Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 14, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
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 | Non-accelerated Filer | |
Trading Symbol | TKAT | |
Entity Common Stock, Shares Outstanding | 11,226,025 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true |
INTERIM CONDENSED CONSOLIDATED
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 8,418,818 | $ 11,866,965 |
Restricted cash | 7,515,860 | 25,273,617 |
Account receivables, net | 971,480 | 2,291,698 |
Prepayment and other current assets | 2,257,181 | 2,300,207 |
Inventories | 14,859 | 0 |
Amount due from a related party | 5,914,240 | 0 |
Short term investments, held to maturity | 873,617 | 0 |
Loan receivables | 3,859,075 | 7,834,115 |
Total current assets | 29,825,130 | 49,566,602 |
Non-current assets | ||
Property and equipment, net | 1,992,564 | 2,191,321 |
Intangible assets | 22,297 | 22,334 |
Deferred tax assets | 700,668 | 291,430 |
Other non-current assets | 394,555 | 757,235 |
Total non-current assets | 3,110,084 | 3,262,320 |
Total assets | 32,935,214 | 52,828,922 |
Current liabilities | ||
Accrued expenses and other payables | 623,472 | 1,461,858 |
Customer deposits | 7,515,860 | 25,273,617 |
Advance from customers | 14,355 | 170,078 |
Short-term borrowings from third parties | 3,950,099 | 7,208,761 |
Amount due to related parties | 6,389,042 | 483,822 |
Tax payables | 15,848 | 312,575 |
Total current liabilities | 18,508,676 | 34,910,711 |
Total liabilities | 18,508,676 | 34,910,711 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common stock (1,000,000,000 shares authorized; $0.001 par value; 11,226,025 shares issued and outstanding as of September 30, 2018; 11,188,882 shares issued and outstanding as of December 31, 2017) | 11,226 | 11,189 |
Additional paid-in capital | 6,298,910 | 6,116,216 |
Retained earnings | 8,568,638 | 12,111,096 |
Accumulated other comprehensive loss | (452,236) | (320,290) |
Total stockholders' equity | 14,426,538 | 17,918,211 |
Total liabilities and stockholders' equity | $ 32,935,214 | $ 52,828,922 |
INTERIM CONDENSED CONSOLIDATE_2
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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 | 11,226,025 | 11,188,882 |
Common stock, shares outstanding | 11,226,025 | 11,188,882 |
INTERIM CONDENSED CONSOLIDATE_3
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | ||||
Listing fee | $ 0 | $ 1,455,498 | $ 3,978,735 | $ 4,606,649 |
Commission | 253,331 | 1,496,826 | 3,557,411 | 4,970,651 |
Management fee | 107,905 | 402,547 | 455,133 | 967,518 |
Annual fee | 54 | 140 | 378 | 859 |
Authorized agent subscription revenue | 0 | 191,623 | 0 | |
Online artwork sales | 2,244 | 0 | 8,548 | 0 |
Total revenue | 363,534 | 3,355,011 | 8,191,828 | 10,545,677 |
Cost of revenue | (299,482) | (292,168) | (2,173,296) | (822,335) |
Gross profit | 64,052 | 3,062,843 | 6,018,532 | 9,723,342 |
Operating expenses: | ||||
General and administrative expenses | (2,208,264) | (2,498,848) | (7,791,747) | (7,311,128) |
Selling expenses | (149,035) | (624,151) | (851,173) | (1,272,010) |
Impairment loss – construction-in-progress | (326,227) | 0 | (326,227) | 0 |
Total operating expenses | (2,683,526) | (3,122,999) | (8,969,147) | (8,583,138) |
(Loss) income from operations | (2,619,474) | (60,156) | (2,950,615) | 1,140,204 |
Other income and expenses: | ||||
Other income | 65,487 | 186,259 | 470,752 | 440,470 |
Loan interest expense | (199,821) | (152,059) | (504,287) | (455,762) |
Exchange gain (loss) | (870,218) | 177,652 | (1,132,510) | 526,603 |
Total other income (loss) | (1,004,552) | 211,852 | (1,166,045) | 511,311 |
(Loss) income before provision for income taxes | (3,624,026) | 151,696 | (4,116,660) | 1,651,515 |
Income tax benefit (expense) | 742,670 | (124,662) | 574,202 | (594,377) |
Net (loss) income | (2,881,356) | 27,034 | (3,542,458) | 1,057,138 |
Foreign currency translation adjustment | (3,668) | 311,485 | (131,946) | 787,660 |
Comprehensive (loss) income | $ (2,885,024) | $ 338,519 | $ (3,674,404) | $ 1,844,798 |
(Loss) earnings per common share– basic | $ (0.26) | $ 0 | $ (0.32) | $ 0.10 |
(Loss) earnings per common share– diluted | $ (0.26) | $ 0 | $ (0.32) | $ 0.09 |
Weighted average number of common shares outstanding-basic | 11,226,025 | 11,188,882 | 11,216,009 | 11,039,880 |
Weighted average number of common shares outstanding-diluted | 11,226,025 | 11,248,688 | 11,216,009 | 11,398,082 |
INTERIM CONDENSED CONSOLIDATE_4
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (3,542,458) | $ 1,057,138 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 713,933 | 538,532 |
Interest expense | 262,561 | 181,341 |
Bad debt expense | (76,402) | 241,248 |
Changes in exchange rate | 1,132,510 | (526,603) |
Stock-based compensation | 217,231 | 558,704 |
Impairment loss on CIP | 326,227 | 0 |
Deferred tax liabilities | 0 | (17,317) |
Deferred tax assets | (409,238) | (50,904) |
Changes in operating assets and liabilities: | ||
Account receivables | 1,396,620 | (915,249) |
Prepaid loan interest expense | 0 | (111,477) |
Prepayment and other current assets | (58,673) | (64,440) |
Other non-current assets | 362,680 | (106,656) |
Customer deposits | (17,757,757) | (2,685,627) |
Amount due to related party | 0 | 53,675 |
Tax payables | (296,727) | 544,988 |
Advance from customer | (155,723) | (360,248) |
Accrued expenses and other payables | (704,607) | 5,792 |
Net cash used in operating activities | (18,589,823) | (1,657,103) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (775,730) | (455,255) |
Purchase of available-for-sales investment | (90,293,454) | (53,501,874) |
Maturity and redemption of available-for-sales investment | 90,293,454 | 53,501,874 |
Loan to third parties | 0 | (3,518,325) |
Loan to related parties | (6,369,809) | 0 |
Repayment from loan to third parties | 3,641,871 | 3,412,070 |
Repayment from loan to related parties | 0 | 0 |
Purchase of held-to-maturity investment | (873,617) | 0 |
Net cash used in investing activities | (4,377,285) | (561,510) |
Cash flows from financing activities: | ||
Proceeds from related party loan | 6,389,042 | 0 |
Loan repayment to related party | (483,822) | 0 |
Loan repayment to third party | (3,480,000) | 0 |
Net cash provided by financing activities | 2,425,220 | 0 |
Effect of exchange rate change on cash, cash equivalents and restricted cash | (664,016) | 1,025,539 |
Net decrease in cash, cash equivalents and restricted cash | (21,205,904) | (1,193,074) |
Cash, cash equivalents and restricted cash, beginning balance | 37,140,582 | 35,138,697 |
Cash, cash equivalents and restricted cash, ending balance | 15,934,678 | 33,945,623 |
Supplemental cash flows information: | ||
Cash | 8,418,818 | 14,887,890 |
Restricted cash included in customer deposits | 7,515,860 | 19,057,733 |
Total cash and restricted cash | 15,934,678 | 33,945,623 |
Cash paid during the period for: Interest | 241,727 | 212,954 |
Cash paid during the period for: Income tax | $ 111,917 | $ 136,453 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2018 | |
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 and subsidiaries (“Takung” or the “Company”), a Delaware corporation (formerly Cardigant Medical Inc.) through Hong Kong Takung Art Company Limited (formerly Hong Kong Takung Assets and Equity of Artworks Exchange Co., Ltd.), a Hong Kong company (“Hong Kong Takung”) 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. Hong Kong Takung was incorporated in Hong Kong on September 17, 2012 and operates an electronic online platform for offering, selling and trading artwork. For the period from September 17, 2012 (inception) to December 31, 2012, the company had no operation except for the issuance of shares for subscription receivables. The Company generates revenue from its services in connection with the offering and trading of artwork on its system, primarily consisting of listing fees, trading commissions, and management fees. The Company conducts its business primarily in Hong Kong, People’s Republic of China (the “PRC”). Takung (Shanghai) Co., Ltd (“Shanghai Takung”) is a limited liability company, with a registered capital of $1 million, located in the Shanghai Pilot Free Trade Zone. Shanghai Takung was incorporated on July 28, 2015 in the PRC. It is engaged in providing services to its parent company, Hong Kong Takung by receiving deposits from and making payments to online artwork traders of Takung for and on behalf of Takung. Starting the second quarter of 2018, we launched an offering of artwork and artwork related merchandise for sales on our online platform. The offering is to further promote the artwork’s recognition. Takung Cultural Development (Tianjin) Co., Ltd (“Tianjin Takung”) is a limited liability company, with a registered capital of $1 million located in the Pilot Free Trade Zone in Tianjin. Tianjin Takung was incorporated on January 27, 2016 and is a direct wholly-owned subsidiary of Hong Kong Takung. Tianjin Takung provides technology development services to Hong Kong Takung and Shanghai Takung and also carries out marketing and promotion activities in mainland China. Hong Kong Takung Art Holdings Company Limited (“Takung Art Holdings”) was formed in Hong Kong on July 20, 2018 . Art Era Internet Technology (Tianjin) Co., Ltd (“Art Era”) was formed in Tianjin on September 7, 2018,is a directly wholly owned subsidiary of Takung Art Holdings, and formed as a limited liability company with a registered capital of $2 . