| BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Financial Statement Preparation and Presentation The accompanying consolidated financial statements
have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC)
and generally accepted accounting principles in the United States (U.S. GAAP). As mentioned in Note 1 and Note 3, the company
is winding down its commercial vehicle sales, leasing and support business and its insurance agency business and therefore has
classified them as discontinued operations. Certain accounts in the consolidated statements of operations and comprehensive (loss)
income for the years ended December 31, 2015, 2014 and 2013, and balances in the consolidated balance sheets as of December 31,
2015 and 2014, and related notes have been retrospectively adjusted to reflect the effect of assets groups and discontinued operations.
See Note 3 for details of discontinued operations. The results of discontinued operations have been reflected separately in the
consolidated statement of operations as a single line item for all periods presented in accordance with U.S. GAAP. Cash flows from
discontinued operations for the years ended December 31, 2013, 2014 and 2015 were combined with the cash flows from continuing
operations within each of the three categories. Principles of Consolidation The consolidated financial statements include
the financial statements of the Company, its subsidiaries and VIEs. All significant inter- company balances and transactions
have been eliminated in consolidation. Reclassification The Company has reclassified
certain comparative balances in the consolidated balance sheet for December 31, 2014 and certain comparative amounts in the consolidated
statements of income and comprehensive (loss) income for the years ended December 31, 2014 and 2013 to conform to the current years
presentation. The principal reclassifications are related to 1) the aggregation of past due accounts receivables generated from
CeraVest and CeraPay businesses into the balances of loans, net and other financing receivables, respectively, which were previously
disclosed as part of accounts receivable solely for the current portions; 2) the aggregation of accounts payable and customer deposit
into the balance of other payable and accrued liabilities; 3) the aggregation of accounts payable, related parties and due to related
parties into financing payables, related parties and 4) the separate presentation of provision for credit losses, which were previously
included in general and administrative expenses. The reclassification provides more transparent and comprehensive information on
the new CeraVest and CeraPay operations and provides more relevance to the operational focus the Company is shifting to. The reclassification
did not have an impact on the reported total assets, liabilities, stockholders equity and net income. Use of Estimates The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues
and expenses during the periods presented. The most significant estimates and related assumptions include the assessment of the
provision for credit losses, the assessment of the impairment of tangible long-lived assets, and the assessment of the valuation
allowance on deferred tax assets. Actual results could differ from these estimates. Currency Reporting The Company uses U.S. dollars (USD)
as its functional currency. The Companys operations in China and Hong Kong use the local currencies - Renminbi (RMB)
and Hong Kong dollars (HKD) as its functional currencies whereas amounts reported in the accompanying consolidated
financial statements and disclosures are stated in U.S. dollars, the reporting currency of the Company, unless stated otherwise.
As such, the consolidated balance sheets of the Company have been translated into USD at the current rates listed by the Peoples
Bank of China as of December 31, 2015 and 2014 and the consolidated statements of income and comprehensive income (loss) for the
years ended December 31, 2015, 2014 and 2013 have been translated into USD at the average rates during the periods the transactions
were recognized. The resulting translation adjustments are recorded as other comprehensive income (loss) in the consolidated statements
of income and comprehensive income (loss). The following are the exchange rates used by the Company as of December 31, 2015, 2014
and 2013 and for the years ended December 31, 2015, 2014 and 2013.
