | 47.40% | 74.70% | 78.50% | ||||||||||||
Percentage contribution of VIEs, total assets | 11.20% | 11.30% | |||||||||||||
Percentage contribution of VIEs, total liabilities | 14.50% | 15.10% |
Subsidiaries_of_Acorn_Internat
Subsidiaries of Acorn International (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
China DRTV, Inc. ("China DRTV") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 4-Mar-04 |
Place of incorporation | BVI |
Smooth Profit Limited ("Smooth Profit") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 18-Sep-07 |
Place of incorporation | BVI |
MK AND T Communications Limited ("MK AND T") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 27-Oct-98 |
Place of incorporation | Hong Kong |
Bright Rainbow Investments Limited ("Bright Rainbow") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 29-Oct-07 |
Place of incorporation | Hong Kong |
Shanghai Acorn Advertising Broadcasting Co., Ltd. ("Shanghai Advertising") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 19-Aug-04 |
Place of incorporation | PRC |
Shanghai HJX Digital Technology Co., Ltd. ("Shanghai HJX") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 23-Aug-04 |
Place of incorporation | PRC |
Acorn International Electronic Technology (Shanghai) Co., Ltd. ("Acorn Electronic") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 23-Aug-04 |
Place of incorporation | PRC |
Acorn Information Technology (Shanghai) Co., Ltd. ("Acorn Information") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 27-Aug-04 |
Place of incorporation | PRC |
Beijing Acorn Youngleda Oxygen Generating Co., Ltd. ("Beijing Youngleda") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 20-Oct-04 |
Place of incorporation | PRC |
Yiyang Yukang Communication Equipment Co., Ltd. ("Yiyang Yukang") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 29-Nov-05 |
Place of incorporation | PRC |
Zhuhai Sunrana Bio-tech Co., Ltd. ("Zhuhai Sunrana") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 51.00% |
Date of incorporation | 16-Jun-06 |
Place of incorporation | PRC |
Zhuhai Acorn Electronic Technology Co., Ltd. ("Zhuhai Acorn") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 26-Sep-06 |
Place of incorporation | PRC |
Beijing HJZX Software Technology Development Co., Ltd. ("Beijing HJZX") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 22-Jan-07 |
Place of incorporation | PRC |
Zhongshan Meijin Digital Technology Co., Ltd. ("Zhongshan Meijin") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 75.00% |
Date of incorporation | 13-Feb-07 |
Place of incorporation | PRC |
Acorn Trade (Shanghai) Co., Ltd. ("Acorn Trade") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 13-Dec-07 |
Place of incorporation | PRC |
Shanghai Acorn HJX Software Technology Development Co., Ltd. ("HJX Software") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 12-May-09 |
Place of incorporation | PRC |
Wuxi Acorn Enterprise Management Consulting Co., Ltd. ("Wuxi Acorn") | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 29-Jan-10 |
Place of incorporation | PRC |
Star Education & Technology Group Inc. | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 8-Jan-14 |
Place of incorporation | Cayman Island |
Star Education & Technology Limited | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 22-Jan-14 |
Place of incorporation | BVI |
HJX International Limited | |
Organization and Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | 5-Mar-14 |
Place of incorporation | Hong Kong |
Variable_Interest_Detail
Variable Interest (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Beijing Acorn Trade Co., Ltd. ("Beijing Acorn") | |
Variable Interest Entity [Line Items] | |
Date of incorporation | 19-Mar-98 |
Place of incorporation | PRC |
Shanghai Acorn Network Technology Development Co., Ltd. ("Shanghai Network") | |
Variable Interest Entity [Line Items] | |
Date of incorporation | 2-Nov-04 |
Place of incorporation | PRC |
Beijing HJX Technology Development Co., Ltd ("Beijing HJX") | |
Variable Interest Entity [Line Items] | |
Date of incorporation | 16-Sep-13 |
Place of incorporation | PRC |
Shanghai HJX Electronic Technology Co Ltd ("HJX Electronic") | |
Variable Interest Entity [Line Items] | |
Date of incorporation | 3-Dec-13 |
Place of incorporation | PRC |
Summary_of_Financial_Informati
Summary of Financial Information of Group's Four Variable Interest Entities (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Variable Interest Entity [Line Items] | |||
Net revenues | $94,754,722 | $184,710,880 | $242,573,674 |
Net income (loss) | -44,328,912 | -39,895,878 | -17,926,074 |
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Net revenues | 44,907,449 | 137,947,971 | 190,302,130 |
Net income (loss) | ($8,282,712) | $18,873,242 | $1,765,918 |
Recovered_Sheet2
