Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 18, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Wonhe High-Tech International, Inc. | |
Entity Central Index Key | 1,434,388 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 58,510,130 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 55,784,833 | $ 34,447,100 |
Accounts receivable | 2,711,796 | $ 3,267,810 |
Inventory | 2,774 | |
Total current assets | 58,499,403 | $ 37,714,910 |
Fixed assets | 1,006,024 | 486,516 |
Less: accumulated depreciation | (331,374) | (289,266) |
Fixed assets, net | 674,650 | 197,250 |
Other assets: | ||
Intangible assets, net | 25,772 | 8,667 |
Other assets | 16,912 | 14,223 |
Prepaid income taxes | 1,614,330 | 2,341,300 |
Total other assets | 1,657,014 | 2,364,190 |
TOTAL ASSETS | 60,831,067 | 40,276,350 |
Current liabilities: | ||
Payroll payable | 38,695 | 22,687 |
Taxes payable | 150,663 | 172,248 |
Loan from stockholder | 294,525 | 241,561 |
Accrued expenses and other payables | 140,842 | 154,261 |
Total current liabilities | $ 624,725 | $ 590,757 |
Commitments and Contingencies | ||
Stockholders' equity: | ||
Preferred stock: $0.001 par value; 10,000,000 shares authorized; none issued and outstanding | ||
Common stock: $0.001 par value; 90,000,000 shares authorized; 58,510,130 shares issued and outstanding at June 30, 2015 and 38,380,130 shares issued and outstanding at December 31, 2014 | $ 58,510 | $ 38,380 |
Additional paid-in capital | 32,187,299 | 17,011,131 |
Retained earnings | 22,747,091 | 18,332,743 |
Statutory reserve fund | 2,524,259 | 2,033,776 |
Other comprehensive income | 943,055 | 787,787 |
Stockholders' equity before noncontrolling interests | 60,206,342 | 39,685,593 |
Noncontrolling interests | 1,746,128 | 1,481,776 |
Total stockholders' equity | 60,206,342 | 39,685,593 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 60,831,067 | $ 40,276,350 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares, issued | 58,510,130 | 38,380,130 |
Common stock, shares outstanding | 58,510,130 | 38,380,130 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Other Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Sales | $ 7,243,941 | $ 13,424,684 | ||
Cost of sales | (3,864,137) | (7,115,998) | ||
Gross profit | 3,379,804 | 6,308,686 | ||
Operating expenses: | ||||
Research and development expenses | 31,597 | $ 23,569 | 55,385 | $ 47,280 |
Selling and marketing | 117,409 | 43,620 | 131,362 | 151,835 |
General and administrative | 163,336 | 121,732 | 301,444 | 244,471 |
Total operating expenses | 312,342 | 188,921 | 488,191 | 443,586 |
Income (loss) from operations | 3,067,462 | (188,921) | 5,820,495 | (443,586) |
Interest income | 48,592 | 30,804 | 81,672 | 60,900 |
Income (loss) before provision for income taxes | 3,116,054 | (158,117) | 5,902,167 | (382,686) |
Provision for income taxes | 390,606 | 5,044 | 739,841 | 9,899 |
Net income (loss) | 2,725,448 | (163,161) | 5,162,326 | (392,585) |
Noncontrolling interests | (135,942) | 8,914 | (257,495) | 21,114 |
Net income (loss) attributable to common stockholders | $ 2,589,506 | $ (154,247) | $ 4,904,831 | $ (371,471) |
Earnings (loss) per common share, basic and diluted | $ 0.05 | $ 0 | $ 0.11 | $ (0.01) |
Weighted average shares outstanding, basic and diluted | 53,864,745 | 38,380,130 | 46,165,213 | 38,380,130 |
Net income (loss) | $ 2,725,448 | $ (163,161) | $ 5,162,326 | $ (392,585) |
Foreign currency translation adjustment | 6,368 | 45,748 | 162,125 | (277,851) |
Comprehensive income (loss) | 2,731,816 | (117,413) | 5,324,451 | (670,436) |
Comprehensive income (loss) attributable to noncontrolling interests | (136,881) | 7,248 | (264,352) | 31,291 |
Comprehensive income (loss) attributable to common stockholders | $ 2,594,935 | $ (110,165) | $ 5,060,099 | $ (639,145) |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2015 - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Statutory Reserve Fund | Noncontrolling Interest | Other Comprehensive Income |
Balance at Dec. 31, 2014 | $ 39,685,593 | $ 38,380 | $ 17,011,131 | $ 18,332,743 | $ 2,033,776 | $ 1,481,776 | $ 787,787 |
Sale of common stock in private placement | 15,196,298 | $ 20,130 | $ 15,176,168 | ||||
Net income | $ 5,162,326 | $ 4,904,831 | $ 257,495 | ||||
Appropriation of statutory reserve | $ (490,483) | $ 490,483 | |||||
Other comprehensive (loss) | $ 162,125 | $ 6,857 | $ 155,268 | ||||
Balance at Jun. 30, 2015 | $ 60,206,342 | $ 58,510 | $ 32,187,299 | $ 22,747,091 | $ 2,524,259 | $ 1,746,128 | $ 943,055 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 5,162,326 | $ (392,585) |
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 47,906 | 45,103 |
Change in operating assets and liabilities: | ||
Decrease in accounts receivable | 553,325 | 137 |
(Increase) decrease in inventory | $ (2,774) | 13,150 |
Decrease in prepaid expenses | 35,934 | |
Decrease in prepaid income taxes | $ 726,970 | 19,329 |
(Decrease) in accounts payable | (107) | |
Increase (decrease) in payroll payable | $ 16,008 | (904) |
(Decrease) increase in taxes payable | (21,585) | 11,078 |
(Decrease) increase in accrued expenses and other payable | (13,419) | 31,892 |
Net cash provided by (used in) operating activities | 6,468,757 | $ (236,973) |
Cash flows from Investing activities: | ||
Purchase of property, plant and equipment | (519,508) | |
Purchase of intangible assets | (22,032) | |
Net cash used in investing activities | (541,540) | |
Cash flows from financing activities: | ||
Stockholder loans | 51,898 | $ 4,095 |
Proceeds from sale of common stock | 15,196,298 | |
Net cash provided by financial activities | 15,248,196 | $ 4,095 |
Effect of exchange rate changes on cash | 162,320 | (275,776) |
Net change in cash | 21,337,733 | (508,654) |
Cash, beginning | 34,447,100 | 35,146,245 |
Cash, ending | $ 55,784,833 | $ 34,637,591 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | ||
Cash paid for interest |
Organization
Organization | 6 Months Ended |
Jun. 30, 2015 | |
Organization [Abstract] | |
ORGANIZATION | 1. ORGANIZATION Wonhe High-Tech International, Inc. (the “Company” or “Wonhe High-Tech”) was incorporated in the State of Nevada on August 13, 2007. The Company changed its name from Baby Fox International, Inc. to Wonhe High-Tech International, Inc. on April 20, 2012. On June 27, 2012, the Company acquired all of the outstanding capital stock of World Win International Holding Ltd. or “World Win” in exchange for 19,128,130 shares of the Company’s common stock (the “Share Exchange”). As a result of the acquisition, the Company’s consolidated subsidiaries include World Win, the Company’s wholly-owned subsidiary, which is incorporated under the laws of the British Virgin Island (“BVI”), Kuayu International Holdings Group Limited (Hong Kong), or “Kuayu,” a wholly-owned subsidiary of World Win which is incorporated under the laws of Hong Kong, Shengshihe Management Consulting (Shenzhen) Co., Ltd., or “Shengshihe Consulting,” a wholly-owned subsidiary of Kuayu which is incorporated under the laws of the People’s Republic of China (“PRC”). The Company also consolidates the financial position and results of operations of Shenzhen Wonhe Technology Co., Ltd., or “Shenzhen Wonhe,” a company incorporated under the laws of the PRC which is effectively and substantially controlled by Shengshihe Consulting through a series of captive agreements. Shenzhen Wonhe is considered a variable interest entity (“VIE”) of Shengshihe Consulting. Shenzhen Wonhe is a Chinese entity established on November 16, 2010 with registered capital of $7,495,000. It specializes in the research and development, outsourced-manufacturing and sale of hi-tech products based on x86 (instruction set architecture based on the Intel 8086 CPU) and ARM (32-bit reduced instruction set architecture). Current products still under research and development include a Smart Media Box (SMB), Home Smart Server (HSS), Mini PC (MPC), All in One PC (AIO-PC), Business PAD (B-PAD), and Portable PAD (P-PAD). The Company started to sell its new product HMC 720 in the last quarter of 2014. In addition, the Company started to sell another new product, a Wi-Fi-Router with model number YLT-100S, during the first quarter of 2015 and model number YLT-300S during the second quarter of 2015. As explained by the Company, YLT-100S is mostly used by individuals, and YLT-300S is primarily used in shopping malls. The Company is located in Shenzhen, Guangdong Province, China. On May 30, 2012, Shenzhen Wonhe entered into (i) an Exclusive Technical Service and Business Consulting Agreement, (ii) a Proxy Agreement, (iii) Share Pledge Agreement, and (iv) Call Option Agreement with Shengshihe Consulting. The foregoing agreements are collectively referred to as the “VIE Agreements.” Exclusive Technical Service and Business Consulting Agreement: Proxy Agreement: Call Option Agreement: Share Pledge Agreement: After the Share Exchange, the Company’s current organization structure is as follows: |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting and Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting. The consolidated financial statements as of and for the three and six months ended June 30, 2015 and 2014 include Wonhe High-Tech, World Win, Kuayu, Shengshihe Consulting and its VIE, Shenzhen Wonhe. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited interim consolidated financial statements of the Company as of June 30, 2015 and for the three and six months ended June 30, 2015 and 2014, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the SEC which apply to interim financial statements. Accordingly, they do not include all of the information and footnotes normally required by accounting principles generally accepted in the United States of America for annual financial statements. The interim consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K for the year ended December 31, 2014, previously filed with the SEC. In the opinion of management, the interim information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of the results to be expected for future quarters or for the year ending December 31, 2015. Variable Interest Entity Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation” Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. The reporting entity’s determination of whether it has this power is not affected by the existence of kick-out rights or participating rights, unless a single enterprise, including its related parties and de facto agents, have the unilateral ability to exercise those rights. Shenzhen Wonhe’s stockholders do not hold any kick-out rights that affect the consolidation determination. Through the VIE agreements disclosed in Note 1, the Company is deemed the primary beneficiary of Shenzhen Wonhe and, accordingly, the balance sheets, results of operations and cash flows of Shenzhen Wonhe have been included in the accompanying consolidated financial statements. Shenzhen Wonhe has no assets that are collateral for or restricted solely to settle its obligations. The creditors of Shenzhen Wonhe do not have recourse to the general credit of Shengshihe Consulting or its parent entities. Principally, almost of the assets recorded on the balance sheets of the Company are owned by Shenzhen Wonhe. In addition, all of the unrecognized revenue-producing assets of the Company are owned by Shenzhen Wonhe. Likewise, all of the recognized assets of Shenzhen Wonhe are recorded on the Company’s balance sheets, and all of the unrecognized assets of Shenzhen Wonhe are utilized for the benefit of the Company. The following are financial statement amounts and balances of Shenzhen Wonhe that have been included in the accompanying consolidated financial statements. ASSETS June 30, December 31, (Unaudited) Current assets: Cash $ 55,546,870 $ 34,228,266 Account receivable 2,711,796 3,267,810 Inventory 2,774 - Total current assets 58,261,440 37,496,076 Fixed assets, net 674,650 197,250 Other assets: Intangible assets 25,772 8,667 Other assets 16,912 14,223 Prepaid income taxes 1,614,330 2,341,300 Total other assets 1,657,014 2,364,190 TOTAL ASSETS $ 60,593,104 $ 40,057,516 LIABILITIES June 30, December 31, (Unaudited) Current liabilities: Payable to WFOE (1) $ 25,922,042 $ 21,029,629 Due to Wonhe High-Tech International, Inc. (2) 25,056,724 9,882,600 Payroll payable 37,194 21,192 Taxes payable 89,060 116,629 Accrued expenses and other payables 487,563 401,584 Total current liabilities 51,592,583 31,451,634 TOTAL LIABILITIES $ 51,592,583 $ 31,451,634 (1) Payable to WFOE represents amounts due to Shengshihe Consulting under the Exclusive Technical Service and Business Consulting Agreement for consulting services provided to Shenzhen Wonhe in exchange for 95% of Shenzhen Wonhe’s net income and monthly payments of RMB 50,000 (approximately US$8,165). The monthly payments have been paid in full as of June 30, 2015. (2) Due to Wonhe High-Tech International, Inc. represents the cash received by Shenzhen Wonhe for the sale of 14,480,000 common shares issued by Wonhe High-Tech International, Inc. on May 2, 2013 at $0.68 each (total approximately US$9,850,000). 