Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Apr. 04, 2017 | Jun. 30, 2016 | |
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-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 5,103,824 | ||
Entity Common Stock, Shares Outstanding | 73,510,130 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 42,085,769 | $ 52,074,752 |
Accounts receivable | 7,798,031 | 3,645,907 |
Inventory | 1,785 | |
Interest receivable | 100,176 | |
Prepaid expenses | 14,998 | |
Total current assets | 50,000,759 | 55,720,659 |
Fixed assets | 831,534 | 2,161,102 |
Less: accumulated depreciation | (401,535) | (416,521) |
Fixed assets, net | 429,999 | 1,744,581 |
Other assets: | ||
Intangible assets, net | 9,180 | 16,749 |
Investment in project | 5,852,430 | |
Loan receivable | 23,349,800 | |
Other assets | 31,378 | 17,121 |
Prepaid income taxes | 33,436 | 1,164,478 |
Total other assets | 23,423,794 | 7,050,778 |
TOTAL ASSETS | 73,854,552 | 64,516,018 |
Current liabilities: | ||
Accounts payable | 1,382,335 | |
Payroll payable | 54,708 | 47,891 |
Taxes payable | 281,637 | 176,997 |
Loan from stockholder | 434,324 | 335,655 |
Accrued expenses and other payables | 414,141 | 192,550 |
Total current liabilities | 2,567,145 | 753,093 |
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; 73,510,130 and 58,510,130 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively | 73,510 | 58,510 |
Additional paid-in capital | 38,791,666 | 37,592,346 |
Retained earnings | 12,469,735 | 7,610,229 |
Statutory reserve fund | 2,119,892 | 1,695,564 |
Other comprehensive (loss) | (4,145,398) | (1,989,695) |
Stockholders' equity before noncontrolling interests | 49,309,405 | 44,966,954 |
Noncontrolling interests | 21,978,002 | 18,795,971 |
Total stockholders' equity | 71,287,407 | 63,762,925 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 73,854,552 | $ 64,516,018 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
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 | 73,510,130 | 58,510,130 |
Common stock, shares outstanding | 73,510,130 | 58,510,130 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Other Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Sales | $ 49,201,963 | $ 31,424,963 |
Cost of sales | (33,140,138) | (18,135,975) |
Gross profit | 16,061,825 | 13,288,988 |
Operating expenses: | ||
Research and development expenses | 796,145 | 142,527 |
Selling and marketing expenses | 578,701 | 642,207 |
General and administrative expenses | 1,292,001 | 8,394,140 |
Total operating expenses | 2,666,847 | 9,178,874 |
Income from operations | 13,394,978 | 4,110,114 |
Other income (expense): | ||
Interest income | 453,674 | 172,305 |
Other non-operating income | 1,924 | |
Other non-operating (expenses) | (2,052,605) | (69,302) |
Total non-operating (expenses) income | (1,598,931) | 104,927 |
Income before provision for income taxes | 11,796,047 | 4,215,041 |
Provision for income taxes | 1,795,044 | 1,489,251 |
Net income | 10,001,003 | 2,725,790 |
Noncontrolling interests | 4,717,169 | 4,842,574 |
Net income (loss) attributable to common stockholders | $ 5,283,834 | $ (2,116,783) |
Earnings (loss) per common share, basic and diluted | $ 0.08 | $ (0.04) |
Weighted average shares outstanding, basic and diluted | 68,989,582 | 52,333,253 |
Comprehensive income: | ||
Net income | $ 10,001,003 | $ 2,725,790 |
Foreign currency translation adjustment | (3,506,673) | (3,318,614) |
Comprehensive income (loss) | 6,494,330 | (592,824) |
Comprehensive income attributable to noncontrolling interests | 3,366,199 | 3,942,638 |
Comprehensive income (loss) attributable to common stockholders | $ 3,128,131 | $ (4,535,461) |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Statutory Reserve Fund | Noncontrolling Interests | 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 |
Net income | 2,725,790 | (2,116,784) | 4,842,574 | ||||
Sale of common stock in private placement | 15,196,298 | 20,130 | 15,176,168 | ||||
Acquisition of VIE noncontrolling interest | (1,540) | 373,210 | 957,945 | 106,262 | (1,481,776) | 42,819 | |
Subsidiary stock issued for compensation | 7,534,080 | 7,534,080 | |||||
Reclassification for issuance of subsidiary stock for compensation | (3,029,520) | (7,716,275) | (856,015) | 11,945,813 | (344,003) | ||
Increase and reclassification in equity attributable to the sale of subsidiary stock | 1,941,318 | 527,277 | (1,292,476) | (143,383) | 2,907,520 | (57,620) | |
Appropriation of statutory reserves | (554,924) | 554,924 | |||||
Other comprehensive (loss) | (3,318,614) | (899,936) | (2,418,678) | ||||
Balance at Dec. 31, 2015 | 63,762,925 | 58,510 | 37,592,346 | 7,610,229 | 1,695,564 | 18,795,971 | 1,989,695 |
Net income | 10,001,003 | 5,283,834 | 4,717,169 | ||||
Sales of common stock | 1,214,320 | 15,000 | 1,199,320 | ||||
Dividend declared | (184,168) | (184,168) | |||||
Appropriation of statutory reserves | (424,328) | 424,328 | |||||
Other comprehensive (loss) | (3,506,673) | (1,350,970) | (2,155,703) | ||||
Balance at Dec. 31, 2016 | $ 71,287,407 | $ 73,510 | $ 38,791,666 | $ 12,469,735 | $ 2,119,892 | $ 21,978,002 | $ (4,145,398) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 10,001,003 | $ 2,725,790 |
Adjustment to reconcile net (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 207,922 | 207,546 |
Loss on disposal of fixed assets | 4,105 | 61,287 |
Allowance for doubtful account | 2,047,267 | |
Stock compensation | 7,534,080 | |
Change in operating assets and liabilities: | ||
(Increase) in accounts receivable | (4,613,282) | (378,097) |
(Increase) in inventory | (1,867) | |
(Increase) in prepaid expenses | (15,198) | |
(Increase) in interest receivable | (104,752) | |
Decrease in prepaid income taxes | 1,103,590 | 1,176,822 |
(Increase) in other assets | (14,257) | |
Increase in accounts payable | 1,445,485 | |
Increase in payroll payable | 10,382 | 25,204 |
Increase in taxes payable | 99,947 | 4,749 |
Increase in accrued expenses and other payable | 327,955 | 38,289 |
Net cash provided by operating activities | 10,498,300 | 11,395,670 |
Cash flows from Investing activities: | ||
Purchase of property, plant and equipment | (56,420) | (1,877,447) |
Loan to third party | (19,612,873) | |
Purchase of intangible assets | (21,647) | |
Investment in project | (6,091,847) | |
Proceeds from sale of subsidiary's stock | 1,290 | |
Acquisition of VIE | (1,540) | |
Net cash (used in) investing activities | (19,669,293) | (7,991,191) |
Cash flows from financing activities: | ||
Net proceeds from sale of subsidiary's stock | 1,941,318 | |
Dividend paid | (184,168) | |
Proceeds from stockholder loan | 47,703 | |
Proceeds from sale of common stock | 1,214,320 | 15,196,298 |
Net cash provided by financial activities | 1,030,152 | 17,185,319 |
Effect of exchange rate changes on cash | (1,848,142) | (2,962,146) |
Net change in cash | (9,988,983) | 17,627,652 |
Cash, beginning | 52,074,752 | 34,447,100 |
Cash, ending | 42,085,769 | 52,074,752 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 691,454 | 388,412 |
Cash paid for interest | ||
Noncash financing activities: | ||
Loan to third party | 6,748,441 | |
Payment of accrued expenses by stockholder | $ 115,000 | $ 108,003 |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization and Business [Abstract] | |
ORGANIZATION AND BUSINESS | 1. ORGANIZATION AND BUSINESS 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 in June 2012, the Company’s consolidated subsidiaries included 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, and 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 consolidated 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 was effectively and substantially controlled by Shengshihe Consulting through a series of captive agreements. Shenzhen Wonhe was considered a variable interest entity (“VIE”) of Shengshihe Consulting. 