Summary of Principal Accounting Policies - Additional Information (Detail) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2011 | Jun. 30, 2009 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | CNY | CNY | USD ($) | Shanghai Yimeng Software Technology Co Ltd | Shanghai Yimeng Software Technology Co Ltd | EMS | EMS | EMS | EMS | Long-term Debt | Variable Interest Entity, Primary Beneficiary | Variable Interest Entity, Primary Beneficiary | Variable Interest Entity, Primary Beneficiary | Subsequent Event | Minimum | Maximum | |
USD ($) | USD ($) | Accounts Receivable | Accounts Receivable | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||||||
Net loss attributable to Acorn International, Inc. shareholders | ($44,328,912) | ($39,895,878) | ($17,926,074) | ($8,282,712) | $18,873,242 | $1,765,918 | |||||||||||||
Accumulated deficits | -86,190,592 | -41,861,680 | |||||||||||||||||
Net cash provided by (used in) operating activities | -45,632,724 | 2,467,551 | -17,578,047 | ||||||||||||||||
Cash and cash equivalents | 34,686,379 | 82,552,314 | 90,975,155 | 111,180,139 | 2,482,194 | 5,932,591 | |||||||||||||
Advertising expenses | 16,232,840 | 51,730,624 | 58,337,710 | ||||||||||||||||
Prepaid advertising expenses | 6,161,815 | 3,214,784 | |||||||||||||||||
Monthly labor cost reduction | -300,000 | ||||||||||||||||||
Repayment of line of credit | 8,450,000 | ||||||||||||||||||
Amount of borrowing facility | 16,100,000 | 100,000,000 | |||||||||||||||||
Cash and cash equivalents and restricted cash | 39,485,342 | 88,903,710 | 241,610,810 | 542,037,027 | |||||||||||||||
Restricted cash, current | 9,759,765 | 347,718 | 9,642,098 | 117,666 | 118,093 | ||||||||||||||
Restricted cash, non-current | 0 | 9,677,049 | |||||||||||||||||
Acquired intangible assets useful life | 5 years | 15 years | |||||||||||||||||
Cost method percentage of ownership interest | 12.90% | 18.00% | |||||||||||||||||
Sales taxes | 199,721 | 439,144 | 706,540 | ||||||||||||||||
Gross direct sales revenues | 45,361,639 | 136,810,535 | 194,220,344 | ||||||||||||||||
Gross distribution sales revenues | 49,592,804 | 48,339,489 | 49,059,870 | ||||||||||||||||
Shipping and handling costs | 4,902,307 | 12,351,337 | 15,222,530 | ||||||||||||||||
Government subsidies | 829,238 | 2,130,623 | 2,997,096 | ||||||||||||||||
Gain (loss) on foreign currency transactions | -31,847 | 184,157 | -20,498 | ||||||||||||||||
Accounts receivables | $7,089,542 | $6,097,658 | $0 | $1,140,368 | $1,199,717 | $3,311,055 | |||||||||||||
Percentage of accounts receivables | 10.00% | 18.70% |
Estimated_Useful_Lives_of_Prop
Estimated Useful Lives of Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment estimated useful life | 20 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment useful life description | Lesser of the term of the lease or the estimated useful lives of the assets |
Machinery | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment estimated useful life | 10 years |
Information Technology equipment | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment estimated useful life | 5 years |
Computers and office equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment estimated useful life | 3 years |
Computers and office equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment estimated useful life | 5 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment estimated useful life | 4 years |
ShortTerm_Investments_Addition
Short-Term Investments - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Investment [Line Items] | ||
Trading securities | $0 | $0 |
Investment_Gain_Loss_of_Tradin
Investment Gain (Loss) of Trading Securities (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Gain (Loss) on Investments [Line Items] | |||
Realized gains from sales of trading securities | $222,532 | $349,338 | |
Unrealized holding gains (losses) | 0 | 252,455 | |
Gains on trading securities | $0 | $222,532 | $601,793 |
Analysis_of_Allowance_for_Doub
Analysis of Allowance for Doubtful Accounts (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Balance at beginning of the year | $3,508,859 | $4,127,947 | $4,157,614 |
Charged to (Reduce from) expenses | -180,039 | -16,491 | 1,064,477 |
Charges taken against allowance | -201,472 | -602,597 | -1,094,144 |
Balance at end of the year | $3,127,348 | $3,508,859 | $4,127,947 |
Inventory_Detail
Inventory (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Inventory [Line Items] | ||
Raw materials and work in progress | $1,272,379 | $3,310,501 |
Finished goods and merchandise goods | 11,509,362 | 13,336,559 |
Inventory | $12,781,741 | $16,647,060 |
Inventory_Additional_Informati
Inventory - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Inventory [Line Items] | |||
Inventory write down | $936,126 | $3,856,608 | $270,902 |
Recovered_Sheet3
Other Prepaid Expenses and Current Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | ||
Value-added tax recoverable | $1,580,141 | $1,902,630 |
Advances to suppliers | 2,814,648 | 1,510,128 |
Interest receivable | 656,785 | 0 |
Prepaid income tax | 28,394 | 140,365 |
Other prepaid expenses | 4,245,432 | 3,348,179 |
Other prepaid expenses and current assets, net of allowance for doubtful accounts | $9,325,400 | $6,901,302 |
Property_and_Equipment_Net_Det
