Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
Entity File Number | 000-54884 | |
Entity Registrant Name | China United Insurance Service, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 30-0826400 | |
Entity Address, Address Line One | 7F, No. 311 Section 3 | |
Entity Address, City or Town | Taipei City | |
Entity Address, Country | TW | |
City Area Code | 8862 | |
Local Phone Number | 87126958 | |
Title of 12(b) Security | N/A | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
No Trading Symbol Flag | true | |
Entity Common Stock, Shares Outstanding | 29,421,736 | |
Entity Central Index Key | 0001512927 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 13,571,935 | $ 12,615,008 |
Time deposits | 46,890,005 | 38,731,658 |
Accounts receivable | 15,309,244 | 22,541,558 |
Contract assets | 3,593,536 | 0 |
Marketable securities | 1,214,712 | 290,153 |
Other current assets | 1,751,824 | 1,810,962 |
Total current assets | 82,331,256 | 75,989,339 |
Property and equipment, net | 2,176,044 | 1,402,866 |
Right-of-use assets under operating leases | 5,791,689 | 5,522,665 |
Intangible assets, net | 387,986 | 518,264 |
Long-term investments | 2,784,188 | 2,693,082 |
Restricted cash - noncurrent | 63,779 | 43,492 |
Deferred tax assets | 1,016,388 | 441,364 |
Other assets | 3,776,728 | 2,631,350 |
TOTAL ASSETS | 98,328,058 | 89,242,422 |
Current liabilities | ||
Short-term loans | 13,466,184 | 8,100,000 |
Commissions payable to sales professionals | 10,466,205 | 12,545,730 |
Contract liabilities - current | 1,609,155 | 1,781,975 |
Income tax payable - current | 2,583,652 | 2,389,304 |
Operating lease liabilities - current | 2,740,054 | 2,242,034 |
Due to related parties | 190,933 | 462,859 |
Other current liabilities | 7,306,157 | 9,875,209 |
Total current liabilities | 38,362,340 | 37,397,111 |
Contract liabilities - noncurrent | 271,375 | 1,049,258 |
Income tax payable - noncurrent | 719,515 | 815,451 |
Operating lease liabilities - noncurrent | 3,008,155 | 3,048,632 |
Other liabilities | 1,365,689 | 1,180,478 |
TOTAL LIABILITIES | 43,727,074 | 43,490,930 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000 issued and outstanding | 10 | 10 |
Common stock, par value $0.00001, 100,000,000 authorized, 29,421,736 issued and outstanding | 294 | 294 |
Additional paid-in capital | 8,190,449 | 8,190,449 |
Statutory reserves | 8,228,904 | 8,228,904 |
Retained earnings | 12,191,120 | 9,402,294 |
Accumulated other comprehensive income | 1,715,678 | 417,015 |
Total stockholders' equity attribute to the Company's shareholders | 30,326,455 | 26,238,966 |
Noncontrolling interests | 24,274,529 | 19,512,526 |
TOTAL STOCKHOLDERS' EQUITY | 54,600,984 | 45,751,492 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 98,328,058 | $ 89,242,422 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 1,000,000 | 1,000,000 |
Preferred Stock, shares outstanding | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 29,421,736 | 29,421,736 |
Common stock, shares outstanding | 29,421,736 | 29,421,736 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Revenue | $ 33,235,952 | $ 23,266,852 | $ 91,200,916 | $ 64,449,994 |
Cost of revenue | 21,269,044 | 14,374,811 | 63,261,959 | 41,805,241 |
Gross profit | 11,966,908 | 8,892,041 | 27,938,957 | 22,644,753 |
Operating expenses: | ||||
Selling | 926,004 | 744,429 | 1,783,692 | 1,741,372 |
General and administrative | 5,705,115 | 4,706,802 | 18,614,446 | 12,934,838 |
Total operating expense | 6,631,119 | 5,451,231 | 20,398,138 | 14,676,210 |
Income from operations | 5,335,789 | 3,440,810 | 7,540,819 | 7,968,543 |
Other income (expenses): | ||||
Interest income | 100,266 | 138,408 | 325,168 | 356,896 |
Interest expenses | (33,443) | (64,372) | (153,703) | (144,515) |
Dividend income | 2,368 | (720) | 321,603 | 309,903 |
Other - net | 23,648 | (180,560) | 94,796 | 134,122 |
Total other income (expense), net | 92,839 | (107,244) | 587,864 | 656,406 |
Income before income taxes | 5,428,628 | 3,333,566 | 8,128,683 | 8,624,949 |
Income tax expense | (1,364,725) | (933,985) | (2,893,297) | (2,254,086) |
Net income | 4,063,903 | 2,399,581 | 5,235,386 | 6,370,863 |
Less: net income attributable to noncontrolling interests | (1,277,587) | (1,071,427) | (2,446,560) | (2,557,603) |
Net income attributable to the Company's shareholders | 2,786,316 | 1,328,154 | 2,788,826 | 3,813,260 |
Other comprehensive income (loss) items: | ||||
Foreign currency translation gain (loss) | 1,106,349 | (186,331) | 2,066,175 | (782,667) |
Other | (201) | 0 | (317) | 0 |
Total other comprehensive income (loss) | 1,106,148 | (186,331) | 2,065,858 | (782,667) |
Comprehensive income | 5,170,051 | 2,213,250 | 7,301,244 | 5,588,196 |
Less: comprehensive income attributable to noncontrolling interests | (1,709,453) | (1,044,640) | (3,213,755) | (2,311,894) |
Comprehensive income attributable to the Company's shareholders | $ 3,460,598 | $ 1,168,610 | $ 4,087,489 | $ 3,276,302 |
Weighted average shares outstanding | ||||
Basic and diluted | 29,421,736 | 29,421,736 | 29,421,736 | 29,432,047 |
Earnings per share attributable to the Company's shareholders | ||||
Basic and diluted | $ 0.092 | $ 0.044 | $ 0.092 | $ 0.125 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Statutory Reserves [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Parent [Member] | Noncontrolling Interests [Member] | Total |
Balance at Dec. 31, 2018 | $ 295 | $ 10 | $ 8,190,449 | $ 7,299,123 | $ (171,318) | $ 7,273,227 | $ 22,591,786 | $ 16,351,044 | $ 38,942,830 |
Balance (in shares) at Dec. 31, 2018 | 29,452,669 | 1,000,000 | |||||||
Appropriation of reserves | 757,211 | (757,211) | |||||||
Foreign currency translation gain (loss) | (536,958) | (536,958) | (245,709) | (782,667) | |||||
Retirement of common stock | $ (1) | (1) | (1) | ||||||
Retirement of common stock (in shares) | (30,933) | ||||||||
Net income | 3,813,260 | 3,813,260 | 2,557,603 | 6,370,863 | |||||
Balance at Sep. 30, 2019 | $ 294 | $ 10 | 8,190,449 | 8,056,334 | (708,276) | 10,329,276 | 25,868,087 | 18,662,938 | 44,531,025 |
Balance (in shares) at Sep. 30, 2019 | 29,421,736 | 1,000,000 | |||||||
Balance at Jun. 30, 2019 | $ 294 | $ 10 | 8,190,449 | 8,058,094 | (548,732) | 8,999,362 | 24,699,477 | 17,648,448 | 42,347,925 |
Balance (in shares) at Jun. 30, 2019 | 29,421,736 | 1,000,000 | |||||||
Appropriation of reserves | (1,760) | 1,760 | |||||||
Acquisition of noncontrolling interest | (30,150) | (30,150) | |||||||
Foreign currency translation gain (loss) | (159,544) | (159,544) | (26,787) | (186,331) | |||||
Net income | 1,328,154 | 1,328,154 | 1,071,427 | 2,399,581 | |||||
Balance at Sep. 30, 2019 | $ 294 | $ 10 | 8,190,449 | 8,056,334 | (708,276) | 10,329,276 | 25,868,087 | 18,662,938 | 44,531,025 |
Balance (in shares) at Sep. 30, 2019 | 29,421,736 | 1,000,000 | |||||||
Balance at Dec. 31, 2019 | $ 294 | $ 10 | 8,190,449 | 8,228,904 | 417,015 | 9,402,294 | 26,238,966 | 19,512,526 | 45,751,492 |
Balance (in shares) at Dec. 31, 2019 | 29,421,736 | 1,000,000 | |||||||
Compensation cost in connection with issuance of preferred stock on the Company's subsidiary, Uniwill, to nonemployees | 1,547,229 | 1,547,229 | |||||||
Business acquisition | 1,019 | 1,019 | |||||||
Business acquisition | 1,548,248 | ||||||||
Foreign currency translation gain (loss) | 1,298,872 | 1,298,872 | 767,303 | 2,066,175 | |||||
Other comprehensive loss | (209) | (209) | (108) | (317) | |||||
Net income | 2,788,826 | 2,788,826 | 2,446,560 | 5,235,386 | |||||
Balance at Sep. 30, 2020 | $ 294 | $ 10 | 8,190,449 | 8,228,904 | 1,715,678 | 12,191,120 | 30,326,455 | 24,274,529 | 54,600,984 |
Balance (in shares) at Sep. 30, 2020 | 29,421,736 | 1,000,000 | |||||||
Balance at Jun. 30, 2020 | $ 294 | $ 10 | 8,190,449 | 8,228,904 | 1,041,396 | 9,404,804 | 26,865,857 | 22,565,076 | 49,430,933 |
Balance (in shares) at Jun. 30, 2020 | 29,421,736 | 1,000,000 | |||||||
Foreign currency translation gain (loss) | 674,414 | 674,414 | 431,935 | 1,106,349 | |||||
Other comprehensive loss | (132) | (132) | (69) | (201) | |||||
Net income | 2,786,316 | 2,786,316 | 1,277,587 | 4,063,903 | |||||
Balance at Sep. 30, 2020 | $ 294 | $ 10 | $ 8,190,449 | $ 8,228,904 | $ 1,715,678 | $ 12,191,120 | $ 30,326,455 | $ 24,274,529 | $ 54,600,984 |
Balance (in shares) at Sep. 30, 2020 | 29,421,736 | 1,000,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 5,235,386 | $ 6,370,863 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Compensation cost in connection with issuance of preferred stock on the Company's subsidiary, Uniwill, to nonemployees | 1,547,229 | 0 |
Depreciation and amortization | 694,862 | 498,178 |
Amortization of bond premium | 202 | 0 |
Gain on sales of marketable securities | (104,208) | (18,970) |
Gain on valuation of financial assets | (48,904) | (24,296) |
Loss on disposal of equipment | 45,306 | 20,733 |
Loss on disposal of a subsidiary | 5,645 | 0 |
Deferred income tax | (98,596) | (66,746) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 7,775,347 | 4,473,238 |
Contract assets | (3,494,823) | (3,304,938) |
Other current assets | 234,614 | (265,401) |
Other assets | (1,512,399) | (3,126,292) |
Commissions payable to sales professionals | (2,439,637) | (735,625) |
Contract liabilities | (1,019,695) | (335,879) |
Income tax payable | 33,874 | 169,161 |
Other current liabilities | (2,565,675) | 22,573 |
Other liabilities | 140,468 | 80,562 |