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: Until September 15, 2015, Shengshihe Management controlled Shenzhen Wonhe through the above contractual agreements, which made Shenzhen Wonhe a variable interest entity, the effect of which was to cause the balance sheet and operating results of Shenzhen Wonhe to be consolidated with those of Shengshihe Management in the Company’s financial statements. On September 15, 2015, Shengshihe Consulting, exercised its option to purchase all of the registered equity of Shenzhen Wonhe. The purchase price paid for the equity was RMB10,000 (approximately $1,569). The equity was purchased from Qing Tong, Nanfang Tong, Youliang Wang and Jingwu Li, who are the members of Wonhe High-Tech’s Board of Directors. As a result of the acquisition by Shengshihe Consulting of the registered ownership of Shenzhen Wonhe, the balance sheet and operating results of Shenzhen Wonhe will hereafter continue to be consolidated with those of Shengshihe Consulting as its 100% owned subsidiary. In July 2015, World Win, the Company’s wholly-owned subsidiary, organized Wonhe Multimedia Commerce Ltd. (“Australian Wonhe”) under Australian law. 60% of the capital stock of Australian Wonhe was issued to World Win, 25% was issued to Wonhe International (Hong Kong), which is wholly owned and controlled by Qing Tong, who is Chairman of the Board of Wonhe High-Tech and the remaining 15% was issued to three non-affiliated financial consultants. On August 5, 2015, World Win sold all of the outstanding capital stock of Kuayu to Australian Wonhe. In exchange for Kuayu, Australian Wonhe paid World Win $10,000 Hong Kong Dollars (US $1,290). Kuayu is the sole owner of Shengshihe Consulting, which in turn had the VIE agreements with Shenzhen Wonhe at that time, the Company’s VIE and operating company. The effect of the sale of Kuayu, therefore, reduced the interest of the Company in its operating company by 40%. The 33,750,000 shares of Australia Wonhe issued to the chairman of the board’s wholly owned company, Wonhe International (Hong Kong), and the 20,250,000 shares issued to the financial consultants was recognized as compensation during the quarter ended September 30, 2015. The value of the compensation was determined using the public offering price of $0.13952 US per share for the shares to be sold in Australia. The total stock compensation recognized was $7,534,080. On December 21, 2015, the Company’s 60% owned subsidiary, Australia Wonhe was listed on the ASX and sold 16,951,802 of its ordinary shares for net proceeds of $1,941,318, leaving the Company with a 53.3% beneficial interest in Australian Wonhe and its subsidiaries. The Company’s current organization structure is as follows: Shenzhen Wonhe is a Chinese entity established on November 16, 2010 with registered capital of $7,495,000. It specializes in the research and development, outsourced-manufacturing and sale of hi-tech products based on x86 (instruction set architecture based on the Intel 8086 CPU) and ARM (32-bit reduced instruction set architecture). Current products still under research and development include a Smart Media Box (SMB), Home Smart Server (HSS), Mini PC (MPC), All in One PC (AIO-PC), Business PAD (B-PAD), and Portable PAD (P-PAD). The Company started to sell its new product HMC 720 in the last quarter of 2014. In addition, the Company started to sell another new product, a Wi-Fi-Router with model number YLT-100S, during the first quarter of 2015, model number YLT-300S during the second quarter of 2015, and model number YLT-300J during the fourth quarter of 2016. YLT-100S and YLT-300J are used by individuals, and YLT-300S is used in shopping malls. Shenzhen Wonhe is located in City of Shenzhen, Guangdong Province in the PRC. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting and Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) which apply to annual financial statements. The consolidated financial statements as of and for the years ended December 31, 2016 and 2015 include Wonhe High-Tech, World Win, Wonhe Multimedia, Kuayu, Shengshihe Consulting and Shenzhen Wonhe. All significant intercompany accounts and transactions have been eliminated in consolidation. All consolidated financial statements and notes to the consolidated financial statements are presented in United States dollars (“US Dollar” or “US$” or “$”). 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”). For Australian Wonhe, the functional currency is the Australian dollar (“AUD”). 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 the Financial Accounting Standards Board “FASB” Accounting Standards Codification “ASC” section 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 operations 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: December 31, 2016 2015 Balance sheet items, except for stockholders’ equity, as of year end 0.1440 0.1540 Amounts included in the statements of operations and the comprehensive income (loss), changes in stockholders’ equity and cash flows 0.1506 0.1603 The exchange rates used to translate amounts in AUD into US dollars for the purposes of preparing the consolidated financial statements are as follows: December 31, 2016 2015 Balance sheet items, except for stockholders’ equity, as of year end 0.7202 0.7288 Amounts included in the statements of operations and the comprehensive income (loss), changes in stockholders’ equity and cash flows 0.7438 0.7188 For the years ended December 31, 2016 and 2015, foreign currency translation adjustments of $(3,596,114) and $(3,318,614), respectively, have been reported as other comprehensive loss. Other comprehensive income (loss) of the Company consists solely of foreign currency translation adjustments. Pursuant to FASB 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 and Australian dollars at that rate or any other rate. The value of the RMB against the US and Australian dollar 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. During year 2016, the PRC devalued its currency by approximately 6.5%. 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. 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 the three Wifi Routers and is responsible for all of their 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 the HMC720, which was developed by the Company and outsourced to others to produce. During the first quarter of 2015, the Company commenced selling the Wifi-Router YLT-100S. During the second quarter of 2015, the Company commenced selling the YLT-300S. During the fourth quarter of 2016, the Company commenced selling the YLT-300J. 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 December 31, 2016 and 2015, 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 receivables and 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 $451,714 and $341,840 for the years ended December 31, 2016 and 2015, respectively. 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 $796,145 and $142,527 for the years ended December 31, 2016 and 2015, 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 December 31, 2016 and 2015, the Company considered all accounts receivable collectable and an allowance for doubtful accounts was not necessary. For the years ended December 31, 2016 and 2015, the Company did not write off any accounts receivable as bad debts. 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,” which addresses the financial accounting and reporting for the recognition and measurement of impairment losses for long-lived assets. In accordance with ASC 360, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company may recognize the impairment of long-lived assets in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to those assets. No impairment of long-lived assets was recognized for the periods presented. Statutory Reserve Fund Pursuant to corporate law of the PRC, Shengshihe Consulting and Shenzhen Wonhe 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 December 31, 2016, $424,328 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”), which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. Deferred tax assets and liabilities represent the future tax consequences for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized 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 December 31, 2016 and 2015, the Company did not have any liabilities for unrecognized tax benefits. The income tax laws of various jurisdictions in which the Company and its subsidiaries 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 years ended December 31, 2016 and 2015. 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%. Australia Australian Wonhe is incorporated in Australia. Pursuant to the income tax laws of Australia, the Company is not subject to tax on non-Australia source income. 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. 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 and has 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 December 31, 2016 and 2015. For the year ended December 31, 2015, the Company offset the income tax provision of $1,485,898, paid income tax of $ 388,412, leaving a balance of prepaid income taxes of $ 1,164,478. For the year ended December 31, 2016, the Company offset the income tax provision of $1,131,042, and paid income tax of $ 691,454. Noncontrolling Interests The noncontrolling interest in Wonhe Multimedia 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 | 12 Months Ended |