20,130,000 common shares issued by Wonhe High-Tech International, Inc. in April, 2015 at $0.77 each (Approximately US$15,196,000). Three Months Ended Six Months Ended 2015 2014 2015 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Sales $ 7,243,941 $ - $ 13,424,684 $ - Net income (loss) (3) $ 2,718,856 $ (162,074 ) $ 5,149,908 $ (384,315 ) (3) Under the Exclusive Technical Service and Business Consulting Agreement, 95% of the net income is to be remitted to the WFOE. For the Six Months Ended 2015 2014 (Unaudited) (Unaudited) Net cash provided by (used in) operating activities $ 21,720,695 $ (346,129 ) Net cash provided by financing activities - 4,189 Effect of exchange rate changes on cash (402,091 ) (206,787 ) Net change in cash $ 21,318,604 $ (548,727 ) The Company believes that Shengshihe Consulting’s contractual agreements with Shenzhen Wonhe are in compliance with PRC law and are legally enforceable. The stockholders of Shenzhen Wonhe are also the senior management of the Company and therefore the Company believes that they have no current interest in seeking to act contrary to the contractual arrangements. However, Shenzhen Wonhe and its stockholders may fail to take certain actions required for the Company’s business or to follow the Company’s instructions despite their contractual obligations to do so. Furthermore, if Shenzhen Wonhe or its stockholders do not act in the best interests of the Company under the contractual arrangements and any dispute relating to these contractual arrangements remains unresolved, the Company will have to enforce its rights under these contractual arrangements through the operations of PRC law and courts and therefore will be subject to uncertainties in the PRC legal system. All of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. As a result, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements, which may make it difficult to exert effective control over Shenzhen Wonhe, and its ability to conduct business may be adversely affected. Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Foreign Currency Translation Almost all of the Company’s assets are located in the PRC. The functional currency for the majority of the operations is the Renminbi (“RMB”). For Kuayu, the functional currency for the majority of its operations is the Hong Kong Dollar (“HKD”). The Company uses the US Dollar for financial reporting purposes. The consolidated financial statements of the Company have been translated into US dollars in accordance with FASB ASC 830, “Foreign Currency Matters.” All asset and liability accounts have been translated using the exchange rate in effect at the balance sheet date. Equity accounts have been translated at their historical exchange rates when the capital transactions occurred. The consolidated statements of income (loss) and other comprehensive income (loss) amounts have been translated using the average exchange rate for the periods presented. Adjustments resulting from the translation of the Company’s consolidated financial statements are recorded as other comprehensive income (loss). The exchange rates used to translate amounts in RMB into US dollars for the purposes of preparing the consolidated financial statements are as follows: June 30, 2015 December 31, Balance sheet items, except for stockholders’ equity, as of periods end 0.1632 0.1625 Three Months Ended Six Months Ended June 30 2015 2014 2015 2014 Amounts included in the statements of income and cash flows for the periods 0.1633 0.1628 0.1629 0.1628 For the three months ended June 30, 2015 and 2014, foreign currency translation adjustments of $6,368 and $45,748 and for the six months ended June 30, 2015 and 2014, foreign currency translation adjustments of $162,125 and $(277,851), respectively, have been reported as other comprehensive income (loss). Other comprehensive income (loss) of the Company consists entirely of foreign currency translation adjustments. Pursuant to ASC 740-30-25-17, “Exceptions to Comprehensive Recognition of Deferred Income Taxes,” Although government regulations now allow convertibility of the RMB for current account transactions, significant restrictions still remain. Hence, such translations should not be construed as representations that the RMB could be converted into US dollars at that rate or any other rate. The value of the RMB against the US dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions. Any significant revaluation of the RMB may materially affect the Company’s financial condition in terms of US dollar reporting. Revenue and Cost Recognition The Company receives revenues from the sale of electronic products. The Company’s revenue recognition policies are in compliance with SEC Staff Accounting Bulletin (“SAB”) 104 (codified in FASB ASC Topic 605). Sales revenue is recognized when the products are delivered and when customer acceptance occurs, the price is fixed or determinable, no other significant obligations of the Company exist and collectability is reasonably assured. Finished goods are delivered from outsourced manufacturers to the Company. Revenue is recognized when the title to the products has been passed to the customer, which is the date the products are picked up by the customer at the Company’s location or delivered to the designated locations by Company employees and accepted by the customer and the previously discussed requirements are met. The customer’s acceptance occurs upon inspection at the time of pickup or delivery by signing an acceptance form. The Company does not provide its customers with the right of return. A 36-month warranty is offered to customers for exchange or repair of defective products, the cost of which is substantially covered by the outsourced manufacturers’ warranty policies as specified in the contract between the Company and its outsourced manufacturers. As a result, the Company does not recognize a warranty liability. Payments received before all of the relevant criteria for revenue recognition are met are recorded as advances from customers. The Company follows the guidance set forth by FASB ASC 605-45-45 to assess whether the Company acts as the principal or agent in the transaction. The determination involves judgment and is based on an evaluation of whether the Company has the substantial risks and rewards of ownership under the terms of the arrangement. Based on the assessment, the Company determined it acts as a principal in the transaction and reports revenues on the gross basis. FASB ASC 605-45-45 sets forth eight criteria that support reporting recognition of gross revenue (i.e. principal sales) and three that support reporting net revenue (i.e. agent sales). As applied to the relationship between the Company, its manufacturers, and its customers, the following are the criteria that support reporting gross revenue: ● Shenzhen Wonhe is the primary obligor in each sale, as it is responsible for fulfillment of customer orders, including the acceptability of the products purchased by the customer. ● Shenzhen Wonhe has general inventory risk, as it takes title to a product before that product is ordered by or delivered to a customer. ● Shenzhen Wonhe establishes its own pricing for its products. ● Shenzhen Wonhe has discretion in supplier selection. ● Shenzhen Wonhe designed the Home Media Center Model 720 (the “HMC720”) and two categories of Wifi Routers and is responsible for all of its specifications. ● Shenzhen Wonhe has physical inventory loss risk until the product is delivered to the customer. ● Shenzhen Wonhe has full credit risk for amounts billed to its customers. The only criterion supporting recognition of gross revenue that is not satisfied by the relationship between the Company and its manufacturers is: the entity changes the product or performs part of the service. Moreover, none of the three criteria supporting recognition of net revenue is present in the Company’s sales transactions. For this reason, the Company records gross revenue with respect to sales by Shenzhen Wonhe. During the last quarter of 2014, the Company started to sell an updated product, HMC720, which was developed by the Company and outsourced to others to produce. During the first quarter of 2015, the Company started to sell a new product, a Wifi-Router YLT-100S. During the second quarter of 2015, the Company commenced the sale of another Wifi-Router, YLT-300S. These Routers were developed by the Company and outsourced to others to produce. Fair Value of Financial Instruments FASB ASC 820 specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy: Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly. Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements. ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of June 30 2015 and December 31, 2014, none of the Company’s assets and liabilities were required to be reported at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including cash, accounts receivable and various payables, approximate their fair values due to the short term nature of these financial instruments. There were no changes in methods or assumptions during the periods presented. Advertising Costs Advertising costs are paid to an advertising agency for market analysis and strategic planning and are charged to operations when incurred. Advertising costs were $97,980 and $32,200 for the three months ended June 30, 2015 and 2014, respectively, and $97,740 and $130,240 for the six months ended June 30, 2015 and 2014. Research and Development Costs The Company develops software to be marketed as part of its products, and that is not for internal use. The software is essential to the functionality of the Company’s tangible products. Therefore, the Company accounts for research and development costs incurred in development of its software in accordance with FASB ASC 985-20. Research and development costs are charged to operations when incurred. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Company’s products are released soon after technological feasibility has been established. Therefore, costs incurred subsequent to achievement of technological feasibility are usually not significant, and generally most software development costs have been expensed as incurred. Research and development costs were $31,597 and $23,569 for the three months ended June 30, 2015 and 2014, respectively, and $55,385 and $47,280 for the six months ended June 30, 2015 and 2014, respectively Cash and Cash Equivalents The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents. Accounts Receivable Accounts receivable are stated at cost, net of an allowance for doubtful accounts. Receivables outstanding longer than the payment terms are considered past due. The Company provides an allowance for doubtful accounts for estimated losses resulting from the failure of customers to make required payments, when due. The Company reviews the accounts receivable on a periodic basis and makes allowances where there is doubt as to the collectability of the outstanding balance. In evaluating the collectability of an individual receivable balance, the Company considers many factors, including the age of the balance, the customer’s payment history, its current credit-worthiness and current economic trends. As of June 30, 2015 and December 31, 2014, the Company considered all accounts receivable collectable and an allowance for doubtful accounts was not necessary. For the three and six months ended June 30, 2015 and 2014, the Company did not write off any accounts receivable as bad debts. Inventory Inventory, comprised of HMC 720s, is valued at the lower of cost or market value. The value of inventory is determined using the first-in, first-out method. Fixed Assets and Depreciation Fixed assets are recorded at cost, less accumulated depreciation. Cost includes the price paid to acquire the asset, and any expenditure that substantially increases the asset’s value or extends the useful life of an existing asset. Leasehold improvements are amortized over the lesser of the remaining term of the lease or the estimated useful lives of the improvements. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the periods benefited. Maintenance and repairs are generally expensed as incurred. The estimated useful lives for fixed asset categories are as follows: Office equipment 5 years Motor vehicles 5 years Leasehold improvements Shorter of the remaining term of the lease or life of the improvement Impairment of Long-lived Assets The Company applies FASB ASC 360, “Property, Plant and Equipment,” Statutory Reserve Fund Pursuant to corporate law of the PRC, Shengshihe Consulting and the VIE are required to transfer 10% of their net income, as determined under PRC accounting rules and regulations, to a statutory reserve fund until such reserve balance reaches 50% of their registered capital. The statutory reserve fund is non-distributable, other than during liquidation, and can be used to fund prior years’ losses, if any, and may be utilized for business expansion or used to increase registered capital, provided that the remaining reserve balance after such use is not less than 25% of the registered capital. As of June 30, 2015, $2,524,259 has been transferred from retained earnings to the statutory reserve fund. Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes” ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with these tax positions. As of June 30, 2015 and December 31, 2014, the Company did not have any liabilities for unrecognized tax benefits. The income tax laws of various jurisdictions in which the Company, its subsidiaries and the VIE operate are summarized as follows: United States The Company is subject to United States tax at graduated rates from 15% to 35%. No provision for income taxes in the United States has been made as the Company had no U.S. taxable income for the three and six months ended June 30, 2015 and 2014. PRC Shenzhen Wonhe and Shengshihe Consulting are subject to an Enterprise Income Tax at 25% and each file their own tax returns. Consolidated tax returns are not permitted in China. On July 23, 2012, the National Tax Bureau, Shenzhen Nanshan Branch declared that Shenzhen Wonhe is qualified for the preferential tax treatment afforded by the PRC to enterprises engaged in the development of software or integrated circuits. As a result, starting from its first profitable year, Shenzhen Wonhe had a two-year exemption from the Enterprise Income Tax followed by a 50% exemption for the next three years commencing January 1, 2014. The tax regulations required that the enterprise pay income tax until its eligibility for the exemption is determined - i.e. until the local tax bureau determines that the enterprise has recorded its first profitable year. Payments were made of approximately $2,600,000 (RMB 16,107,000) based upon 2012 income while the local tax bureau reviewed the Company’s financial results. The National Tax Bureau determined that the Company had realized a profit in 2012. Since the Company was declared exempt from tax with respect to 2012, the payments that were made will be applied to future income taxes due. The payments have been reflected as prepaid income taxes on the balance sheet as of June 30, 2015 and 2014. For the six months ended June 30, 2015, the Company offset the income tax provision of $735,701, leaving a balance of prepaid income taxes of $1,614,330. BVI World Win is incorporated in the BVI and is governed by the income tax laws of the BVI. According to current BVI income tax law, the applicable income tax rate for the Company is 0%. Hong Kong Kuayu International is incorporated in Hong Kong. Pursuant to the income tax laws of Hong Kong, the Company is not subject to tax on non Hong Kong source income. Noncontrolling Interests The Company evaluated and determined that under the VIE agreements as disclosed in Note 1, it is deemed to be the primary beneficiary of Shenzhen Wonhe. The noncontrolling interest, representing 5% of the net assets in Shenzhen Wonhe not attributable, directly or indirectly to the Company, is measured at its carrying value in the stockholders’ equity section of the consolidated balance sheets. Net Income (Loss) Per Share The Company computes net income (loss) per common share in accordance with FASB ASC 260, “Earnings Per Share” |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 6 Months Ended |
Jun. 30, 2015 | |
Recently Issued Accounting Standards [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS | 3. RECENTLY ISSUED ACCOUNTING STANDARDS In January 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2015-01 – Income Statement – Extraordinary and Unusual Items (Subtopic 225-20). This ASU addressed the simplification of income statement presentation by eliminating the concept of extraordinary items. The objective of the Simplification Initiative is to identify, evaluate, and improve areas of generally accepted accounting principles (GAAP) for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to the users of financial statements. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. This accounting standard update is not expected to have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued authoritative guidance that requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern and requires additional disclosures if certain criteria are met. This guidance is effective for fiscal periods ending after December 15, 2016, with early adoption permitted. This accounting standard update is not expected to have any impact on the Company’s consolidated financial statements. In June 2014, FASB issued ASU No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” |
Fixed Assets
Fixed Assets | 6 Months Ended |
Jun. 30, 2015 | |
Fixed Assets [Abstract] | |
FIXED ASSETS | 4. FIXED ASSETS Fixed assets at June 30, 2015 and December 31, 2014 are summarized as follows: June 30, December 31, 2015 2014 (Unaudited) Office equipment $ 194,974 $ 157,751 Motor vehicles 701,233 219,419 Leasehold improvements 109,817 109,346 1,006,024 486,516 Less: accumulated depreciation (331,374 ) (289,266 ) Fixed assets, net $ 674,650 $ 197,250 Depreciation expense charged to operations for the three months ended June 30, 2015 and 2014 was $20,443 and $20,293, respectively. Depreciation expense charged to operations for the six months ended June 30, 2015 and 2014 was $42,951 and $40,761, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS Intangible assets at June 30, 2015 and December 31, 2014 are summarized as follows: June 30, December 31, 2014 (Unaudited) Software $ 48,144 $ 26,000 Less: accumulated amortization (22,372 ) (17,333 ) Intangible assets, net $ 25,772 $ 8,667 Software was purchased in December 2012, and is being amortized over three years, beginning in January 2013. The Company purchased an “OA” office system in June 2015, which is being amortized over three years, beginning in June 2015. Amortization expense charged to operations for the three months ended June 30, 2015 and 2014 was $2,790 and $2,161 respectively. Amortization expense charged to operations for the six months ended June 30, 2015 and 2014 was $4,955 and $4,342, respectively. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS | 6. COMMITMENTS Leases On September 30, 2013, the Company entered into a lease agreement with an unrelated third party at a monthly rental of $9,579 per month. The lease expired on August 31, 2014. On September 1, 2014, the Company renewed the lease agreement at the same rent for twelve months. The lease was terminated in May 2015 without incurring any penalties. In May 2015, the Company entered into a new lease agreement with an unrelated party at a monthly rent of $12,119 for one year, expiring in May 2016. Rent expense for the three months ended June 30, 2015 and 2014 was $39,696 and $31,979, respectively. Rental expense for the six months ended June 30, 2015 and 2014 was $71,716 and $64,195, respectively. Employment Agreements Shenzhen Wonhe, our operating affiliate, has employment agreements with our officers Nanfang Tong and Qing Tong: Nanfang Tong’s employment agreement, as the chief executive officer, provides for a monthly salary of RMB 8,000 (approximately US $1306) which terminates on October 31, 2016. Mr. Tong is eligible for a bonus which is determined by, and at the discretion of, the Board of Directors of the Company, based on a review of Mr. Tong’s performance. Qing Tong’s employment agreement, as director, provides for a monthly salary of RMB 10,000 (approximately US $1632) and terminates on October 31, 2016. Ms. Tong is eligible for a bonus which is determined by, and at the discretion of, the board of directors of the Company, based on a review of Ms. Tong’s performance. Other than the salary and necessary social benefits required by the government, which are defined in the employment agreement, we currently do not provide other benefits to the officers at this time. Other than government severance payments, our executive officers are not entitled to severance payments upon the termination of their employment agreements or following a change in control PRC employment law requires an employee be paid severance pay based on the number of years worked with the employer at the rate of one month’s wage for each full year worked. Any period of more than six months but less than one year shall be counted as one year. Strategic Cooperation Agreement In April 2015, the Company entered into a distribution agreement with Shenzhen Yunlutong Technology Co., Ltd (“YLT”), which owned by one of the Company’s directors, who own 4.87% of the Company’s common stock. The agreement expires in 3 years. Under the agreement, 1) YLT shall purchase 662,000 Commercial Routers from Shenzhen Wonhe, with 200,000 purchased during the first year, 220,000 during the second year and 242,000 Commercial Routers during the third year, for a total purchase price of RMB 926,800,000 (US $151,253,760). During the three and six months ended June 30, 2015, the Company purchased RMB1,680,000 (US $274,176). Any change in share ownership of YLT shall be approved by Shenzhen Wonhe. In addition, Shenzhen Wonhe obtained an exclusive right to acquire YLT if YLT’s gross annual revenues reach RMB 150,000,000 (US $24,480,000) and net annual profit reaches RMB 12,500,000 during the term of the agreement. YLT agreed not to sell any equity or issue any debt during the 3 years. The price of the acquisition shall be established by an independent appraiser. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 7. RELATED PARTY TRANSACTIONS From time to time, a stockholder/officer loans money to the Company, primarily to meet the non-RMB cash requirements of the parent and subsidiaries. The loans are non-interest bearing, and the balance due was $294,525 and $241,561 at June 30, 2015 and December 31, 2014, respectively. The loans principally represent professional and legal fees incurred in the U.S. paid by the stockholder and operating expenses for Wonhe High-Tech and Shengshihe Consulting since their inception. The balance is reflected as loan from stockholder. |
