Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 12, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Takung Art Co., Ltd. | |
Entity Central Index Key | 1,491,487 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | TKAT | |
Entity Common Stock, Shares Outstanding | 9,632,276 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash & equivalents | $ 4,591,681 | $ 2,355,839 |
Restricted cash | 14,719,845 | 6,865,821 |
Deposits | 191,595 | 73,852 |
Accounts receivables | 291,617 | 291,496 |
Other receivables | 50,536 | 295,870 |
Prepayment | 745,584 | 183,083 |
Due from director | 502 | 0 |
Total current assets | 20,591,360 | 10,065,961 |
PROPERTY AND EQUIPMENT, net | 1,304,020 | 1,037,758 |
INTANGIBLES, net | 20,555 | 20,547 |
TOTAL ASSETS | 21,915,935 | 11,124,266 |
CURRENT LIABILITIES | ||
Accounts Payable | 14,987 | 0 |
Accrued expenses and other payables | 534,141 | 1,891,525 |
Customer deposits | 14,719,845 | 6,865,821 |
Due to director | 0 | 2,730 |
Tax payables | 744,875 | 249,092 |
Total current liabilities | 16,013,848 | 9,009,168 |
NON-CURRENT LIABILITIES | ||
Deferred tax liabilities | 51,261 | 66,555 |
Total non-current liabilities | 51,261 | 66,555 |
TOTAL LIABILITIES | 16,065,109 | 9,075,723 |
STOCKHOLDERS' EQUITY | ||
Common stock, 1,000,000,000 shares authorized; $0.001 par value; 9,632,267 shares issued and outstanding at September 30, 2015; 9,332,267 shares issued and outstanding at December 31, 2014 | 9,632 | 9,332 |
Additional paid-in capital | 2,755,798 | 2,570,098 |
Subscription receivables | 0 | (1,896,548) |
Retained earnings | 3,081,213 | 1,365,868 |
Accumulated other comprehensive loss | 4,183 | (207) |
Total stockholders' equity | 5,850,826 | 2,048,543 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 21,915,935 | $ 11,124,266 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 9,632,267 | 9,332,267 |
Common stock, shares outstanding | 9,632,267 | 9,332,267 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue | $ 2,706,388 | $ 921,860 | $ 4,917,368 | $ 2,435,448 |
Cost of revenue | (214,530) | (119,156) | (592,342) | (296,029) |
Gross profit | 2,491,858 | 802,704 | 4,325,026 | 2,139,419 |
Operating expenses: | ||||
General and administrative expenses | (999,072) | (415,437) | (2,124,550) | (970,951) |
Income from operations | 1,492,786 | 387,267 | 2,200,476 | 1,168,468 |
Other income (loss) | (5,201) | 59 | (4,718) | 122 |
Income before provision for income taxes | 1,487,585 | 387,326 | 2,195,758 | 1,168,590 |
Provision for income taxes | (343,512) | (68,214) | (480,414) | (205,116) |
Net income | 1,144,073 | 319,112 | 1,715,344 | 963,474 |
Foreign currency translation adjustment | (22,523) | (4,006) | (21,903) | (2,302) |
Comprehensive income | $ 1,121,550 | $ 315,106 | $ 1,693,441 | $ 961,172 |
Earnings per common share- basic and diluted (in dollars per share) | $ 0.12 | $ 0.04 | $ 0.18 | $ 0.12 |
Weighted average number of common shares outstanding (in shares) | 9,452,919 | 8,339,040 | 9,407,386 | 8,339,040 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 1,715,344 | $ 963,474 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation | 240,921 | 134,901 |
Share-based compensation | 186,000 | 0 |
Changes in operating assets and liabilities: | ||
Deposit | (117,678) | (302) |
Other receivables | 213,665 | (30,415) |
Prepayment | (562,231) | 24,796 |
Account receivables | 0 | (82,554) |
Restricted cash | (7,949,252) | (1,510,621) |
Accounts payables | 14,980 | 0 |
Due todirector | (3,231) | 8,357 |
Customer deposits | 7,949,252 | 1,511,666 |
Deferred tax assets | 0 | 27,504 |
Deferred tax liabilities | (15,303) | (4,557) |
Tax payable | 495,775 | 182,170 |
Accrued expenses and other payables | (1,356,612) | 90,058 |
Net cash provided by operating activities | 811,630 | 1,314,477 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property, plant and equipment | (507,032) | (20,544) |
Deposit for property, plant and equipment | (164,665) | |
Net cash used in investing activities | (507,032) | (185,209) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from subscription receivables | 1,928,191 | 0 |
Net cash provided by (used in) investing activities | 1,928,191 | 0 |
Effect of exchange rate change on cash and cash equivalents | 3,053 | (1,854) |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 2,235,842 | 1,127,414 |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 2,355,839 | 260,187 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 4,591,681 | 1,387,601 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITY | ||
Cash paid during the year for income taxes | 0 | 0 |