Dec. 31, 2016 | |
Recently Issued Accounting Standards [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS | 3. RECENTLY ISSUED ACCOUNTING STANDARDS In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain specific cash flow issues including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The Company is currently evaluating the effect this ASU will have on its consolidated statement of cash flows. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2020, with early application permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In May, 2016, the FASB issued ASU No. 2016-10, Revenue with Contracts with Customers: Narrow-scope Improvements and Practical Expedients, which is an amendment to ASU No. 2014-09 that clarifies the objective of the collectability criterion, to allow entities to exclude amounts collected from customers from all sales taxes from the transaction price, to specify the measurement date for noncash consideration is contract inception, variable consideration guidance applies only to variability resulting from reasons other than the form of the consideration, and clarification on contract modifications at transition. The implementation guidelines follow ASU No. 2014-09. In April, 2016, the FASB issued ASU No. 2016-10, Revenue with Contracts with Customers: Identifying Performance Obligations and Licensing, which is an amendment to ASU No. 2014-09 that clarifies the aspects of identifying performance obligations and the licensing implementing guidance, while retaining the related principles within those areas. The implementation guidelines follow ASU No. 2014-09. In March, 2016, the FASB issued ASU No. 2016-08, Revenue with Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus net), which is an amendment to ASU No. 2014-09 that improved the operability and understandability of implementation guidance versus agent considerations by clarifying the determination of principal versus agent. The implementation guidelines follow ASU No. 2014-09. In March 2016, the FASB issued ASU No. 2016-06, Contingent Put and Call Options in Debt Instruments, Derivatives and Hedging (Topic 815). ASU 2016-06 clarifies that determining whether the economic characteristics of a put or call are clearly and closely related to its debt host requires only an assessment of the four-step decision sequence outlined in FASB ASC paragraph 815-15-25-24. Additionally, entities are not required to separately assess whether the contingency itself is clearly and closely related. The standard is effective for public business entities in interim and annual periods in fiscal years beginning after December 15, 2016. Early adoption is permitted in any interim period for which the entity’s financial statements have not been issued, but would be retroactively applied to the beginning of the year that includes the interim period. The standard requires a modified retrospective transition approach, with a cumulative catch-up adjustment to opening retained earnings in the period of adoption. For instruments that are eligible for the fair value option, an entity has a one-time option to irrevocably elect to measure the debt instrument affected by the standard in its entirety at fair value with changes in fair value recognized in earnings. The Company does not expect the application of this guidance to have a material impact on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. This new guidance effectively removes the retroactive application imposed in current guidance when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. The new standard becomes effective for the Company on January 1, 2017. Early adoption is permissible. The Company does not anticipate the adoption of ASU 2015-11 to have a material impact on the consolidated financial statements and related disclosures. In March 2016, the FASB Issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The standard will be effective for the Company beginning January 1, 2017, with early application permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. This accounting standard update is not expected to have a material impact on the Company’s financial statements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The updated guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The update to the standard is effective for the Company beginning June 1, 2018. The Company is currently evaluating the effect the guidance will have on the Consolidated Financial Statements. |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2016 | |
Fixed Assets [Abstract] | |
FIXED ASSETS | 4. FIXED ASSETS Fixed assets at December 31, 2016 and 2015 are summarized as follows: December 31, 2016 2015 Office equipment $ 212,828 $ 211,897 Motor vehicles 618,706 661,703 Production equipment - 1,287,502 831,534 2,161,102 Less: accumulated depreciation (401,535 ) (416,521 ) Fixed assets, net $ 429,999 $ 1,744,581 Depreciation expense charged to operations for the years ended December 31, 2016 and 2015 was $201,146 and $194,789, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS Intangible assets at December 31, 2016 and 2015 are summarized as follows: December 31, 2016 2015 Software $ 49,649 $ 45,432 Less: accumulated amortization (40,469 ) (28,683 ) Intangible assets, net $ 9,180 $ 16,749 Amortization expense charged to operations for the years ended December 31, 2016 and 2015 was $6,776 and $12,757 respectively. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Commitments/Contingencies [Abstract] | |
COMMITMENTS | 6 COMMITMENTS In May 2015, the Company entered into a lease agreement with an unrelated party at a monthly rent of $11,175 for one year, expiring in May 2016. In May 2016, the Company renewed this lease at the same monthly rent to May 2017. Rent expense for the year ended December 31, 2016 and 2015 was $147,707 and $135,657, respectively. On May 5 2016, the Company entered into an agreement to lease a laboratory office from an unrelated party with the fee to be determined based on usage. The lease has a two-year term, which expires on May 5, 2018. The lease fee of the laboratory for the year ended December 31, 2016 was $315,887. Employment Agreements Shenzhen Wonhe, our operating subsidiary, entered into employment agreements with our officers Nanfang Tong and Qing Tong on November 1, 2016: ● Nanfang Tong’s employment agreement, as the chief executive officer, provides for a monthly salary of RMB 13,000 (approximately US $1,872) and expires on October 31, 2019. 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 chairman of Board of Directors provides for a monthly salary of RMB 15,000 (approximately US $2,160) and expires on October 31, 2019. 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. At December 31, 2016, the future commitments under these agreements was approximately $137,082. Other than the salary and necessary social benefits required by the government, which are defined in the employment agreements, 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. The severance pay payable to an employee for any period of less than six months shall be one-half of his monthly wages. The monthly salary mentioned above is defined as the average salary of 12 months before revocation or termination of the employment contract. Strategic Cooperation Agreement In April 2015, Shenzhen Wonhe entered into a strategic cooperation agreement with Shenzhen Yunlutong Technology Co., Ltd (the “YLT”), which is owned by one of the Company’s directors, who owns 4.87% of the Company’s common stock. The agreement expires in 3 years. Under the agreement, as amended and restated, YLT and Shenzhen Wonhe agreed to engage in mutual cooperation aimed at the sale of routers by Shenzhen Wonhe to YLT. The Company produced approximately $18,211,683 in sales with YLT for the year ended December 31, 2016. In addition, Shenzhen Wonhe obtained the exclusive right to acquire YLT if its gross annual revenues reach RMB 150,000,000 (US $24,480,000) and net annual profit reaches RMB 12,500,000 (US $2,040,000) during the term of the agreement. The price of the acquisition shall be established by an independent appraiser. YLT agreed not to sell any equity or issue any debt during the 3 years, and any change in ownership of YLT must be approved by Shenzhen Wonhe. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