Sale of Common Stock
Sale of Common Stock | 6 Months Ended |
Jun. 30, 2015 | |
Sale of Common Stock [Abstract] | |
SALE OF COMMON STOCK | 8 . SALE OF COMMON STOCK In April 2015, Wonhe High-Tech International, Inc. Sold 20,130,000 shares of common stock to 21 unrelated individuals, 3 major shareholders of Shenzhen Wonhe, and 3 unrelated companies in a private offering in the PRC. The purchase price for the shares was approximately RMB 4.72 (US $.77) per share, or a total of RMB 93,000,600 (US $15,196,298). The shares were sold to accredited investors for their own accounts. The offering was exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) and Section 4(5) of the Securities Act. The offering was also sold in compliance with the exemption from registration provided by Regulation S, as all of the purchasers are residents of the People’s Republic of China. Of the 20,130,000 shares sold, 4,600,000 (22.7%) were sold to two directors and one officer /director of the Company. On the date of sale, the Company’s common stock was quoted on the OTCQB at $3.07 per share. Since over 75% of the shares in this offering were sold to unrelated parties at $0.77 per share, the Company believes that this price was more representative of the price per share than $3.07. In addition, no shares of the Company’s common stock were traded on the OTCQB from January 1, 2015 to April 22, 2015. As a result, management believes that the $0.77 per share was a fair price and recorded no compensation related to the share sold to the officer/ director of the Company. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Taxes [Abstract] | |
INCOME TAXES | 9. INCOME TAXES The Company is required to file income tax returns in both the United States and the PRC. Its operations in the United States have been insignificant and income taxes have not been accrued. In the PRC, the Company files tax returns for Shenzhen Wonhe and Shengshihe Consulting. The provision for (benefit from) income taxes consists of the following for the three and six months ended June 30, 2015 and 2014: For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Current $ 390,606 $ 5,044 $ 739,841 $ 9,899 Deferred - (22,178 ) - (52,677 ) Change in valuation allowance - 22,178 - 52,677 $ 390,606 $ 5,044 $ 739,841 $ 9,899 The following is a reconciliation of the statutory rate with the effective income tax rate for the three and six months ended June 30, 2015 and 2014. For the Three Months Ended June 30, 2015 For the Six Months Ended June 30, 2015 Tax Provision Rate of Tax Tax Provision Rate of Tax (Unaudited) (Unaudited) (Unaudited) (Unaudited) Tax at PRC statutory rate $ 779,014 25.0 % $ 1,475,542 25.0 % VIE tax holiday (388,408 ) (12.5 ) (735,701 ) (12.5 ) Effective tax rate $ 390,606 12.5 % $ 739,841 12.5 % Three Months Ended Six Months Ended Tax Provision Rate of Tax Tax Provision Rate of Tax (Unaudited) (Unaudited) (Unaudited) (Unaudited) Tax at PRC statutory rate $ (19,656 ) 12.50 % $ (42,727 ) 12.50 % Valuation allowance 24,700 (15.7 ) 57,626 (15.1 ) Effective tax rate $ 5,044 (3.21 )% $ 9,899 (2.59 )% The following presents the aggregate dollar and per share effects of the Company’s VIE tax holidays: Three Months Ended Six Months Ended 2015 2014 2015 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Aggregate dollar effect of tax holiday $ 388,408 $ - $ 735,701 $ - Per share effect, basic and diluted $ 0.01 $ - $ 0.01 $ - The Company’s PRC tax filings for the tax year ended December 31, 2013 were examined by the tax authorities in May, 2014. The examinations were completed and resulted in no adjustments. The Company’s PRC tax filings for the tax year ended December 31, 2014 were examined by the tax authorities in May, 2015. The examinations were completed and resulted in no adjustments. The Company did not file its U.S. federal income tax returns, including, without limitation, information returns on Internal Revenue Service (“IRS”) Form 5471, “Information Return of U.S. Persons with Respect to Certain Foreign Corporations” for the fiscal year ended June 30, 2012, the six months period ended December 31, 2012, a short year income tax return required to be filed as a result of the change in the fiscal year and the year ended December 31, 2013 and 2014. Because the Company did not generate any income in the United States or otherwise have any U.S. taxable income, the Company does not believe that it has any U.S. federal income tax liabilities with respect to any transactions that the Company or any of its subsidiaries may have engaged in through June 30, 2015. However, there can be no assurance that the IRS will agree with this position, and therefore the Company ultimately could be liable for U.S. federal income taxes, interest and penalties. The tax year ended June 30, 2012, six-month tax period ended December 31, 2012, and the tax years ended December 31, 2014 and 2013 remain open to examination by the IRS. All of the Company’s operations are conducted in the PRC. At June 30, 2015, the Company’s unremitted foreign earnings of its PRC subsidiaries totaled approximately $55.8 million and the Company held approximately $55.5 million of cash and cash equivalents in the PRC. These unremitted earnings are planned to be reinvested indefinitely into the operations of the Company in the PRC. While repatriation of cash held in the PRC may be restricted by local PRC laws, most of the Company’s foreign cash balances could be repatriated to the United States but, under current U.S. income tax laws, would be subject to U.S. federal income taxes less applicable foreign tax credits. Determination of the amount of unrecognized deferred U.S. income tax liability on the unremitted earnings is not practicable because of the complexities associated with this hypothetical calculation, and as the Company does not plan to repatriate any cash in the PRC to the United States during the foreseeable future, no deferred tax liability has been accrued. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies [Abstract] | |
CONTINGENCIES | 10. CONTINGENCIES As disclosed in Note 9, the Company was delinquent in filing certain tax returns with the U.S. Internal Revenue Service. The Company is unable to determine the amount of penalties, if any, that may be assessed at this time. Management is of the opinion that penalties, if any, that may be assessed would not be material to the consolidated financial statements. The Company did not file the information reports for the years ended December 31, 2014, 2013 and 2012, concerning its interest in foreign bank accounts on form TDF 90-22.1, “Report of Foreign Bank and Financial Accounts” (“FBAR”). Not complying with the FBAR reporting and recordkeeping requirements will subject the Company to civil penalties up to $10,000 for each of its foreign bank accounts. The Company has not determined the amount of any penalties that may be assessed at this time and believes that penalties, if any, that may be assessed would not be material to the consolidated financial statements. |
Concentration of Credit Risk
Concentration of Credit Risk | 6 Months Ended |
Jun. 30, 2015 | |
Concentration of Credit Risk [Abstract] | |
CONCENTRATION OF CREDIT RISK | 11. CONCENTRATION OF CREDIT RISK Cash and cash equivalents Substantially all of the Company’s bank accounts are in banks located in the People’s Republic of China and are not covered by protection similar to that provided by the FDIC on funds held in United States banks. Major customers One customer accounted for approximately 10% of total sales for the three months ended June 30, 2015 and the same customer accounted for approximately 11% of total sales for the six months ended June 30, 2015. During the three and six months June 30, 2014, the Company had no sales. Five customers accounted for approximately 92% of accounts receivable as of June 30, 2015. Seven customers accounted for approximately 91% of accounts receivable as of December, 2014. |
Contributions to Multi-Employer
Contributions to Multi-Employer Welfare Programs | 6 Months Ended |
Jun. 30, 2015 | |
Contributions to Multi-Employer Welfare Programs [Abstract] | |
CONTRIBUTIONS TO MULTI-EMPLOYER WELFARE PROGRAMS | 12. CONTRIBUTIONS TO MULTI-EMPLOYER WELFARE PROGRAMS Shenzhen Wonhe is required to make contributions to PRC multi-employer welfare programs by government regulation sometimes identified as the Mainland China Contribution Plan. Specifically, the following regulations require that the Company pay a percentage of employee salaries into the specified plans: Regulation Plan % of Salary Shenzhen Special Economic Zone Social Retirement Insurance Regulations Pension 13% Shenzhen Work-Related Injury Insurance Regulations Workers Comp. 0.4% Guangdong Unemployment Insurance Regulations Unemployment 2% Housing Provident Fund Management Regulations Housing 5% Shenzhen Social Medical Insurance Measures Medical 6.5% or 0.6%* Guangdong Employees Maternity Insurance Maternity 0.5% or 0.2%* * Depending on their position in the Company, employees receive either hospitalization, medical and maternity insurance or comprehensive medical and maternity insurance, which is a lower premium. Total contributions to employee welfare programs for the three and six months ended June 30, 2015 and 2014 were as follow: For the three months ended June 30, For the six months ended 2015 2014 2015 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Total contributions $ 4,217 $ 4,846 $ 14,512 $ 9,631 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS In July 2015, World Win, a wholly owned subsidiary of the Company, received 60% of the ownership in Wonhe Multimedia Commerce Ltd, a company newly organized in Australia (“Australian Wonhe”). 25% of the stock of Australian Wonhe is owned by Wonhe International (Hong Kong) which is owned and controlled by Qing Tong, the chairman of the Board of Director of our Company. The remaining 15% is owned by three unaffiliated investors. The ownership of Australian Wonhe is as follows Shares World Win 81,000,000 Wonhe International Holdings Group Co., Ltd.* 33,750,000 Dowshe Group Ltd. 9,450,000 Huili Chen 6,750,000 Beijing Ruihua Future Investment Management Co., Ltd. 4,050,000 Total 135,000,000 * Wonhe International Holdings Croup Co., Ltd. is owned 100% by Qing Tong, the chairman of the Board of Director of the Company. On August 5, 2015, World Win sold all the outstanding common stock of Kuayu International Holdings Group Limited (“Kuayu”) to Australian Wonhe for 10,000 Hong Kong Dollars (“US$1,290”). Kuayu is the sole owner of Shengshihe Management Consulting (Shenzhen) Co. Ltd, the subsidiary in China that has the VIE agreement with ShenzZhen Wonhe Technology Co., Ltd., the operating company. The effect of the sale of Kuayu was to reduce the Company’s interest in the operating company from 100% to 60%. During the quarter ended September 30, 2015, the Company will recognize a transaction loss of approximately $13,400,000, based upon June 30, 2015 information. Australian Wonhe plans to sell 15 to 20 million shares on the Australian Stock Exchange at $0.15 US per share to assist Australian Wonhe in aiding the VIE’s commercial development objectives. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Accounting and Presentation | Basis of Accounting and Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting. The consolidated financial statements as of and for the three and six months ended June 30, 2015 and 2014 include Wonhe High-Tech, World Win, Kuayu, Shengshihe Consulting and its VIE, Shenzhen Wonhe. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited interim consolidated financial statements of the Company as of June 30, 2015 and for the three and six months ended June 30, 2015 and 2014, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the SEC which apply to interim financial statements. Accordingly, they do not include all of the information and footnotes normally required by accounting principles generally accepted in the United States of America for annual financial statements. The interim consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K for the year ended December 31, 2014, previously filed with the SEC. In the opinion of management, the interim information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of the results to be expected for future quarters or for the year ending December 31, 2015. |