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated balance sheet as of December 31, 2017, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements as of September 30, 2018 and for the three months ended and nine months ended September 30, 2018 and 2017 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures, which are normally included in financial statements prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”), have been condensed or omitted pursuant to such rules and regulations. Management believes that the disclosures made are adequate to provide a fair presentation. The interim financial information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, previously filed with the SEC. 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. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s consolidated financial position as of September 30, 2018, its consolidated results of operations and cash flows for the nine-month periods ended September 30, 2018 and 2017, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods. Recently Adopted Accounting Standards Adoption of ASC Topic 606, “Revenue from Contracts with Customers” Effective January 1, 2018, the Company adopted Topic 606 using modified retrospective approach applied to its contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are accounted for and presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with Topic 605. We recognize revenue when control of the promised services is transferred to our traders and offering agents. Revenue is measured at the transaction price, which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised services to our traders and offering agents. Our revenue mainly falls into the following broad categories: (i) listing fees, (ii) trading commissions, (iii) management fees, (iv) authorized agent subscription fee, (v) annual fee, and (vi) online artwork sales. Listing fee revenue Using the output method, we recognize the listing fee revenue at a point when the ownership units of the artwork are listed and successfully traded on our system, based on the agreed percentage of the total offering price. This amount is collected from the money raised from the issuance of such units accounted as the listing fee revenue accordingly. When the ownership units of the artwork are listed and starts trading on our system, the original owner and/or the offering agent pays us a one-time offering fee and a listing deposit. Commission fee revenue We generate commission fee from non-VIP traders and selected traders. We measure the progress of performance obligations using the output method, as traders obtain the benefits of receiving access to making transactions on our trading platform. For non-VIP traders, the commission revenue is calculated based on a percentage of transaction value of artworks, where we charge trading commissions for the purchase and sale of the ownership shares of the artworks. For selected traders, starting from April 1, 2016, we charge a predetermined monthly fee which allows unlimited trades for specific artworks. Commission rebate programs are offered to traders and service agents. We pay to existing traders and service agents a commission rebate at a predetermined referral rate of commission earned from the transactions of new traders referred by them. The commission rebate is recognized as a reduction of the commission revenue prior to January 1, 2018 under Topic 605. Starting from January 1, 2018, we account for the commission rebate as cost of revenue under Topic 606-10-32-26. Since this is a reclassification between revenue and cost of revenue, it would have no impact on the opening balance for the year beginning January 1, 2018. Commission rebates were $1,207,104 and $201,524 for the nine months period ended September 30, 2018 and 2017, and were $2,094 and $103,742 for the three months ended September 30, 2018 and 2017. The rebates are recognized in the same period the related revenue is recognized. Management fee revenue A custody and insurance service are provided for each individual artwork on a daily basis. The cost of custody and insurance for each unit of artwork is constant for all artworks. Using the cost-based input method, we charge traders a management fee to cover the costs of insurance, storage and transportation for an artwork and trading management of artwork units, which are calculated at $0.0013 (HK$0.01) per 100 artwork units daily. The management fee is accounted for as revenue, and immediately deducted from proceeds from the sale of artwork ownership shares when a transaction is completed. A discount program is offered to waive the management fee during certain promotion periods. Such discounts are recognized as a reduction of the revenue upon the completion of the transactions. Authorized agent subscription revenue We charge an authorized agent subscription fee, which is an annual service fee paid by authorized agents to grant them the right to allow their network of artwork owners to list their artwork on our trading platform. This revenue is recognized ratably over the annual agreement period for each agent. Annual fee revenue We charge an up-front annual fee for providing traders with premium services, including in-depth information and tools on the trading platform. This revenue is recognized ratably over the service agreement period for each trader. Online artwork sales From the second quarter of 2018, we launched an offering of artwork and artwork related merchandise for sales on our online platform. Sales of artwork: The sale of artwork consists of fees charged to third-party merchants that the Company provides access to the online platform for sales of their artworks, which are primarily paintings. The Company is not the primary obligor on these transactions, the Company does not bear the inventory risk, does not have the ability to establish prices, and does not provide any fulfillment services since the goods are shipped direct from third-party merchants to end customers. Upon successful sales on the Company's online platform, the Company charges the third-party merchants commission fees based on the agreed percentage of the total selling price. Commission fees are recognized on a net basis when the artwork sales order is completed. Sales of artwork related merchandise: The Company also offers its own artwork related merchandise through its online platform. Revenue is recognized when control of the goods is transferred to the customer, which generally occurs upon our delivery to the carrier or the customer. For comparative purpose, we adjusted the revenue for three and nine months ended September 30, 2017 as if retrospectively adopted ASC 606. The following tables identify the disaggregation of our revenue for the three months ended September 30, 2018 and 2017, respectively: Three months ended September 30, 2018 2017 (Unaudited) (Unaudited) As previously reported Adjustments Adjusted Listing fee revenue $ - $ 1,455,498 - $ 1,455,498 Commission 253,331 1,496,826 103,742 1,600,568 Management fee revenue 107,905 402,547 - 402,547 Annual fee revenue 54 140 - 140 Online artwork sales 2,244 - - - Total $ 363,534 $ 3,355,011 $ 103,742 $ 3,458,753 The following tables identify the disaggregation of our revenue for the nine months ended September 30, 2018 and 2017, respectively: Nine months ended September 30, 2018 2017 (Unaudited) (Unaudited) As previously reported Adjustments Adjusted Listing fee revenue $ 3,978,735 $ 4,606,649 - $ 4,606,649 Commission 3,557,411 4,970,651 201,524 5,172,175 Management fee revenue 455,133 967,518 - 967,518 Authorized agent subscription revenue 191,623 - - - Annual fee revenue 378 859 - 859 Online artwork sales 8,548 - - - Total $ 8,191,828 $ 10,545,677 $ 201,524 $ 10,747,201 The Company has elected to apply the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. We do not have amounts of contract assets that the Company has right to consideration in exchange for services that the Company has transferred to customers when that right is conditioned on something other than the passage of time. Our contract liabilities are the Company’s obligation to transfer services to traders for which the Company has received consideration from the traders. All contract liabilities are expected to be recognized as revenue within one month and are presented in Advance from Customers in our Condensed Consolidated Balance Sheet. Statement of Cash Flows: In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash” (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017 and early adoption is permitted. The adoption of this guidance will result in the inclusion of the restricted cash balances within the overall cash balance and removal of the changes in restricted cash activity, as a