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 its subsidiaries. The loans are non-interest bearing, and the balance due was $434,324 and $335,655 at December 31, 2016 and 2015, 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. Nanfang Tong, the chief executive officer and Qing Tong, the director, are brothers. |
Sale of Common Stock
Sale of Common Stock | 12 Months Ended |
Dec. 31, 2016 | |
Sale of Common Stock/Cash Dividends [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 at the time, and 3 unrelated companies in a private offering in the PRC. The purchase price for the shares was approximately RMB 4.72 (US $0.77) 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, and since no shares of the Company’s common stock were traded on the OTCQB from January 1, 2015 to April 22, 2015, the Company believes that the price of $.77 per share was more representative of the fair value than $3.07. As a result, management recorded no compensation related to the share sold to the officer director of the Company. On April 19, 2016 the Company sold a total of 15,000,000 shares of common stock to two investors in a private offering. Qing Tong, a member of the Company’s board of directors, purchased 3,000,000 shares. The remaining 12,000,000 shares were purchased by an unaffiliated entity. The purchase price for the shares was 0.52 Renminbi (approx. $.08) per share, or a total of 7,800,000 Renminbi (approx. $1,200,000), which exceeded the market price on that date. The shares were sold to investors who are accredited investors and were purchasing for their own accounts. The offering, therefore, 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 were residents of the People’s Republic of China. |
Cash Dividends
Cash Dividends | 12 Months Ended |
Dec. 31, 2016 | |
Sale of Common Stock/Cash Dividends [Abstract] | |
CASH DIVIDENDS | 9. CASH DIVIDENDS On September 30, 2016, the Board of Directors of Wonhe Multimedia Commerce Ltd., in which Wonhe High-Tech indirectly owns a 53.3% interest, declared a cash dividend of AUD $0.004857 per share, for a total dividend of AUD$637,190 (approximately USD$486,000). The dividend payment was made to the shareholders of Wonhe Multimedia Commerce Ltd. subsequent to the third quarter. On October 31 2016, Wonhe Multimedia Commerce Ltd., the Company’s 53.3%-owned Australian subsidiary, paid the dividend of AUD $637,190 (approximately USD$486,000) declared on September 30, 2016. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
INCOME TAXES | 10. 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 years ended December 31, 2016 and 2015: Year Ended December 31, 2016 2015 Current $ 1,795,044 $ 1,489,251 Deferred - - Total $ 1,795,044 $ 1,489,251 The following is a reconciliation of the statutory rate with the effective income tax rate for the year ended December 31, 2016 and 2015. Year Ended December 31, Year Ended December 31, 2016 2015 Tax at PRC statutory rate 25.0 % 25.0 % VIE tax holiday (13.0 ) (12.5 ) Effect of unusable parent tax loss - 22.6 Other 0.9 0.2 Effective tax rate 12.9 % 35.3 % The following presents the aggregate dollar and per share effects of the Company’s subsidiaries’ tax holidays: Years Ended December 31, 2016 2015 Aggregate dollar effect of tax holiday $ 1,795,044 $ 1,448,924 Per share effect, basic and diluted 0.03 0.03 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 years ended December 31, 2016, 2015, 2014 and 2013. Failure to furnish any income tax and information returns with respect to any foreign business entity required, within the time prescribed by the IRS, subjects the Company to civil penalties. Management is of the opinion that penalties, if any, that may be assessed would not be material to the consolidated financial statements. 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 December 31, 2016. 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 years ended December 31, 2016, 2015, 2014 and 2013 remain open to examination by the IRS. All of the Company’s operations are conducted in the PRC. At December 31, 2016, the Company’s unremitted foreign earnings of its PRC subsidiaries totaled approximately $21.3 million and the Company held approximately $27.7 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 | 12 Months Ended |
Dec. 31, 2016 | |
Commitments/Contingencies [Abstract] | |
CONTINGENCIES | 11. CONTINGENCIES As disclosed in Note 10, 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, 2016, 2015, 2014, and 2013, 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 | 12 Months Ended |
Dec. 31, 2016 | |
Concentration of Credit Risk [Abstract] | |
CONCENTRATION OF CREDIT RISK | 12. 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. The Company’s bank account in Australia is protected by Australian government up to AUD 250,000. Major customers One customer accounted for approximately 37% of total sales for the year ended December 31, 2016. Three customer accounted for approximately 36% of total sales for the year ended December 31, 2015. Two customers accounted for approximately 61% of accounts receivable as of December 31, 2016, the largest being 34%. Four customers accounted for approximately 94% of accounts receivable as of December, 2015, the largest being 34%. |
Contributions to Multi-Employer
Contributions to Multi-Employer Welfare Programs | 12 Months Ended |
Dec. 31, 2016 | |
Contributions to Multi-Employer Welfare Programs [Abstract] | |
CONTRIBUTIONS TO MULTI-EMPLOYER WELFARE PROGRAMS | 13. CONTRIBUTIONS TO MULTI-EMPLOYER WELFARE PROGRAMS Shenzhen Wonhe is required to make contributions to PRC multi-employer welfare programs by government regulations 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 year ended December 31, 2016 and 2015 were as follow: Year Ended December 31, 2016 2015 Total contributions $ 43,805 $ 29,981 |
Loan Receivable
Loan Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Loan Receivable [Abstract] | |
LOAN RECEIVABLE | 14. LOAN RECEIVABLE On January 12, 2016 the Registrant’s operating subsidiary, Shenzhen Wonhe Technology Co., Ltd. (“Shenzhen Wonhe”), entered into an agreement titled “Cooperative Agreement on Wireless Network Coverage Project in Beijing Area” with Guangdong Kesheng Enterprise Co., Ltd. (“Guangdong Kesheng”). The agreement contemplated that the two parties would work together to develop a wireless network in certain designated areas of Beijing. The commercial purpose of the network was to serve as a vehicle for advertising and marketing, with the income to be shared between Shenzhen Wonhe and Guangdong Kesheng. Shenzhen Wonhe committed in the agreement to make a capital contribution of RMB 382,990,000 (USD $55.63 million) to the project. Shenzhen Wonhe also committed to develop the data systems that will be used by the network. Guangdong Kesheng committed to supervise the engineering and construction, coordinate relationships with local government, and manage the network’s operations. On November 30, 2016 Shenzhen Wonhe and Guangdong Kesheng signed an amendment to the January agreement, titled “Cooperative Agreement on Wireless Network Coverage Project in Beijing Area”, which terminates the participation of Shenzhen Wonhe in the construction and operation of the wireless network, and also terminates the commitment of Shenzhen Wonhe to develop the data systems used by the network. Shenzhen Wonhe has no further obligation to contribute capital to the project, and will receive no distribution of income from the project. Shenzhen Wonhe will, however, supply 36,300 routers for the project prior to the end of 2017, and Guangdong Kesheng will pay Shenzhen Wonhe RMB 1,800 ($261) for each router. As of November 30, 2016 Shenzhen Wonhe had contributed to the wireless network project cash, equipment, engineering, and a pilot project in the Tongzhou District of Beijing. The total contribution of RMB 175,755,641 (USD$25.31 million) will be repaid to Shenzhen Wonhe in three equal annual installments, and Shenzhen Wonhe will get the first repayment on December 31, 2017; the unpaid portion of that obligation will accrue interest at 4.75% per annum. The related receivable is recorded at its present value after applying a discount rate of 20% to reflect the market risk of depending on Guangdong Kesheng’s continuing operations and the related risk that Guangdong Kesheng will fail to make required payments when due. |
Condensed Financial Information