Property and Equipment Net (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $43,690,913 | $45,332,336 |
Less: accumulated depreciation and amortization | -16,861,205 | -16,286,927 |
Property Plant And Equipment Excluding Construction In Progress, Total | 26,829,708 | 29,045,409 |
Construction in progress | 10,476 | 709,673 |
Property and equipment, net | 26,840,184 | 29,755,082 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | 27,644,891 | 27,961,937 |
Computers and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | 12,820,490 | 12,188,023 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | 869,130 | 2,780,058 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | 872,860 | 916,226 |
Information Technology equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | 839,068 | 845,512 |
Machinery | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $644,474 | $640,580 |
Property_and_Equipment_Net_Add
Property and Equipment, Net - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expenses for property and equipment | $3,066,565 | $3,470,338 | $3,307,549 |
Leasehold improvement disposals | $529,187 |
Recovered_Sheet4
Acquired Intangible Assets, Net (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | $5,255,302 | $5,258,214 |
Less: accumulated amortization | -4,076,635 | -3,777,851 |
Acquired intangible assets, net | 1,178,667 | 1,480,363 |
Distribution networks | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | 2,329,849 | 2,329,849 |
Trademarks | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | $2,925,453 | $2,928,365 |
Recovered_Sheet5
Acquired Intangible Assets, Net - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset amortization expense | $301,697 | $316,121 | $330,220 |
Estimated amortization expense, 2015 | 301,669 | ||
Estimated amortization expense, 2016 | 301,699 | ||
Estimated amortization expense, 2017 | 221,584 | ||
Estimated amortization expense, 2018 | 141,470 | ||
Estimated amortization expense, 2019 | $141,470 |
Investments_in_Affiliates_Addi
Investments in Affiliates - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 31, 2010 | Dec. 31, 2011 | Dec. 31, 2009 | Feb. 28, 2013 | |
Investments in and Advances to Affiliates [Line Items] | |||||||
Equity in losses of affiliates | ($235,161) | ($205,567) | $0 | ||||
Payments to acquire equity method investments | 0 | 0 | 1,300,000 | ||||
Shanghai An-Nai-Chi | |||||||
Investments in and Advances to Affiliates [Line Items] | |||||||
Percentage of ownership interest | 51.00% | ||||||
Cash injection to one of Group's subsidiary | 1,500,000 | ||||||
Equity method percentage of ownership interest | 33.20% | ||||||
Fair value of equity method ownership interest | 1,100,000 | ||||||
Equity in losses of affiliates | 0 | 0 | 0 | -743,153 | |||
Equity method investment carrying amount | 0 | ||||||
China Branding Company Limited | |||||||
Investments in and Advances to Affiliates [Line Items] | |||||||
Equity method percentage of ownership interest | 9.30% | ||||||
Equity in losses of affiliates | 235,161 | 205,567 | |||||
Payments to acquire equity method investments | $1,300,000 | ||||||
Percentage of ownership interest sold | 0.60% | ||||||
China Branding Company Limited | Maximum | |||||||
Investments in and Advances to Affiliates [Line Items] | |||||||
Cost method percentage of ownership interest | 9.30% | ||||||
China Branding Company Limited | Minimum | |||||||
Investments in and Advances to Affiliates [Line Items] | |||||||
Cost method percentage of ownership interest | 8.70% | ||||||
China Branding Company Limited | Board of Directors Chairman | |||||||
Investments in and Advances to Affiliates [Line Items] | |||||||
Equity method percentage of ownership interest | 7.60% |
Accrued_Expenses_and_Other_Cur2
Accrued Expenses and Other Current Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accrued Expenses and Other Current Liabilities [Line Items] | ||
Other taxes payable | $1,303,688 | $1,923,070 |
Accrued employee payroll and welfare | 2,919,888 | 3,402,678 |
Other payable | 2,889,184 | 4,910,720 |
Accrued expenses | 4,114,212 | 2,580,340 |
Advances from customers | 597,614 | 290,952 |
Accrued expenses and other current liabilities | $11,824,586 | $13,107,760 |
Accrued_Expenses_and_Other_Cur3
Accrued Expenses and Other Current Liabilities - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Accrued Expenses and Other Current Liabilities [Line Items] | |
Value-added tax rate | 17.00% |
Business tax rate | 5.00% |
Debt_Detail
Debt (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | ||
Long-term debt, current portion | $8,506,324 | $0 |
Total debt, current | 8,506,324 | 0 |
Long-term debt | 0 | 8,502,198 |
Total | $8,506,324 | $8,502,198 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Debt Instrument [Line Items] | |
Long term borrowing agreement, maturity period | 2 years |
Long term borrowing agreement, start date | 13-Mar-13 |
Long term borrowing agreement, maturity date | 10-Feb-15 |
Long term borrowing agreement, maximum borrowing credit amount | $8.45 |