result, the Company no longer presents transfers between cash and cash equivalents and restricted cash in the statement of cash flows. Furthermore, an additional reconciliation will be required to reconcile Cash, cash equivalents, and restricted cash reported within the Interim Condensed Consolidated Balance Sheets to sum to the total shown in the Interim Condensed Consolidated Statement of Cash Flows. The Company has already disclosed the restricted cash separately on its Interim Condensed Consolidated Statements of Financial Position. Beginning the first quarter of 2018, the Company has adopted and included the restricted cash balances on the Interim Condensed Consolidated Statement of Cash Flows and reconciliation of Cash, cash equivalent, and restricted cash within its Interim Condensed Consolidated Statements of Financial Positions that sum to the total of the same such amounts shown in Interim Condensed Consolidated Statement of Cash Flows. The Cash Flows of nine months ended September 30, 2017 has been applied retrospectively. In January 2018, the FASB staff released guidance on accounting for the tax provisions of Global Intangible Low-Taxed Income (“GILTI”) as provided under the Tax Cuts and Jobs Act (“the Act”). GILTI refers to the tax on the excess of a United States shareholder’s total net foreign income over a deemed return on tangible assets. Based on the information available for the third quarter of 2018, the Company provisionally made a policy election and accounted for its potential GILTI tax as a period cost when incurred. Accounting Pronouncements Issued But Not Yet Adopted Codification Improvements: In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements . This amendment makes changes to a variety of topics to clarify, correct errors in, or make minor improvements to the Accounting Standards Codification. The majority of the amendments in ASU 2018-09 are effective for periods beginning after December 15, 2018. The Company is currently evaluating this guidance and the impact it may have on the Company's consolidated financial statements. Leases: This amendment affects the amendments in ASU 2016-12, which are not yet effective, but early adoption is allowed. For entities that adopted ASC Topic 842 early, the amendments are effective upon issuance of ASU No. 2018-10, and the transition requirements are identical to those in ASC Topic 842. For entities that have not adopted ASC Topic 842, the effective date and transition requirements will be identical to the effective date and transition requirements in ASC Topic 842. This amendment will be effective for the Company in March 2019 by which time ASC Topic 842 will be adopted. The Company is currently evaluating this guidance and the impact it may have on the Company's consolidated financial statements. In July 2018, FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements. This guidance amends ASC 842, Leases in two major areas.First ASU 842 permits lessors to combine lease and non-lease components by class of underlying assets in agreements that meet certain criteria. For a lessor to qualify for this practical expedient, the lease and non-lease components must have the same timing and pattern of transfer, and the lease component, if accounted for on a stand-alone basis, would be classified as an operating lease. Second, this guidance provides entities with a transition option for adopting ASU 842. This transition option allows entities not to apply the new lease standard at the adoption date by recognizing a cumulative effect by adjusting the opening balance of the retained earnings rather than restate the comparative periods presented in the financial statements. The Company determined that the practical expedient to the lessors is not applicable while it is evaluating the transition option. Except for the above ASUs issued but not yet adopted and the ones disclosed in Note 2 to the financial statements on Form 10-K for the fiscal year ended December 31, 2017, previously filed with the SEC, there is no ASU issued by the FASB that is expected to have a material impact on the condensed consolidated financial statements upon adoption. |
PREPAYMENT AND OTHER CURRENT AS
PREPAYMENT AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets [Text Block] | 3. PREPAYMENT AND OTHER CURRENT ASSETS Prepayment and other current assets consisted of the following: September 30, 2018 December 31, 2017 (Unaudited) Tax receivables $ 1,286,415 $ 1,132,140 Prepaid service fees 241,064 489,424 Short-term borrowings to third party 436,809 461,092 Staff advance 90,054 52,124 Prepaid repair and maintenance 1,704 46,733 Other current assets 201,135 118,694 Prepayment and other current assets $ 2,257,181 $ 2,300,207 |
ACCOUNT RECEIVABLES, NET
ACCOUNT RECEIVABLES, NET | 9 Months Ended |
Sep. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 4. ACCOUNT RECEIVABLES, NET Account receivables consisted of the following: September 30, 2018 December 31, 2017 (Unaudited) Listing fee $ 971,134 $ 2,259,671 Authorized agent subscription revenue 558,165 559,101 Monthly commission fee 1,455,501 1,463,243 Others 54,004 80,473 Subtotal 3,038,804 4,362,488 Less: allowance for doubtful accounts (2,067,324 ) (2,070,790 ) Account receivables, net $ 971,480 $ 2,291,698 |
LOAN RECEIVABLES
LOAN RECEIVABLES | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Financing Receivables [Text Block] | 5. LOAN RECEIVABLES The following table sets forth a summary of the loan agreements in loan receivables balance: Date Borrower Lender Original Amount (RMB) Outstanding Balance (RMB) Amount in Reporting Currency (USD) Annual Interest Rate Repayment Due Date 12/9/2016 Xiaohui Wang Tianjin Takung 10,550,000 10,062,400 $ 1,465,114 0 % 11/30/2018 4/4/2017 Xiaohui Wang Tianjin Takung 22,921,725 9,821,725 $ 1,430,071 0 % 12/31/2018 12/15/2017 Xiaohui Wang Tianjin Takung 3,310,000 3,310,000 $ 481,945 0 % 12/14/2018 12/19/2017 Xiaohui Wang Tianjin Takung 3,310,000 3,310,000 $ 481,945 0 % 12/18/2018 Total $ 3,859,075 All the transactions were aimed to meet the Company’s working capital needs in U.S. Dollars, which are freely convertible to Hong Kong Dollar. • The interest-free loans (the “RMB Loans”) entered into by Tianjin Takung were guaranteed by Chongqing Wintus (New Star) Enterprises Group (“Chongqing”). Xiaohui Wang (“Ms. Wang”) is a citizen of the People’s Republic of China. Ms. Wang is a shareholder and the legal representative of Chongqing. Both Chongqing and Ms. Wang are non-related parties to the Company. • Hong Kong Takung entered into loan agreements (the “U.S. Dollar Loans”) with Merit Crown Limited, a Hong Kong company (“Merit Crown”) with interest accruing at a rate of 8% per annum (See Note 8). Merit Crown is a non-related party to the Company. Through an understanding between Ms. Wang and Merit Crown, the U.S. Dollar Loans are “secured” by the RMB Loans. It is the understanding between the parties that the U.S. Dollar Loans and the RMB Loans will be repaid simultaneously. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 6. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: September 30, 2018 December 31, 2017 (Unaudited) Furniture, fixtures and equipment $ 332,529 $ 167,651 Leasehold improvements 473,183 426,138 Computer trading and clearing system 3,642,143 3,485,844 Transport equipment 104,741 - Sub-total 4,552,596 4,079,633 Less: accumulated depreciation (2,560,032 ) (1,888,312 ) Property and equipment, net $ 1,992,564 $ 2,191,321 Depreciation expense was $241,448 and $190,626 for the three months ended September 30, 2018 and 2017, respectively, and $713,933 and $538,532 for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018 and December 31, 2017, due to the close of Hangzhou branch office during the third quarter of 2018, the technology developments were downsized and the software projects were halted, we provide an impairment reserve for unamortized capitalized costs incurred in connection with developing or obtaining internal use software, which were included in computer and trading system, of $309,321 and $0, respectively. |
ACCRUED EXPENSES AND OTHER PAYA
ACCRUED EXPENSES AND OTHER PAYABLES | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | 7. ACCRUED EXPENSES AND OTHER PAYABLES Accrued expenses and other payables as of September 30, 2018 and December 31, 2017 consisted of the following: September 30, December 31, 2018 2017 (Unaudited) Accruals for consulting fees $ 264,949 $ 265,393 Trading and clearing system 82,122 52,564 Payroll payables 81,455 827,246 Discount payable to traders 79,324 - Accruals for business trip expense 17,382 27,186 Accruals for professional fees 33,215 192,067 Other payables 65,025 97,402 Total accrued expenses, account & other payables $ 623,472 $ 1,461,858 |
SHORT-TERM BORROWINGS FROM THIR