Condensed Financial Information of the Parent Company | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of the Parent Company [Abstract] | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 15. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY The condensed financial information of the Company’s US parent only balance sheets as of December 31, 2016, and the US parent company only statements of operations, and cash flows for the years ended December 31, 2016 and 2015 are as follows: Condensed Balance Sheets December 31, 2016 2015 ASSETS Cash-restricted $ 14,428,459 $ 14,332,241 Other receivable from subsidiaries 11,116,320 9,912,000 Investment in subsidiaries 24,198,950 21,093,752 TOTAL ASSETS $ 49,743,729 $ 45,337,994 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Loan from stockholder $ 434,324 $ 366,040 Accrued liabilities - 5,000 Total current liabilities 434,324 371,040 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; 73,510,130 and 58,510,130 shares issued and outstanding at December 31, 2016 and 2015, respectively 73,510 58,510 Additional paid-in capital 38,791,666 37,592,346 Retained earnings 10,444,229 7,316,098 Total stockholders’ equity 49,309,405 44,966,954 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 49,743,729 $ 45,337,994 Condensed Statements of Income Year Ended 2015 2015 Revenues: Share of earnings from investment in subsidiaries $ 5,393,835 $ 5,521,942 Operating expenses: Stock compensation - 7,534,080 General and administrative 110,000 104,645 Net income $ 5,283,835 $ (2,116,783 ) Condensed Statements of Cash Flows Year Ended December 31, 2016 2015 Cash flows from operating activities: Net income $ 5,283,835 $ (2,116,783 ) Adjustments to reconcile net income to net cash provided by (used in) operating activities Share of earnings from investment in subsidiaries (5,283,835 ) (5,521,942 ) Stock compensation - 7,534,080 (Decrease) increase in accrued liabilities - (32,509 ) Net cash (used by) operating activities - (137,154 ) Cash flows from financing activities: Proceeds from sale of common stock - 15,196,298 Proceeds from stockholders - 137,154 Net cash (used by) financing activities - 15,333,452 Effect of exchange rate changes on cash: 96,218 (864,057 ) Year Ended 2016 2015 Net increase in cash 96,218 14,332,241 Cash, beginning of year 14,332,241 - Cash, end of year $ 14,428,459 $ 14,332,241 Noncash financing activities: Payment of accrued liabilities by shareholder $ 115,000 $ 108,003 Basis of Presentation The Company records its investment in its subsidiaries under the equity method of accounting. Such investment is presented as “Investment in subsidiaries” in the condensed balance sheets and the U.S. parent’s share of the subsidiaries’ profits are presented as “Share of earnings from investment in subsidiaries” in the condensed statements of income. Certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. The parent only financial information has been derived from the Company’s consolidated financial statements and should be read in conjunction with the Company’s consolidated financial statements. Restricted Net Assets Under PRC laws and regulations, the Company’s PRC subsidiaries are restricted in their ability to transfer certain of their net assets to the parent company in the form of dividend payments, loans or advances. The restricted net assets of the Company’s PRC subsidiaries amounted to $49,309,405 and $44,966,954 as of December 31, 2016 and 2015, respectively. In addition, the Company’s operations and revenues are conducted and generated in the PRC; all of the Company’s revenues being earned and currency received are denominated in RMB. RMB is subject to the foreign exchange control regulations in China, and, as a result, the Company may be unable to distribute dividends outside of China due to PRC’s foreign exchange control regulations that restrict the Company’s ability to convert RMB into US Dollars. Schedule I of Article 5-04 of Regulation S-X requires the condensed financial information of the parent company to be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of this test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant’s proportionate share of net assets of its consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company in the form of loans, advances or cash dividends without the consent of a third party. The condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the Company’s PRC subsidiaries exceed 25% of the consolidated net assets of the Company. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 16. SUBSEQUENT EVENT On March 31, 2017, the Board of announced that the Company will pay an AUD $0.005882 (approximately USD $0.0042) per share unfranked final dividend. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Accounting and Presentation | Basis of Accounting and Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) which apply to annual financial statements. The consolidated financial statements as of and for the years ended December 31, 2016 and 2015 include Wonhe High-Tech, World Win, Wonhe Multimedia, Kuayu, Shengshihe Consulting and Shenzhen Wonhe. All significant intercompany accounts and transactions have been eliminated in consolidation. All consolidated financial statements and notes to the consolidated financial statements are presented in United States dollars (“US Dollar” or “US$” or “$”). |
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”). For Australian Wonhe, the functional currency is the Australian dollar (“AUD”). 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 the Financial Accounting Standards Board “FASB” Accounting Standards Codification “ASC” section 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 operations 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: December 31, 2016 2015 Balance sheet items, except for stockholders’ equity, as of year end 0.1440 0.1540 Amounts included in the statements of operations and the comprehensive income (loss), changes in stockholders’ equity and cash flows 0.1506 0.1603 The exchange rates used to translate amounts in AUD into US dollars for the purposes of preparing the consolidated financial statements are as follows: December 31, 2016 2015 Balance sheet items, except for stockholders’ equity, as of year end 0.7202 0.7288 Amounts included in the statements of operations and the comprehensive income (loss), changes in stockholders’ equity and cash flows 0.7438 0.7188 For the years ended December 31, 2016 and 2015, foreign currency translation adjustments of $(3,596,114) and $(3,318,614), respectively, have been reported as other comprehensive loss. Other comprehensive income (loss) of the Company consists solely of foreign currency translation adjustments. Pursuant to FASB 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 and Australian dollars at that rate or any other rate. The value of the RMB against the US and Australian dollar 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. During year 2016, the PRC devalued its currency by approximately 6.5%. |
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. 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 the three Wifi Routers and is responsible for all of their 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 the HMC720, which was developed by the Company and outsourced to others to produce. During the first quarter of 2015, the Company commenced selling the Wifi-Router YLT-100S. During the second quarter of 2015, the Company commenced selling the YLT-300S. During the fourth quarter of 2016, the Company commenced selling the YLT-300J. 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 December 31, 2016 and 2015, 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 receivables and 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 $451,714 and $341,840 for the years ended December 31, 2016 and 2015, respectively. |
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 $796,145 and $142,527 for the years ended December 31, 2016 and 2015, 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 December 31, 2016 and 2015, the Company considered all accounts receivable collectable and an allowance for doubtful accounts was not necessary. For the years ended December 31, 2016 and 2015, the Company did not write off any accounts receivable as bad debts. |
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,” which addresses the financial accounting and reporting for the recognition and measurement of impairment losses for long-lived assets. In accordance with ASC 360, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company may recognize the impairment of long-lived assets in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to those assets. No impairment of long-lived assets was recognized for the periods presented. |