Net cash provided by operating activities | 4,428,996 | 3,757,161 |
Cash flows from investing activities: | ||
Cash received from issuance of preferred stock on the Company's subsidiary, Uniwill, to nonemployees | 371 | 0 |
Purchases of time deposits | (53,753,884) | (41,901,757) |
Proceeds from maturities of time deposits | 47,141,011 | 31,802,019 |
Purchases of marketable securities | (950,791) | (315,442) |
Proceeds from sales of marketable securities | 215,832 | 364,748 |
Purchase of equipment | (1,250,361) | (454,612) |
Proceeds from disposal of equipment | 3,008 | 22,557 |
Purchase of intangible assets | (51,797) | (71,568) |
Net cash used in investing activities | (8,646,611) | (10,554,055) |
Cash flows from financing activities: | ||
Proceeds from short-term loans | 38,774,384 | 21,539,897 |
Repayment of short-term loans | (33,560,000) | (19,542,276) |
Proceeds from related party borrowing | (275,573) | 116,581 |
Net cash provided by financing activities | 4,938,811 | 2,114,202 |
Foreign currency translation | 256,018 | (366,421) |
Net decrease in cash, cash equivalents and restricted cash | 977,214 | (5,049,113) |
Cash, cash equivalents and restricted cash, beginning balance | 12,658,500 | 20,639,771 |
Cash, cash equivalents and restricted cash, ending balance | 13,635,714 | 15,590,658 |
SUPPLEMENTARY DISCLOSURE: | ||
Interest paid | 160,978 | 151,011 |
Income tax paid | $ 3,298,391 | $ 2,023,938 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 9 Months Ended |
Sep. 30, 2020 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES China United Insurance Service, Inc. (“China United”, “CUII”, or the “Company”) is a Delaware corporation, organized on June 4, 2010 by Yi-Hsiao Mao, a Taiwan citizen, as a listing vehicle for both ZLI Holdings Limited (“CU Hong Kong”) and Action Holdings Financial Limited (“AHFL,” a company incorporated in the British Virgin Islands). The Company primarily engages in brokerage and insurance agency services by providing two broad categories of insurance products, life insurance products and property and casualty insurance products, and manages its business through aggregating them into three geographic operating segments, Taiwan, PRC, and Hong Kong. The Company’s common stock currently trades over the counter under the ticker symbol “CUII” on the OTC Pink market. In May 2019, AHFL entered into an agreement to make capital contributions of $485,909 (NTD 15,000,000 ) to AIlife International Investment Co., Limited (“AIlife”, formerly known as “Ilife”). After the transaction, the Company owned 93.75% of AIlife. In July 2019, AHFL acquired the remaining 6.25% shares of AIlife, which became the Company's wholly owned subsidiary. The business objective of AIlife is to obtain a non-exclusive license covering certain information technology systems from Law Broker and generate revenues from marketing and making the technologies available to insurance intermediary companies. O June 4, 2019, AIlife entered into an acquisition agreement with the selling shareholder of Uniwill Insurance Broker Co., Ltd (“Uniwill”). Pursuant to the acquisition agreement, AIlife agreed to pay $14,535 (NTD 450,000 ) in exchange for the insurance brokerage licenses issued to Uniwill by the Taiwanese government, along with right to the Uniwill company name and $6,455 (NTD 200,000 ) of legal deposits. The Company has no intention of operating the Uniwill existing brokerage business nor retaining any of its sales personnel. Therefore, the acquisition is accounted as an assets purchase. On November 15, 2019, AIlife, Cyun-Jhan Enterprise Co., Ltd. (“Cyun-Jhan”), and Jian-Zao International Industrial Co., Ltd. (“Jian-Zao” and, collectively with AIlife and Cyun-Jhan, the “Parties”) entered into a Joint Venture Agreement (the “JV Agreement”). Under the terms of the JV Agreement, the Parties agreed to invest funds, labor and technology into Uniwill. Under the terms of the JV Agreement, the paid-in capital of Uniwill should increase to an aggregate amount of $13.3 million (NTD 400 million) by AIlife, provided that the other two parties no later than December 31, 2021. On August 15, 2019, AIlife increased and completed the capital injections in Uniwill to the amount of $3.3 million. Uniwill issued a total of 9,608 preferred shares to Cyun-Jhan and Jian-Zao for cash and On May 27, 2020, the Company completed the acquisition of Rays Technology Corporation ("Rays") for its 90% equity interest. The consideration to acquire 27,000 shares of Ray was US$9,177 (NTD 270,000). The acquisition is accounted as a business purchase. The Company did not recognize any goodwill or gain on bargain purchase as a result of the net asset value acquired approximating to the consideration paid. On July 2, 2020, the Company had liquidated a subsidiary in the PRC, Prime Management Consulting (Nanjing) Co., Limited and recognized a loss on disposal of a subsidiary of $5,645 for the three and nine months ended September 30, 2020. In January 2020, the World Health Organization declared an outbreak of the coronavirus (COVID-19) to be a Public Health Emergency of International Concern, subsequently declared COVID-19 a global pandemic, and recommended containment and mitigation measures worldwide on March 11, 2020. We had experienced some adverse impacts on our business in the PRC Segment, such as limited access to our staff in the PRC in the beginning of the outbreak and restrictions on business travel within the PRC and between Taiwan and the PRC. Even though the operations in the PRC segment fully resumed in the second quarter of 2020, the pandemic has created global economic uncertainties and led to negative impact on the financial markets. The extent of the COVID-19 impact to the Company will depend on numerous factors and developments related to COVID-19. Consequently, any potential impacts of COVID-19 remain highly uncertain and cannot be predicted with confidence. The corporate structure as of September 30, 2020 is as follows: |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The condensed consolidated financial statements include the accounts of China United, its subsidiaries and variable interest entities as shown in the corporate structure in Note 1. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the consolidated financial statements for prior year to the current year’s presentation. Such reclassifications have no effect on net income as previously reported. Basis of Presentation The condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2019, which were included in the Company’s 2019 Annual Report on Form 10-K (“2019 Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2019, has been derived from the Company’s audited consolidated financial statements as of that date. Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable includes commission receivables stated at net realizable values. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary at each quarter-end. Management reviews the composition of accounts receivable and analyzes the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. No allowance was deemed necessary as of September 30, 2020 and December 31, 2019. Foreign Currency Transactions The Company’s financial statements are presented in U.S. dollars ($), which is the Company’s reporting and functional currency. The functional currencies of the Company’s subsidiaries are NTD, RMB and HKD. The resulting translation adjustments are reported under other comprehensive income in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 220 (“ASC 220”), “Reporting Comprehensive Income” The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for condensed consolidated financial statements are as follows: Average Rate for the Nine Months Ended September 30, 2020 2019 New Taiwan dollar (NTD) NTD 29.770854 NTD 31.032055 China yuan (RMB) RMB 6.994085 RMB 6.861782 Hong Kong dollar (HKD) HKD 7.757236 HKD 7.837965 United States dollar ($) $ 1.000000 $ 1.000000 Exchange Rate at September 30, 2020 December 31, 2019 New Taiwan dollar (NTD) NTD 28.953074 NTD 29.953143 China yuan (RMB) RMB 6.801266 RMB 6.966764 Hong Kong dollar (HKD) HKD 7.749884 HKD 7.787223 United States dollar ($) $ 1.000000 $ 1.000000 Earnings Per Share Basic earnings per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued. As the holders of preferred stock of the Company are entitled to share equally with the holders of common stock, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the board of directors, the preferred stock is treated as a participating security. When calculating the basic earnings per common share, the two-class method is used to allocate earnings to common stock and participating security as required by FASB ASC Topic 260, “Earnings Per Share”. As of September 30, 2020 and 2019, the Company did not have any potentially dilutive instrument. Fair Value of Financial Instruments Fair value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which 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. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels 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 liabilities, 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. The following fair value hierarchy tables present information about the Company's assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019: September 30, 2020 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Total time deposits $ 46,890,005 $ — $ — $ 46,890,005 Marketable securities : Mutual funds 1,214,712 — — 1,214,712 Long-term investments: Government bonds held for available-for-sale — 104,165 — 104,165 REITs 1,352,533 — — 1,352,533 Total assets measured at fair value $ 49,457,250 $ 104,165 $ — $ 49,561,415 December 31, 2019 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Total cash equivalents and time deposits $ 40,194,850 $ — $ — $ 40,194,850 Marketable securities : Mutual funds 290,153 — — 290,153 Long-term investments: Government bonds held for available -for -sale — 101,203 — 101,203 REITs 1,308,711 — — 1,308,711 Total assets measured at fair value $ 41,793,714 $ 101,203 $ — $ 41,894,917 The carrying amounts of current financial assets and liabilities in the consolidated balance sheets for cash equivalents and time deposits approximate fair value due to the short-term duration of those instruments. During the nine months ended September 30, 2020, there were no assets or liabilities Marketable securities and long-term investments in REITs – The fair values of mutual funds and REITs were valued based on quoted market prices in active markets. Government bonds – The fair value of government bonds is valued based on theoretical bond price in the Taipei Exchange. According to Taiwan Regulations Governing Deposit of Bond and Acquirement of Insurance by Insurance Agents, Insurance Brokers and Insurance Surveyors (“RGDBAI”) Article 3 and 4, Law Broker is required to maintain a minimum of NTD 3,000,000 ($103,616 and $100,156 as of September 30, 2020 and December 31, 2019, respectively) restricted balance in a separate account or government bonds issued by the central government in order to maintain its insurance license. The government bonds will mature on March 17, 2021 and the amortized cost of the bonds is $103,742 (NTD 3,003,650) and $100,479 (NTD 3,009,674) as of September 30, 2020 and December 31, 2019, respectively. The Company will purchase a similar investment after the maturity of the bonds to maintain the insurance license. Concentration of Risk The Company maintains cash with banks in the USA, People’s Republic of China (“PRC" or "China”), Hong Kong, and Taiwan. Should any bank holding cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Taiwan, a depositor has up to NTD3,000,000 insured by Central Deposit Insurance Corporation (“CDIC”). In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In Hong Kong, a depositor has up to HKD500,000 insured by Hong Kong Deposit Protection Board (“DPB”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”). Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, time deposits, restricted cash, register capital deposits and accounts receivable. As of September 30, 2020 and December 31, 2019, approximately $2,483,000 and $2,293,000 of the Company’s cash and cash equivalents, time deposits, restricted cash equivalents and register capital deposits held by financial institutions, was insured, and the remaining balance of approximately $60,540,000 and $50,108,000, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have an allowance for doubtful accounts. For the three months ended September 30, 2020 and 2019, the Company’s revenues from sale of insurance policies underwritten by these companies were: Three Months Ended September 30, 2020 2019 % of Total % of Total Amount Revenue Amount Revenue Taiwan Life Insurance Co., Ltd. $ 8,435,924 25 % $ 6,048,897 26 % TransGlobe Life Insurance Inc. 8,160,190 25 % 2,952,262 13 % Farglory Life Insurance Co., Ltd. 4,157,250 13 % 3,662,473 16 % For the nine months ended September 30, 2020 and 2019, the Company’s revenues from sale of insurance policies underwritten by these companies were: Nine Months Ended September 30, 2020 2019 % of Total % of Total Amount Revenue Amount Revenue TransGlobe Life Insurance Inc. $ 20,012,602 22 % $ 7,927,576 12 % Taiwan Life Insurance Co., Ltd. 19,656,521 22 % 13,589,908 21 % Farglory Life Insurance Co., Ltd. 11,120,320 12 % 12,347,817 19 % As of September 30, 2020 and December 31, 2019, the Company’s accounts receivable from these companies were: September 30, 2020 December 31, 2019 % of Total % of Total Accounts Accounts Amount Receivable Amount Receivable TransGlobe Life Insurance Inc. $ 3,668,147 24 % $ 4,239,621 19 % Taiwan Life Insurance Co., Ltd 2,938,229 19 % 4,012,914 18 % Farglory Life Insurance Co., Ltd. 2,111,619 14 % 2,664,140 12 % AIA International Limited Taiwan Branch 1,472,303 10 % 2,447,051 11 % Shin Kong Life Insurance Co., Ltd. 743,251 5 % 3,586,795 16 % The Company’s operations are in the PRC, Hong Kong and Taiwan. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, foreign currency exchange and legal environments in the PRC, Hong Kong and Taiwan, and by the state of each economy. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, Hong Kong and Taiwan, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things. Stock-Based Compensation The Company accounts for equity-based compensation cost in accordance with ASC 718, Compensation-Stock Compensation Income Taxes The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized. When tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations and other comprehensive income (loss). New Accounting Pronouncements and Other Guidance Credit Losses In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations. Income Tax In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which is intended to simplify various aspects related to accounting for income taxes. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The standard will be adopted upon the effective date for us beginning January 1, 2021. We are currently evaluating the effects of the standard on our consolidated financial statements and related disclosures. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions in which the reference LIBOR or another reference rate are expected to be discontinued as a result of the Reference Rate Reform. The standard is effective for all entities. The standard may be adopted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2022. We are currently evaluating the effects of the standard on our consolidated financial statements and related disclosures. The management does not believe that other than disclosed above, accounting pronouncements the recently issued but not yet adopted will have a material impact on its financial position, results of operations or cash flows. |
CASH, CASH EQUIVALENTS AND REST
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS | 9 Months Ended |
Sep. 30, 2020 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS | NOTE 3 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS Cash, cash equivalents and restricted cash equivalents consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Cash and cash equivalents: Cash on hand and in banks $ 13,571,935 $ 11,151,816 Time deposits - with original maturities less than three months (see Note 4) — 1,463,192 13,571,935 12,615,008 Restricted cash – noncurrent 63,779 43,492 Total cash, cash equivalents and restricted cash shown in the statements of cash flows $ 13,635,714 $ 12,658,500 Noncurrent restricted cash includes a mandatory deposit in the bank in conformity with Provisions of the Supervision and Administration of Specialized Insurance Agencies in PRC, which is not allowed to be withdrawn without the permission of the regulatory commission, and a trust account held for Law Broker's officer’s bonus plan. |
TIME DEPOSITS
TIME DEPOSITS | 9 Months Ended |
Sep. 30, 2020 | |
TIME DEPOSITS | |
TIME DEPOSITS | NOTE 4 – TIME DEPOSITS September 30, 2020 December 31, 2019 Total time deposits $ 46,890,005 $ 40,194,850 Less: Time deposits – with original maturities less than three months (see Note 3) — (1,463,192) Time deposits – original maturities over three months but less than one year $ 46,890,005 $ 38,731,658 Time Deposits Pledged as Collateral The Company had a total of $14,786,148 and $11,920,632 restricted time deposits, respectively, as of September 30, 2020 and December 31, 2019. A total of time deposits $34,539 (NTD 1 million) was pledged as collateral for the Company’s credit card as of September 30, 2020. In addition, the Company had time deposits of $14,751,609 and $11,920,632 pledged as collateral for short-term loans, respectively, as of September 30, 2020 and December 31, 2019. See Note 5. |
SHORT-TERM LOANS
SHORT-TERM LOANS | 9 Months Ended |
Sep. 30, 2020 | |
SHORT-TERM LOANS | |