Long term borrowing agreement,effective interest rate | 2.25% |
USD 6-month Libor | |
Debt Instrument [Line Items] | |
Long term borrowing agreement, percentage added to the reference rate | 1.80% |
ShareBased_Compensation_Additi
Share-Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-06 | Dec. 31, 2010 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangements, authorized ordinary shares for issuance | 24,133,000 | ||||
Share-based compensation arrangements, compensation expense | $428,000 | $446,412 | $424,445 | ||
Weighted-average fair value of share options and SARs granted | $0 | $0 | $0 | ||
Total fair value of options and SARs vested | 0 | 0 | 0 | ||
Aggregate intrinsic value | 0 | ||||
Aggregate intrinsic value of options and SARs exercised | 0 | ||||
Unrecognized compensation cost related to non-vested share-based compensation arrangements | $71,333 | ||||
Unrecognized compensation cost related to non-vested share-based compensation arrangements, weighted-average recognition period | 1 month 28 days | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangements, awards expiration period | 10 years | ||||
Stock Appreciation Rights (SARs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangements, awards expiration period | 6 years | ||||
Stock Options And Stock Appreciation Rights | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangements, percentage of awards vesting upon grant | 25.00% | ||||
Share-based compensation arrangements, awards to vest on the last day of each year | 75.00% | ||||
Share-based compensation arrangements, awards vesting period | 3 years | ||||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangements, awards to vest on the last day of each year | 33.33% | ||||
Share-based compensation arrangements, awards vesting period | 3 years | 3 years | |||
Share-based compensation arrangements, awards to vest on the last day of each three-month period | 8.33% |
Summary_of_Share_Options_and_S
Summary of Share Options and Stock Appreciation Rights Activities (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Number of share options / SARs | |
Share options/SARs outstanding at January 1, 2014 | 2,335,482 |
Granted | 0 |
Forfeited | 0 |
Expired | 0 |
Exercised | 0 |
Share options/SARs outstanding at December 31, 2014 | 2,335,482 |
Share options/SARs vested or expected to vest at December 31, 2014 | 2,335,482 |
Share options/SAR exercisable at December 31, 2014 | 2,335,482 |
Weighted Average Exercise Price | |
Share options/SARs outstanding at January 1, 2014 | $1.78 |
Granted | $0 |
Forfeited | $0 |
Expired | $0 |
Exercised | $0 |
Share options/SARs outstanding at December 31, 2014 | $1.78 |
Share options/SARs vested or expected to vest at December 31, 2014 | $1.78 |
Share options/SAR exercisable at December 31, 2014 | $1.78 |
Weighted Average Remaining Contractual Life | |
Share options/SARs outstanding at December 31, 2014 | 3 months 22 days |
Share options/SARs vested or expected to vest at December 31, 2014 | 3 months 22 days |
Share options/SAR exercisable at December 31, 2014 | 3 months 22 days |
Aggregate Intrinsic Value | |
Share options/SARs outstanding at December 31, 2014 | $0 |
Share options/SARs vested or expected to vest at December 31, 2014 | 0 |
Share options/SAR exercisable at December 31, 2014 | $0 |
Summary_of_Restricted_Stock_Un
Summary of Restricted Stock Units Activities (Detail) (Restricted Stock Units (RSUs), USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Restricted Stock Units (RSUs) | |
Number of RSUs | |
Nonvested at January 1, 2014 | 900,000 |
Granted | 0 |
Forfeited | -300,000 |
Vested | -300,000 |
Nonvested at December 31, 2014 | 300,000 |
Weighted average grant date fair value | |
Nonvested at January 1, 2014 | $1.43 |
Granted | $1.43 |
Forfeited | $1.43 |
Vested | $1.43 |
Nonvested at December 31, 2014 | $1.43 |
Taxation_Additional_Informatio
Taxation - Additional Information (Detail) | 12 Months Ended | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | USD ($) | Minimum | Maximum | CHINA | Non-resident Enterprises | Subsidiaries | Subsidiaries | Subsidiaries | Subsidiaries | Subsidiaries | Subsidiaries | Subsidiaries | Subsidiaries | Subsidiaries | Subsidiaries | |
CHINA | CHINA | CHINA | CHINA | CHINA | CHINA | CHINA | CHINA | CHINA | CHINA | CHINA | ||||||||
Maximum | Non-Transfer Pricing Matters | Non-Transfer Pricing Matters | Transfer Pricing Matters | Transfer Pricing Matters | Transfer Pricing Matters | Underpayment of income taxes is due to computational errors made by the taxpayer | Underpayment of income tax liability exceeding RMB100,000 (approximately $15,000) | Underpayment of income tax liability exceeding RMB100,000 (approximately $15,000) | Underpayment of income tax liability exceeding RMB100,000 (approximately $15,000) | |||||||||
Minimum | Maximum | Minimum | Maximum | Minimum | Minimum | |||||||||||||
USD ($) | CNY | |||||||||||||||||
Income Taxes [Line Items] | ||||||||||||||||||
Enterprise income tax rate | 25.00% | 25.00% | 25.00% | 25.00% | ||||||||||||||