Statutory Reserve Fund | Statutory Reserve Fund Pursuant to corporate law of the PRC, Shengshihe Consulting and Shenzhen Wonhe 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 December 31, 2016, $424,328 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”), which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. Deferred tax assets and liabilities represent the future tax consequences for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized 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 December 31, 2016 and 2015, the Company did not have any liabilities for unrecognized tax benefits. The income tax laws of various jurisdictions in which the Company and its subsidiaries 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 years ended December 31, 2016 and 2015. 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%. Australia Australian Wonhe is incorporated in Australia. Pursuant to the income tax laws of Australia, the Company is not subject to tax on non-Australia source income. 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. 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 and has 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 December 31, 2016 and 2015. For the year ended December 31, 2015, the Company offset the income tax provision of $1,485,898, paid income tax of $ 388,412, leaving a balance of prepaid income taxes of $ 1,164,478. For the year ended December 31, 2016, the Company offset the income tax provision of $1,131,042, and paid income tax of $ 691,454. |
Noncontrolling Interests | Noncontrolling Interests The noncontrolling interest in Wonhe Multimedia 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 Accoun24
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of exchange rates used to translate amounts in RMB into US dollars | December 31, 2016 2015 Balance sheet items, except for stockholders’ equity, as of year end 0.1440 0.1540 Amounts included in the statements of operations and the comprehensive income (loss), changes in stockholders’ equity and cash flows 0.1506 0.1603 The exchange rates used to translate amounts in AUD into US dollars for the purposes of preparing the consolidated financial statements are as follows: December 31, 2016 2015 Balance sheet items, except for stockholders’ equity, as of year end 0.7202 0.7288 Amounts included in the statements of operations and the comprehensive income (loss), changes in stockholders’ equity and cash flows 0.7438 0.7188 |
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) | 12 Months Ended |
Dec. 31, 2016 | |
Fixed Assets [Abstract] | |
Summary of fixed assets | December 31, 2016 2015 Office equipment $ 212,828 $ 211,897 Motor vehicles 618,706 661,703 Production equipment - 1,287,502 831,534 2,161,102 Less: accumulated depreciation (401,535 ) (416,521 ) Fixed assets, net $ 429,999 $ 1,744,581 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets [Abstract] | |
Summary of intangible assets | December 31, 2016 2015 Software $ 49,649 $ 45,432 Less: accumulated amortization (40,469 ) (28,683 ) Intangible assets, net $ 9,180 $ 16,749 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Summary of provision for (benefit from) income taxes | Year Ended December 31, 2016 2015 Current $ 1,795,044 $ 1,489,251 Deferred - - Total $ 1,795,044 $ 1,489,251 |
Summary of reconciliation of the statutory rate with the effective income tax rate | Year Ended December 31, Year Ended December 31, 2016 2015 Tax at PRC statutory rate 25.0 % 25.0 % VIE tax holiday (13.0 ) (12.5 ) Effect of unusable parent tax loss - 22.6 Other 0.9 0.2 Effective tax rate 12.9 % 35.3 % |
Summary of aggregate dollar and per share effects of the Company's tax holidays | Years Ended December 31, 2016 2015 Aggregate dollar effect of tax holiday $ 1,795,044 $ 1,448,924 Per share effect, basic and diluted 0.03 0.03 |
Contributions to Multi-Employ28
Contributions to Multi-Employer Welfare Programs (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Contributions to Multi-Employer Welfare Programs [Abstract] | |
Schedule of 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. |
Schedule of total contributions to employee welfare programs | Year Ended December 31, 2016 2015 Total contributions $ 43,805 $ 29,981 |
Condensed Financial Informati29
Condensed Financial Information of the Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of the Parent Company [Abstract] | |
Condensed Balance Sheets | December 31, 2016 2015 ASSETS Cash-restricted $ 14,428,459 $ 14,332,241 Other receivable from subsidiaries 11,116,320 9,912,000 Investment in subsidiaries 24,198,950 21,093,752 TOTAL ASSETS $ 49,743,729 $ 45,337,994 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Loan from stockholder $ 434,324 $ 366,040 Accrued liabilities - 5,000 Total current liabilities 434,324 371,040 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; 73,510,130 and 58,510,130 shares issued and outstanding at December 31, 2016 and 2015, respectively 73,510 58,510 Additional paid-in capital 38,791,666 37,592,346 Retained earnings 10,444,229 7,316,098 Total stockholders’ equity 49,309,405 44,966,954 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 49,743,729 $ 45,337,994 |
Condensed Statements of Income | Year Ended 2015 2015 Revenues: Share of earnings from investment in subsidiaries $ 5,393,835 $ 5,521,942 Operating expenses: Stock compensation - 7,534,080 General and administrative 110,000 104,645 Net income $ 5,283,835 $ (2,116,783 ) |
Condensed Statements of Cash Flows | Year Ended December 31, 2016 2015 Cash flows from operating activities: Net income $ 5,283,835 $ (2,116,783 ) Adjustments to reconcile net income to net cash provided by (used in) operating activities Share of earnings from investment in subsidiaries (5,283,835 ) (5,521,942 ) Stock compensation - 7,534,080 (Decrease) increase in accrued liabilities - (32,509 ) Net cash (used by) operating activities - (137,154 ) Cash flows from financing activities: Proceeds from sale of common stock - 15,196,298 Proceeds from stockholders - 137,154 Net cash (used by) financing activities - 15,333,452 Effect of exchange rate changes on cash: 96,218 (864,057 ) Year Ended 2016 2015 Net increase in cash 96,218 14,332,241 Cash, beginning of year 14,332,241 - Cash, end of year $ 14,428,459 $ 14,332,241 Noncash financing activities: Payment of accrued liabilities by shareholder $ 115,000 $ 108,003 |
Organization and Business (Deta
Organization and Business (Details) | Dec. 21, 2015USD ($)shares | Sep. 15, 2015USD ($) | Sep. 15, 2015CNY (¥) | Aug. 05, 2015USD ($) | Aug. 05, 2015HKD | Jun. 27, 2012shares | May 30, 2012USD ($)$ / shares | May 30, 2012CNY (¥) | Jul. 31, 2015 | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015$ / sharesshares | May 30, 2012¥ / shares | Nov. 16, 2010USD ($) |
Organization and Business (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 | ¥ 1 | ||||||||||||
Service fee paid to shengshihe consulting description | 95% of Shenzhen Wonhe's annual net income plus an additional monthly payment of approximately $8,015 (RMB 50,000). | 95% of Shenzhen Wonhe's annual net income plus an additional monthly payment of approximately $8,015 (RMB 50,000). | ||||||||||||
Additional payment paid for consideration of consulting services | $ 8,015 | ¥ 50,000 | ||||||||||||
Ownership Percentage | 25.00% | |||||||||||||
Purchase price paid for equity | $ (1,540) | |||||||||||||
Proceeds from sale of subsidiary's stock | $ 1,290 | |||||||||||||
Stock compensation for shareholder and consultants | $ 7,534,080 | |||||||||||||
Wonhe International Holdings Group Co., Ltd. [Member] | ||||||||||||||
Organization and Business (Textual) | ||||||||||||||
Ownership Percentage | 100.00% | 100.00% | ||||||||||||
Percentage change of ownership | 15.00% | |||||||||||||
Shares issued | shares | 20,250,000 | |||||||||||||
Kuayu [Member] | ||||||||||||||
Organization and Business (Textual) | ||||||||||||||
Proceeds from sale of subsidiary's stock | $ (1,290) | HKD 10,000 | ||||||||||||
Wonhe Multimedia Commerce Ltd [Member] | ||||||||||||||
Organization and Business (Textual) | ||||||||||||||
Ownership Percentage | 60.00% | |||||||||||||
Shengshihe Consulting [Member] | ||||||||||||||
Organization and Business (Textual) | ||||||||||||||
Purchase price paid for equity | $ 1,569 | ¥ 10,000 | ||||||||||||
Australia Wonhe [Member] | ||||||||||||||
Organization and Business (Textual) | ||||||||||||||
Ownership Percentage | 60.00% | |||||||||||||
Proceeds from sale of subsidiary's stock | $ 1,941,318 | |||||||||||||
Shares issued | shares | 33,750,000 | |||||||||||||
Shares price (US per share) | $ / shares | $ 0.13952 | |||||||||||||
Ordinary shares | shares | 16,951,802 | |||||||||||||