SHORT-TERM BORROWINGS FROM THIRD PARTIES | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Short-term Debt [Text Block] | 8. SHORT-TERM BORROWINGS FROM THIRD PARTIES The following table sets forth a summary of the loan agreements in short-term borrowings: Date Borrower Lender September 30, 2018 (USD) December 31, 2017 (USD) Annual Interest Rate Repayment Due Date 7/15/2016 Hong Kong Takung Merit Crown Limited $ - $ 1,500,000 8 % 12/31/2018 8/24/2016 Hong Kong Takung Merit Crown Limited $ 1,499,500 $ 1,999,500 8 % 12/31/2018 11/18/2016 Hong Kong Takung Merit Crown Limited $ - $ 1,480,000 8 % 10/31/2018 12/9/2016 Hong Kong Takung Merit Crown Limited $ 1,520,000 $ 1,520,000 8 % 11/30/2018 12/19/2017 Hong Kong Takung Merit Crown Limited $ 500,000 $ 500,000 8 % 12/18/2018 12/22/2017 Hong Kong Takung Merit Crown Limited $ 500,000 $ 500,000 8 % 12/21/2018 Less: Discount loan payable $ (69,401 ) $ (290,739 ) Total $ 3,950,099 $ 7,208,761 The U.S. Dollar Loans are to provide Hong Kong Takung with sufficient U.S. Dollar-denominated currency to meet its working capital requirements. It is “secured” by the aforementioned RMB Loans (See Note 5) of equivalent amount by its subsidiary to an individual and guarantor affiliated with the lender of the U.S. Dollar Loans. It is the understanding between the parties that the U.S. Dollar Loans and the RMB Loans will be repaid simultaneously. On July 4, 2018 and July 20, 2018, Hong Kong Takung repaid $2,000,000 and $1,480,000 to Merit Crown. Meanwhile, repaid RMB13,100,000 (equals to USD 2,000,000) and RMB9,827,200 (equals to USD 1,480,000) to Shanghai Takung and Tianjin Takung, respectively. The weighted average interest rate of outstanding short-term borrowings was 8% per annum as of September 30, 2018 and December 31, 2017. The fair value of the short-term borrowings approximates their carrying amounts. The weighted average short-term borrowings were $7,319,041 and $6,315,799 for the nine months period ended September 30, 2018 and the year ended December 31, 2017, respectively. The interest expenses for the short-term borrowings were $199,822 and $133,174 for the three months ended September 30, 2018 and 2017, respectively, and $500,080 and $394,295 for the nine months ended September 30, 2018 and 2017, respectively. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 9. RELATED PARTY BALANCES AND TRANSACTIONS The following is a list of related parties to which the Company has transactions with: (a) Jianping Mao (“Mao”), the wife of the Vice General Manager of Hong Kong Takung. (b) Liu Zhenying (“Liu”), the Vice President of Hong Kong Takung Amount due from a related party September 30, 2018 December 31, 2017 (Unaudited) Liu (b) $ 5,914,240 $ - Total 5,914,240 - Amount due to related parties September 30, 2018 December 31, 2017 (Unaudited) Mao (a) $ - $ 483,822 Liu (b) 6,389,042 - Total 6,389,042 483,822 The Company fully repaid the amount due to Mao on March 13, 2018. On May 16, 2018, Hong Kong Takung entered into an interest-free loan agreement (the "HK Dollar Loan") with Liu for the loan of $6,389,042 (HK$50,000,000) to Hong Kong Takung. The purpose of the loan is to provide Hong Kong Takung with sufficient Hong Kong Dollar-denominated currency to meet its working capital requirements. The maturity date of the loan is May 15, 2019. In the meantime, Tianjin Takung entered into an interest-free loan agreement (the "RMB Loan") with Liu for the loan of $5,914,240 (RMB40,619,000) to Liu. The maturity date of the loan is May 15, 2019. Through an understanding between Liu and the Company, the HK Dollar Loan is "secured" by the RMB Loan. It is the understanding between the parties that the HK Dollar Loan and the RMB Loan will be repaid simultaneously. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 10. INCOME TAXES Takung was incorporated in the State of Delaware and is subject to United States income tax. Hong Kong Takung was incorporated in Hong Kong S.A.R. People’s Republic of China and is subject to Hong Kong profits tax. Shanghai Takung and Tianjin Takung are PRC corporations and are subject to enterprise taxes in the PRC. United States of America Tax Cuts and Jobs Act Enacted in 2017 On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate income tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal corporate income taxes on dividends from foreign subsidiaries; and (4) providing modification to subpart F provisions and new taxes on certain foreign earnings such as Global Intangible Low-Taxed Income (GILTI). Except for the one-time transition tax, most of these provisions went into effect starting January 1, 2018. Under the Tax Act, the Company is subject to tax on GILTI earned by its foreign subsidiaries and made a reasonable estimate of the impact for the nine months ended September 30, 2018. The GILTI provision requires the Company to include the excess of the U.S. shareholder’s net controlled foreign corporations’ earnings over the U.S. shareholder’s deemed tangible income return. The Company provisionally made a policy election and accounted for its estimated tax on GILTI for the nine months ended September 30, 2018 as a period cost when incurred since the Company does not anticipate any deferred tax impact around GILTI due to its current period impact on the U.S. tax payable. As of September 30, 2018 and December 31, 2017, the Company in the United States had $1,003,852 and $250,590 in net operating loss carry forwards available to offset future taxable income, respectively. For net operating losses arising after December 31, 2017, the Tax Act limits the Company’s ability to utilize NOL carryforwards to 80% of taxable income and carryforward the NOL indefinitely. Carrybacks are now prohibited. NOLs generated prior to January 1, 2018 will not be subject to the taxable income limitation and will begin to expire in 2033 if not utilized. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. As of September 30, 2018, the Company has not completed its accounting for all tax effects of the Tax Act and has made reasonable estimates during 2017. The Company will monitor future guidance set forth by the Department of Treasury with regard to the tax provisions under the Act that are applicable and will revise relevant estimates as appropriate within the one year measurement period. Hong Kong The provision for current income taxes of the subsidiary operating in Hong Kong has been calculated by applying the current rate of taxation of 16.5% for the nine months ended September 30, 2018 and the year ended December 31, 2017, if applicable. PRC In accordance with the relevant tax laws and regulations of the PRC, a company registered in the PRC is subject to income taxes within the PRC at the applicable tax rate on taxable income. All the PRC subsidiaries were subject to income tax at a rate of 25%. The income tax provision consists of the following components: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Current: Federal $ - $ - $ - $ - State - - - - Foreign (332,918 ) 159,281 (160,548 ) 662,598 Total Current $ (332,918 ) $ 159,281 $ (160,548 ) $ 662,598 Deferred: Federal $ - $ - $ 37,398 $ - State - - - - Foreign (409,752 ) (34,619 ) (451,052 ) (68,221 ) Total Deferred $ (409,752 ) $ (34,619 ) $ (413,654 ) $ (68,221 ) Total income tax (benefit) expense $ (742,670 ) $ 124,662 $ (574,202 ) $ 594,377 A reconciliation between the Company’s actual provision for income taxes and the provision at the Hong Kong statutory rate is as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Income (loss) before income tax expense $ (3,624,026 ) $ 151,696 $ (4,116,660 ) $ 1,651,515 Computed tax expense with statutory tax rate (597,964 ) 25,030 (679,249 ) 271,806 Impact of different tax rates in other jurisdictions (89,082 ) (73,258 ) (51,274 ) (230,651 ) Non-deductible items: Tax effect of non-deductible expenses (167,031 ) 25,896 (163,701 ) 100,789 Previous years unrecognized taxation effect 6,870 - 6,870 Changes in valuation allowance 104,537 146,994 313,152 452,433 Total income tax (benefit) expense $ (742,670 ) $ 124,662 $ (574,202 ) $ 594,377 The effective tax rate was 20.5% and 82.2% for the three months ended September 30, 2018 and 2017, respectively, and 13.9% and 36.0% for the nine months ended September 30, 2018 and 2017, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 11. COMMITMENTS AND CONTINGENCIES Operation Commitments The total future minimum lease payments under the non-cancellable operating lease with respect to the office and the dormitory as of September 30, 2018 are payable as follows: Nine months ending December 31, 2018 $ 205,025 Year ending December 31, 2019 170,022 Year ending December 31, 2020 39,736 Year ending December 31, 2021 14,560 Year ending December 31, 2022 and thereafter 51,568 Total $ 480,911 Rental expense of the Company was $276,246 and $293,338 for the three months ended September 30, 2018 and 2017, respectively, and $831,308 and $721,492 for the nine months ended September 30, 2018 and 2017, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 12. 