SHORT-TERM LOANS | NOTE 5 – SHORT-TERM LOANS The Company’s short-term loans consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Credit facility, O-Bank $ 4,000,000 $ 2,600,000 Credit facility, CUB 5,526,184 — Credit facility, KGI 2,100,000 1,500,000 Credit facility, E. Sun 1,000,000 — Credit facility, FEIB 840,000 2,500,000 Credit facility, CTBC — 1,500,000 Total short-term loans $ 13,466,184 $ 8,100,000 The Company entered into the following credit agreements: O-Bank Co., Ltd. (“O-Bank”) CUII has a revolving credit facility in amount of $4,000,000 with O-Bank, which matures on October 22, 2020. Borrowings under the revolving credit facility bear interest at the TAIFX3 rate plus a margin of 0.5%. As of September 30, 2020 and December 31, 2019, the outstanding balance of the revolving credit facility were $4,000,000 with an interest rate of 1.18% and $2,600,000 with a weighted average interest rate of 2.83%, respectively. As of September 30, 2020 and December 31, 2019, the borrowings are secured by a total amount of $4,766,333 (NTD 138 million) and $3,038,079 (NTD 91 million) of time deposits. Law Broker entered into a credit agreement with O-Bank, which matures on October 22, 2020, and the agreement provides for a $3.3 million (NTD 100 million) revolving credit facility. Borrowings under this agreement bear interest at the TAIFX3 rate plus a margin of 0.75%. As of September 30, 2020 and December 31, 2019, the outstanding balance under this credit agreement was nil. Cathay United Bank Company Ltd. ("CUB") In April 2020, AHFL Taiwan Branch entered into a line of credit agreement in the amount of approximately $8,5 KGI Commercial Bank Co., Ltd. ("KGI") CUII was approved for a line of credit agreement with KGI, which matures on October 2, 2020, pursuant to which CUII has a revolving credit facility of $1,600,000. Borrowings under the agreement bear interest at the LIBOR rate plus a margin of 0.9%. As of September 30, 2020 and December 31, 2019, the Company had the outstanding borrowing of $2,100,000 with an interest rate of 1.58% and $1,500,000 with a weighted interest rate of 3.06%, respectively. The borrowings are secured by a total amount of $2,357,415 (RMB 7.6 million and NTD 36 million) and $2,295,061 (RMB 7.6 million and NTD 36 million) of time deposits. Law Broker entered into another credit agreement with KGI providing for a $1.6 million (NTD 50 million), and the agreement matured on October 2, 2020. The borrowing is secured by a total amount of $1,786,660 (RMB 12 million) of time deposits as of December 31, 2019. As of September 30, 2020 and December 31, 2019, there was no outstanding loan under this credit agreement. E. Sun Bank ("E. Sun") On June 3, 2020, CUII was approved for a line of credit agreement in the amount of $1,000,000 with E. Sun, pursuant to which CUII has a revolving credit facility of $1,000,000. Borrowings under the agreement bear interest at the LIBOR rate plus a margin of 1.14%. As of September 30, 2020, the Company had the outstanding borrowing of $1,000,000 with an interest rate of 1.16%. The borrowing is secured by a total amount of $1,003,348 of time deposits. Far Eastern International Bank (“FEIB”) CUII entered into a line of credit agreement with FEIB, which shall mature on January 8, 2021, and borrowings under the revolving credit facility bear interest at the higher of LIBOR or TAIFX3 rate plus a margin of 0.85%. The outstanding balance of the revolving credit facility were $840,000 and $2,500,000 as of September 30, 2020 and December 31, 2019. The interest rate for the outstanding balance as of September 30, 2020 and December 31, 2019 were 1.83% and 3.05%, respectively. As of September 30, 2020 and December 31, 2019, the borrowing is secured by a total amount of $1,098,329 (NTD 31.8 million) and $3,064,787 (NTD 91.8 million) of time deposits. Law Broker entered into a credit agreement with FEIB providing for a $2.6 million (NTD 80 million) revolving credit facility, which shall mature January 8, 2021. As of September 30, 2020 and December 31, 2019, there was no outstanding loan under this credit agreement. CTBC Bank Co., Ltd. (“CTBC”) CUII has a revolving credit facility in an amount of $1,500,000 with CTBC, which matures on August 31, 2020, and borrowings under the revolving credit facility bear interest at the CTBC’s cost of funds plus a margin of 1%. The outstanding balance of the revolving credit facility was nil and $1,500,000 with an interest rate of 3.20% as of September 30, 2020 and December 31, 2019, respectively. As of December 31, 2019, the borrowing was secured by the total amount of $1,736,045 (NTD 52 million) of time deposits. Law Broker is the guarantor of the credit facility. Law Broker entered into a credit agreement with CTBC providing for a $3.3 million (NTD 100 million) revolving credit facility, which matured on August 31, 2020. As of September 30, 2020 and December 31, 2019, the outstanding loan under this credit agreement was nil. Total interest expenses for short-term loans incurred were $33,443 and $64,273, respectively, for the three months ended September 30, 2020 and 2019, and were $153,703 and $144,416 for the nine months ended September 30, 2020 and 2019. |
COMMISSIONS PAYABLE TO SALES PR
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | 9 Months Ended |
Sep. 30, 2020 | |
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | |
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | NOTE 6 – COMMISSIONS PAYABLE TO SALES PROFESSIONALS Commissions payable to sales professionals consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Taiwan $ 10,130,726 $ 12,123,149 PRC 335,479 422,581 Hong Kong — — Total commissions payable to sales professionals $ 10,466,205 $ 12,545,730 Commissions payable to sales professionals are usually settled within twelve months. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
OTHER CURRENT LIABILITIES | |
OTHER CURRENT LIABILITIES | NOTE 7 – OTHER CURRENT LIABILITIES Other current liabilities consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Accrued bonus $ 3,602,880 $ 4,961,323 Accrued business tax and tax withholdings 1,452,087 1,262,570 Payroll payable and other benefits 880,457 1,317,367 Accrued tax penalties 185,318 — Other accrued liabilities 1,185,415 2,333,949 Total other current liabilities $ 7,306,157 $ 9,875,209 Accrued Bonus The Company’s foreign subsidiaries have various bonus plans, which provide cash awards to employees based upon their performance, and had accrued bonus of $2,406,183 and $4,057,515, respectively, related to cash awards to employees as of September 30, 2020 and December 31, 2019. The Company has other compensation plans solely provided by Law Broker to its officers. The compensation plans eligible to Law Broker’s officers include a surplus bonus based on a percentage of income after tax and other performance bonuses such as retention and non-competition. The bonus expenses incurred by Law Broker’s officers under the compensation plans were $157,267 and $437,519, respectively, for the three and nine months ended September 30, 2020, and $302,598 and $501,672 for the three and nine months ended September 30, 2019. As of September 30, 2020 and December 31, 2019, the Company had accrued bonus of $1,196,697 and $903,808 payable within next 12 months, and noncurrent accrued bonus of $576,191 and $471,466, respectively, related to the compensation plans for Law Broker’s officers. See Note 14 for additional information of appointment and engagement agreements with Law Broker’s officers. Other Accrued Liabilities As of September 30, 2020, and December 31, 2019, the Company had other accrued liabilities of $1,185,415 and $2,333,949, respectively. Other accrued liabilities consisted of accrued operating expenses for professional fees, utilities, software maintenance, and recruitment. |
OTHER LIABILITIES
OTHER LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
OTHER LIABILITIES | |
OTHER LIABILITIES | NOTE 8 – OTHER LIABILITIES The Company’s other liabilities consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Accrued bonus - noncurrent (Note 7) $ 576,191 $ 471,466 Due to previous shareholders of AHFL 518,080 500,782 Net defined benefit liability 271,418 208,230 Total other liabilities $ 1,365,689 $ 1,180,478 Due to Previous Shareholders of AHFL Due to previous shareholders of AHFL is the entire remaining balance payable of the 2012 acquisition cost. On March 27, 2019, the Company and the selling shareholders of AHFL entered into a sixth amendment to the acquisition agreement, pursuant to which, the Company will make the cash payment in the amount of NTD15 million on or prior to March 31, 2021. The Company is in negotiation with the previous shareholders of AHFL to extend the repayment date. As of September 30, 2020 and December 31, 2019, the amount due to previous shareholders of AHFL were $518,080 and $500,782, respectively. The change in amounts was due to foreign currency translation. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2020 | |
REVENUE | |