Beneficial interest of percentage | 53.30% |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
RMB [Member] | ||
Summary of exchange rates used to translate amounts in RMB/AUD into US dollars | ||
Balance sheet items, except for stockholders' equity, as of year end | 0.1440 | 0.1540 |
Amounts included in the statements of operations and the comprehensive income (loss), changes in stockholders' equity and cash flows | 0.1506 | 0.1603 |
AUD [Member] | ||
Summary of exchange rates used to translate amounts in RMB/AUD into US dollars | ||
Balance sheet items, except for stockholders' equity, as of year end | 0.7202 | 0.7288 |
Amounts included in the statements of operations and the comprehensive income (loss), changes in stockholders' equity and cash flows | 0.7438 | 0.7188 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2016 | |
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) | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2016CNY (¥) | |
Summary of Significant Accounting Policies (Textual) | |||
Foreign currency translation adjustments | $ (3,596,114) | $ (3,318,614) | |
Valuation of currency percentage | 6.50% | ||
Advertising costs | $ 451,714 | 341,840 | |
Research and development costs | 796,145 | 142,527 | |
Amount transfer from retained earnings to statutory reserve | $ 424,328 | ||
Percentage of net income transfer to statutory reserve fund | 10.00% | ||
Applicable income tax rate by income tax laws of BVI | 0.00% | ||
Enterprise income tax rate by income tax laws of PRC | 25.00% | ||
Enterprise income tax exemption | 50.00% | ||
Percentage of minimum remaining reserve balance of registered capital, description | Not less than 25% of the registered capital. | ||
Prepaid income taxes | $ 2,600,000 | ¥ 16,107,000 | |
Company offset income tax provision | $ 1,131,042 | 1,485,898 | |
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 | ||
Federal tax at graduated rates, minimum (percentage) | 15.00% | ||
Federal tax at graduated rates, maximum (percentage) | 35.00% | ||
Paid income tax | $ 691,454 | 388,412 | |
Prepaid taxes | $ 33,436 | $ 1,164,478 |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of fixed assets | ||
Fixed assets | $ 831,534 | $ 2,161,102 |
Less: accumulated depreciation | (401,535) | (416,521) |
Fixed assets, net | 429,999 | 1,744,581 |
Office equipment [Member] | ||
Summary of fixed assets | ||
Fixed assets | 212,828 | 211,897 |
Motor vehicles [Member] | ||
Summary of fixed assets | ||
Fixed assets | 618,706 | 661,703 |
Production equipment [Member] | ||
Summary of fixed assets | ||
Fixed assets | $ 1,287,502 |
Fixed Assets (Details Textual)
Fixed Assets (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fixed Assets (Textual) | ||
Depreciation expense | $ 201,146 | $ 194,789 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of intangible assets | ||
Software | $ 49,649 | $ 45,432 |
Less: accumulated amortization | (40,469) | (28,683) |
Intangible assets, net | $ 9,180 | $ 16,749 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible Assets (Textual) | ||
Amortization expense | $ 6,776 | $ 12,757 |
Commitments (Details)
Commitments (Details) | 1 Months Ended | 12 Months Ended | |||||
May 31, 2015USD ($) | Apr. 30, 2015USD ($) | Apr. 30, 2015CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015USD ($) | Jul. 31, 2015 | |
Commitments (Textual) | |||||||
Ownership percentage | 25.00% | ||||||
Laboratory lease fee | $ 315,887 | ||||||
Laboratory lease term | 2 years | 2 years | |||||
Description of laboratory lease, expiration date | The lease has a two-year term, which expires on May 5, 2018. | The lease has a two-year term, which expires on May 5, 2018. | |||||
Lease Agreement [Member] | |||||||
Commitments (Textual) | |||||||
Lease expiration date | May 31, 2016 | ||||||
Rent expense | $ 147,707 | $ 135,657 | |||||
Monthly rental from unrelated parties | $ 11,175 | ||||||
Term of agreement | 1 year | ||||||
Employment Agreements [Member] | Nanfang Tong [Member] | |||||||
Commitments (Textual) | |||||||
Monthly salary | $ 1,872 | ¥ 13,000 | |||||
Employment agreement, expiration date | Oct. 31, 2019 | Oct. 31, 2019 | |||||
Future commitments | $ 137,082 | ||||||
Employment Agreements [Member] | Qing Tong [Member] | |||||||
Commitments (Textual) | |||||||
Monthly salary | $ 2,160 | ¥ 15,000 | |||||
Employment agreement, expiration date | Oct. 31, 2019 | Oct. 31, 2019 | |||||
Future commitments | $ 137,082 | ||||||
Strategic Cooperation Agreement [Member] | Shenzhen Yunlutong Technology Co., Ltd [Member] | |||||||
Commitments (Textual) | |||||||
Ownership percentage | 4.87% | 4.87% | |||||
Term of agreement | 3 years | 3 years | |||||
Gross annual revenues | $ 24,480,000 | ¥ 150,000,000 | $ 18,211,683 | ||||
Net annual profit | $ 2,040,000 | ¥ 12,500,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Related Party Transactions (Textual) | ||
Loan from stockholder | $ 434,324 | $ 335,655 |
Sale of Common Stock (Details)
Sale of Common Stock (Details) | 1 Months Ended | |||||||
Apr. 19, 2016USD ($)investors$ / sharesshares | Apr. 19, 2016CNY (¥)investorsshares | Apr. 30, 2015USD ($)ShareholdersDirectors$ / sharesshares | Apr. 30, 2015CNY (¥)ShareholdersDirectorsshares | Apr. 19, 2016¥ / shares | Apr. 30, 2015Shareholders¥ / shares | May 30, 2012$ / shares | May 30, 2012¥ / shares | |
Sale of Common Stock (Textual) | ||||||||
Common stock purchase price, per share | (per share) | $ 0.16 | ¥ 1 | ||||||
Wonhe High-Tech International, Inc. [Member] | ||||||||
Sale of Common Stock (Textual) | ||||||||
Sale of common stock shares | shares | 20,130,000 | 20,130,000 | ||||||
Common stock purchase price, per share | (per share) | $ 0.77 | ¥ 4.72 | ||||||
Total purchase price of shares | $ 15,196,298 | ¥ 93,000,600 | ||||||
Number of individuals | 21 | 21 | ||||||
Number of shareholders | 3 | 3 | ||||||
Number of companies | 3 | 3 | ||||||
Unaffiliated Entity [Member] | ||||||||
Sale of Common Stock (Textual) | ||||||||
Total purchase price of shares | $ | $ 12,000,000 | |||||||
Board of Directors [Member] | ||||||||
Sale of Common Stock (Textual) | ||||||||
Total purchase price of shares | $ | $ 3,000,000 | |||||||
Directors and Officer [Member] | ||||||||
Sale of Common Stock (Textual) | ||||||||
Sale of common stock shares | shares | 4,600,000 | 4,600,000 | ||||||
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, and since no shares of the Company's common stock were traded on the OTCQB from January 1, 2015 to April 22, 2015, the Company believes that the price of $.77 per share was more representative of the fair value than $3.07. As a result, management recorded no compensation related to the share sold to the officer director of the Company. | 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, and since no shares of the Company's common stock were traded on the OTCQB from January 1, 2015 to April 22, 2015, the Company believes that the price of $.77 per share was more representative of the fair value than $3.07. As a result, management recorded no compensation related to the share sold to the officer director of the Company. | ||||||
Percentage of sale of stock | 22.70% | 22.70% | ||||||
Number of individuals | 1 | 1 | ||||||
Number of directors | Directors | 2 | 2 | ||||||
Private Offering [Member] | ||||||||
Sale of Common Stock (Textual) | ||||||||
Sale of common stock shares | shares | 15,000,000 | 15,000,000 | ||||||
Common stock purchase price, per share | (per share) | $ 0.08 | ¥ 0.52 | ||||||
Total purchase price of shares | $ 1,200,000 | ¥ 7,800,000 | ||||||
Number of individuals | investors | 2 | 2 |
Cash Dividends (Details)
Cash Dividends (Details) | Oct. 31, 2016USD ($) | Oct. 31, 2016AUD | Sep. 30, 2016USD ($) | Sep. 30, 2016AUDAUD / shares | Jul. 31, 2015 |
Cash Dividends Textual [Abstract] | |||||
Ownership interest, percentage | 25.00% | ||||
Wonhe Multimedia Commerce Ltd [Member] | |||||
Cash Dividends Textual [Abstract] | |||||
Ownership interest, percentage | 53.30% | 53.30% | |||
Total dividend | $ 486,000 | AUD 637,190 | |||
Wonhe High-Tech International, Inc. [Member] | |||||
Cash Dividends Textual [Abstract] | |||||
Ownership interest, percentage | 53.30% | 53.30% | |||
Cash dividends, per share | AUD 0.004857 | ||||
Total dividend | $ 486,000 | AUD 637,190 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Provision for (benefit from) income taxes | ||
Current | $ 1,795,044 | $ 1,489,251 |
Deferred | ||
Total | $ 1,795,044 | $ 1,489,251 |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of reconciliation of the statutory rate with the effective income tax rate | ||