Variable Interest Entity | Variable Interest Entity Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation” Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. The reporting entity’s determination of whether it has this power is not affected by the existence of kick-out rights or participating rights, unless a single enterprise, including its related parties and de facto agents, have the unilateral ability to exercise those rights. Shenzhen Wonhe’s stockholders do not hold any kick-out rights that affect the consolidation determination. Through the VIE agreements disclosed in Note 1, the Company is deemed the primary beneficiary of Shenzhen Wonhe and, accordingly, the balance sheets, results of operations and cash flows of Shenzhen Wonhe have been included in the accompanying consolidated financial statements. Shenzhen Wonhe has no assets that are collateral for or restricted solely to settle its obligations. The creditors of Shenzhen Wonhe do not have recourse to the general credit of Shengshihe Consulting or its parent entities. Principally, almost of the assets recorded on the balance sheets of the Company are owned by Shenzhen Wonhe. In addition, all of the unrecognized revenue-producing assets of the Company are owned by Shenzhen Wonhe. Likewise, all of the recognized assets of Shenzhen Wonhe are recorded on the Company’s balance sheets, and all of the unrecognized assets of Shenzhen Wonhe are utilized for the benefit of the Company. The following are financial statement amounts and balances of Shenzhen Wonhe that have been included in the accompanying consolidated financial statements. ASSETS June 30, December 31, (Unaudited) Current assets: Cash $ 55,546,870 $ 34,228,266 Account receivable 2,711,796 3,267,810 Inventory 2,774 - Total current assets 58,261,440 37,496,076 Fixed assets, net 674,650 197,250 Other assets: Intangible assets 25,772 8,667 Other assets 16,912 14,223 Prepaid income taxes 1,614,330 2,341,300 Total other assets 1,657,014 2,364,190 TOTAL ASSETS $ 60,593,104 $ 40,057,516 LIABILITIES June 30, December 31, (Unaudited) Current liabilities: Payable to WFOE (1) $ 25,922,042 $ 21,029,629 Due to Wonhe High-Tech International, Inc. (2) 25,056,724 9,882,600 Payroll payable 37,194 21,192 Taxes payable 89,060 116,629 Accrued expenses and other payables 487,563 401,584 Total current liabilities 51,592,583 31,451,634 TOTAL LIABILITIES $ 51,592,583 $ 31,451,634 (1) Payable to WFOE represents amounts due to Shengshihe Consulting under the Exclusive Technical Service and Business Consulting Agreement for consulting services provided to Shenzhen Wonhe in exchange for 95% of Shenzhen Wonhe’s net income and monthly payments of RMB 50,000 (approximately US$8,165). The monthly payments have been paid in full as of June 30, 2015. (2) Due to Wonhe High-Tech International, Inc. represents the cash received by Shenzhen Wonhe for the sale of 14,480,000 common shares issued by Wonhe High-Tech International, Inc. on May 2, 2013 at $0.68 each (total approximately US$9,850,000). 20,130,000 common shares issued by Wonhe High-Tech International, Inc. in April, 2015 at $0.77 each (Approximately US$15,196,000). Three Months Ended Six Months Ended 2015 2014 2015 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Sales $ 7,243,941 $ - $ 13,424,684 $ - Net income (loss) (3) $ 2,718,856 $ (162,074 ) $ 5,149,908 $ (384,315 ) (3) Under the Exclusive Technical Service and Business Consulting Agreement, 95% of the net income is to be remitted to the WFOE. For the Six Months Ended 2015 2014 (Unaudited) (Unaudited) Net cash provided by (used in) operating activities $ 21,720,695 $ (346,129 ) Net cash provided by financing activities - 4,189 Effect of exchange rate changes on cash (402,091 ) (206,787 ) Net change in cash $ 21,318,604 $ (548,727 ) The Company believes that Shengshihe Consulting’s contractual agreements with Shenzhen Wonhe are in compliance with PRC law and are legally enforceable. The stockholders of Shenzhen Wonhe are also the senior management of the Company and therefore the Company believes that they have no current interest in seeking to act contrary to the contractual arrangements. However, Shenzhen Wonhe and its stockholders may fail to take certain actions required for the Company’s business or to follow the Company’s instructions despite their contractual obligations to do so. Furthermore, if Shenzhen Wonhe or its stockholders do not act in the best interests of the Company under the contractual arrangements and any dispute relating to these contractual arrangements remains unresolved, the Company will have to enforce its rights under these contractual arrangements through the operations of PRC law and courts and therefore will be subject to uncertainties in the PRC legal system. All of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. As a result, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements, which may make it difficult to exert effective control over Shenzhen Wonhe, and its ability to conduct business may be adversely affected. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Foreign Currency Translations | Foreign Currency Translation Almost all of the Company’s assets are located in the PRC. The functional currency for the majority of the operations is the Renminbi (“RMB”). For Kuayu, the functional currency for the majority of its operations is the Hong Kong Dollar (“HKD”). The Company uses the US Dollar for financial reporting purposes. The consolidated financial statements of the Company have been translated into US dollars in accordance with FASB ASC 830, “Foreign Currency Matters.” All asset and liability accounts have been translated using the exchange rate in effect at the balance sheet date. Equity accounts have been translated at their historical exchange rates when the capital transactions occurred. The consolidated statements of income (loss) and other comprehensive income (loss) amounts have been translated using the average exchange rate for the periods presented. Adjustments resulting from the translation of the Company’s consolidated financial statements are recorded as other comprehensive income (loss). The exchange rates used to translate amounts in RMB into US dollars for the purposes of preparing the consolidated financial statements are as follows: June 30, 2015 December 31, Balance sheet items, except for stockholders’ equity, as of periods end 0.1632 0.1625 Three Months Ended Six Months Ended June 30 2015 2014 2015 2014 Amounts included in the statements of income and cash flows for the periods 0.1633 0.1628 0.1629 0.1628 For the three months ended June 30, 2015 and 2014, foreign currency translation adjustments of $6,368 and $45,748 and for the six months ended June 30, 2015 and 2014, foreign currency translation adjustments of $162,125 and $(277,851), respectively, have been reported as other comprehensive income (loss). Other comprehensive income (loss) of the Company consists entirely of foreign currency translation adjustments. Pursuant to ASC 740-30-25-17, “Exceptions to Comprehensive Recognition of Deferred Income Taxes,” Although government regulations now allow convertibility of the RMB for current account transactions, significant restrictions still remain. Hence, such translations should not be construed as representations that the RMB could be converted into US dollars at that rate or any other rate. The value of the RMB against the US dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions. Any significant revaluation of the RMB may materially affect the Company’s financial condition in terms of US dollar reporting. |
Revenue and Cost Recognition | Revenue and Cost Recognition The Company receives revenues from the sale of electronic products. The Company’s revenue recognition policies are in compliance with SEC Staff Accounting Bulletin (“SAB”) 104 (codified in FASB ASC Topic 605). Sales revenue is recognized when the products are delivered and when customer acceptance occurs, the price is fixed or determinable, no other significant obligations of the Company exist and collectability is reasonably assured. Finished goods are delivered from outsourced manufacturers to the Company. Revenue is recognized when the title to the products has been passed to the customer, which is the date the products are picked up by the customer at the Company’s location or delivered to the designated locations by Company employees and accepted by the customer and the previously discussed requirements are met. The customer’s acceptance occurs upon inspection at the time of pickup or delivery by signing an acceptance form. The Company does not provide its customers with the right of return. A 36-month warranty is offered to customers for exchange or repair of defective products, the cost of which is substantially covered by the outsourced manufacturers’ warranty policies as specified in the contract between the Company and its outsourced manufacturers. As a result, the Company does not recognize a warranty liability. Payments received before all of the relevant criteria for revenue recognition are met are recorded as advances from customers. The Company follows the guidance set forth by FASB ASC 605-45-45 to assess whether the Company acts as the principal or agent in the transaction. The determination involves judgment and is based on an evaluation of whether the Company has the substantial risks and rewards of ownership under the terms of the arrangement. Based on the assessment, the Company determined it acts as a principal in the transaction and reports revenues on the gross basis. FASB ASC 605-45-45 sets forth eight criteria that support reporting recognition of gross revenue (i.e. principal sales) and three that support reporting net revenue (i.e. agent sales). As applied to the relationship between the Company, its manufacturers, and its customers, the following are the criteria that support reporting gross revenue: ● Shenzhen Wonhe is the primary obligor in each sale, as it is responsible for fulfillment of customer orders, including the acceptability of the products purchased by the customer. ● Shenzhen Wonhe has general inventory risk, as it takes title to a product before that product is ordered by or delivered to a customer. ● Shenzhen Wonhe establishes its own pricing for its products. ● Shenzhen Wonhe has discretion in supplier selection. ● Shenzhen Wonhe designed the Home Media Center Model 720 (the “HMC720”) and two categories of Wifi Routers and is responsible for all of its specifications. ● Shenzhen Wonhe has physical inventory loss risk until the product is delivered to the customer. ● Shenzhen Wonhe has full credit risk for amounts billed to its customers. The only criterion supporting recognition of gross revenue that is not satisfied by the relationship between the Company and its manufacturers is: the entity changes the product or performs part of the service. Moreover, none of the three criteria supporting recognition of net revenue is present in the Company’s sales transactions. For this reason, the Company records gross revenue with respect to sales by Shenzhen Wonhe. During the last quarter of 2014, the Company started to sell an updated product, HMC720, which was developed by the Company and outsourced to others to produce. During the first quarter of 2015, the Company started to sell a new product, a Wifi-Router YLT-100S. During the second quarter of 2015, the Company commenced the sale of another Wifi-Router, YLT-300S. These Routers were developed by the Company and outsourced to others to produce. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments FASB ASC 820 specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy: Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly. Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements. ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of June 30 2015 and December 31, 2014, none of the Company’s assets and liabilities were required to be reported at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including cash, accounts receivable and various payables, approximate their fair values due to the short term nature of these financial instruments. There were no changes in methods or assumptions during the periods presented. |
Advertising Costs | Advertising Costs Advertising costs are paid to an advertising agency for market analysis and strategic planning and are charged to operations when incurred. Advertising costs were $97,980 and $32,200 for the three months ended June 30, 2015 and 2014, respectively, and $97,740 and $130,240 for the six months ended June 30, 2015 and 2014. |
Research and Development Costs | Research and Development Costs The Company develops software to be marketed as part of its products, and that is not for internal use. The software is essential to the functionality of the Company’s tangible products. Therefore, the Company accounts for research and development costs incurred in development of its software in accordance with FASB ASC 985-20. Research and development costs are charged to operations when incurred. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Company’s products are released soon after technological feasibility has been established. Therefore, costs incurred subsequent to achievement of technological feasibility are usually not significant, and generally most software development costs have been expensed as incurred. Research and development costs were $31,597 and $23,569 for the three months ended June 30, 2015 and 2014, respectively, and $55,385 and $47,280 for the six months ended June 30, 2015 and 2014, respectively |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at cost, net of an allowance for doubtful accounts. Receivables outstanding longer than the payment terms are considered past due. The Company provides an allowance for doubtful accounts for estimated losses resulting from the failure of customers to make required payments, when due. The Company reviews the accounts receivable on a periodic basis and makes allowances where there is doubt as to the collectability of the outstanding balance. In evaluating the collectability of an individual receivable balance, the Company considers many factors, including the age of the balance, the customer’s payment history, its current credit-worthiness and current economic trends. As of June 30, 2015 and December 31, 2014, the Company considered all accounts receivable collectable and an allowance for doubtful accounts was not necessary. For the three and six months ended June 30, 2015 and 2014, the Company did not write off any accounts receivable as bad debts. |
Inventory | Inventory Inventory, comprised of HMC 720s, is valued at the lower of cost or market value. The value of inventory is determined using the first-in, first-out method. |
Fixed Assets and Depreciation | Fixed Assets and Depreciation Fixed assets are recorded at cost, less accumulated depreciation. Cost includes the price paid to acquire the asset, and any expenditure that substantially increases the asset’s value or extends the useful life of an existing asset. Leasehold improvements are amortized over the lesser of the remaining term of the lease or the estimated useful lives of the improvements. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the periods benefited. Maintenance and repairs are generally expensed as incurred. The estimated useful lives for fixed asset categories are as follows: Office equipment 5 years Motor vehicles 5 years Leasehold improvements Shorter of the remaining term of the lease or life of the improvement |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company applies FASB ASC 360, “Property, Plant and Equipment,” |
Statutory Reserve Fund | Statutory Reserve Fund Pursuant to corporate law of the PRC, Shengshihe Consulting and the VIE are required to transfer 10% of their net income, as determined under PRC accounting rules and regulations, to a statutory reserve fund until such reserve balance reaches 50% of their registered capital. The statutory reserve fund is non-distributable, other than during liquidation, and can be used to fund prior years’ losses, if any, and may be utilized for business expansion or used to increase registered capital, provided that the remaining reserve balance after such use is not less than 25% of the registered capital. As of June 30, 2015, $2,524,259 has been transferred from retained earnings to the statutory reserve fund. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes” ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with these tax positions. As of June 30, 2015 and December 31, 2014, the Company did not have any liabilities for unrecognized tax benefits. The income tax laws of various jurisdictions in which the Company, its subsidiaries and the VIE operate are summarized as follows: United States The Company is subject to United States tax at graduated rates from 15% to 35%. No provision for income taxes in the United States has been made as the Company had no U.S. taxable income for the three and six months ended June 30, 2015 and 2014. PRC Shenzhen Wonhe and Shengshihe Consulting are subject to an Enterprise Income Tax at 25% and each file their own tax returns. Consolidated tax returns are not permitted in China. On July 23, 2012, the National Tax Bureau, Shenzhen Nanshan Branch declared that Shenzhen Wonhe is qualified for the preferential tax treatment afforded by the PRC to enterprises engaged in the development of software or integrated circuits. As a result, starting from its first profitable year, Shenzhen Wonhe had a two-year exemption from the Enterprise Income Tax followed by a 50% exemption for the next three years commencing January 1, 2014. The tax regulations required that the enterprise pay income tax until its eligibility for the exemption is determined - i.e. until the local tax bureau determines that the enterprise has recorded its first profitable year. Payments were made of approximately $2,600,000 (RMB 16,107,000) based upon 2012 income while the local tax bureau reviewed the Company’s financial results. The National Tax Bureau determined that the Company had realized a profit in 2012. Since the Company was declared exempt from tax with respect to 2012, the payments that were made will be applied to future income taxes due. The payments have been reflected as prepaid income taxes on the balance sheet as of June 30, 2015 and 2014. For the six months ended June 30, 2015, the Company offset the income tax provision of $735,701, leaving a balance of prepaid income taxes of $1,614,330. BVI World Win is incorporated in the BVI and is governed by the income tax laws of the BVI. According to current BVI income tax law, the applicable income tax rate for the Company is 0%. Hong Kong Kuayu International is incorporated in Hong Kong. Pursuant to the income tax laws of Hong Kong, the Company is not subject to tax on non Hong Kong source income. |
Noncontrolling interests | Noncontrolling Interests The Company evaluated and determined that under the VIE agreements as disclosed in Note 1, it is deemed to be the primary beneficiary of Shenzhen Wonhe. The noncontrolling interest, representing 5% of the net assets in Shenzhen Wonhe not attributable, directly or indirectly to the Company, is measured at its carrying value in the stockholders’ equity section of the consolidated balance sheets. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The Company computes net income (loss) per common share in accordance with FASB ASC 260, “Earnings Per Share” |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of variable interest entities, consolidated financial statements | ASSETS June 30, December 31, (Unaudited) Current assets: Cash $ 55,546,870 $ 34,228,266 Account receivable 2,711,796 3,267,810 Inventory 2,774 - Total current assets 58,261,440 37,496,076 Fixed assets, net 674,650 197,250 Other assets: Intangible assets 25,772 8,667 Other assets 16,912 14,223 Prepaid income taxes 1,614,330 2,341,300 Total other assets 1,657,014 2,364,190 TOTAL ASSETS $ 60,593,104 $ 40,057,516 LIABILITIES June 30, December 31, (Unaudited) Current liabilities: Payable to WFOE (1) $ 25,922,042 $ 21,029,629 Due to Wonhe High-Tech International, Inc. (2) 25,056,724 9,882,600 Payroll payable 37,194 21,192 Taxes payable 89,060 116,629 Accrued expenses and other payables 487,563 401,584 Total current liabilities 51,592,583 31,451,634 TOTAL LIABILITIES $ 51,592,583 $ 31,451,634 (1) Payable to WFOE represents amounts due to Shengshihe Consulting under the Exclusive Technical Service and Business Consulting Agreement for consulting services provided to Shenzhen Wonhe in exchange for 95% of Shenzhen Wonhe’s net income and monthly payments of RMB 50,000 (approximately US$8,165). The monthly payments have been paid in full as of June 30, 2015. (2) Due to Wonhe High-Tech International, Inc. represents the cash received by Shenzhen Wonhe for the sale of 14,480,000 common shares issued by Wonhe High-Tech International, Inc. on May 2, 2013 at $0.68 each (total approximately US$9,850,000). 20,130,000 common shares issued by Wonhe High-Tech International, Inc. in April, 2015 at $0.77 each (Approximately US$15,196,000). |
Schedule of operating and non operating income expense | Three Months Ended Six Months Ended 2015 2014 2015 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Sales $ 7,243,941 $ - $ 13,424,684 $ - Net income (loss) (3) $ 2,718,856 $ (162,074 ) $ 5,149,908 $ (384,315 ) (3) Under the Exclusive Technical Service and Business Consulting Agreement, 95% of the net income is to be remitted to the WFOE. |
Schedule of activities resulted in cash increment | For the Six Months Ended 2015 2014 (Unaudited) (Unaudited) Net cash provided by (used in) operating activities $ 21,720,695 $ (346,129 ) Net cash provided by financing activities - 4,189 Effect of exchange rate changes on cash (402,091 ) (206,787 ) Net change in cash $ 21,318,604 $ (548,727 ) |