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. For the Three Months Ended September 30, For the Nine Months Ended September 30, 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Numerator: Net (loss) income $ (2,881,356 ) $ 27,034 $ (3,542,458 ) $ 1,057,138 Denominator: Weighted-average shares outstanding - Basic 11,226,025 11,188,882 11,216,009 11,039,880 Stock options and restricted shares - 59,806 - 358,202 Weighted-average shares outstanding - Diluted 11,226,025 11,248,688 11,216,009 11,398,082 (Loss) earnings per share -Basic (0.26 ) 0.00 (0.32 ) 0.10 -Diluted (0.26 ) 0.00 (0.32 ) 0.09 Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Due to the loss from continuing operations, approximately 29,104 restricted shares for the three months ended September 30, 2018 and 34,915 restricted shares for the nine months ended September 30, 2018, were excluded from the calculation of diluted earnings (loss) per share, because their effect would have been antidilutive. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 13. SUBSEQUENT EVENT Pursuant to the notice of termination of tenancy for redevelopment from the landlord on July 31, 2018, the Company will be required to vacate the Hong Kong office on or by January 31, 2019. Meanwhile, the Company is in process of the tenancy search for the new Hong Kong office. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying consolidated balance sheet as of December 31, 2017, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements as of September 30, 2018 and for the three months ended and nine months ended September 30, 2018 and 2017 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures, which are normally included in financial statements prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”), have been condensed or omitted pursuant to such rules and regulations. Management believes that the disclosures made are adequate to provide a fair presentation. The interim financial information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, previously filed with the SEC. 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. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s consolidated financial position as of September 30, 2018, its consolidated results of operations and cash flows for the nine-month periods ended September 30, 2018 and 2017, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting Standards Adoption of ASC Topic 606, “Revenue from Contracts with Customers” Effective January 1, 2018, the Company adopted Topic 606 using modified retrospective approach applied to its contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are accounted for and presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with Topic 605. We recognize revenue when control of the promised services is transferred to our traders and offering agents. Revenue is measured at the transaction price, which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised services to our traders and offering agents. Our revenue mainly falls into the following broad categories: (i) listing fees, (ii) trading commissions, (iii) management fees, (iv) authorized agent subscription fee, (v) annual fee, and (vi) online artwork sales. Listing fee revenue Using the output method, we recognize the listing fee revenue at a point when the ownership units of the artwork are listed and successfully traded on our system, based on the agreed percentage of the total offering price. This amount is collected from the money raised from the issuance of such units accounted as the listing fee revenue accordingly. When the ownership units of the artwork are listed and starts trading on our system, the original owner and/or the offering agent pays us a one-time offering fee and a listing deposit. Commission fee revenue We generate commission fee from non-VIP traders and selected traders. We measure the progress of performance obligations using the output method, as traders obtain the benefits of receiving access to making transactions on our trading platform. For non-VIP traders, the commission revenue is calculated based on a percentage of transaction value of artworks, where we charge trading commissions for the purchase and sale of the ownership shares of the artworks. For selected traders, starting from April 1, 2016, we charge a predetermined monthly fee which allows unlimited trades for specific artworks. Commission rebate programs are offered to traders and service agents. We pay to existing traders and service agents a commission rebate at a predetermined referral rate of commission earned from the transactions of new traders referred by them. The commission rebate is recognized as a reduction of the commission revenue prior to January 1, 2018 under Topic 605. Starting from January 1, 2018, we account for the commission rebate as cost of revenue under Topic 606-10-32-26. Since this is a reclassification between revenue and cost of revenue, it would have no impact on the opening balance for the year beginning January 1, 2018. Commission rebates were $1,207,104 and $201,524 for the nine months period ended September 30, 2018 and 2017, and were $2,094 and $103,742 for the three months ended September 30, 2018 and 2017. The rebates are recognized in the same period the related revenue is recognized. Management fee revenue A custody and insurance service are provided for each individual artwork on a daily basis. The cost of custody and insurance for each unit of artwork is constant for all artworks. Using the cost-based input method, we charge traders a management fee to cover the costs of insurance, storage and transportation for an artwork and trading management of artwork units, which are calculated at $0.0013 (HK$0.01) per 100 artwork units daily. The management fee is accounted for as revenue, and immediately deducted from proceeds from the sale of artwork ownership shares when a transaction is completed. A discount program is offered to waive the management fee during certain promotion periods. Such discounts are recognized as a reduction of the revenue upon the completion of the transactions. Authorized agent subscription revenue We charge an authorized agent subscription fee, which is an annual service fee paid by authorized agents to grant them the right to allow their network of artwork owners to list their artwork on our trading platform. This revenue is recognized ratably over the annual agreement period for each agent. Annual fee revenue We charge an up-front annual fee for providing traders with premium services, including in-depth information and tools on the trading platform. This revenue is recognized ratably over the service agreement period for each trader. Online artwork sales From the second quarter of 2018, we launched an offering of artwork and artwork related merchandise for sales on our online platform. Sales of artwork: The sale of artwork consists of fees charged to third-party merchants that the Company provides access to the online platform for sales of their artworks, which are primarily paintings. The Company is not the primary obligor on these transactions, the Company does not bear the inventory risk, does not have the ability to establish prices, and does not provide any fulfillment services since the goods are shipped direct from third-party merchants to end customers. Upon successful sales on the Company's online platform, the Company charges the third-party merchants commission fees based on the agreed percentage of the total selling price. Commission fees are recognized on a net basis when the artwork sales order is completed. Sales of artwork related merchandise: The Company also offers its own artwork related merchandise through its online platform. Revenue is recognized when control of the goods is transferred to the customer, which generally occurs upon our delivery to the carrier or the customer. For comparative purpose, we adjusted the revenue for three and nine months ended September 30, 2017 as if retrospectively adopted ASC 606. The following tables identify the disaggregation of our revenue for the three months ended September 30, 2018 and 2017, respectively: Three months ended September 30, 2018 2017 (Unaudited) (Unaudited) As previously reported Adjustments Adjusted Listing fee revenue $ - $ 1,455,498 - $ 1,455,498 Commission 253,331 1,496,826 103,742 1,600,568 Management fee revenue 107,905 402,547 - 402,547 Annual fee revenue 54 140 - 140 Online artwork sales 2,244 - - - Total $ 363,534 $ 3,355,011 $ 103,742 $ 3,458,753 The following tables identify the disaggregation of our revenue for the nine months ended September 30, 2018 and 2017, respectively: Nine months ended September 30, 2018 2017 (Unaudited) (Unaudited) As previously reported Adjustments Adjusted Listing fee revenue $ 3,978,735 $ 4,606,649 - $ 4,606,649 Commission 3,557,411 4,970,651 201,524 5,172,175 Management fee revenue 455,133 967,518 - 967,518 Authorized agent subscription revenue 191,623 - - - Annual fee revenue 378 859 - 859 Online artwork sales 8,548 - - - Total $ 8,191,828 $ 10,545,677 $ 201,524 $ 10,747,201 The Company has elected to apply the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. We do not have amounts of contract assets that the Company has right to consideration in exchange for services that the Company has transferred to customers when that right is conditioned on something other than the passage of time. Our contract liabilities are the Company’s obligation to transfer services to traders for which the Company has received consideration from the traders. All