Tax at PRC statutory rate | 25.00% | 25.00% |
VIE tax holiday | (13.00%) | (12.50%) |
Effect of unusable parent tax loss | 22.60% | |
Other | 0.90% | 0.20% |
Effective tax rate | 12.90% | 35.30% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of aggregate dollar and per share effects of the Company's subsidiaries tax holidays | ||
Aggregate dollar effect of tax holiday | $ 1,795,044 | $ 1,448,924 |
Per share effect, basic and diluted | $ 0.03 | $ 0.03 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) $ in Millions | Dec. 31, 2016USD ($) |
Income Taxes (Textual) | |
Unremitted foreign earnings of PRC subsidiaries | $ 21.3 |
Cash and cash equivalents in PRC | $ 27.7 |
Contingencies (Details)
Contingencies (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Contingencies (Textual) | |
Civil penalties of each foreign bank account | $ 10,000 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) | 12 Months Ended | |
Dec. 31, 2016AUDCustomers | Dec. 31, 2015Customers | |
Concentration of Credit Risk (Textual) | ||
Concentration risk, Percentage | 37.00% | 36.00% |
Number of major customer accounted for revenue | 1 | 3 |
Bank account in Australia | AUD | AUD 250,000 | |
Accounts receivable [Member] | ||
Concentration of Credit Risk (Textual) | ||
Concentration risk, Percentage | 34.00% | 34.00% |
Customer [Member] | Accounts receivable [Member] | ||
Concentration of Credit Risk (Textual) | ||
Concentration risk, Percentage | 61.00% | 94.00% |
Number of major customer accounted for revenue | 2 | 4 |
Contributions to Multi-Employ48
Contributions to Multi-Employer Welfare Programs (Details) | 12 Months Ended | |
Dec. 31, 2016 | ||
Pension [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Shenzhen Special Economic Zone Social Retirement Insurance Regulations | |
Percentage of Salary | 13 | |
Workers Comp. [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Shenzhen Work-Related Injury Insurance Regulations | |
Percentage of Salary | 0.4 | |
Unemployment [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Guangdong Unemployment Insurance Regulations | |
Percentage of Salary | 2 | |
Housing [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Housing Provident Fund Management Regulations | |
Percentage of Salary | 5 | |
Medical [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Shenzhen Social Medical Insurance Measures | |
Percentage of Salary | 6.5% or 0.6%* | [1] |
Maternity [Member] | ||
Multiemployer Plans [Line Items] | ||
Regulation | Guangdong Employees Maternity Insurance | |
Percentage of Salary | 0.5% or 0.2%* | [1] |
[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-Employ49
Contributions to Multi-Employer Welfare Programs (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Contributions to Multi-Employer Welfare Programs [Abstract] | ||
Total contributions | $ 43,805 | $ 29,981 |
Loan Receivable (Details)
Loan Receivable (Details) | 1 Months Ended | |||
Nov. 30, 2016USD ($)Routers | Nov. 30, 2016CNY (¥) | Jan. 12, 2016USD ($) | Jan. 12, 2016CNY (¥) | |
Shenzhen Wonhe [Member] | ||||
Loan Receivable (Textual) | ||||
Capital contribution amount | $ 25,310,000 | ¥ 175,755,641 | $ 382,990,000 | ¥ 55,630,000 |
Number of supply routers | 36,300 | |||
Percentage rate unpaid portion of that obligation accrue interest | 4.75% | 4.75% | ||
Receivable discount rate | 20.00% | |||
Routers and Other Equipment [Member] | ||||
Loan Receivable (Textual) | ||||
Payments of subsidiary | $ 261 | ¥ 1,800 |
Condensed Financial Informati51
Condensed Financial Information of the Parent Company (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | |||
Investment in subsidiaries | $ 5,852,430 | ||
TOTAL ASSETS | 73,854,552 | 64,516,018 | |
Current liabilities: | |||
Loan from stockholder | 434,324 | 335,655 | |
Accrued liabilities | 414,141 | 192,550 | |
Total current liabilities | 2,567,145 | 753,093 | |
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; 73,510,130 and 58,510,130 shares issued and outstanding at December 31, 2016 and 2015, respectively | 73,510 | 58,510 | |
Additional paid-in capital | 38,791,666 | 37,592,346 | |
Retained earnings | 12,469,735 | 7,610,229 | |
Total stockholders' equity | 71,287,407 | 63,762,925 | $ 39,685,593 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 73,854,552 | 64,516,018 | |
Parent Company [Member] | |||
ASSETS | |||
Cash-restricted | 14,428,459 | 14,332,241 | |
Other receivable from subsidiaries | 11,116,320 | 9,912,000 | |
Investment in subsidiaries | 24,198,950 | 21,093,752 | |
TOTAL ASSETS | 49,743,729 | 45,337,994 | |
Current liabilities: | |||
Loan from stockholder | 434,324 | 366,040 | |
Accrued liabilities | 5,000 | ||
Total current liabilities | 434,324 | 371,040 | |
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; 73,510,130 and 58,510,130 shares issued and outstanding at December 31, 2016 and 2015, respectively | 73,510 | 58,510 | |
Additional paid-in capital | 38,791,666 | 37,592,346 | |
Retained earnings | 10,444,229 | 7,316,098 | |
Total stockholders' equity | 49,309,405 | 44,966,954 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 49,743,729 | $ 45,337,994 |
Condensed Financial Informati52
Condensed Financial Information of the Parent Company (Parenthetical) (Details 1) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
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 | 73,510,130 | 58,510,130 |
Common stock, shares outstanding | 73,510,130 | 58,510,130 |
Parent Company [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
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 | 73,510,130 | 58,510,130 |
Common stock, shares outstanding | 73,510,130 | 58,510,130 |
Condensed Financial Informati53
Condensed Financial Information of the Parent Company (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating expenses: | ||
Stock compensation | $ 7,534,080 | |
General and administrative | 1,292,001 | 8,394,140 |
Net income | 5,283,834 | (2,116,783) |
Parent Company [Member] | ||
Revenues: | ||
Share of earnings from investment in subsidiaries | 5,393,835 | 5,521,942 |
Operating expenses: | ||
Stock compensation | 7,534,080 | |
General and administrative | 110,000 | 104,645 |
Net income | $ 5,283,835 | $ (2,116,783) |
Condensed Financial Informati54
Condensed Financial Information of the Parent Company (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 5,283,834 | $ (2,116,783) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||
Stock compensation | 7,534,080 | |
Net cash (used by) operating activities | 10,498,300 | 11,395,670 |
Cash flows from financing activities: | ||
Proceeds from sale of common stock | 1,214,320 | 15,196,298 |
Net cash (used by) financing activities | 1,030,152 | 17,185,319 |
Net increase in cash | (9,988,983) | 17,627,652 |
Cash, beginning | 52,074,752 | 34,447,100 |
Cash, ending | 42,085,769 | 52,074,752 |
Noncash financing activities: | ||
Payment of accrued liabilities by shareholder | 115,000 | 108,003 |
Parent Company [Member] | ||
Cash flows from operating activities: | ||
Net income | 5,283,835 | (2,116,783) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||
Share of earnings from investment in subsidiaries | (5,283,835) | (5,521,942) |
Stock compensation | 7,534,080 | |
(Decrease) increase in accrued liabilities | (32,509) | |
Net cash (used by) operating activities | (137,154) | |
Cash flows from financing activities: | ||
Proceeds from sale of common stock | 15,196,298 | |
Proceeds from stockholders | 137,154 | |
Net cash (used by) financing activities | 15,333,452 | |
Effect of exchange rate changes on cash: | 96,218 | (864,057) |
Net increase in cash | 96,218 | 14,332,241 |
Cash, beginning | 14,332,241 | |
Cash, ending | 14,428,459 | 14,332,241 |
Noncash financing activities: | ||
Payment of accrued liabilities by shareholder | $ 115,000 | $ 108,003 |
Condensed Financial Informati55
Condensed Financial Information of the Parent Company (Details Textual) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Condensed Financial Information of the Parent Company (Textual) | ||
Total stockholders' equity | $ 49,309,405 | $ 44,966,954 |
Parent Company [Member] | ||
Condensed Financial Information of the Parent Company (Textual) | ||
Total stockholders' equity | $ 49,309,405 | $ 44,966,954 |
Restricted net assets exceed percentage | 25.00% |
Subsequent Event (Details)
Subsequent Event (Details) - Mar. 31, 2017 | $ / shares | AUD / shares |
Subsequent Event [Member] | Wonhe Multimedia Commerce Ltd [Member] | ||
Subsequent Event [Line Items] | ||
Dividend declared | (per share) | $ 0.0042 | AUD 0.005882 |