Cash paid during the year for interest expense | $ 0 | $ 0 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Takung Art Co., Ltd.(the “Company” or “Takung Art”), a Delaware corporation (formerly Cardigant Medical Inc.) through HongKong Takung Assets and Equity of Artworks Exchange Co., Ltd. (“Takung”), a Hong Kong company and our wholly owned subsidiary, operates an electronic online platform located at www.takungae.com for artists, art dealers and art investors to offer and trade in valuable artwork. HongKong Takung Assets & Equity of Artworks Exchange Co., Ltd. (“Takung”) was incorporated in Hong Kong on September 17, 2012 Takung (Shanghai) Co., Ltd (“Takung Shanghai”) is a limited liability company, with a registered capital of $ 1 REVERSE MERGER On October 20, 2014, Cardigant Medical Inc. (or “Cardigant”) acquired all the issued and outstanding shares of Takung, a privately held Hong Kong corporation, pursuant to the Share Exchange Agreement and Takung became the wholly owned subsidiary of Cardigant in a reverse merger, or the Merger. Pursuant to the Merger, all of the issued and outstanding shares of Takung common stock were converted, at an exchange ratio of 10.4988 209,976,000 23,330,662 Under generally accepted accounting principles in the United States, (“U.S. GAAP”) because Takung’s former stockholders received the greater portion of the voting rights in the combined entity and Takung’s senior management represents all of the senior management of the combined entity, the Merger was accounted for as a recapitalization effected by a share exchange, wherein Takung is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of Takung have been brought forward at their book value and no goodwill has been recognized. Accordingly, the assets and liabilities and the historical operations that are reflected in Takung's consolidated financial statements are those of Takung and are recorded at the historical cost basis of Takung. The results of operations of the acquired Cardigant business have been included in the consolidated statement of operations since the date of Merger. Unless otherwise indicated or the context otherwise requires, references to “the Company” refer to Takung Art Co., Ltd. Disclosures relating to the pre-merger business of Takung, unless noted as being the business of Cardigant prior to the Merger, pertain to the business of Takung prior to the Merger. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information article 10 of Regulation S-X. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. dollars. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Actual results could differ materially from those results. The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of non-financial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. • Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of September 30, 2015 and December 31, 2014, respectively. The Company follows the provisions of the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 220 “Reporting Comprehensive Income”, and establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. For the period ended September 30, 2015 and 2014, the Company’s comprehensive income includes net income and foreign currency translation adjustments. The functional currency of Takung is the Hong Kong Dollar (“HKD”). The functional currency of Takung Shanghai is the Renminbi (“RMB”). The reporting currency of the Company is the United States Dollar (“USD”). Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on re-translation of monetary items at period-end are included in income statement of the period. For the purpose of presenting these financial statements, the Company’s assets and liabilities are expressed in USD at the exchange rates on the balance sheet dates, which are 7.7499 7.7531 7.7530 7.7545 The Company considers highly liquid investments with maturities of three months or less, when purchased, to be cash equivalents. As of September 30, 2015 and December 31, 2014, the Company’s cash and cash equivalents amounted $ 4,591,681 2,355,839 Restricted cash represents the cash deposited by the traders (“buyers and sellers”) into a specific bank account under Takung (“the broker’s account”) in order to facilitate the trading ownership units of the artwork. The buyers are required to have their funds transferred to the broker’s account before the trading take place. Upon the delivery of the ownership units, the seller can send instructions to the bank, requesting the amount to be transferred to their personal accounts. After deducting the commission and the management fee as per Takung’s instruction, the bank will transfer the remainder to the seller’s personal account. Except for instructing the bank to deduct the commission and management fee, Takung has no right to manipulate any funds in the broker’s account. Restricted cash was $ 14,719,845 6,865,821 Property and equipment are stated at cost less accumulated depreciation and impairment losses. Gains or losses on dispositions of property and equipment are included in operating income (loss). Major additions, renewals and betterments are capitalized, while maintenance and repairs are expensed as incurred. Depreciation and amortization are provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Classification Estimated useful life Furniture, fixtures and equipment 5 years Leasehold improvements 3 years Computer trading and clearing system 5 years The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When these events occur, the Company assesses the recoverability of these long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the future undiscounted cash flow is less than the carrying amount of the assets, the Company recognizes an impairment equal to the difference between the carrying amount and fair value of these assets. No impairments were recorded during the period ended September 30, 2015 and December 31, 2014, respectively. The Company generates revenue from its services in connection with the offering and trading of artwork on our system, primarily consisting of listing fees, trading commissions, and management fees. We recognize revenue once all of the following criteria have been met: · persuasive evidence of an arrangement exists; · delivery of our obligations to our customer has occurred; · the price is fixed or determinable; and · collectability of the related receivable is reasonably assured Listing fee 22.5 47 439,811 1,549,587 309,637 915,632 Commission 0.3 0.2 0.13 As part of the referral incentive program, the Company would rebate 5 Commission revenue was $ 2,239,526 3,267,516 569,482 1,442,443 Management fee $0.0013 (HK$0.01) per 100 artwork ownership units per day. A discount program is offered to waive the management fee during certain promotion periods. Such discount is recognized as a reduction of the revenue in the same period the related revenue is recognized. Management fee revenue was $ 26,889 98,674 42,741 77,373 Annual fee income The Company charges an annual fee for providing traders with premium services, including more in-depth information and tools, on the trading platform. This revenue is recognized ratably over the service agreement period. The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. GAAP also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition. Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. As of September 30, 2015 and December 31, 2014, respectively, there were no outstanding securities or other contracts to issue common stock, such as options, warrants or conversion rights, which would have a dilutive effect on earnings per share. Intangible assets represent the Company’s trademark. For intangible assets with indefinite lives, the Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company has not recorded impairment of intangible assets as of September 30, 2015 and December 31, 2014. Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic In July 2015, the FASB decided to delay the effective date of ASU 2014-09 by one year. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. As such, the updated standard will be effective for us in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. We are still evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements. In September 2015, the FASB issued Accounting Standards Update ("ASU") 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments," which requires the acquirer in a business combination recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Public entities are required to apply ASU 2015-16 for annual and interim reporting periods beginning after December 15, 2015. The Company is evaluating the impact that this new guidance will have on its consolidated financial statements. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 3. PROPERTY AND EQUIPMENT, NET September 30, 2015 December 31, 2014 Cost Furniture, fixtures and equipment $ 61,414 $ 54,429 Leasehold improvements 140,970 139,686 Computer trading and clearing system 1,624,441 1,125,316 Sub-total 1,826,825 1,319,431 Less: accumulated depreciation (522,805) (281,673) Property and equipment, net $ 1,304,020 $ 1,037,758 Depreciation expense was $ 84,076 240,921 48,340 134,901 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | 4. INTANGIBLE ASSETS Intangible assets consist of the Company’s trademarks with indefinite useful life. The intangible asset was $ 20,555 20,547 December 31, |
ACCRUED EXPENSES AND OTHER PAYA