December 31, 2015 December 31, 2014 December 31, 2013
Exchange rates as of the date specified for 6.4936:1 RMB to USD 6.1190:1 RMB to USD 6.0969:1 RMB to USD
the year ended on the date specified 7.7510:1 HKD to USD 7.7567:1 HKD to USD 7.7546:1 HKD to USD
Average exchange rates for the years ended 6.2245:1 RMB to USD 6.1443:1 RMB to USD 6.1983:1 RMB to USD
7.7521:1 HKD to USD 7.7556:1 HKD to USD 7.7573:1 HKD to USD Cash and Cash Equivalents For purposes of the consolidated statements
of cash flows, cash equivalents include all highly liquid debt instruments with original maturities of three months or less which
are not securing any corporate obligations. As of December 31, 2015 and 2014, the majority of cash, including restricted cash,
was in RMB on deposit in PRC financial institutions under the Companys PRC VIEs and subsidiaries, which the management believes
are of high credit quality. Cash remittance in or out of the PRC are subject to the PRC foreign exchange control regulations pursuant
to which PRC government approval is required for the Company to receive funds from or distribute funds outside the PRC. Restricted Cash As of December 31, 2015 and 2014, the restricted
cash was $157 and $988, respectively, which were guarantee deposits required by the China Insurance Regulatory Commission (CIRC)
in order to protect insurance premium appropriation by insurance agency and security deposits under the CITIC mortgage financing
arrangement. Other financing Receivables, net Other financing receivables, net represent current
and overdue financing provided to registered customers on the CeraPay platform, usually with an original term of 30 days. Other
financing receivables become overdue after an eight day grace period from the monthly due date. Loans, net Loans, net represents loans provided to small
and medium sized businesses (SMBs) through the CeraVest platform with a six-month term and an interest rate
of 8.62% per annum. It includes any amounts that are overdue. The SMBs are expected to repay the principal and interest to the
Company in lump-sum at the maturity of the loan. Borrowed funds from CeraVest investors Borrowed funds from CeraVest investors represents
1) the funds provided by investors through the CeraVest platform for the purpose of funding CeraVest loans with a six-month term;
and 2) the funds provided by investors through CeraVest Flex for the investment in the obligation rights generated by the Company
on the CeraPay users. These payables bear interest at a weighted average interest rate of 8.33% for fixed and 8.03% for flexible
term per annum as of December 31, 2015, respectively. Provision for Credit Losses The allowance for credit losses, which includes
the allowance for other financing receivables and loans, net represents managements estimate of probable losses inherent
in the Companys Internet-based business. The Company determines that both the other financing receivables and loans, net
represent large groups of smaller-balance homogeneous loans to the CeraPay and CeraVest customers based on their similar general
credit risk characteristics, and evaluates the allowance for receivables due from CeraPay and CeraVest customers respectively.
When evaluating the credit losses, the Company normally bases it on its historical loss experience derived from the commercial
vehicle sales, leasing and support business, which has a similar credit portfolio with the existing Internet-based borrowers, and
also makes reference to the experience of other entities in the same business. The Company performs periodic and systematic
detailed reviews of its other financing receivables and loans, net , to identify credit risks and to assess the overall
collectability of those portfolios, and may adjust its estimates on allowance of credit losses when new circumstances arise. Concentration of Credit Risk Financial instruments that potentially subject
the Company to concentration of credit risk consist principally of other financing receivables and loans, net. Credit risk concentration
with respect to other financing receivables and loans, net is reduced because a large number of diverse customers over a wide geographic
area make up the Companys customer base. Property, Equipment, and Leasehold Improvements,
net Property and equipment are recorded at cost
and depreciated using the straight-line method over their estimated useful lives. All depreciation is included in operating expenses
on the accompanying consolidated statements of income and comprehensive (loss) income. Leasehold improvements are capitalized and
amortized over the lesser of the life of the lease or the useful life of the related asset. The estimated useful lives of property, equipment
and leasehold improvements are as follows:
Useful life
Buildings 40 years
Equipment 5 - 10 years
Furniture and fixtures 5 - 10 years
Company automobiles 3 - 5 years
Leasehold improvements Shorter of the remaining lease terms and estimated useful lives Expenditures for major additions or improvements
that extend the useful lives of assets are capitalized. Minor replacements, maintenance and repairs that do not improve or extend
the lives of such assets are expensed as incurred. The Company reviews its long-lived assets for
impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable.
When these events occur, the Company assesses the recoverability of the long-lived assets by comparing the carrying value of the
long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual
disposition where the fair value is lower than the carrying value, measurement of an impairment loss is recognized in the consolidated
statements of income and comprehensive income (loss) for the difference between the fair value, using the expected future discounted
cash flows, and the carrying value of the assets. No impairment of long-lived assets was recognized for the periods presented. Fair Value of Financial Instruments Financial instruments consist primarily of cash
and cash equivalents, restricted cash, prepaid expenses, other financing receivables, loans, short-term bank borrowings, borrowed
funds from CeraVest investors, financing payables, related parties, other payables and accrued liabilities and long-term bank borrowings.