contract liabilities are expected to be recognized as revenue within one month and are presented in Advance from Customers in our Condensed Consolidated Balance Sheet. Statement of Cash Flows: In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash” (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017 and early adoption is permitted. The adoption of this guidance will result in the inclusion of the restricted cash balances within the overall cash balance and removal of the changes in restricted cash activity, as a result, the Company no longer presents transfers between cash and cash equivalents and restricted cash in the statement of cash flows. Furthermore, an additional reconciliation will be required to reconcile Cash, cash equivalents, and restricted cash reported within the Interim Condensed Consolidated Balance Sheets to sum to the total shown in the Interim Condensed Consolidated Statement of Cash Flows. The Company has already disclosed the restricted cash separately on its Interim Condensed Consolidated Statements of Financial Position. Beginning the first quarter of 2018, the Company has adopted and included the restricted cash balances on the Interim Condensed Consolidated Statement of Cash Flows and reconciliation of Cash, cash equivalent, and restricted cash within its Interim Condensed Consolidated Statements of Financial Positions that sum to the total of the same such amounts shown in Interim Condensed Consolidated Statement of Cash Flows. The Cash Flows of nine months ended September 30, 2017 has been applied retrospectively. In January 2018, the FASB staff released guidance on accounting for the tax provisions of Global Intangible Low-Taxed Income (“GILTI”) as provided under the Tax Cuts and Jobs Act (“the Act”). GILTI refers to the tax on the excess of a United States shareholder’s total net foreign income over a deemed return on tangible assets. Based on the information available for the third quarter of 2018, the Company provisionally made a policy election and accounted for its potential GILTI tax as a period cost when incurred. Accounting Pronouncements Issued But Not Yet Adopted Codification Improvements: In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements . This amendment makes changes to a variety of topics to clarify, correct errors in, or make minor improvements to the Accounting Standards Codification. The majority of the amendments in ASU 2018-09 are effective for periods beginning after December 15, 2018. The Company is currently evaluating this guidance and the impact it may have on the Company's consolidated financial statements. Leases: This amendment affects the amendments in ASU 2016-12, which are not yet effective, but early adoption is allowed. For entities that adopted ASC Topic 842 early, the amendments are effective upon issuance of ASU No. 2018-10, and the transition requirements are identical to those in ASC Topic 842. For entities that have not adopted ASC Topic 842, the effective date and transition requirements will be identical to the effective date and transition requirements in ASC Topic 842. This amendment will be effective for the Company in March 2019 by which time ASC Topic 842 will be adopted. The Company is currently evaluating this guidance and the impact it may have on the Company's consolidated financial statements. In July 2018, FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements. This guidance amends ASC 842, Leases in two major areas.First ASU 842 permits lessors to combine lease and non-lease components by class of underlying assets in agreements that meet certain criteria. For a lessor to qualify for this practical expedient, the lease and non-lease components must have the same timing and pattern of transfer, and the lease component, if accounted for on a stand-alone basis, would be classified as an operating lease. Second, this guidance provides entities with a transition option for adopting ASU 842. This transition option allows entities not to apply the new lease standard at the adoption date by recognizing a cumulative effect by adjusting the opening balance of the retained earnings rather than restate the comparative periods presented in the financial statements. The Company determined that the practical expedient to the lessors is not applicable while it is evaluating the transition option. Except for the above ASUs issued but not yet adopted and the ones disclosed in Note 2 to the financial statements on Form 10-K for the fiscal year ended December 31, 2017, previously filed with the SEC, there is no ASU issued by the FASB that is expected to have a material impact on the condensed consolidated financial statements upon adoption. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule Of Revenue Impact By Changes In Accounting Policies [Table Text Block] | The following tables identify the disaggregation of our revenue for the three months ended September 30, 2018 and 2017, respectively: Three months ended September 30, 2018 2017 (Unaudited) (Unaudited) As previously reported Adjustments Adjusted Listing fee revenue $ - $ 1,455,498 - $ 1,455,498 Commission 253,331 1,496,826 103,742 1,600,568 Management fee revenue 107,905 402,547 - 402,547 Annual fee revenue 54 140 - 140 Online artwork sales 2,244 - - - Total $ 363,534 $ 3,355,011 $ 103,742 $ 3,458,753 The following tables identify the disaggregation of our revenue for the nine months ended September 30, 2018 and 2017, respectively: Nine months ended September 30, 2018 2017 (Unaudited) (Unaudited) As previously reported Adjustments Adjusted Listing fee revenue $ 3,978,735 $ 4,606,649 - $ 4,606,649 Commission 3,557,411 4,970,651 201,524 5,172,175 Management fee revenue 455,133 967,518 - 967,518 Authorized agent subscription revenue 191,623 - - - Annual fee revenue 378 859 - 859 Online artwork sales 8,548 - - - Total $ 8,191,828 $ 10,545,677 $ 201,524 $ 10,747,201 |
PREPAYMENT AND OTHER CURRENT _2
PREPAYMENT AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Prepayment and other current assets consisted of the following: September 30, 2018 December 31, 2017 (Unaudited) Tax receivables $ 1,286,415 $ 1,132,140 Prepaid service fees 241,064 489,424 Short-term borrowings to third party 436,809 461,092 Staff advance 90,054 52,124 Prepaid repair and maintenance 1,704 46,733 Other current assets 201,135 118,694 Prepayment and other current assets $ 2,257,181 $ 2,300,207 |
ACCOUNT RECEIVABLES, NET (Table
ACCOUNT RECEIVABLES, NET (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounts Receivable [Member] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Account receivables consisted of the following: September 30, 2018 December 31, 2017 (Unaudited) Listing fee $ 971,134 $ 2,259,671 Authorized agent subscription revenue 558,165 559,101 Monthly commission fee 1,455,501 1,463,243 Others 54,004 80,473 Subtotal 3,038,804 4,362,488 Less: allowance for doubtful accounts (2,067,324 ) (2,070,790 ) Account receivables, net $ 971,480 $ 2,291,698 |
LOAN RECEIVABLES (Tables)
LOAN RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Loans Receivable [Member] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | The following table sets forth a summary of the loan agreements in loan receivables balance: Date Borrower Lender Original Amount (RMB) Outstanding Balance (RMB) Amount in Reporting Currency (USD) Annual Interest Rate Repayment Due Date 12/9/2016 Xiaohui Wang Tianjin Takung 10,550,000 10,062,400 $ 1,465,114 0 % 11/30/2018 4/4/2017 Xiaohui Wang Tianjin Takung 22,921,725 9,821,725 $ 1,430,071 0 % 12/31/2018 12/15/2017 Xiaohui Wang Tianjin Takung 3,310,000 3,310,000 $ 481,945 0 % 12/14/2018 12/19/2017 Xiaohui Wang Tianjin Takung 3,310,000 3,310,000 $ 481,945 0 % 12/18/2018 Total $ 3,859,075 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment consisted of the following: September 30, 2018 December 31, 2017 (Unaudited) Furniture, fixtures and equipment $ 332,529 $ 167,651 Leasehold improvements 473,183 426,138 Computer trading and clearing system 3,642,143 3,485,844 Transport equipment 104,741 - Sub-total 4,552,596 4,079,633 Less: accumulated depreciation (2,560,032 ) (1,888,312 ) Property and equipment, net $ 1,992,564 $ 2,191,321 |
ACCRUED EXPENSES AND OTHER PA_2
ACCRUED EXPENSES AND OTHER PAYABLES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | Accrued expenses and other payables as of September 30, 2018 and December 31, 2017 consisted of the following: September 30, December 31, 2018 2017 (Unaudited) Accruals for consulting fees $ 264,949 $ 265,393 Trading and clearing system 82,122 52,564 Payroll payables 81,455 827,246 Discount payable to traders 79,324 - Accruals for business trip expense 17,382 27,186 Accruals for professional fees 33,215 192,067 Other payables 65,025 97,402 Total accrued expenses, account & other payables $ 623,472 $ 1,461,858 |
SHORT-TERM BORROWINGS FROM TH_2