ACCRUED EXPENSES AND OTHER PAYABLES | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | 5. ACCRUED EXPENSES AND OTHER PAYABLES September 30, December 31, 2015 2014 Trading and clearing system $ 122,830 $ 399,195 Accruals for promotional services related to trading platform - 894,481 Accruals for professional fees 55,158 73,420 Accruals for consulting fees 201,645 413,900 Accruals for office rental 5,089 11,437 Accruals for Artwork Storage 138,545 - Payroll payables 3,032 297 Other payables 7,842 98,795 Total accrued expenses and other payables $ 534,141 $ 1,891,525 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 6. INCOME TAXES The income tax expense was $ 343,512 480,414 68,214 205,116 Our effective tax rate was 23.1 21.9 17.6 17.6 Capital Commitments The Company purchased property, plant and equipment which the payment was due within one year. As of September 30, 2015 and December 31, 2014, the Company has capital commitments of $ 348,329 499,929 Operation Commitments Remaining 2015 $ 132,148 Year ending December 31, 2016 349,083 Year ending December 31, 2017 249,088 Year ending December 31, 2018 84,541 Total $ 814,860 Rental expense of the Company was $ 103,144 308,400 61,268 170,844 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | 7. STOCKHOLDERS’ EQUITY On July 7, 2015, the Board granted 300,000 186,000 |
SUMMARY OF SIGNIFICANT ACCOUN13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information article 10 of Regulation S-X. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. dollars. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Actual results could differ materially from those results. |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of non-financial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. • Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of September 30, 2015 and December 31, 2014, respectively. |
Comprehensive Income, Policy [Policy Text Block] | The Company follows the provisions of the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 220 “Reporting Comprehensive Income”, and establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. For the period ended September 30, 2015 and 2014, the Company’s comprehensive income includes net income and foreign currency translation adjustments. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation The functional currency of Takung is the Hong Kong Dollar (“HKD”). The functional currency of Takung Shanghai is the Renminbi (“RMB”). The reporting currency of the Company is the United States Dollar (“USD”). Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on re-translation of monetary items at period-end are included in income statement of the period. For the purpose of presenting these financial statements, the Company’s assets and liabilities are expressed in USD at the exchange rates on the balance sheet dates, which are 7.7499 7.7531 7.7530 7.7545 |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers highly liquid investments with maturities of three months or less, when purchased, to be cash equivalents. As of September 30, 2015 and December 31, 2014, the Company’s cash and cash equivalents amounted $ 4,591,681 2,355,839 |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash Restricted cash represents the cash deposited by the traders (“buyers and sellers”) into a specific bank account under Takung (“the broker’s account”) in order to facilitate the trading ownership units of the artwork. The buyers are required to have their funds transferred to the broker’s account before the trading take place. Upon the delivery of the ownership units, the seller can send instructions to the bank, requesting the amount to be transferred to their personal accounts. After deducting the commission and the management fee as per Takung’s instruction, the bank will transfer the remainder to the seller’s personal account. Except for instructing the bank to deduct the commission and management fee, Takung has no right to manipulate any funds in the broker’s account. Restricted cash was $ 14,719,845 6,865,821 |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and impairment losses. Gains or losses on dispositions of property and equipment are included in operating income (loss). Major additions, renewals and betterments are capitalized, while maintenance and repairs are expensed as incurred. Depreciation and amortization are provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Classification Estimated useful life Furniture, fixtures and equipment 5 years Leasehold improvements 3 years Computer trading and clearing system 5 years |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-lived Assets The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When these events occur, the Company assesses the recoverability of these long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the future undiscounted cash flow is less than the carrying amount of the assets, the Company recognizes an impairment equal to the difference between the carrying amount and fair value of these assets. No impairments were recorded during the period ended September 30, 2015 and December 31, 2014, respectively. |