The carrying amounts of the short-term financial instruments at December 31, 2015 and 2014 approximated their fair values because
of their short maturities or existence of variable interest rates, which reflect current market rates. For long-term financial
instruments, the carrying amount approximates its fair value since the interest rates applied to determine the carrying amount
is close to the market interest rates for similar types of long-term instruments. When available, the Company 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. Pricing information that the Company 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 Company generally estimates 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 Companys evaluation of those factors changes.
Although the Company 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 Companys consolidated assets, liabilities, equity and
net income or loss. A financial instruments categorization
within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three
levels of inputs are used to measure fair value: Level 1 applies to assets or liabilities for
which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for
which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as
quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets
with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs
are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for
which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the
assets or liabilities. As of December 31, 2015 and 2014, there were
no assets or liabilities within the continued operations that were measured and reported at fair value on a recurring basis. Comprehensive (Loss) Income U.S. GAAP generally requires that recognized
revenue, expenses, gains and losses be included in net income or loss. Although certain changes in assets and liabilities are reported
as separate components of the equity section of the consolidated balance sheet, such items, along with net income, are components
of comprehensive income or loss. The components of other comprehensive income or loss consist solely of foreign currency translation
adjustments during the years ended December 31, 2015, 2014 and 2013. Commitments and Contingencies In the normal course of business, the Company
is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of
matters, including among others. The Company recognizes a liability for such contingency if it determines it is probable that a
loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments
including historical and the specific facts and circumstances of each matter. Revenue Recognition Service Charges Service charges consists of various fees. For CeraPay it includes
transaction fees, penalty fees and late fees. We charge merchants transaction fees for accepting CeraPay payments and those fees
are recognized when collected. We charge CeraPay users with penalties and late fees if they become delinquent in repaying any outstanding
monthly CeraPay balance. Those fees are recognized when their collectability is reasonably assured. CeraVest fees are derived from
borrowers. They include origination fees, penalty fees and late fees. We charge borrowers an origination fee upon origination of
CeraVest loans and amortize it throughout the period of the loan. We charge borrowers with penalties and late fees if they become
delinquent in repaying a CeraVest loan. Those fees are recognized when their collectability is reasonably assured. Interest Income Interest income consists of the interest income generated from CeraVest
loans and bank deposits. We recognize interest income on CeraVest loans based on the effective interest rate method over the term
of the financing period. Recognition of income is suspended and a receivable is placed on
non-accrual status when management determines that collection of future income is not probable. Accrual is resumed, and previously
suspended income is recognized, when the receivable becomes contractually current and/or collection doubts are removed. Cash receipts
on impaired loans are recorded against the loan principle and then to any unrecognized income. Property lease and management Minimum contractual rental income related to
office leases are recognized on a straight-line basis over the terms of the respective leases. Straight-line rental revenue commences
when the customer assumes control of the leased premises. In accordance with the Company's standard lease terms, rental payments
are generally due on a monthly basis. Tenant recovery revenue includes payments from tenants as reimbursements for management fees
and utilities, etc., which are recognized when the related expenses are incurred. Rental from office lease and tenant recovery
revenue together were recorded as Property lease and management. Advertising The Company expenses advertising costs as incurred.