Summary of exchange rates used to translate amounts in RMB into US dollars | June 30, 2015 December 31, Balance sheet items, except for stockholders’ equity, as of periods end 0.1632 0.1625 Three Months Ended Six Months Ended June 30 2015 2014 2015 2014 Amounts included in the statements of income and cash flows for the periods 0.1633 0.1628 0.1629 0.1628 |
Summary of estimated useful lives for fixed assets | Office equipment 5 years Motor vehicles 5 years Leasehold improvements Shorter of the remaining term of the lease or life of the improvement |
Fixed Assets (Tables)
Fixed Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fixed Assets [Abstract] | |
Summary of components of fixed assets | June 30, December 31, 2015 2014 (Unaudited) Office equipment $ 194,974 $ 157,751 Motor vehicles 701,233 219,419 Leasehold improvements 109,817 109,346 1,006,024 486,516 Less: accumulated depreciation (331,374 ) (289,266 ) Fixed assets, net $ 674,650 $ 197,250 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Intangible Assets [Abstract] | |
Summary of intangible assets | June 30, December 31, 2014 (Unaudited) Software $ 48,144 $ 26,000 Less: accumulated amortization (22,372 ) (17,333 ) Intangible assets, net $ 25,772 $ 8,667 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Income Taxes [Abstract] | |
Summary of provision for (benefit from) income taxes | For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Current $ 390,606 $ 5,044 $ 739,841 $ 9,899 Deferred - (22,178 ) - (52,677 ) Change in valuation allowance - 22,178 - 52,677 $ 390,606 $ 5,044 $ 739,841 $ 9,899 |
Summary of reconciliation of the statutory rate with the effective income tax rate | For the Three Months Ended June 30, 2015 For the Six Months Ended June 30, 2015 Tax Provision Rate of Tax Tax Provision Rate of Tax (Unaudited) (Unaudited) (Unaudited) (Unaudited) Tax at PRC statutory rate $ 779,014 25.0 % $ 1,475,542 25.0 % VIE tax holiday (388,408 ) (12.5 ) (735,701 ) (12.5 ) Effective tax rate $ 390,606 12.5 % $ 739,841 12.5 % Three Months Ended Six Months Ended Tax Provision Rate of Tax Tax Provision Rate of Tax (Unaudited) (Unaudited) (Unaudited) (Unaudited) Tax at PRC statutory rate $ (19,656 ) 12.50 % $ (42,727 ) 12.50 % Valuation allowance 24,700 (15.7 ) 57,626 (15.1 ) Effective tax rate $ 5,044 (3.21 )% $ 9,899 (2.59 )% |
Summary of aggregate dollar and per share effects of the Company's VIE tax holidays | Three Months Ended Six Months Ended 2015 2014 2015 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Aggregate dollar effect of tax holiday $ 388,408 $ - $ 735,701 $ - Per share effect, basic and diluted $ 0.01 $ - $ 0.01 $ - |
Contributions to Multi-Employ25
Contributions to Multi-Employer Welfare Programs (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Contributions to Multi-Employer Welfare Programs [Abstract] | |
Schedule of employee salaries required to pay into plans | Regulation Plan % of Salary Shenzhen Special Economic Zone Social Retirement Insurance Regulations Pension 13% Shenzhen Work-Related Injury Insurance Regulations Workers Comp. 0.4% Guangdong Unemployment Insurance Regulations Unemployment 2% Housing Provident Fund Management Regulations Housing 5% Shenzhen Social Medical Insurance Measures Medical 6.5% or 0.6%* Guangdong Employees Maternity Insurance Maternity 0.5% or 0.2%* * Depending on their position in the Company, employees receive either hospitalization, medical and maternity insurance or comprehensive medical and maternity insurance, which is a lower premium. |
Schedule of percentage of employee salaries required to pay into plans | For the three months ended June 30, For the six months ended 2015 2014 2015 2014 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Total contributions $ 4,217 $ 4,846 $ 14,512 $ 9,631 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Schedule of owned shares | Shares World Win 81,000,000 Wonhe International Holdings Group Co., Ltd.* 33,750,000 Dowshe Group Ltd. 9,450,000 Huili Chen 6,750,000 Beijing Ruihua Future Investment Management Co., Ltd. 4,050,000 Total 135,000,000 * Wonhe International Holdings Croup Co., Ltd. is owned 100% by Qing Tong, the chairman of the Board of Director of the Company. |
Organization (Details)
Organization (Details) | Jun. 27, 2012shares | May. 30, 2012USD ($)$ / shares | May. 30, 2012CNY (¥) | Apr. 30, 2015$ / shares | Apr. 30, 2015¥ / shares | May. 02, 2013$ / shares | May. 30, 2012¥ / shares | Nov. 16, 2010USD ($) |
Organization (Textual) | ||||||||
Number of common stock issued in exchange of acquisition | shares | 19,128,130 | |||||||
Registered capital of Shenzhen Wonhe Technology Co., Ltd. | $ 7,495,000 | |||||||
Purchase price per share paid for equity interest acquired | (per share) | $ 0.16 | $ 0.77 | ¥ 4.72 | $ 0.68 | ¥ 1 | |||
Service fee paid to Shengshihe Consulting, description | 95% of Shenzhen Wonhe’s annual net income plus an additional monthly payment of approximately $8,165 (RMB 50,000). The agreement has an unlimited term and can only be terminated by mutual agreement of the parties. | 95% of Shenzhen Wonhe’s annual net income plus an additional monthly payment of approximately $8,165 (RMB 50,000). The agreement has an unlimited term and can only be terminated by mutual agreement of the parties. | ||||||
Additional payment paid for consideration of consulting services | $ 8,165 | ¥ 50,000 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Current assets: | |||||
Cash | $ 55,784,833 | $ 34,447,100 | $ 34,637,591 | $ 35,146,245 | |
Accounts receivable | 2,711,796 | $ 3,267,810 | |||
Inventory | 2,774 | ||||
Total current assets | 58,499,403 | $ 37,714,910 | |||
Fixed assets, net | 674,650 | 197,250 | |||
Other assets: | |||||
Intangible assets | 25,772 | 8,667 | |||
Other assets | 16,912 | 14,223 | |||
Prepaid income taxes | 1,614,330 | 2,341,300 | |||
Total other assets | 1,657,014 | 2,364,190 | |||
TOTAL ASSETS | 60,831,067 | 40,276,350 | |||
Current liabilities: | |||||
Payroll payable | 38,695 | 22,687 | |||
Taxes payable | 150,663 | 172,248 | |||
Accrued expenses and other payables | 140,842 | 154,261 | |||
Total current liabilities | 624,725 | 590,757 | |||
Variable Interest Entity [Member] | |||||
Current assets: | |||||
Cash | 55,546,870 | 34,228,266 | |||
Accounts receivable | 2,711,796 | $ 3,267,810 | |||
Inventory | 2,774 | ||||
Total current assets | 58,261,440 | $ 37,496,076 | |||
Fixed assets, net | 674,650 | 197,250 | |||
Other assets: | |||||
Intangible assets | 25,772 | 8,667 | |||
Other assets | 16,912 | 14,223 | |||
Prepaid income taxes | 1,614,330 | 2,341,300 | |||
Total other assets | 1,657,014 | 2,364,190 | |||
TOTAL ASSETS | 60,593,104 | 40,057,516 | |||
Current liabilities: | |||||
Payable to WFOE(1) | [1] | 25,922,042 | 21,029,629 | ||
Due to Wonhe High-Tech International, Inc. (2) | [2] | 25,056,724 | 9,882,600 | ||
Payroll payable | 37,194 | 21,192 | |||
Taxes payable | 89,060 | 116,629 | |||
Accrued expenses and other payables | 487,563 | 401,584 | |||
Total current liabilities | 51,592,583 | 31,451,634 | |||
TOTAL LIABILITIES | $ 51,592,583 | $ 31,451,634 | |||
[1] | Payable to WFOE represents amounts due to Shengshihe Consulting under the Exclusive Technical Service and Business Consulting Agreement for consulting services provided to Shenzhen Wonhe in exchange for 95% of Shenzhen Wonhe's net income and monthly payments of RMB 50,000 (approximately US$8,165). The monthly payments have been paid in full as of June 30, 2015. | ||||
[2] | Due to Wonhe High-Tech International, Inc. represents the cash received by Shenzhen Wonhe for the sale of 14,480,000 common shares issued by Wonhe High-Tech International, Inc. on May 2, 2013 at $0.68 each (total approximately US$9,850,000). 20,130,000 common shares issued by Wonhe High-Tech International, Inc. in April, 2015 at $0.77 each (Approximately US$15,196,000). |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Summary of variable interest entity, consolidated, income | |||||
Sales | $ 7,243,941 | $ 13,424,684 | |||
Net income (loss) | 2,589,506 | $ (154,247) | 4,904,831 | $ (371,471) | |
WFOE [Member] | |||||
Summary of variable interest entity, consolidated, income | |||||
Sales | 7,243,941 | 13,424,684 | |||
Net income (loss) | [1] | $ 2,718,856 | $ (162,074) | $ 5,149,908 | $ (384,315) |
[1] | Under the Exclusive Technical Service and Business Consulting Agreement, 95% of the net income is to be remitted to the WFOE. |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details 2) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Summary of variable interest entity, consolidated, cash flows | ||
Net cash provided by (used in) operating activities | $ 6,468,757 | $ (236,973) |
Net cash provided by financial activities | 15,248,196 | 4,095 |
Effect of exchange rate changes on cash | 162,320 | (275,776) |
Net change in cash | 21,337,733 | (508,654) |
WFOE [Member] | ||
Summary of variable interest entity, consolidated, cash flows | ||
Net cash provided by (used in) operating activities | $ 21,720,695 | (346,129) |
Net cash provided by financial activities | 4,189 | |
Effect of exchange rate changes on cash | $ (402,091) | (206,787) |
Net change in cash | $ 21,318,604 | $ (548,727) |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details 3) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Summary of Exchange rates used to translate amounts in RMB into US dollars | |||||
Balance sheet items except for stockholders equity as of periods end | 0.1632 | 0.1632 | 0.1625 | ||
Amounts included in the statements of income and cash flows for the periods | 0.1633 | 0.1628 | 0.1629 | 0.1628 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details 4) | 6 Months Ended |
Jun. 30, 2015 | |
Office equipment [Member] | |
Schedule of estimated useful lives for fixed assets | |
Estimated useful lives for fixed assets | 5 years |
Motor vehicles [Member] | |
Schedule of estimated useful lives for fixed assets | |
Estimated useful lives for fixed assets | 5 years |
Leasehold improvements [Member] | |
Schedule of estimated useful lives for fixed assets | |
Estimated useful lives for fixed assets | Shorter of the remaining term of the lease or life of the improvement |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Details Textual) | May. 02, 2013USD ($)$ / sharesshares | Apr. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)shares | Jun. 30, 2015CNY (¥)shares | Jun. 30, 2014USD ($) | Jun. 30, 2015CNY (¥) | Apr. 30, 2015¥ / shares | Dec. 31, 2014USD ($) | May. 30, 2012$ / shares | May. 30, 2012¥ / shares |
Accounting Policies (Textual) | ||||||||||||
Payable for issuance of common stock | shares | 14,480,000 | 20,130,000 | 4,600,000 | 4,600,000 | ||||||||
Common stock purchase price | (per share) | $ 0.68 | $ 0.77 | ¥ 4.72 | $ 0.16 | ¥ 1 | |||||||
Issuance of common stock | $ 9,850,000 | $ 15,196,000 | ||||||||||
Foreign currency translation adjustments | $ 6,368 | $ 45,748 | $ 162,125 | $ (277,851) | ||||||||
Advertising costs | 97,980 | 32,200 | 97,740 | 130,240 | ||||||||
R & D expenses | $ 31,597 | 23,569 | $ 55,385 | 47,280 | ||||||||
Applicable income tax rate by income tax laws of BVI | 0.00% | 0.00% | ||||||||||
Noncontrolling interest, Percentage of net assets in Shenzhen Wonhe | 5.00% | 5.00% | 5.00% | |||||||||
Prepaid income taxes | $ 2,600,000 | $ 2,600,000 | ¥ 16,107,000 | |||||||||
Prepaid income taxes | 1,614,330 | 1,614,330 | $ 2,341,300 | |||||||||
Income tax provision | 390,606 | $ 5,044 | $ 739,841 | $ 9,899 | ||||||||
Consulting service fees as percentage of Shenzhen Wonhe's net income | 95.00% | 95.00% | ||||||||||
Consulting expenses monthly payments | $ 8,165 | ¥ 50,000 | ||||||||||
Percentage of net income remitted to WFOE | 95.00% | 95.00% | ||||||||||
Percentage of net income transfer to statutory reserve fund | 10.00% | 10.00% | ||||||||||