Revenue Recognition Accounting Policy, Gross and Net Revenue Disclosure [Policy Text Block] | Revenue Recognition The Company generates revenue from its services in connection with the offering and trading of artwork on our system, primarily consisting of listing fees, trading commissions, and management fees. We recognize revenue once all of the following criteria have been met: · persuasive evidence of an arrangement exists; · delivery of our obligations to our customer has occurred; · the price is fixed or determinable; and · collectability of the related receivable is reasonably assured Listing fee 22.5 47 439,811 1,549,587 309,637 915,632 Commission 0.3 0.2 0.13 As part of the referral incentive program, the Company would rebate 5 Commission revenue was $ 2,239,526 3,267,516 569,482 1,442,443 Management fee $0.0013 (HK$0.01) per 100 artwork ownership units per day. A discount program is offered to waive the management fee during certain promotion periods. Such discount is recognized as a reduction of the revenue in the same period the related revenue is recognized. Management fee revenue was $ 26,889 98,674 42,741 77,373 Annual fee income The Company charges an annual fee for providing traders with premium services, including more in-depth information and tools, on the trading platform. This revenue is recognized ratably over the service agreement period. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. GAAP also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition. |
Earnings Per Share, Policy [Policy Text Block] | Earnings per share Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. As of September 30, 2015 and December 31, 2014, respectively, there were no outstanding securities or other contracts to issue common stock, such as options, warrants or conversion rights, which would have a dilutive effect on earnings per share. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible Assets Intangible assets represent the Company’s trademark. For intangible assets with indefinite lives, the Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company has not recorded impairment of intangible assets as of September 30, 2015 and December 31, 2014. |
Reclassification, Policy [Policy Text Block] | Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic In July 2015, the FASB decided to delay the effective date of ASU 2014-09 by one year. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. As such, the updated standard will be effective for us in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. We are still evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements. In September 2015, the FASB issued Accounting Standards Update ("ASU") 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments," which requires the acquirer in a business combination recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Public entities are required to apply ASU 2015-16 for annual and interim reporting periods beginning after December 15, 2015. The Company is evaluating the impact that this new guidance will have on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of an Asset [Table Text Block] | Estimated useful lives are as follows, taking into account the assets' estimated residual value: Classification Estimated useful life Furniture, fixtures and equipment 5 years Leasehold improvements 3 years Computer trading and clearing system 5 years |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | September 30, 2015 December 31, 2014 Cost Furniture, fixtures and equipment $ 61,414 $ 54,429 Leasehold improvements 140,970 139,686 Computer trading and clearing system 1,624,441 1,125,316 Sub-total 1,826,825 1,319,431 Less: accumulated depreciation (522,805) (281,673) Property and equipment, net $ 1,304,020 $ 1,037,758 |
ACCRUED EXPENSES AND OTHER PA16
ACCRUED EXPENSES AND OTHER PAYABLES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | Accrued expenses and other payables as of September 30, 2015 and December 31, 2014 consisted of: September 30, December 31, 2015 2014 Trading and clearing system $ 122,830 $ 399,195 Accruals for promotional services related to trading platform - 894,481 Accruals for professional fees 55,158 73,420 Accruals for consulting fees 201,645 413,900 Accruals for office rental 5,089 11,437 Accruals for Artwork Storage 138,545 - Payroll payables 3,032 297 Other payables 7,842 98,795 Total accrued expenses and other payables $ 534,141 $ 1,891,525 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | The total future minimum lease payments under the non-cancellable operating lease with respect to the office and the dormitory, as well as hardware trading platform as of September 30, 2015 are payable as follows: Remaining 2015 $ 132,148 Year ending December 31, 2016 349,083 Year ending December 31, 2017 249,088 Year ending December 31, 2018 84,541 Total $ 814,860 |
ORGANIZATION AND DESCRIPTION 18
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Textual) $ in Millions | 1 Months Ended | 9 Months Ended |