Advertising expenses totaled approximately $187, $141 and $107 for the years ended December 31, 2015, 2014 and 2013,
respectively, and are included in selling and marketing expense in the accompanying consolidated statements of operations. Value added Tax and Business Tax In the PRC, value added tax (the VAT)
of 17% on invoice amount is collected in respect of the sales of goods on behalf of tax authorities. The VAT collected is not revenue
of the Company; instead, the amount is recorded as a liability on the balance sheet until such VAT is paid to the authorities. The Companys PRC subsidiaries are also
subject to business tax of 5% for their revenues from the new Internet-based businesses, membership fee, interest from sales-type
leases, management servicing fee, commission fee and revenues from tires, fuel and insurance financing services, which are recognized
after net off business tax. The office leasing segment is also subject to business tax of 5% on rental income. Income Taxes Income taxes are accounted for using an asset
and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates
in the applicable tax jurisdiction expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period
that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets
and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current
and non-current based on their expected period of realization. Realization of the deferred tax asset is dependent on generating
sufficient taxable income in future years. The Company recognizes interest on non-payment
of income taxes under requirement by tax law and penalties associated with tax positions when a tax position does not meet the
minimum statutory threshold to avoid payment of penalties. According to the PRC Tax Administration and Collection Law, the statute
of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding
agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more
than RMB 100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation
in the case of tax evasion. The tax returns of the Companys PRC VIEs and subsidiaries are subject to examination by the
relevant tax authorities. The Company did not have any material interest or penalties associated with tax positions and did not
have any significant unrecognized uncertain tax positions as of December 31, 2015 and 2014 respectively. The Companys Chinese subsidiaries are
subject to taxation in the PRC. The PRC income tax returns are generally not subject to examination by the tax authorities for
tax years before 2010. With a few exceptions, the tax years 2010 - 2015 remain open to examination by tax authorities in the PRC.
The tax years 2012 - 2015 for US entities remains open to examination by tax authorities in the US. Segment Reporting Operating segments are defined as components
of an enterprise about which separate financial information is available that is evaluated regularly by the chief executive officer,
in deciding how to allocate resources and assessing performance. All of the Companys sales are generated in the PRC and
substantially all of the Companys assets are located in the PRC. The Companys operations consist of two reporting
and operating segments, the Internet-based business and property lease and management business. Earnings Per Share The Company computes earnings per share (EPS)
in accordance with generally accepted accounting principles. Companies with complex capital structures are to present basic and
diluted EPS. Basic EPS is measured as the income available to ordinary shareholders divided by the weighted average ordinary shares
outstanding for the period. For basic EPS, the weighted average number of shares outstanding for the period includes contingently
issuable shares (i.e., shares issuable for little or no cash consideration upon the satisfaction of the conditions of a contingent
stock agreement) as of the date that all necessary conditions have been met. Diluted EPS is similar to basic EPS but presents the
dilutive effect on a per share basis of potential ordinary shares (e.g., convertible securities, options and warrants) as if they
had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an
anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation
of diluted EPS. Basic and diluted earnings per share for each
of the periods presented are calculated as follows:
Year ended December 31,
2015 2014
Net income $ 8,281 $ 10,166
Weighted average number of common shares outstanding Basic 23,550,145 23,549,112
Stock options 530,104 291,532
Weighted average number of common shares outstanding Diluted 24,080,249 23,840,644
Earnings per share
Basic $ 0.35 $ 0.43
Diluted $ 0.34 $ 0.43 Share-Based Payments The Company records all share-based payments
grants of employee stock options to employees in the financial statements based on their fair values on grant date and amortizes
to expense on straight-line basis over the vesting period. The Company used the Black-Scholes option-pricing model to estimate
the fair value of the options at the date of grant for both the 2009 incentive plan and the 2015 incentive plan. On August 6, 2012,
the Companys board of directors determined to amend certain Share Option Award Agreements entered into pursuant to the 2009
incentive plan to reduce the exercise price per share thereunder to the current fair market value of the Companys ordinary
shares. The Company used the binomial model to estimate the fair value of repriced options as the Company has reassessed the exercise
pattern and determined that the Binomial Pricing model was a better model for estimating the fair values of the repriced options. Recently Issued Accounting Pronouncements In April 2014, the FASB issued ASU No.2014-08,
Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which amends the definition of a discontinued
operation in ASC 205-20 and requires entities to disclose additional information about disposal transactions that do not meet the
discontinued-operations criteria. ASU 2014-08 provides more decision-useful information to users and to elevate the threshold for
a disposal transaction to qualify as a discontinued operation. This Update is effective when all disposals (or classifications
as held for sale) of components of an entity and all businesses or nonprofit activities that, on acquisition, are classified as
held for sale that occur within annual period beginning on or after December 15, 2014, and interim periods within those years.