REVENUE | NOTE 9 – REVENUE The Company’s revenue is derived from insurance agency and brokerage services. The Company, through its subsidiaries and variable interest entities, sells insurance products provided by insurance companies to individuals, and is compensated in the form of commissions from the respective insurance companies, according to the terms of each service agreement made by and between the Company and the insurance companies. The sale of an insurance product by the Company is considered complete when initial insurance premium is paid by an individual and the insurance policy is approved by the respective insurance company. When a policy is effective, the insurance company is obligated to pay the agreed-upon commission to the Company under the terms of its service agreement with the Company and such commission is recognized as revenue. The Company considers the contracts with insurance companies contain one performance obligation and consideration should be recorded when performance obligation is satisfied at point in time. The amount of revenue to be recognized when the insurance policy is effective includes first year commission and other contingent commission that a significant reversal of revenue would not occur in the subsequent periods. When other contingent commission that could not be determined if a significant reversal of revenue would occur, the Company recognizes the commission after receiving insurance companies’ notice. For the three months ended September 30, 2020 and 2019, the Company recorded revenue of $33,235,952 and $23,266,852, respectively. For the nine months ended September 30, 2020 and 2019, the Company recorded revenue of $91,200,916 and $64,449,994, respectively. Disaggregation information of revenue is disclosed in Note 15. Contract Balance Contract assets are the Company’s conditional rights to consideration for completed performance obligation and are in relation to the performance bonus to be rewarded based on the annual performance. The Company recognizes the contingent commission as a contract asset when the performance obligation is fulfilled, and the Company has not had the unconditional rights to the payment. Contract liabilities include payments received in advance of performance under the contract and are realized when the associated performance obligation is satisfied. September 30, 2020 December 31, 2019 Accounts receivable $ 15,309,244 $ 22,541,558 Contract assets – current 3,593,536 — Contract liabilities – current 1,609,155 1,781,975 Contract liabilities – noncurrent 271,375 1,049,258 Contract Liabilities – AIATW On June 10, 2013, AHFL entered into a Strategic Alliance Agreement (the “Alliance Agreement”) with AIA International Limited Taiwan Branch (“AIATW”), the purpose of which is to promote life insurance products provided by AIATW within Taiwan by insurance agencies or brokerage companies affiliated with AHFL or CUIS. The original term of the Alliance Agreement was from June 1, 2013 to May 31, 2018. Pursuant to the terms of the Alliance Agreement, AIATW paid AHFL an execution fee of approximately $8,326,700 (NTD250,000,000, including the tax of NTD11,904,762, the “Execution Fee”), which is to be recorded as revenue upon fulfilling sales targets and the 13-month persistency ratio, as defined, over the next five years. The Execution Fee may be required to be recalculated if certain performance targets are not met by AHFL. On September 30, 2014, AHFL entered into a Strategic Alliance Supplemental Agreement (the “First Amendment to the Alliance Agreement”) with AIATW. In the First Amendment to the Alliance Agreement, the performance targets and the provision about refunding the Execution Fee on a pro rata basis when the performance targets are not met were revised. On January 6, 2016, AHFL entered into an Amendment No. 2 to the Alliance Agreement (the “Second Amendment to the Alliance Agreement”) with AIATW to further revise certain provisions in the Strategic Alliance Agreement and the previous amendment entered into by and between AHFL and AIATW. To the extent permitted by applicable laws and regulations, AHFL shall assist and encourage any insurance agency company or insurance brokerage company duly approved by the competent government authorities of Taiwan (the “Appointed Broker/Agent”), to cooperate with AIATW for the promotion of life insurance products of AIATW. Pursuant to the Second Amendment to the Alliance Agreement, the expiration date of the Strategic Alliance Agreement was extended from May 31, 2018 to December 31, 2021, and the effect of the Alliance Agreement during the period from October 1, 2014 to December 31, 2015 was suspended. In addition, both AHFL and AIATW agreed to adjust certain terms and conditions set forth in the Alliance Agreement, some of which are as follows: (i) expanding the scope of services to be provided by AHFL to AIATW to include, without limitation, assessment and advice on suitability of cooperative partners, advice on product strategies suitable for promotion channel development, advice on promotion/sales channel improvement, advice on promotion channel marketing and strategic planning, and promotion channel talent training; and (ii) removing certain provisions related to performance milestones and refund of Execution Fees. On March 15, 2016, AHFL issued a promise letter (the “2016 Letter”) to AIATW that AHFL is required to (i) fulfill sales targets and (ii) the 13-month persistency ratio. On June 14, 2017, with AIATW’s consent, the 2016 Letter was revoked in order to conform with the latest terms and conditions regarding the cooperation between AHFL and AIATW as set forth in an Amendment No. 3 to the Alliance Agreement (the “Third Amendment to the Alliance Agreement”). Pursuant to the Third Amendment to the Alliance Agreement, both AHFL and AIATW agreed to adjust certain terms and conditions set forth this amendment, some of which included (i) except the first contract year (April 15th, 2013 to September 30th, 2014), the sales target of the alliance between the parties shall be changed to (a) value of new business (“VONB”) and (b) the 13-month persistency ratio; and (ii) AIATW will calculate and recognize the VONB and 13-month persistency ratio each contract year and inform the Company the result; and (iii) the Company agreed to return the basic business promotion fees to AIATW within thirty (30) days of receipt of the notice sent by AIATW if the Company fails to meet the targets set forth in the Third Amendment to the Alliance Agreement, AIATW reserved the right to offset such amount against the amount payable by it to the Company; and (iv) upon the termination of the Alliance Agreement and its amendments pursuant to the Section 8.2 of the Alliance Agreement, both parties agreed to calculate the amount to be returned or repaid, as applicable, based on the past and current contract years. The Company shall return the basic business execution fees at NTD50 million for the first contract year, NTD35 million for the second contract year, and NTD33 million for each contract year thereafter within one month after the termination. The following table presents the amounts recognized as revenue and refund for each contract year: Contract Revenue Revenue VAT Refund Refund VAT Year Period Execution Fees Amount Amount Amount Amount First 04/15/2013 - 09/30/2014 NTD 50,000,000 NTD 27,137,958 (1) NTD 1,356,898 NTD 20,481,090 (1) NTD 1,024,054 Second 01/01/2016 - 12/31/2016 NTD 35,000,000 NTD 12,855,000 (2) NTD 642,750 NTD 20,478,333 (2) NTD 1,023,917 Third 01/01/2017 - 12/31/2017 NTD 33,000,000 NTD 12,628,201 (3) NTD 631,410 NTD 18,800,370 (3) NTD 940,019 Fourth 01/01/2018 - 12/31/2018 NTD 33,000,000 NTD 11,228,600 (4) NTD 561,429 NTD 20,199,971 (4) NTD 1,010,000 Fifth 01/01/2019 - 12/31/2019 NTD 33,000,000 NTD 9,481,371 (5) NTD 474,069 NTD 21,947,200 (5) NTD 1,097,360 Sixth 01/01/2020 - 12/31/2020 NTD 33,000,000 NTD 11,213,344 (6) NTD 560,667 NTD 20,215,227 (6) NTD 1,010,762 Seventh 01/01/2021 - 12/31/2021 NTD 33,000,000 NTD — NTD — NTD — NTD — TOTAL NTD 250,000,000 NTD 84,544,474 NTD 4,227,223 NTD 122,122,191 NTD 6,106,112 1) 2) 3) 4) 5) 6) The Company recognized revenue of $94,493 (NTD 2,813,139), net of VAT, and $73,691(NTD 2,281,470), net of VAT for the three months ended September 30, 2020 and 2019, and $282,491 (NTD 8,410,008) and $234,852 (NTD 7,271,032) , net of VAT, for the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020 and December 31, 2019, the Company had non-current portion of contract liabilities of $271,375 and $1,049,258, respectively, and current contract liabilities of $1,609,155 and $1,781,975, respectively, related to the Alliance Agreement. |
LEASE
LEASE | 9 Months Ended |
Sep. 30, 2020 | |
LEASE | |
LEASE | NOTE 10 –LEASE The Company adopted ASC 842 as of January 1, 2019 using a modified retrospective transition with no adjustment to its comparative periods in the year of transition. The Company elected the practical expedients, which allow the Company not to reassess prior conclusions with respect to lease identification, lease classification and initial direct costs under ASC 842. The Company did not elect the hindsight practical expedient to determine the lease term or in assessing the likelihood that a lease purchase option will be exercised. The adoption of ASC 842 resulted in the recognition of operating lease right-of-use assets of $4.0 million and corresponding operating lease liabilities of $3.7 million as of January 1, 2019 on the consolidated balance sheet. The Company has operating leases for its offices with lease terms ranging from one The Company recorded operating lease cost of $910,073 and $2,562,384 for the three and nine months ended September 30, 2020, and $701,341 and $2,076,084 for the three and nine months ended September 30, 2019, respectively. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As of September 30, 2020, operating lease right-of-use assets and lease liabilities were as follows: September 30, 2020 December 31, 2019 Right-of-use assets under operating leases $ 5,791,689 $ 5,522,665 Operating lease liabilities – current 2,740,054 2,242,034 Operating lease liabilities – noncurrent 3,008,155 3,048,632 Lease Term and Discount Rate September 30, 2020 December 31, 2019 Weighted average remaining lease term Operating lease 2.64 years 2.91 years Weighted average discount rate Operating lease 3.04 % 2.85 % Supplemental Cash Flow Information Related to Leases September 30, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows related to operating leases $ 2,497,196 $ 2,655,644 The minimum future lease payments as of September 30, 2020 are as follows: Amount 2020 (reminder of year) $ 792,888 2021 2,642,057 2022 1,387,905 2023 677,494 2024 442,299 Thereafter 47,115 Total minimum lease payments 5,989,758 Less: Interest (241,549) Present value of future minimum lease payments $ 5,748,209 |