Enterprise income tax rate, effective date | 1/1/08 | |||||||||||||||||
Enterprise Income Tax law, transition period | 5 years | |||||||||||||||||
Foreign invested manufacturing enterprises, scheduled operational period | 10 years | |||||||||||||||||
Tax exemption period | 2 years | |||||||||||||||||
Tax rate reduction period | 3 years | |||||||||||||||||
Tax rate reduction starting from the first profit making year | 50.00% | |||||||||||||||||
Tax holiday | 5 years | |||||||||||||||||
Tax payable without tax holidays | $0 | $204,884 | $49,642 | |||||||||||||||
Increase (decrease) in basic and diluted loss per ordinary share from continuing operations due to tax holidays | $0 | $0 | $0 | |||||||||||||||
Income tax rate | 10.00% | |||||||||||||||||
Dividend withholding tax rate | 10.00% | |||||||||||||||||
Unrecognized tax benefits would impact the effective if recognized | 1,800,000 | 700,000 | 0 | 2,500,000 | ||||||||||||||
Liability for uncertain tax positions, current | 1,100,000 | 700,000 | 0 | |||||||||||||||
Income tax examination year under examination | 2010 | 2014 | 2004 | 2014 | ||||||||||||||
Period of statute of limitations | 10 years | 3 years | 5 years | |||||||||||||||
Underpayment of income tax liability | 15,000 | 100,000 | ||||||||||||||||
Income tax losses carrying forward | 88,694,725 | |||||||||||||||||
Income tax losses carrying forward, expiration year | 2015 | 2019 | ||||||||||||||||
Valuation allowances recognized | $10,100,000 | $9,200,000 | $7,600,000 |
Reconciliation_of_Beginning_an
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Contingency [Line Items] | |||
Unrecognized tax benefits at beginning of the year | $0.70 | $0 | $2.50 |
Additions in current year | 1.1 | 0.7 | 0 |
Lapse of statute of limitation | 0 | 0 | -2.5 |
Unrecognized tax benefits at end of the year | $1.80 | $0.70 | $0 |
Current_and_Deferred_Portion_o
Current and Deferred Portion of Income Tax (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Components Of Income Tax Expense Benefit [Line Items] | |||
Current income tax (expenses) benefits | ($1,280,181) | ($1,200,896) | $1,359,513 |
Deferred income tax (expenses) benefits | 109,664 | 555,133 | -3,182,139 |
Income tax expenses | ($1,170,517) | ($645,763) | ($1,822,626) |
Reconciliation_between_Effecti
Reconciliation between Effective Income Tax Rate and Statutory Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule Of Effective Tax Rates [Line Items] | |||
PRC statutory tax rate | 25.00% | 25.00% | 25.00% |
Expenses not deductible for tax purposes | 1.00% | -2.00% | -1.00% |
Effect of different tax rate of subsidiary operations in other jurisdiction | -1.00% | -1.00% | -3.00% |
Change in valuation allowance | -24.00% | -23.00% | -47.00% |
Effect of change in tax rate on deferred tax assets/liabilities | -1.00% | 1.00% | 0.00% |
Recognition of the unrecognized tax benefit | -3.00% | -2.00% | 15.00% |
Effective tax rate | -3.00% | -2.00% | -11.00% |
Components_of_Deferred_Income_
Components of Deferred Income Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||
Allowance and reserves | $2,807,768 | $2,635,126 |
Accrued expenses | 1,683,185 | 1,254,642 |
Revenue recognition difference | 343,377 | 432,911 |
Advertising expenses | 4,420,265 | 4,707,264 |
YiyangYukang long-term assets reduction | 812 | 815 |
Net operating losses | 21,985,889 | 11,987,650 |
Deferred Tax Assets, Gross, Total | 31,241,296 | 21,018,408 |
Less: valuation allowance | -30,287,901 | -20,170,712 |
Deferred Tax Assets, Net of Valuation Allowance, Total | 953,395 | 847,696 |
Deferred tax liabilities: | ||
Fair value step up of retained investment in Shanghai Yimeng | -855,709 | -858,811 |
Deferred Tax Liabilities, Net | -855,709 | -858,811 |
Deferred Tax Assets, Net, Total | 97,686 | -11,115 |
Deferred tax assets were analyzed as: | ||
Current | 953,395 | 847,696 |
Deferred tax liabilities were analyzed as: | ||
Non-current | -855,709 | -858,811 |
Deferred Tax Liabilities, Net | -855,709 | -858,811 |
Deferred Tax Assets, Net | $97,686 | ($11,115) |
Other_Income_Expense_Detail
Other Income (Expense) (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Income And Other Expense Disclosure [Line Items] | |||
Interest income | $2,599,279 | $3,298,083 | $3,302,882 |
Sale of E-Roda trademark | 0 | 0 | 1,942,682 |
Investment gain | 0 | 308,160 | 601,793 |
Others | -455,729 | -58,836 | -92,340 |
Other expenses | $2,143,550 | $3,547,407 | $5,755,017 |
Computation_of_Basic_and_Dilut
Computation of Basic and Diluted Loss Per Ordinary Share (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Numerator: | |||
Net loss attributable to Acorn International, Inc. shareholders from operations-basic and diluted | ($44,328,912) | ($39,895,878) | ($17,926,074) |
Denominator: | |||
Weighted average ordinary shares outstanding-basic and diluted | 82,690,613 | 84,115,169 | 89,965,979 |
Loss per ordinary share: | |||
Basic and diluted | ($0.54) | ($0.47) | ($0.20) |
Loss_Per_Share_Additional_Info
Loss Per Share - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of diluted income (loss) per share | 2,635,482 | 3,235,482 | 4,443,648 |