The Company has adopted this amendment and has incorporated it into the assessment of the discontinued operations. In May 2014, the FASB issued Accounting Standards
Update 2014-09, Revenue from Contracts with Customers, or ASU 2014-09. This new standard will replace all current U.S. GAAP guidance
on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine
when and how revenue is recognized. The core principle is that a company should recognize revenue to correlate with the transfer
of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled
in exchange for those goods or services. In July 2015, the FASB voted to defer the effective date of ASU 2014-09 by one year, while
allowing a company to adopt the new revenue standard early but not before the original effective date. This guidance will be effective
as to us on January 1, 2018 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment
as of the date of adoption. We are evaluating the impact of adopting ASU 2014-09 on our consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02,
Amendments to the Consolidation Analysis. Under both current GAAP requirements and the amendments in this update, a decision maker
is determined to be the primary beneficiary of a VIE if it satisfies both the power and the economics criteria. The primary beneficiary
consolidates a VIE because it has a controlling financial interest. Under the requirements in current GAAP, if a fee arrangement
paid to a decision maker, such as an asset management fee, is determined to be a variable interest in a VIE, the decision maker
must include the fee arrangement in its primary beneficiary determination and could consolidate the VIE on the basis of power (decision-making
authority) and economics (the fee arrangement). Management has assessed and no impact will arise from these Amendments. In April 2015, the FASB issued Accounting Standards
Update (ASU) No. 2015-03, Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance
Costs. It requires companies to present debt issuance costs the same way they currently present debt discounts, as a direct deduction
from the carrying value of that debt liability. ASU 2015-03 does not impact the recognition and measurement guidance for debt issuance
costs. For public businesses, ASU No. 2015-03 will be effective for fiscal years starting after December 15, 2015, including any
interim periods within those years. Early adoption of ASU No. 2015-03 will be allowed for financial statements that have yet to
be issued. The amendments of ASU No. 2015-03 must be applied retrospectively, where the balance sheet of each presented individual
period is adjusted to indicate the period-specific impact of using the new guidance. During the transition phase, a business must
adhere to the appropriate disclosures for an adjustment in an accounting principle. Such disclosures include why the change in
accounting principle is occurring, the method of transition, an explanation of the previous periods information that was
retrospectively adjusted, and how the change impacts the financial statement line items (i.e., debt issuance cost asset and the
debt liability).The Company is evaluating the impact of adopting ASU 2014-09 on the consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17,
Income Taxes. To simplify the presentation of deferred income taxes, the amendments in this update require that deferred tax liabilities
and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update apply to
all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities and
assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this
update. For public business entities, the amendments in this update are effective for financial statements issued for annual periods
beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities
as of the beginning of an interim or annual reporting period. Entities may apply the update prospectively to all deferred tax assets
and liabilities and taxes, or retrospectively for all periods presented. The Company has early adopted it in 2015. All the deferred
tax liabilities and assets in all periods in these financial statements were retrospectively adjusted to reflect this accounting
principle amendment. In January 2016, the FASB issued ASU No. 2016-01,
Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this Update
address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments in this
Update require public business entities that are required to disclose fair value of financial instruments measured at amortized
cost on the balance sheet to measure that fair value using the exit price notion consistent with Topic 820, Fair Value Measurement.
The amendments in this Update require an entity to present separately in other comprehensive income the portion of the total change
in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to
measure the liability at fair value in accordance with the fair value option. The amendments in this Update require separate presentation
of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans
and receivables) on the balance sheet or in the accompanying notes to the financial statements. For public business entities, the
amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those
fiscal years. Early application by public business entities to financial statements of fiscal years or interim periods that have
not yet been issued or, by all other entities, that have not yet been made available for issuance of the following amendments in
this Update are permitted as of the beginning of the fiscal year of adoption: an entity should present separately in other comprehensive
income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit
risk if the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.
We are in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02,
Leases. The new standard creates Topic 842, Leases, in the FASB Accounting Standards Codification (FASB ASC) and supersedes FASB
ASC 840, Leases. ASU 2016-02 requires a lessee to recognize the assets and liabilities that arise from leases (operating and finance).
However, for leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize
lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally
on a straight-line basis over the lease term. For public business entities, the amendments in this update are effective for financial
statements issued for annual periods beginning after December 15, 2018, and interim periods within those annual peri |