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS | 9 Months Ended |
Sep. 30, 2020 | |
NON-CONTROLLING INTERESTS | |
NON-CONTROLLING INTERESTS | NOTE 11 – NON-CONTROLLING INTERESTS Non-controlling interests consisted of the following as of September 30, 2020 and December 31, 2019: % of Non- Other controlling December 31, Contribution Net Income Comprehensive September 30, Name of Entity Interest 2019 /Acquisition (Loss) Income 2020 Law Enterprise 34.05 % $ (204,964) $ — $ (232,274) $ 16,642 $ (420,596) Law Broker 34.05 % 19,536,104 — 3,610,495 748,243 23,894,842 Uniwill 50.00 % — 1,547,229 (993,938) 20 553,311 Rays 10.00 % — 1,019 (3,328) — (2,309) PFAL 49.00 % 351,278 — 59,244 881 411,403 MKI 49.00 % 283 — (1,016) — (733) PA Taiwan 49.00 % (167,531) — 5,931 211 (161,389) PTC Nanjing 49.00 % (2,644) — 1,446 1,198 — Total $ 19,512,526 $ 1,548,248 $ 2,446,560 $ 767,195 $ 24,274,529 % of Non- Other Controlling December 31, Net Income Comprehensive December 31, Name of Entity Interests 2018 (Loss) Income (Loss) Dividends 2019 Law Enterprise 34.05 % $ (72,557) $ (147,948) $ 15,541 $ — $ (204,964) Law Broker 34.05 % 16,149,662 2,985,723 400,719 — 19,536,104 PFAL 49.00 % 436,742 7,086 1,265 (93,815) 351,278 MKI 49.00 % (2,630) 2,913 — — 283 PA Taiwan 49.00 % (157,762) (9,694) (75) — (167,531) PTC Nanjing 49.00 % (2,411) (139) (94) — (2,644) Total $ 16,351,044 $ 2,837,941 $ 417,356 $ (93,815) $ 19,512,526 Uniwill issued a total of 9,608 preferred shares to Cyun-Jhan and Jian-Zao for cash pursuant to the JV Agreement entered on November 15, 2019 after the performance goals of first stage were achieved on February 10, 2020 (the “Grant Date”). The preferred stocks issued have voting rights at 1 share to 1,000 voting rights in shareholder’s meeting, and rights of participating in the daily operating of Uniwill and to receive 50% of earnings of the operating subsidiary. In addition, the holders of the preferred stocks are eligible to convert the preferred stock to common stock of Uniwill at a ratio of 1 preferred share to 1,000 common shares upon the achievement of the performance goals of stage two set forth in the JV Agreement. Based on ASC 718, the Company determined that the fair market value of 9,608 shares of convertible preferred stock was $1,547,229 on the Grant Date valuated by an independent third-party valuation firm using the probability-based recognition approach. Nil and $1,547,229 compensation cost was recognized after cash surrendered for the three and nine months ended September 30, 2020 as a result. |
INCOME TAX
INCOME TAX | 9 Months Ended |
Sep. 30, 2020 | |
INCOME TAX | |
INCOME TAX | NOTE 12 – INCOME TAX The following table reconciles the Company’s statutory tax rates to effective tax rates for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, 2020 2019 US statutory rate 21 % 21 % Tax rate difference (1) % (1) % Income tax on undistributed earnings 5 % 4 % Change in valuation allowance — % 5 % Utilization of deferred tax assets not previously recognized — % (3) % Withholding taxes 5 % — % Provision for uncertain tax position (5) % — % True up of prior year income tax (1) % 2 % Other 1 % — % Effective tax rate 25 % 28 % Nine Months Ended September 30, 2020 2019 US statutory rate 21 % 21 % Tax rate difference (1) % (1) % Income tax on undistributed earnings 6 % 4 % Change in valuation allowance 5 % 3 % Non-deductible and non-taxable items 4 % — % Utilization of deferred tax not recognized in prior year — % (1) % Withholding taxes 3 % — % True up of prior year income tax (3) % — % Other 1 % — % Effective tax rate 36 % 26 % The Company’s income tax expense is mainly generated by its subsidiaries in Taiwan. The Company’s subsidiaries in Taiwan are subject to the statutory tax rate on income reported in the statutory financial statements after appropriate adjustments at 20% and 5% of the tax on any undistributed earnings according to the Income Tax Law of Taiwan. As of September 30, 2020 and December 31, 2019, the Company had current tax payable of $2,484,895 and $2,230,793 for Taiwan income tax, respectively. The Company had previously estimated and recorded an uncertain tax position related to withholding tax matters. During the third quarter of 2020, the Company received an assessment letter from National Taxation Bureau of Taiwan, which requires the Company to remit a supplementary tax payment of $281,605 for such matters, and the amount was fully paid in September 2020. For the three and nine months ended September 30, 2020, the Company recognized interest and penalties of nil and approximately $178,000, in general and administrative expenses. WFOE and the Company’s Consolidated Affiliated Entities (“CAE”) in PRC are governed by the Income Tax Law of PRC concerning private-run enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriate adjustments. One of our CAE in Jiangsu province was levied at 10% of total revenue instead of net income according to the requirement of local tax authorities prior to May 2019 and currently is subject to tax at 25% on income reported in the statutory financial statements after appropriate adjustment. WFOE and CAE had no income tax expenses for the three and nine months ended September 30, 2020 and 2019 due to the net operating losses generated in the previous years. The Company’s subsidiaries in Hong Kong are governed by the Inland Revenue Ordinance Tax Law of Hong Kong and are generally subject to a profit tax at the rate of 8.25% on the estimated assessable profits. As of September 30, 2020 and December 31, 2019, the Company had current tax payable of nil and $56,993 for Hong Kong income tax, respectively. The Company is subject to the statutory rate of 21% in the U.S. federal jurisdiction. The Company had no income tax expense for the three and nine months ended September 30, 2020 and 2019 due to the loss positions. For the three and nine months ended September 30, 2020 and 2019, the Company did not recognize any GILTI tax as no GILTI tax obligation existed. The Company recognized a one-time transition tax of $1,199,195 in the year of 2018 based on the Company’s total post-1986 earnings and profits (“E&P”) that it previously deferred from U.S. income tax. As of September 30, 2020, and December 31, 2019, the Company had current tax payable of $98,757 and $101,518 and noncurrent tax payable of $719,515 and $815,451 associated with the one-time transition tax. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), P.L. 116-136, was passed into law, amending portions of certain relevant US tax laws. The CARES Act includes a number of federal income tax law changes, including, but not limited to: 1) permitting net operating loss carrybacks to offset 100% of taxable income for taxable years beginning before 2021, 2) accelerating alternative minimum tax credit refunds, 3) temporarily increasing the allowable business interest deduction from 30% to 50% of adjusted taxable income, and 4) providing a technical correction for depreciation related to qualified improvement property. The Company does not believe that the CARES Act will have a material impact on the Company's consolidated financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS Due to Related Parties The following summarizes the Company’s loans payable to related parties as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Due to Mr. Mao (CEO and Principal shareholder of the Company) $ 102,922 $ 373,183 Due to Ms. Lu (A shareholder of Anhou) 75,381 85,074 Others 12,630 4,602 Total $ 190,933 $ 462,859 Due to Mr. Mao Amounts due to Mr. Mao were associated with funding provided by Mr. Mao for the formation of our subsidiaries in China in 2011. As of September 30, 2020 and December 31, 2019, due to Mr. Mao in the respective amounts of $102,922 and $373,183 was non-interesting bearing and payable on demand. Due to Ms. Lu Due to Ms. Lu were borrowings from Ms. Lu to support Anhou’s business operation. As of September 30, 2020 and December 31, 2019, due to Ms. Lu in the respective amounts of $75,381 and $85,074 was non-interesting bearing and payable on demand. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 14– COMMITMENTS AND CONTINGENCIES Operating Leases See future minimum annual lease payments in Note 10. Time Deposits Pledged as Collateral See time deposits pledged as collateral in Note 4 and 5. Legal Proceedings On December 20, 2018, the Company and one of the Company’s former employees, agreed to settle fraud charges brought by the SEC relating to a scheme to manipulate the Company’s trading volume for the purpose of obtaining a listing on Nasdaq. Neither the Company nor the former employee realized financial gain from the scheme. Both the Company and the former employee agreed to the entry of a final judgment entered on January 18, 2019 that enjoins them from violating the charged provisions of the federal securities laws, orders the Company to comply with its undertaking to retain an independent compliance monitor for a period of not less than one year. The SEC did not seek a monetary penalty against the Company and there is no financial impact to the Company. On April 10, 2020, the Company submitted a written certification (the “Certification”) to the SEC of its compliance with the undertaking indicated by the Final Judgment entered into on January 18, 2019 in front of the United States District Court for the Southern District of New York (SEC v. China United Ins. Serv., Inc., No. 18 Civ. 12055, Consent of Defendant China United Insurance Service, Inc. (ECF No. 3-1) (S.D.N.Y Dec. 20, 2018)) requiring the Company to retain an independent compliance monitor (“Independent Monitor”) for a period of not less than one year. The Independent Monitor was mandated to review and evaluate the Company’s commitment to and implementation of a revised compliance program and to submit a final report to the SEC with respect to these matters. The Company reviewed the Independent Monitor’s final report submitted to the SEC on December 23, 2019 and confirmed in its Certification that, to the best knowledge of the Company, the factual content of the final report was true and accurate as of the date of such report. Appointment Agreement On December 21, 2018, Law Broker entered into an appointment agreement with Shu-Fen, Lee (“Ms. Lee”), pursuant to which, she serves as the president of Law Broker from December 21, 2018 to December 20, 2021. Ms. Lee’s primary responsibilities include 1) overall business planning, 2) implementation of resolution of the shareholders’ meeting or the board of directors, 3) the appointment and dismissal of the Law Broker’s employees and sales professionals, except for internal auditors, 4) financial management and application, 5) being the representative of Law Broker, 6) other matters assigned by the board of directors. According to the agreement, Ms. Lee’s compensation plan include: 1) base salary, 2) managerial allowance, 3) surplus bonus based on 1.25% of Law Broker’s income after tax, and 4) annual year-end bonus. For the three and nine months ended September 30, 2020, the Company has recorded the compensation expense of $86,240 and $164,095 under the appointment agreement, respectively. For the three and nine months ended September 30, 2019, the Company has recorded the compensation expense of $89,408 and $125,954 under the appointment agreement, respectively. Engagement Agreement On May 10, 2016, Law Broker entered into an engagement agreement with Hui-Hsien Chao ("Ms. Chao"), pursuant to which, she serves as the general manager of Law Broker from December 29, 2015 to December 28, 2018. The engagement agreement with Ms. Chao was renewed in 2019 and her service period has extended to December 20, 2021. Ms. Chao's primary responsibilities are to assist Law Broker in operating and managing insurance agency business. According to the engagement agreement, Ms. Chao's Bonus plans include: 1) execution, 2) long-term service fees, 3) pension and 4) non-competition. The payment of such bonuses will only occur upon satisfaction of certain condition and subject to the terms in the engagement agreement. Ms. Chao acts as the general manager or equivalent position of Law Broker for a term of at least three years. For the three and nine months ended September 30, 2020, the Company has recorded the compensation expense of $189,333 and $273,424 under the engagement agreement, respectively. For the three and nine months ended September 30, 2019, the Company has recorded the compensation expense of $213,190 and $375,718 under the engagement agreement, respectively. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2020 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | NOTE 15 – SEGMENT REPORTING The geographical distributions of the Company's financial information for the three months ended September 30, 2020 and 2019 were as follows: Three Months Ended September 30, Geographical Areas 2020 2019 Revenue Taiwan $ 31,677,340 $ 21,053,131 PRC 1,801,064 1,965,552 Hong Kong 124,879 248,152 Elimination adjustment (367,331) 17 Total revenue $ 33,235,952 $ 23,266,852 Income from operations Taiwan $ 3,983,680 $ 3,181,981 PRC 156,417 45,213 Hong Kong 72,425 179,428 Elimination adjustment 1,123,267 34,188 Total income from operations $ 5,335,789 $ 3,440,810 Net income Taiwan $ 3,743,338 $ 2,180,558 PRC 191,636 62,290 Hong Kong 87,896 151,941 Elimination adjustment 41,033 4,792 Total net income $ 4,063,903 $ 2,399,581 The geographical distributions of the Company’s financial information for the nine months ended September 30, 2020 and 2019 were as follows: Nine Months Ended September 30, Geographical Areas 2020 2019 Revenue Taiwan $ 87,096,588 $ 57,036,548 PRC 4,978,500 6,749,851 Hong Kong 244,065 671,061 Elimination adjustment (1,118,237) (7,466) Total revenue $ 91,200,916 $ 64,449,994 Income from operations Taiwan $ 6,051,545 $ 7,112,388 PRC 126,864 325,018 Hong Kong 104,817 426,774 Elimination adjustment 1,257,593 104,363 Total income from operations $ 7,540,819 7,968,543 Net income Taiwan $ 4,874,683 $ 5,666,549 PRC 155,885 329,141 Hong Kong 120,907 364,074 Elimination adjustment 83,911 11,099 Total net income $ 5,235,386 $ 6,370,863 The geographical distribution of the Company’s financial information as of September 30, 2020 and December 31, 2019 were as follows: Geographical Areas September 30, 2020 December 31, 2019 Long-lived assets Taiwan $ 2,076,095 $ 1,280,728 PRC 101,162 124,443 Hong Kong 1,794 602 Elimination adjustment (3,007) (2,907) Total long-lived assets $ 2,176,044 $ 1,402,866 Reportable assets Taiwan $ 161,018,794 $ 144,663,045 PRC 12,863,362 12,349,634 Hong Kong 892,496 800,746 Elimination adjustment (76,446,594) (68,571,003) Total reportable assets $ 98,328,058 $ 89,242,422 Capital investment Taiwan $ 1,239,610 $ 602,442 PRC 9,175 57,569 Hong Kong 1,576 — Total capital investments $ 1,250,361 $ 660,011 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date these condensed consolidated financial statements were issued and determine that there were no subsequent events or transactions that require recognition or disclosures in the condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of China United, its subsidiaries and variable interest entities as shown in the corporate structure in Note 1. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the consolidated financial statements for prior year to the current year’s presentation. Such reclassifications have no effect on net income as previously reported. |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included. Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2019, which were included in the Company’s 2019 Annual Report on Form 10-K (“2019 Form 10-K”). The accompanying consolidated balance sheet as of December 31, 2019, has been derived from the Company’s audited consolidated financial statements as of that date. |
Use of Estimates | Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable includes commission receivables stated at net realizable values. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary at each quarter-end. Management reviews the composition of accounts receivable and analyzes the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. No allowance was deemed necessary as of September 30, 2020 and December 31, 2019. |
Foreign Currency Transactions | Foreign Currency Transactions The Company’s financial statements are presented in U.S. dollars ($), which is the Company’s reporting and functional currency. The functional currencies of the Company’s subsidiaries are NTD, RMB and HKD. The resulting translation adjustments are reported under other comprehensive income in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 220 (“ASC 220”), “Reporting Comprehensive Income” The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD, RMB and HKD into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for condensed consolidated financial statements are as follows: Average Rate for the Nine Months Ended September 30, 2020 2019 New Taiwan dollar (NTD) NTD 29.770854 NTD 31.032055 China yuan (RMB) RMB 6.994085 RMB 6.861782 Hong Kong dollar (HKD) HKD 7.757236 HKD 7.837965 United States dollar ($) $ 1.000000 $ 1.000000 Exchange Rate at September 30, 2020 December 31, 2019 New Taiwan dollar (NTD) NTD 28.953074 NTD 29.953143 China yuan (RMB) RMB 6.801266 RMB 6.966764 Hong Kong dollar (HKD) HKD 7.749884 HKD 7.787223 United States dollar ($) $ 1.000000 $ 1.000000 |