Share_Repurchase_Program_Addit
Share Repurchase Program - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended |
Sep. 30, 2012 | Nov. 30, 2012 | |
Equity, Class of Treasury Stock [Line Items] | ||
Discount of stock repurchased, percentage | 15.20% | |
Common Stock | ||
Equity, Class of Treasury Stock [Line Items] | ||
Shares authorized to repurchase, shares | 7,859,550 | |
Purchase price, per share | $1.10 | |
American Depository Share | ||
Equity, Class of Treasury Stock [Line Items] | ||
Shares authorized to repurchase, shares | 2,619,850 | |
Purchase price, per share | $3.30 |
Mainland_China_Contribution_Pl1
Mainland China Contribution Plan and Profit Appropriation - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contribution towards retirement plan | $1,952,480 | $2,671,372 | $1,952,704 |
Employer contribution towards benefit plan | 1,968,199 | 2,610,731 | 2,036,029 |
Percentage of profit after tax transferred to statutory surplus reserve | 10.00% | ||
Statutory reserve balance | $7,674,602 | $7,648,288 | |
Required percentage of statutory surplus reserve fund to registered capital, maximum | 50.00% |
Recovered_Sheet6
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Commitments and Contingencies [Line Items] | |||
Rental expenses under operating leases | $2,908,304 | $2,753,740 | $2,216,502 |
Prepaid advertising expense | 6,161,815 | 3,214,784 | |
Contracts | |||
Commitments and Contingencies [Line Items] | |||
Prepaid advertising expense | $6,111,611 |
Future_Minimum_Lease_Payments_
Future Minimum Lease Payments under Non-cancelable Operating Leases Agreements (Detail) (USD $) | Dec. 31, 2014 |
Operating Leased Assets [Line Items] | |
2015 | $1,387,765 |
2016 | 1,110,661 |
2017 | 398,570 |
2018 | 86,452 |
2019 and thereafter | 211,213 |
Operating Leases, Future Minimum Payments Due, Total | $3,194,661 |
Commitments_for_Advertising_Co
Commitments for Advertising Contracts (Detail) (USD $) | Dec. 31, 2014 |
Commitments and Contingencies [Line Items] | |
2014 | $16,737,049 |
Recovered_Sheet7
Segment and Geographic Information - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Customer | Customer | Customer | |
Segment | |||
Segment Reporting Information [Line Items] | |||
Number of operating and reporting segments | 2 | ||
Customer accounted for 10% or more of the Group's net revenues | 0 | 0 | 0 |
Revenues_by_Each_Group_of_Simi
Revenues by Each Group of Similar Products (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Segment Reporting Information [Line Items] | |||
Total gross revenues | $94,954,443 | $185,150,024 | $243,280,214 |
Less: sales taxes | -199,721 | -439,144 | -706,540 |
Total revenues, net | 94,754,722 | 184,710,880 | 242,573,674 |
Electronic learning products | |||
Segment Reporting Information [Line Items] | |||
Total gross revenues | 44,137,557 | 40,902,630 | 41,345,071 |
Fitness products | |||
Segment Reporting Information [Line Items] | |||
Total gross revenues | 4,554,072 | 38,427,278 | 62,629,956 |
Collectible products | |||
Segment Reporting Information [Line Items] | |||
Total gross revenues | 15,413,624 | 29,642,629 | 20,427,475 |
Kitchen and household | |||
Segment Reporting Information [Line Items] | |||
Total gross revenues | 9,809,998 | 27,008,095 | 2,842,536 |
Mobile phones | |||
Segment Reporting Information [Line Items] | |||
Total gross revenues | 6,000,241 | 25,923,877 | 64,712,559 |
Health products | |||
Segment Reporting Information [Line Items] | |||
Total gross revenues | 9,876,415 | 10,098,466 | 10,691,723 |
Cosmetics products | |||
Segment Reporting Information [Line Items] | |||
Total gross revenues | 853,133 | 2,311,099 | 7,089,145 |
Consumer electronics products | |||
Segment Reporting Information [Line Items] | |||
Total gross revenues | 61,161 | 807,764 | 8,489,927 |
Auto products | |||
Segment Reporting Information [Line Items] | |||
Total gross revenues | 191,314 | 323,920 | 452,282 |
Other products | |||
Segment Reporting Information [Line Items] | |||
Total gross revenues | $4,056,928 | $9,704,266 | $24,599,540 |
Gross_Profit_By_Segments_Detai
Gross Profit By Segments (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Segment Reporting Information [Line Items] | |||
Revenue, net | $94,754,722 | $184,710,880 | $242,573,674 |
Cost of revenue | 56,922,919 | 92,491,412 | 131,946,586 |
Gross profit | 37,831,803 | 92,219,468 | 110,627,088 |
Direct Sales | |||
Segment Reporting Information [Line Items] | |||
Revenue, net | 45,232,943 | 136,416,423 | 193,614,500 |
Cost of revenue | 24,352,882 | 57,445,266 | 96,471,502 |
Gross profit | 20,880,061 | 78,971,157 | 97,142,998 |
Distribution Sale | |||
Segment Reporting Information [Line Items] | |||
Revenue, net | 49,521,779 | 48,294,457 | 48,959,174 |
Cost of revenue | 32,570,037 | 35,046,146 | 35,475,084 |
Gross profit | $16,951,742 | $13,248,311 | $13,484,090 |
Related_Party_Transactions_Par
Related Party Transactions, Partnership Agreements (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Software purchase | |||