SHORT-TERM BORROWINGS FROM THIRD PARTIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt [Table Text Block] | The following table sets forth a summary of the loan agreements in short-term borrowings: Date Borrower Lender September 30, 2018 (USD) December 31, 2017 (USD) Annual Interest Rate Repayment Due Date 7/15/2016 Hong Kong Takung Merit Crown Limited $ - $ 1,500,000 8 % 12/31/2018 8/24/2016 Hong Kong Takung Merit Crown Limited $ 1,499,500 $ 1,999,500 8 % 12/31/2018 11/18/2016 Hong Kong Takung Merit Crown Limited $ - $ 1,480,000 8 % 10/31/2018 12/9/2016 Hong Kong Takung Merit Crown Limited $ 1,520,000 $ 1,520,000 8 % 11/30/2018 12/19/2017 Hong Kong Takung Merit Crown Limited $ 500,000 $ 500,000 8 % 12/18/2018 12/22/2017 Hong Kong Takung Merit Crown Limited $ 500,000 $ 500,000 8 % 12/21/2018 Less: Discount loan payable $ (69,401 ) $ (290,739 ) Total $ 3,950,099 $ 7,208,761 |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | The following is a list of related parties to which the Company has transactions with: (a) Jianping Mao (“Mao”), the wife of the Vice General Manager of Hong Kong Takung. (b) Liu Zhenying (“Liu”), the Vice President of Hong Kong Takung Amount due from a related party September 30, 2018 December 31, 2017 (Unaudited) Liu (b) $ 5,914,240 $ - Total 5,914,240 - Amount due to related parties September 30, 2018 December 31, 2017 (Unaudited) Mao (a) $ - $ 483,822 Liu (b) 6,389,042 - Total 6,389,042 483,822 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The income tax provision consists of the following components: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Current: Federal $ - $ - $ - $ - State - - - - Foreign (332,918 ) 159,281 (160,548 ) 662,598 Total Current $ (332,918 ) $ 159,281 $ (160,548 ) $ 662,598 Deferred: Federal $ - $ - $ 37,398 $ - State - - - - Foreign (409,752 ) (34,619 ) (451,052 ) (68,221 ) Total Deferred $ (409,752 ) $ (34,619 ) $ (413,654 ) $ (68,221 ) Total income tax (benefit) expense $ (742,670 ) $ 124,662 $ (574,202 ) $ 594,377 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | A reconciliation between the Company’s actual provision for income taxes and the provision at the Hong Kong statutory rate is as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Income (loss) before income tax expense $ (3,624,026 ) $ 151,696 $ (4,116,660 ) $ 1,651,515 Computed tax expense with statutory tax rate (597,964 ) 25,030 (679,249 ) 271,806 Impact of different tax rates in other jurisdictions (89,082 ) (73,258 ) (51,274 ) (230,651 ) Non-deductible items: Tax effect of non-deductible expenses (167,031 ) 25,896 (163,701 ) 100,789 Previous years unrecognized taxation effect 6,870 - 6,870 Changes in valuation allowance 104,537 146,994 313,152 452,433 Total income tax (benefit) expense $ (742,670 ) $ 124,662 $ (574,202 ) $ 594,377 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 of September 30, 2018 are payable as follows: Nine months ending December 31, 2018 $ 205,025 Year ending December 31, 2019 170,022 Year ending December 31, 2020 39,736 Year ending December 31, 2021 14,560 Year ending December 31, 2022 and thereafter 51,568 Total $ 480,911 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 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. For the Three Months Ended September 30, For the Nine Months Ended September 30, 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Numerator: Net (loss) income $ (2,881,356 ) $ 27,034 $ (3,542,458 ) $ 1,057,138 Denominator: Weighted-average shares outstanding - Basic 11,226,025 11,188,882 11,216,009 11,039,880 Stock options and restricted shares - 59,806 - 358,202 Weighted-average shares outstanding - Diluted 11,226,025 11,248,688 11,216,009 11,398,082 (Loss) earnings per share -Basic (0.26 ) 0.00 (0.32 ) 0.10 -Diluted (0.26 ) 0.00 (0.32 ) 0.09 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Textual) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Art Era Internet Technology Tianjin Co Ltd [Member] | |
Organization And Description Of Business [Line Items] | |
Equity Method Investment Summarized Financial Information, Equity | $ 2 |
Subsidiary of Limited Liability Company or Limited Partnership, Date | Sep. 7, 2018 |
HongKong Takung Assets And Equity of Artworks Exchange Co Ltd [Member] | |
Organization And Description Of Business [Line Items] | |
Entity Incorporation, State Country Name | Hong Kong |
Entity Incorporation, Date of Incorporation | Sep. 17, 2012 |
Takung Shanghai Co Ltd [Member] | |
Organization And Description Of Business [Line Items] | |
Entity Incorporation, State Country Name | Shanghai Takung |
Entity Incorporation, Date of Incorporation | Jul. 28, 2015 |
Capital Units, Value | $ 1 |
Takung Cultural Development Tianjin Co Ltd [Member] | |
Organization And Description Of Business [Line Items] | |
Entity Incorporation, State Country Name | Tianjin Takung |
Entity Incorporation, Date of Incorporation | Jan. 27, 2016 |
Capital Units, Value | $ 1 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Listing fee revenue | $ 0 | $ 1,455,498 | $ 3,978,735 | $ 4,606,649 |
Commission | 253,331 | 1,496,826 | 3,557,411 | 4,970,651 |
Management fee revenue | 107,905 | 402,547 | 455,133 | 967,518 |
Authorized agent subscription revenue | 0 | 191,623 | 0 | |
Annual fee revenue | 54 | 140 | 378 | 859 |
Online artwork sales | 2,244 | 0 | 8,548 | 0 |
Total revenue | $ 363,534 | 3,355,011 | $ 8,191,828 | 10,545,677 |
Scenario, Previously Reported [Member] | ||||
Listing fee revenue | 1,455,498 | 4,606,649 | ||
Commission | 1,496,826 | 4,970,651 | ||
Management fee revenue | 402,547 | 967,518 | ||
Authorized agent subscription revenue | 0 | |||
Annual fee revenue | 140 | 859 | ||
Online artwork sales | 0 | 0 | ||
Total revenue | 3,355,011 | 10,545,677 | ||
Restatement Adjustment [Member] | ||||
Listing fee revenue | 0 | 0 | ||
Commission | 103,742 | 201,524 | ||
Management fee revenue | 0 | 0 | ||
Authorized agent subscription revenue | 0 | |||
Annual fee revenue | 0 | 0 | ||
Online artwork sales | 0 | 0 | ||
Total revenue | 103,742 | 201,524 | ||
As Adjusted [Member] | ||||
Listing fee revenue | 1,455,498 | 4,606,649 | ||
Commission | 1,600,568 | 5,172,175 | ||
Management fee revenue | 402,547 | 967,518 | ||
Authorized agent subscription revenue | 0 | |||
Annual fee revenue | 140 | 859 | ||
Online artwork sales | 0 | 0 | ||
Total revenue | $ 3,458,753 | $ 10,747,201 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Line Items] | ||||
Management Fee Income Description | $0.0013 (HK$0.01) per 100 artwork units daily | |||
Commission rebate | $ 2,094 | $ 103,742 | $ 1,207,104 | $ 201,524 |
PREPAYMENT AND OTHER CURRENT _3
PREPAYMENT AND OTHER CURRENT ASSETS (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Tax receivables | $ 1,286,415 | $ 1,132,140 |
Prepaid service fees | 241,064 | 489,424 |
Short-term borrowings to third party | 436,809 | 461,092 |
Staff advance | 90,054 | 52,124 |
Prepaid repair and maintenance | 1,704 | 46,733 |
Other current assets | 201,135 | 118,694 |
Prepayment and other current assets | $ 2,257,181 | $ 2,300,207 |
ACCOUNT RECEIVABLES, NET (Detai
ACCOUNT RECEIVABLES, NET (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Subtotal | $ 3,038,804 | $ 4,362,488 |
Less: allowance for doubtful accounts | (2,067,324) | (2,070,790) |
Account receivables, net | 971,480 | 2,291,698 |
Listing fee [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, Gross, Current | 971,134 | 2,259,671 |
Authorized agent subscription revenue [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, Gross, Current | 558,165 | 559,101 |
Monthly commission fee [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, Gross, Current | 1,455,501 | 1,463,243 |
Others [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, Gross, Current | $ 54,004 | $ 80,473 |
LOAN RECEIVABLES (Details)
LOAN RECEIVABLES (Details) | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2018CNY (¥) | Dec. 31, 2017USD ($) | |
Loans and Leases Receivable, Net Amount | $ | $ 3,859,075 | ||
Loans and Leases Receivable, Balance Amount | $ | $ 3,859,075 | $ 7,834,115 | |
Loan Receivable One [Member] | |||
Loans And Leases Receivable, Initiation Date | Dec. 9, 2016 | ||
Loans And Leases Receivable, Name Of Borrower | Xiaohui Wang | ||
Loans And Leases Receivable, Name Of Lender | Tianjin Takung | ||
Loans and Leases Receivable, Net Amount | $ 1,465,114 | ¥ 10,550,000 | |
Loans and Leases Receivable, Balance Amount | 10,062,400 | ||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 0.00% | ||
Loans And Leases Receivable, Maturity Date | Nov. 30, 2018 | ||
Loan Receivable Two [Member] | |||
Loans And Leases Receivable, Initiation Date | Apr. 4, 2017 | ||
Loans And Leases Receivable, Name Of Borrower | Xiaohui Wang | ||
Loans And Leases Receivable, Name Of Lender | Tianjin Takung | ||
Loans and Leases Receivable, Net Amount | $ 1,430,071 | 22,921,725 | |
Loans and Leases Receivable, Balance Amount | 9,821,725 | ||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 0.00% | ||
Loans And Leases Receivable, Maturity Date | Dec. 31, 2018 | ||
Loan Receivable Three [Member] | |||
Loans And Leases Receivable, Initiation Date | Dec. 15, 2017 | ||
Loans And Leases Receivable, Name Of Borrower | Xiaohui Wang | ||
Loans And Leases Receivable, Name Of Lender | Tianjin Takung | ||
Loans and Leases Receivable, Net Amount | $ 481,945 | 3,310,000 | |