Oct. 20, 2014shares | Sep. 30, 2015USD ($) | |
Organization And Description Of Business [Line Items] | ||
Entity Incorporation, Date of Incorporation | Sep. 17, 2012 | |
Capital Units, Value | $ | $ 1 | |
Common Stock [Member] | ||
Organization And Description Of Business [Line Items] | ||
Stock Issued During Period, Shares, Acquisitions | 23,330,662 | |
Common Stock [Member] | Share Exchange Agreement [Member] | ||
Organization And Description Of Business [Line Items] | ||
Stock Issued During Period, Shares, New Issues | 209,976,000 | |
Conversion of common stock, Conversion Ratio | 10.4988 |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Furniture, fixtures and equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | 5 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | 3 years |
Computer Trading and Clearing System [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Summary of Significant Accounting Policies [Line Items] | ||||||
Cash and Cash Equivalents, at Carrying Value, Total | $ 4,591,681 | $ 1,387,601 | $ 4,591,681 | $ 1,387,601 | $ 2,355,839 | $ 260,187 |
Foreign Currency Exchange Rate Weighted Average Translation Rate | 7.7530 | 7.7545 | ||||
Listing Fee Revenue | $ 439,811 | 309,637 | $ 1,549,587 | $ 915,632 | ||
Commissions Fee Percentage on Total Transaction | 0.30% | |||||
Reduced Commission Fee Percentage on Total Transaction | 0.20% | |||||
Minimum Charge on Total Transaction | $ 0.13 | |||||
Incentive Percentage to Related Referrer on Commission Earned | 5.00% | |||||
Foreign Currency Exchange Rate, Translation | 7.7499 | 7.7499 | 7.7531 | |||
Restricted Cash and Cash Equivalents | $ 14,719,845 | $ 14,719,845 | $ 6,865,821 | |||
Fees and Commissions, Other | 2,239,526 | 569,482 | 3,267,516 | 1,442,443 | ||
Property Management Fee Revenue | $ 26,889 | $ 42,741 | $ 98,674 | $ 77,373 | ||
Management Fee Income Description | $0.0013 (HK$0.01) per 100 artwork ownership units per day. | |||||
China, Yuan Renminbi | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Foreign Currency Exchange Rate Weighted Average Translation Rate | 6.2477 | |||||
Foreign Currency Exchange Rate, Translation | 6.3556 | 6.3556 | ||||
Minimum [Member] | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Offering Fee Percent | 22.50% | 22.50% | ||||
Maximum [Member] | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Offering Fee Percent | 47.00% | 47.00% |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Cost | ||
Furniture, fixtures and equipment | $ 61,414 | $ 54,429 |
Leasehold improvements | 140,970 | 139,686 |
Computer trading and clearing system | 1,624,441 | 1,125,316 |
Sub-total | 1,826,825 | 1,319,431 |
Less: accumulated depreciation | (522,805) | (281,673) |
Property and equipment, net | $ 1,304,020 | $ 1,037,758 |
PROPERTY AND EQUIPMENT, NET (22
PROPERTY AND EQUIPMENT, NET (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 84,076 | $ 48,340 | $ 240,921 | $ 134,901 |
INTANGIBLE ASSETS (Details Text
INTANGIBLE ASSETS (Details Textual) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Trademarks [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 20,555 | $ 20,547 |
ACCRUED EXPENSES AND OTHER PA24
ACCRUED EXPENSES AND OTHER PAYABLES (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Schedule Of Accounts Payable And Accrued Liabilities [Line Items] | ||
Trading and clearing system | $ 122,830 | $ 399,195 |
Accruals for promotional services related to trading platform | 0 | 894,481 |
Accruals for professional fees | 55,158 | 73,420 |
Accruals for consulting fees | 201,645 | 413,900 |
Accruals for office rental | 5,089 | 11,437 |
Accruals for Artwork Storage | 138,545 | 0 |
Payroll payables | 3,032 | 297 |
Other payables | 7,842 | 98,795 |
Total accrued expenses and other payables | $ 534,141 | $ 1,891,525 |
INCOME TAXES (Details)
INCOME TAXES (Details) | Sep. 30, 2015USD ($) |
Operating Leased Assets [Line Items] | |
Remaining 2,015 | $ 132,148 |
Year ending December 31, 2016 | 349,083 |
Year ending December 31, 2017 | 249,088 |
Year ending December 31, 2018 | 84,541 |
Total | $ 814,860 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income Taxes [Line Items] | |||||
Income Tax Expense (Benefit) | $ 343,512 | $ 68,214 | $ 480,414 | $ 205,116 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 23.10% | 17.60% | 21.90% | 17.60% | |
Capital Lease Obligations, Current | $ 348,329 | $ 348,329 | $ 499,929 | ||
Operating Leases, Rent Expense, Net, Total | $ 103,144 | $ 61,268 | $ 308,400 | $ 170,844 |
STOCKHOLDERS' EQUITY (Details T
STOCKHOLDERS' EQUITY (Details Textual) | 3 Months Ended |
Sep. 30, 2015USD ($)shares | |
Schedule of Stockholders Equity [Line Items] | |
Stock Issued During Period, Shares, Issued for Services | 300,000 |
Stock Issued During Period, Value, Issued for Services | $ | $ 186,000 |