Related Party Transaction [Line Items] | |||
Related party transaction | $1,187,922 | $0 | $0 |
Service rendered | |||
Related Party Transaction [Line Items] | |||
Related party transaction | 391,800 | 0 | 0 |
Goods purchase | |||
Related Party Transaction [Line Items] | |||
Related party transaction | $309,473 | $0 | $0 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Jul. 04, 2013 | |
Related Party Transaction [Line Items] | ||
Payment of Related party | $1,200,000 | |
Related Party | China Branding Company Limited | ||
Related Party Transaction [Line Items] | ||
Debt instrument, face amount | 21,850 | |
Related party loan | $21,850 | |
Debt instrument, interest rate, stated percentage | 7.00% | 7.00% |
Related_Party_Transactions_and
Related Party Transactions and Balances, Leased Out Vacant Premises to CBG (Detail) (China Branding Company Limited, USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Related Party Transaction [Line Items] | |||
Other receivable | $168,303 | $21,850 | |
Lease income | |||
Related Party Transaction [Line Items] | |||
Related party transaction | 97,635 | 0 | 0 |
Service income | |||
Related Party Transaction [Line Items] | |||
Related party transaction | $48,818 | $0 | $0 |
Restricted_Net_Assets_Addition
Restricted Net Assets - Additional Information (Detail) (Subsidiaries, USD $) | Dec. 31, 2014 |
Subsidiaries | |
Restricted net assets | $4,497,180 |
Retained earnings unavailable for distribution as a normal dividend | $20,336,734 |
Financial_Information_of_Paren
Financial Information of Parent Company Balance Sheets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current assets: | ||||
Cash and cash equivalents | $34,686,379 | $82,552,314 | $90,975,155 | $111,180,139 |
Total current assets | 80,880,489 | 116,608,532 | ||
Total assets | 125,732,462 | 175,353,713 | ||
Current liabilities: | ||||
Current portion of long-term debt | 8,506,324 | 0 | ||
Total current liabilities | 33,204,904 | 29,720,551 | ||
Long-term debt | 0 | 8,502,198 | ||
Total liabilities | 34,060,613 | 39,081,560 | ||
Equity: | ||||
Ordinary shares ($0.01 par value; 100,000,000 shares authorized, 94,937,174 and 95,237,174 shares issued and 82,449,791 and 82,749,791 shares outstanding as of December 31, 2013 and 2014, respectively) | 952,372 | 949,372 | ||
Additional paid-in capital | 161,924,810 | 161,499,810 | ||
Accumulated deficits | -86,190,592 | -41,861,680 | ||
Accumulated other comprehensive income | 34,584,804 | 35,284,912 | ||
Treasury stock, at cost (12,487,383 and 12,487,383 shares as of December 31, 2013 and 2014, respectively) | -20,109,451 | -20,109,451 | ||
Total Acorn International, Inc. shareholders' equity | 91,161,943 | 135,762,963 | ||
Total liabilities and equity | 125,732,462 | 175,353,713 | ||
Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 4,928,041 | 2,708,804 | 3,603,676 | 4,116,849 |
Other current assets | 88,420 | 69,153 | ||
Amounts due from subsidiaries | 8,881,560 | 8,909,203 | ||
Total current assets | 13,898,021 | 11,687,160 | ||
Investments in subsidiaries | 65,447,106 | 111,453,643 | ||
Total assets | 79,345,127 | 123,140,803 | ||
Current liabilities: | ||||
Other current liabilities | 206,414 | 254,980 | ||
Amount due to subsidiaries | 849,784 | 0 | ||
Current portion of long-term debt | 8,506,324 | 0 | ||
Total current liabilities | 9,562,522 | 254,980 | ||
Long-term debt | 0 | 8,502,198 | ||
Total liabilities | 9,562,522 | 8,757,178 | ||
Equity: | ||||
Ordinary shares ($0.01 par value; 100,000,000 shares authorized, 94,937,174 and 95,237,174 shares issued and 82,449,791 and 82,749,791 shares outstanding as of December 31, 2013 and 2014, respectively) | 952,372 | 949,372 | ||
Additional paid-in capital | 159,387,286 | 158,962,286 | ||
Accumulated deficits | -105,032,406 | -60,703,494 | ||
Accumulated other comprehensive income | 34,584,804 | 35,284,912 | ||
Treasury stock, at cost (12,487,383 and 12,487,383 shares as of December 31, 2013 and 2014, respectively) | -20,109,451 | -20,109,451 | ||
Total Acorn International, Inc. shareholders' equity | 69,782,605 | 114,383,625 | ||
Total liabilities and equity | $79,345,127 | $123,140,803 |
Financial_Information_of_Paren1
Financial Information of Parent Company Balance Sheets (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Condensed Financial Statements, Captions [Line Items] | ||
Ordinary shares, par value | $0.01 | $0.01 |
Ordinary shares, shares authorized | 100,000,000 | 100,000,000 |
Ordinary shares, shares issued | 95,237,174 | 94,937,174 |
Ordinary shares, shares outstanding | 82,749,791 | 82,449,791 |
Treasury stock, shares | 12,487,383 | 12,487,383 |
Parent Company | ||
Condensed Financial Statements, Captions [Line Items] | ||
Ordinary shares, par value | $0.01 | $0.01 |
Ordinary shares, shares authorized | 100,000,000 | 100,000,000 |
Ordinary shares, shares issued | 95,237,174 | 94,937,174 |
Ordinary shares, shares outstanding | 82,749,791 | 82,449,791 |
Treasury stock, shares | 12,487,383 | 12,487,383 |
Financial_Information_of_Paren2