Loans and Leases Receivable, Balance Amount | 3,310,000 | ||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 0.00% | ||
Loans And Leases Receivable, Maturity Date | Dec. 14, 2018 | ||
Loan Receivable Four [Member] | |||
Loans And Leases Receivable, Initiation Date | Dec. 19, 2017 | ||
Loans And Leases Receivable, Name Of Borrower | Xiaohui Wang | ||
Loans And Leases Receivable, Name Of Lender | Tianjin Takung | ||
Loans and Leases Receivable, Net Amount | $ 481,945 | 3,310,000 | |
Loans and Leases Receivable, Balance Amount | ¥ 3,310,000 | ||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 0.00% | ||
Loans And Leases Receivable, Maturity Date | Dec. 18, 2018 |
LOAN RECEIVABLES (Details Textu
LOAN RECEIVABLES (Details Textual) | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Furniture, fixtures and equipment | $ 332,529 | $ 167,651 |
Leasehold improvements | 473,183 | 426,138 |
Computer trading and clearing system | 3,642,143 | 3,485,844 |
Transport equipment | 104,741 | 0 |
Sub-total | 4,552,596 | 4,079,633 |
Less: accumulated depreciation | (2,560,032) | (1,888,312) |
Property and equipment, net | $ 1,992,564 | $ 2,191,321 |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation | $ 241,448 | $ 190,626 | $ 713,933 | $ 538,532 | |
Impairment Reserve | $ 309,321 | $ 309,321 | $ 0 |
ACCRUED EXPENSES AND OTHER PA_3
ACCRUED EXPENSES AND OTHER PAYABLES (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule Of Accounts Payable And Accrued Liabilities [Line Items] | ||
Accruals for consulting fees | $ 264,949 | $ 265,393 |
Trading and clearing system | 82,122 | 52,564 |
Payroll payables | 81,455 | 827,246 |
Discount payable to traders | 79,324 | 0 |
Accruals for business trip expense | 17,382 | 27,186 |
Accruals for professional fees | 33,215 | 192,067 |
Other payables | 65,025 | 97,402 |
Total accrued expenses, account & other payables | $ 623,472 | $ 1,461,858 |
SHORT-TERM BORROWINGS FROM TH_3
SHORT-TERM BORROWINGS FROM THIRD PARTIES (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Short-term Debt | $ 3,950,099 | $ 7,208,761 |
Debt Instrument, Unamortized Discount, Current | $ (69,401) | (290,739) |
Short Term Debt One [Member] | ||
Debt Instrument, Date | Jul. 15, 2016 | |
Debt Instrument Borrower | Hong Kong Takung | |
Debt Instrument, Lender | Merit Crown Limited | |
Short-term Debt | $ 0 | 1,500,000 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 8.00% | |
Debt Instrument, Repayment Due Date | Dec. 31, 2018 | |
Short Term Debt Two [Member] | ||
Debt Instrument, Date | Aug. 24, 2016 | |
Debt Instrument Borrower | Hong Kong Takung | |
Debt Instrument, Lender | Merit Crown Limited | |
Short-term Debt | $ 1,499,500 | 1,999,500 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 8.00% | |
Debt Instrument, Repayment Due Date | Dec. 31, 2018 | |
Short Term Debt Three [Member] | ||
Debt Instrument, Date | Nov. 18, 2016 | |
Debt Instrument Borrower | Hong Kong Takung | |
Debt Instrument, Lender | Merit Crown Limited | |
Short-term Debt | $ 0 | 1,480,000 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 8.00% | |
Debt Instrument, Repayment Due Date | Oct. 31, 2018 | |
Short Term Debt Four [Member] | ||
Debt Instrument, Date | Dec. 9, 2016 | |
Debt Instrument Borrower | Hong Kong Takung | |
Debt Instrument, Lender | Merit Crown Limited | |
Short-term Debt | $ 1,520,000 | 1,520,000 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 8.00% | |
Debt Instrument, Repayment Due Date | Nov. 30, 2018 | |
Short Term Debt Five [Member] | ||
Debt Instrument, Date | Dec. 19, 2017 | |
Debt Instrument Borrower | Hong Kong Takung | |
Debt Instrument, Lender | Merit Crown Limited | |
Short-term Debt | $ 500,000 | 500,000 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 8.00% | |
Debt Instrument, Repayment Due Date | Dec. 18, 2018 | |
Short Term Debt Six [Member] | ||
Debt Instrument, Date | Dec. 22, 2017 | |
Debt Instrument Borrower | Hong Kong Takung | |
Debt Instrument, Lender | Merit Crown Limited | |
Short-term Debt | $ 500,000 | $ 500,000 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 8.00% | |
Debt Instrument, Repayment Due Date | Dec. 21, 2018 |
SHORT-TERM BORROWINGS FROM TH_4
SHORT-TERM BORROWINGS FROM THIRD PARTIES (Details Textual) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jul. 20, 2018USD ($) | Jul. 20, 2018CNY (¥) | Jul. 04, 2018USD ($) | Jul. 04, 2018CNY (¥) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% | 8.00% | ||||||
Interest Expense | $ 262,561 | $ 181,341 | |||||||
Short-term Debt, Average Outstanding Amount | 7,319,041 | $ 6,315,799 | |||||||
Repayments of Related Party Debt | 483,822 | 0 | |||||||
Shanghai Takung [Member] | |||||||||
Repayments of Related Party Debt | $ 2,000,000 | ¥ 13,100,000 | |||||||
Tianjin Takung [Member] | |||||||||
Repayments of Related Party Debt | $ 1,480,000 | ¥ 9,827,200 | |||||||
Hong Kong Takung [Member] | |||||||||
Repayments of Short-term Debt | $ 1,480,000 | $ 2,000,000 | |||||||
Short-term Debt [Member] | |||||||||
Interest Expense | $ 199,822 | $ 133,174 | $ 500,080 | $ 394,295 |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | |
Due from Related Parties, Current | $ 5,914,240 | $ 0 | |
Due to Related Parties, Current | 6,389,042 | 483,822 | |
Mao [Member] | |||
Due to Related Parties, Current | [1] | 0 | 483,822 |
Liu [Member] | |||
Due from Related Parties, Current | [2] | 5,914,240 | 0 |
Due to Related Parties, Current | [2] | $ 6,389,042 | $ 0 |
[1] | Jianping Mao (“Mao”), the wife of the Vice General Manager of Hong Kong Takung. | ||
[2] | Liu Zhenying (“Liu”), the Vice President of Hong Kong Takung |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS (Details Textual) - 1 months ended May 16, 2018 - Liu Zhenying [Member] | USD ($) | CNY (¥) | HKD ($) |
Related Party Transaction [Line Items] | |||
Receivable with Imputed Interest, Face Amount | $ 5,914,240 | ¥ 40,619,000 | |
Receivable with Imputed Interest, Due Date | May 15, 2019 | ||
Loans Payable [Member] | |||
Related Party Transaction [Line Items] | |||
Debt Instrument, Maturity Date | May 15, 2019 | ||
Debt Instrument, Face Amount | $ 6,389,042 | $ 50,000,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Current: | ||||
Federal | $ 0 | $ 0 | $ 0 | $ 0 |
State | 0 | 0 | 0 | 0 |
Foreign | (332,918) | 159,281 | (160,548) | 662,598 |
Total Current | (332,918) | 159,281 | (160,548) | 662,598 |
Deferred: | ||||
Federal | 0 | 0 | 37,398 | 0 |
State | 0 | 0 | 0 | 0 |
Foreign | (409,752) | (34,619) | (451,052) | (68,221) |
Total Deferred | (409,752) | (34,619) | (413,654) | (68,221) |
Total income tax (benefit) expense | $ (742,670) | $ 124,662 | $ (574,202) | $ 594,377 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income (loss) before income tax expense | $ (3,624,026) | $ 151,696 | $ (4,116,660) | $ 1,651,515 |
Computed tax expense with statutory tax rate | (597,964) | 25,030 | (679,249) | 271,806 |
Impact of different tax rates in other jurisdictions | (89,082) | (73,258) | (51,274) | (230,651) |
Non-deductible items: | ||||
Tax effect of non-deductible expenses | (167,031) | 25,896 | (163,701) | 100,789 |
Previous years unrecognized taxation effect | 6,870 | 0 | 6,870 | |
Changes in valuation allowance | 104,537 | 146,994 | 313,152 | 452,433 |
Total income tax (benefit) expense | $ (742,670) | $ 124,662 | $ (574,202) | $ 594,377 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Taxes [Line Items] | |||||
Operating Loss Carryforwards | $ 1,003,852 | $ 1,003,852 | $ 250,590 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, PercentEffective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | |||
Effective Income Tax Rate Reconciliation, Percent | 20.50% | 82.20% | 13.90% | 36.00% | |
Percentage Of Net Operating Loss Carryforwards | 80.00% | ||||
Hong Kong [Member] | |||||
Income Taxes [Line Items] | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, PercentEffective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 16.50% | 16.50% | |||
PRC [Member] | |||||
Income Taxes [Line Items] | |||||
Effective Income Tax Rate Reconciliation, Percent | 25.00% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Sep. 30, 2018USD ($) |
Operating Leased Assets [Line Items] | |
Nine months ending December 31, 2018 | $ 205,025 |
Year ending December 31, 2019 | 170,022 |
Year ending December 31, 2020 | 39,736 |
Year ending December 31, 2021 | 14,560 |
Year ending December 31, 2022 and thereafter | 51,568 |
Total | $ 480,911 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Leased Assets [Line Items] | ||||
Operating Leases, Rent Expense, Net | $ 276,246 | $ 293,338 | $ 831,308 | $ 721,492 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net (loss) income | $ (2,881,356) | $ 27,034 | $ (3,542,458) | $ 1,057,138 |
Denominator: | ||||
Weighted-average shares outstanding - Basic | 11,226,025 | 11,188,882 | 11,216,009 | 11,039,880 |
Stock options and restricted shares | 0 | 59,806 | 0 | 358,202 |
Weighted-average shares outstanding - Diluted | 11,226,025 | 11,248,688 | 11,216,009 | 11,398,082 |
(Loss) earnings per share | ||||
-Basic | $ (0.26) | $ 0 | $ (0.32) | $ 0.10 |
-Diluted | $ (0.26) | $ 0 | $ (0.32) | $ 0.09 |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 29,104 | 34,915 |