Statutory reserve fund transfer limitation, description | 10% of their net income, as determined under PRC accounting rules and regulations, to a statutory reserve fund until such reserve balance reaches 50% of their registered capital. | 10% of their net income, as determined under PRC accounting rules and regulations, to a statutory reserve fund until such reserve balance reaches 50% of their registered capital. | ||||||||||
Percentage of minimum remaining reserve balance of Registered Capital, description | Not less than 25% of the registered capital. | Not less than 25% of the registered capital. | ||||||||||
Amount transfer from retained earnings to statuary reserve | $ 2,524,259 | $ 2,524,259 | ||||||||||
Federal tax at graduated rates, minimum (percentage) | 15.00% | 15.00% | ||||||||||
Federal tax at graduated rates, maximum (percentage) | 35.00% | 35.00% | ||||||||||
Enterprise income tax rate by income tax laws of PRC | 25.00% | 25.00% | ||||||||||
Enterprise Income Tax Exemption | 50.00% | 50.00% |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Summary of Components of fixed assets | ||
Fixed assets | $ 1,006,024 | $ 486,516 |
Less: accumulated depreciation | (331,374) | (289,266) |
Fixed assets, net | 674,650 | 197,250 |
Office equipment [Member] | ||
Summary of Components of fixed assets | ||
Fixed assets | 194,974 | 157,751 |
Motor vehicles [Member] | ||
Summary of Components of fixed assets | ||
Fixed assets | 701,233 | 219,419 |
Leasehold improvements [Member] | ||
Summary of Components of fixed assets | ||
Fixed assets | $ 109,817 | $ 109,346 |
Fixed Assets (Details Textual)
Fixed Assets (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Fixed Assets (Textual) | ||||
Depreciation expense | $ 20,443 | $ 20,293 | $ 42,951 | $ 40,761 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Summary of intangible assets | ||
Software | $ 48,144 | $ 26,000 |
Less: Accumulated amortization | (22,372) | (17,333) |
Intangible assets, net | $ 25,772 | $ 8,667 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Intangible Assets (Textual) | ||||
Amortization expense | $ 2,790 | $ 2,161 | $ 4,955 | $ 4,342 |
Amortization period of intangible assets | 3 years |
Commitments (Details)
Commitments (Details) | Sep. 30, 2013USD ($) | May. 31, 2015USD ($) | Apr. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)Routers | Jun. 30, 2015CNY (¥)Routers | Jun. 30, 2014USD ($) | Jun. 30, 2015CNY (¥) | Apr. 30, 2015CNY (¥) |
Commitments [Textual] | ||||||||||
Lease expiration date | Aug. 31, 2014 | May 31, 2016 | ||||||||
Rent expense | $ | $ 39,696 | $ 31,979 | $ 71,716 | $ 64,195 | ||||||
Monthly rental from unrelated third parties | $ | $ 9,579 | $ 12,119 | ||||||||
YLT [Member] | ||||||||||
Commitments [Textual] | ||||||||||
Number of commercial routers purchase | 662,000 | 662,000 | ||||||||
YLT [Member] | One Year [Member] | ||||||||||
Commitments [Textual] | ||||||||||
Number of commercial routers purchase | 200,000 | 200,000 | ||||||||
YLT [Member] | Two Year [Member] | ||||||||||
Commitments [Textual] | ||||||||||
Number of commercial routers purchase | 220,000 | 220,000 | ||||||||
YLT [Member] | Three Year [Member] | ||||||||||
Commitments [Textual] | ||||||||||
Number of commercial routers purchase | 242,000 | 242,000 | ||||||||
Employment Agreements [Member] | Nanfang Tong [Member] | ||||||||||
Commitments [Textual] | ||||||||||
Monthly salary | $ 1,306 | ¥ 8,000 | ||||||||
Agreements terminates date | Oct. 31, 2016 | Oct. 31, 2016 | ||||||||
Employment Agreements [Member] | Qing Tong [Member] | ||||||||||
Commitments [Textual] | ||||||||||
Monthly salary | $ 1,632 | ¥ 10,000 | ||||||||
Agreements terminates date | Oct. 31, 2016 | Oct. 31, 2016 | ||||||||
Strategic Cooperation Agreement [Member] | YLT [Member] | ||||||||||
Commitments [Textual] | ||||||||||
Ownership percentage | 4.87% | 4.87% | ||||||||
Term of agreement | 3 years | |||||||||
Total purchase price | $ 151,253,760 | $ 274,176 | $ 274,176 | ¥ 1,680,000 | ¥ 926,800,000 | |||||
Gross annual revenues | $ 24,480,000 | ¥ 150,000,000 | ||||||||
Net annual profit | ¥ | ¥ 12,500,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Related Party Transaction (Textual) | ||
Loan from stockholder | $ 294,525 | $ 241,561 |
Sale of Common Stock (Details)
Sale of Common Stock (Details) | May. 02, 2013$ / sharesshares | Apr. 30, 2015USD ($)IndividualsShareholdersCompanies$ / sharesshares | Apr. 30, 2015CNY (¥)shares | Jun. 30, 2015Directorsshares | Apr. 30, 2015IndividualsShareholdersCompanies¥ / shares | May. 30, 2012$ / shares | May. 30, 2012¥ / shares |
Sale Of Common Stock Textual [Abstract] | |||||||
Sale of common stock shares | shares | 14,480,000 | 20,130,000 | 20,130,000 | 4,600,000 | |||
Common stock purchase price | (per share) | $ 0.68 | $ 0.77 | ¥ 4.72 | $ 0.16 | ¥ 1 | ||
Total common stock value | $ 15,196,298 | ¥ 93,000,600 | |||||
Number of unrelated individuals | Individuals | 21 | 21 | |||||
Number of shareholders | Shareholders | 3 | 3 | |||||
Number of unrelated companies | 3 | 3 | |||||
Description of sale of stock | The Company's common stock was quoted on the OTCQB at $3.07 per share. Since over 75% of the shares in this offering were sold to unrelated parties at $0.77 per share, the Company believes that this price was more representative of the price per share than $3.07. In addition, no shares of the Company's common stock were traded on the OTCQB from January 1, 2015 to April 22, 2015. As a result, management believes that the $0.77 per share was a fair price and recorded no compensation related to the share sold to the officer/ director of the Company. | ||||||
Percentage of sale of stock | 22.70% | ||||||
Number of director | Directors | 2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Provision for (benefit from) income taxes | ||||
Current | $ 390,606 | $ 5,044 | $ 739,841 | $ 9,899 |
Deferred | (22,178) | (52,677) | ||
Change in valuation allowance | 22,178 | 52,677 | ||
Total | $ 390,606 | $ 5,044 | $ 739,841 | $ 9,899 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Summary of reconciliation of the statutory rate with the effective income tax rate | ||||
Tax at PRC statutory rate | $ 779,014 | $ (19,656) | $ 1,475,542 | $ (42,727) |
VIE tax holiday | $ (388,408) | $ (735,701) | ||
Effective tax rate | 12.50% | (3.21%) | 12.50% | (2.59%) |
Valuation Allowance | $ 24,700 | $ 57,626 | ||
Provision for income taxes | $ 390,606 | $ 5,044 | $ 739,841 | $ 9,899 |
Rate of Tax, Tax at statutory rate | 25.00% | 12.50% | 25.00% | 12.50% |
VIE tax holiday | (12.50%) | (15.70%) | (12.50%) | |
Valuation Alllowance | (15.10%) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Summary of aggregate dollar and per share effects of the Company's VIE tax holidays [Abstract] | ||||
Aggregate dollar effect of tax holiday | $ 388,408 | $ 735,701 | ||
Per share effect, basic and diluted | $ 0.01 | $ 0.01 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Income Tax (Textual) | ||||
Unremitted foreign earnings of PRC subsidiaries | $ 55,800,000 | |||
Cash and cash equivalents in PRC | $ 55,784,833 | $ 34,447,100 | $ 34,637,591 | $ 35,146,245 |
Contingencies (Details)
Contingencies (Details) | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Contingencies (Textual) | |
Civil penalties of each foreign bank account | $ 10,000 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) - Customers | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Accounts Receivable [Member] | |||
Concentration of Credit Risk (Textual) | |||
Concentration risk, Percentage | 92.00% | 91.00% | |
Number of major customer accounted for revenue | 5 | 7 | |
Customer One [Member] | |||
Concentration of Credit Risk (Textual) | |||
Concentration risk, Percentage | 10.00% | 11.00% | |
Number of major customer accounted for revenue | 1 | 1 |
Contributions to Multi-Employ47
Contributions to Multi-Employer Welfare Programs (Details) | 6 Months Ended | |
Jun. 30, 2015 | ||
Pension [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Shenzhen Special Economic Zone Social Retirement Insurance Regulations | |
% of Salary | 13 | |
Workers Comp. [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Shenzhen Work-Related Injury Insurance Regulations | |
% of Salary | 0.4 | |
Unemployment [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Guangdong Unemployment Insurance Regulations | |
% of Salary | 2 | |
Housing [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Housing Provident Fund Management Regulations | |
% of Salary | 5 | |
Medical [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Shenzhen Social Medical Insurance Measures | |
% of Salary | [1] | 6.5% or 0.6 |
Maternity [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Guangdong Employees Maternity Insurance | |
% of Salary | [1] | 0.5% or 0.2 |
[1] | Depending on their position in the Company, employees receive either hospitalization, medical and maternity insurance or comprehensive medical and maternity insurance, which is a lower premium. |
Contributions to Multi-Employ48
Contributions to Multi-Employer Welfare Programs (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Contributions to Multi-Employer Welfare Programs [Abstract] | ||||
Total contributions | $ 4,217 | $ 4,846 | $ 14,512 | $ 9,631 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | 1 Months Ended | |
Jul. 31, 2015shares | ||
Subsequent Event [Line Items] | ||
Total number of shares owned | 135,000,000 | |
World Win [Member] | ||
Subsequent Event [Line Items] | ||
Total number of shares owned | 81,000,000 | |
Wonhe International Holdings Group Co., Ltd. [Member] | ||
Subsequent Event [Line Items] | ||
Total number of shares owned | [1] | 33,750,000 |
Dowshe Group Ltd [Member] | ||
Subsequent Event [Line Items] | ||
Total number of shares owned | 9,450,000 | |
Huili Chen [Member] | ||
Subsequent Event [Line Items] | ||
Total number of shares owned | 6,750,000 | |
Beijing Ruihua Future Investment Management Co., Ltd [Member] | ||
Subsequent Event [Line Items] | ||
Total number of shares owned | 4,050,000 | |
[1] | Wonhe International Holdings Croup Co., Ltd. is owned 100% by Qing Tong, the chairman of the board of director of the company. |
Subsequent Events (Details Text
Subsequent Events (Details Textual) | Aug. 05, 2015USD ($)$ / sharesshares | Aug. 05, 2015HKDshares | May. 02, 2013shares | Sep. 30, 2015USD ($) | Jul. 31, 2015 | Apr. 30, 2015shares | Jun. 30, 2015shares |
Subsequent Event (Textual) | |||||||
Number of sale of shares | 14,480,000 | 20,130,000 | 4,600,000 | ||||
Subsequent Event [Member] | |||||||
Subsequent Event (Textual) | |||||||
Common stock shares exchange value | $ 1,290 | HKD 10,000 | |||||
Loss due to change of ownership | $ | $ 13,400,000 | ||||||
Ownership percentage shares to unaffiliated investors | 15.00% | ||||||
Subsequent Event [Member] | Wonhe International Holdings Group Co., Ltd. [Member] | |||||||
Subsequent Event (Textual) | |||||||
Ownership Percentage | 100.00% | ||||||
Subsequent Event [Member] | Kuayu Member] | |||||||
Subsequent Event (Textual) | |||||||
Percentage of exchange of shares | 100.00% | 100.00% | |||||
Subsequent Event [Member] | Multi [Member] | |||||||
Subsequent Event (Textual) | |||||||
Ownership Percentage | 60.00% | ||||||
Percentage of exchange of shares | 60.00% | 60.00% | |||||
Common stock shares exchange value | $ 1,290 | HKD 10,000 | |||||
Per share Price | $ / shares | $ 0.15 | ||||||
Subsequent Event [Member] | Multi [Member] | Maximum [Member] | |||||||
Subsequent Event (Textual) | |||||||
Number of sale of shares | 20,000,000 | 20,000,000 | |||||
Subsequent Event [Member] | Multi [Member] | Minimum [Member] | |||||||
Subsequent Event (Textual) | |||||||
Number of sale of shares | 15,000,000 | 15,000,000 | |||||
Subsequent Event [Member] | Qing Tong [Member] | |||||||
Subsequent Event (Textual) | |||||||
Ownership Percentage | 25.00% |