Financial Information of Parent Company Statements of Operations (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Operating expenses: | |||
Other selling and marketing expenses | $40,177,216 | $54,873,872 | $50,346,118 |
General and administrative expenses | 28,417,373 | 30,680,912 | 27,070,799 |
Total operating expenses | 82,706,221 | 134,670,847 | 132,477,874 |
Loss from operations | -44,874,418 | -42,451,379 | -21,850,786 |
Other expenses | 2,143,550 | 3,547,407 | 5,755,017 |
Income (loss) before income taxes and equity in losses of affiliates | -42,920,731 | -39,056,903 | -16,095,769 |
Income taxes | -1,170,517 | -645,763 | -1,822,626 |
Net loss attributable to Acorn International, Inc. shareholders | -44,328,912 | -39,895,878 | -17,926,074 |
Parent Company | |||
Operating expenses: | |||
Other selling and marketing expenses | 357 | 640 | 0 |
General and administrative expenses | 1,888,954 | 1,131,520 | 1,479,363 |
Total operating expenses | 1,889,311 | 1,132,160 | 1,479,363 |
Loss from operations | -1,889,311 | -1,132,160 | -1,479,363 |
Equity in losses of subsidiaries | -42,249,948 | -38,650,417 | -16,446,388 |
Other expenses | -189,653 | -113,301 | -323 |
Income (loss) before income taxes and equity in losses of affiliates | -44,328,912 | -39,895,878 | -17,926,074 |
Income taxes | 0 | 0 | 0 |
Net loss attributable to Acorn International, Inc. shareholders | ($44,328,912) | ($39,895,878) | ($17,926,074) |
Financial_Information_of_Paren3
Financial Information of Parent Company Statements of Other Comprehensive Loss (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Condensed Financial Statements, Captions [Line Items] | |||
Net loss | ($44,328,912) | ($39,895,878) | ($17,926,074) |
Other comprehensive income, net of tax | |||
Foreign currency translation adjustments | -701,895 | 4,578,301 | 400,568 |
Comprehensive loss | -45,028,304 | -35,329,932 | -17,517,827 |
Parent Company | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net loss | -44,328,912 | -39,895,878 | -17,926,074 |
Other comprehensive income, net of tax | |||
Foreign currency translation adjustments | -700,108 | 4,564,209 | 399,847 |
Comprehensive loss | ($45,029,020) | ($35,331,669) | ($17,526,227) |
Financial_Information_of_Paren4
Financial Information of Parent Company Statements of Cash Flows (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Operating activities: | |||
Net loss attributable to Acorn International, Inc. shareholders | ($44,328,912) | ($39,895,878) | ($17,926,074) |
Share-based compensation | 428,000 | 446,412 | 424,445 |
Changes in operating assets and liabilities: | |||
Net cash provided by (used in) operating activities | -45,632,724 | 2,467,551 | -17,578,047 |
Investing activities: | |||
Net cash provided by investing activities | -1,714,262 | -13,874,461 | -2,896,282 |
Financing activities: | |||
Increase in long-term debt | 0 | 8,450,000 | 0 |
Repurchase of ordinary shares | 0 | -8,645,505 | 0 |
Dividends paid | 0 | 0 | -467 |
Net cash used in financing activities | 0 | -195,505 | -467 |
Net decrease in cash and cash equivalents | -47,865,935 | -8,422,841 | -20,204,984 |
Cash and cash equivalents at the beginning of the year | 82,552,314 | 90,975,155 | 111,180,139 |
Cash and cash equivalents at the end of the year | 34,686,379 | 82,552,314 | 90,975,155 |
Long-term Debt | |||
Operating activities: | |||
Accrued interests | 189,863 | 152,931 | 0 |
Parent Company | |||
Operating activities: | |||
Net loss attributable to Acorn International, Inc. shareholders | -44,328,912 | -39,895,878 | -17,926,074 |
Share-based compensation | 428,000 | 446,412 | 424,445 |
Equity in (earnings) losses of subsidiaries | 42,249,948 | 38,650,417 | 16,446,388 |
Changes in operating assets and liabilities: | |||
Other current assets | -19,267 | 19,260 | 10,432 |
Amounts due from subsidiaries | 27,643 | 0 | 559,832 |
Amounts due to subsidiaries | 849,784 | ||
Other current liabilities | -48,564 | -72,509 | -27,729 |
Net cash provided by (used in) operating activities | -837,242 | -699,367 | -512,706 |
Investing activities: | |||
Cash received from capital deduction of YiyangYukang | 3,056,479 | 0 | 0 |
Net cash provided by investing activities | 3,056,479 | 0 | 0 |
Financing activities: | |||
Increase in long-term debt | 0 | 8,450,000 | 0 |
Repurchase of ordinary shares | 0 | -8,645,505 | 0 |
Dividends paid | 0 | 0 | -467 |
Net cash used in financing activities | 0 | -195,505 | -467 |
Net decrease in cash and cash equivalents | 2,219,237 | -894,872 | -513,173 |
Cash and cash equivalents at the beginning of the year | 2,708,804 | 3,603,676 | 4,116,849 |
Cash and cash equivalents at the end of the year | 4,928,041 | 2,708,804 | 3,603,676 |
Parent Company | Long-term Debt | |||
Operating activities: | |||
Accrued interests | $4,126 | $152,931 | $0 |
Note_to_Schedule_I_Additional_
Note to Schedule I - Additional Information (Detail) | Dec. 31, 2013 |
Condensed Financial Statements, Captions [Line Items] | |
Restricted net assets of consolidated subsidiaries as percentage of consolidated net assets | 25.00% |