Earnings (Loss) Per Share | Earnings Per Share Basic earnings per common share (“EPS”) is computed by dividing net income attributable to the common shareholders of the Company by the weighted-average number of common shares outstanding. Diluted EPS is computed in the same manner as basic EPS, except the number of shares includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued. As the holders of preferred stock of the Company are entitled to share equally with the holders of common stock, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the board of directors, the preferred stock is treated as a participating security. When calculating the basic earnings per common share, the two-class method is used to allocate earnings to common stock and participating security as required by FASB ASC Topic 260, “Earnings Per Share”. As of September 30, 2020 and 2019, the Company did not have any potentially dilutive instrument. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which 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. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels 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 liabilities, 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. The following fair value hierarchy tables present information about the Company's assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019: September 30, 2020 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Total time deposits $ 46,890,005 $ — $ — $ 46,890,005 Marketable securities : Mutual funds 1,214,712 — — 1,214,712 Long-term investments: Government bonds held for available-for-sale — 104,165 — 104,165 REITs 1,352,533 — — 1,352,533 Total assets measured at fair value $ 49,457,250 $ 104,165 $ — $ 49,561,415 December 31, 2019 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Total cash equivalents and time deposits $ 40,194,850 $ — $ — $ 40,194,850 Marketable securities : Mutual funds 290,153 — — 290,153 Long-term investments: Government bonds held for available -for -sale — 101,203 — 101,203 REITs 1,308,711 — — 1,308,711 Total assets measured at fair value $ 41,793,714 $ 101,203 $ — $ 41,894,917 The carrying amounts of current financial assets and liabilities in the consolidated balance sheets for cash equivalents and time deposits approximate fair value due to the short-term duration of those instruments. During the nine months ended September 30, 2020, there were no assets or liabilities Marketable securities and long-term investments in REITs – The fair values of mutual funds and REITs were valued based on quoted market prices in active markets. Government bonds – The fair value of government bonds is valued based on theoretical bond price in the Taipei Exchange. According to Taiwan Regulations Governing Deposit of Bond and Acquirement of Insurance by Insurance Agents, Insurance Brokers and Insurance Surveyors (“RGDBAI”) Article 3 and 4, Law Broker is required to maintain a minimum of NTD 3,000,000 ($103,616 and $100,156 as of September 30, 2020 and December 31, 2019, respectively) restricted balance in a separate account or government bonds issued by the central government in order to maintain its insurance license. The government bonds will mature on March 17, 2021 and the amortized cost of the bonds is $103,742 (NTD 3,003,650) and $100,479 (NTD 3,009,674) as of September 30, 2020 and December 31, 2019, respectively. The Company will purchase a similar investment after the maturity of the bonds to maintain the insurance license. |
Concentration of Risk | Concentration of Risk The Company maintains cash with banks in the USA, People’s Republic of China (“PRC" or "China”), Hong Kong, and Taiwan. Should any bank holding cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Taiwan, a depositor has up to NTD3,000,000 insured by Central Deposit Insurance Corporation (“CDIC”). In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In Hong Kong, a depositor has up to HKD500,000 insured by Hong Kong Deposit Protection Board (“DPB”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”). Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, time deposits, restricted cash, register capital deposits and accounts receivable. As of September 30, 2020 and December 31, 2019, approximately $2,483,000 and $2,293,000 of the Company’s cash and cash equivalents, time deposits, restricted cash equivalents and register capital deposits held by financial institutions, was insured, and the remaining balance of approximately $60,540,000 and $50,108,000, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have an allowance for doubtful accounts. For the three months ended September 30, 2020 and 2019, the Company’s revenues from sale of insurance policies underwritten by these companies were: Three Months Ended September 30, 2020 2019 % of Total % of Total Amount Revenue Amount Revenue Taiwan Life Insurance Co., Ltd. $ 8,435,924 25 % $ 6,048,897 26 % TransGlobe Life Insurance Inc. 8,160,190 25 % 2,952,262 13 % Farglory Life Insurance Co., Ltd. 4,157,250 13 % 3,662,473 16 % For the nine months ended September 30, 2020 and 2019, the Company’s revenues from sale of insurance policies underwritten by these companies were: Nine Months Ended September 30, 2020 2019 % of Total % of Total Amount Revenue Amount Revenue TransGlobe Life Insurance Inc. $ 20,012,602 22 % $ 7,927,576 12 % Taiwan Life Insurance Co., Ltd. 19,656,521 22 % 13,589,908 21 % Farglory Life Insurance Co., Ltd. 11,120,320 12 % 12,347,817 19 % As of September 30, 2020 and December 31, 2019, the Company’s accounts receivable from these companies were: September 30, 2020 December 31, 2019 % of Total % of Total Accounts Accounts Amount Receivable Amount Receivable TransGlobe Life Insurance Inc. $ 3,668,147 24 % $ 4,239,621 19 % Taiwan Life Insurance Co., Ltd 2,938,229 19 % 4,012,914 18 % Farglory Life Insurance Co., Ltd. 2,111,619 14 % 2,664,140 12 % AIA International Limited Taiwan Branch 1,472,303 10 % 2,447,051 11 % Shin Kong Life Insurance Co., Ltd. 743,251 5 % 3,586,795 16 % The Company’s operations are in the PRC, Hong Kong and Taiwan. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, foreign currency exchange and legal environments in the PRC, Hong Kong and Taiwan, and by the state of each economy. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, Hong Kong and Taiwan, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things. |
Stock-based Compensation | Stock-Based Compensation The Company accounts for equity-based compensation cost in accordance with ASC 718, Compensation-Stock Compensation |
Income Taxes | Income Taxes The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that the deferred tax assets will not be realized. When tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of operations and other comprehensive income (loss). |
New Accounting Pronouncements and Other Guidance | New Accounting Pronouncements and Other Guidance Credit Losses In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations. Income Tax In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which is intended to simplify various aspects related to accounting for income taxes. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The standard will be adopted upon the effective date for us beginning January 1, 2021. We are currently evaluating the effects of the standard on our consolidated financial statements and related disclosures. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions in which the reference LIBOR or another reference rate are expected to be discontinued as a result of the Reference Rate Reform. The standard is effective for all entities. The standard may be adopted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 through December 31, 2022. We are currently evaluating the effects of the standard on our consolidated financial statements and related disclosures. The management does not believe that other than disclosed above, accounting pronouncements the recently issued but not yet adopted will have a material impact on its financial position, results of operations or cash flows. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Intercompany Foreign Currency Balances | Average Rate for the Nine Months Ended September 30, 2020 2019 New Taiwan dollar (NTD) NTD 29.770854 NTD 31.032055 China yuan (RMB) RMB 6.994085 RMB 6.861782 Hong Kong dollar (HKD) HKD 7.757236 HKD 7.837965 United States dollar ($) $ 1.000000 $ 1.000000 Exchange Rate at September 30, 2020 December 31, 2019 New Taiwan dollar (NTD) NTD 28.953074 NTD 29.953143 China yuan (RMB) RMB 6.801266 RMB 6.966764 Hong Kong dollar (HKD) HKD 7.749884 HKD 7.787223 United States dollar ($) $ 1.000000 $ 1.000000 |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following fair value hierarchy tables present information about the Company's assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019: September 30, 2020 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Total time deposits $ 46,890,005 $ — $ — $ 46,890,005 Marketable securities : Mutual funds 1,214,712 — — 1,214,712 Long-term investments: Government bonds held for available-for-sale — 104,165 — 104,165 REITs 1,352,533 — — 1,352,533 Total assets measured at fair value $ 49,457,250 $ 104,165 $ — $ 49,561,415 December 31, 2019 Fair Value Carrying Level 1 Level 2 Level 3 Value Assets Total cash equivalents and time deposits $ 40,194,850 $ — $ — $ 40,194,850 Marketable securities : Mutual funds 290,153 — — 290,153 Long-term investments: Government bonds held for available -for -sale — 101,203 — 101,203 REITs 1,308,711 — — 1,308,711 Total assets measured at fair value $ 41,793,714 $ 101,203 $ — $ 41,894,917 |
Schedule Of Revenue From Insurance Services | For the three months ended September 30, 2020 and 2019, the Company’s revenues from sale of insurance policies underwritten by these companies were: Three Months Ended September 30, 2020 2019 % of Total % of Total Amount Revenue Amount Revenue Taiwan Life Insurance Co., Ltd. $ 8,435,924 25 % $ 6,048,897 26 % TransGlobe Life Insurance Inc. 8,160,190 25 % 2,952,262 13 % Farglory Life Insurance Co., Ltd. 4,157,250 13 % 3,662,473 16 % For the nine months ended September 30, 2020 and 2019, the Company’s revenues from sale of insurance policies underwritten by these companies were: Nine Months Ended September 30, 2020 2019 % of Total % of Total Amount Revenue Amount Revenue TransGlobe Life Insurance Inc. $ 20,012,602 22 % $ 7,927,576 12 % Taiwan Life Insurance Co., Ltd. 19,656,521 22 % 13,589,908 21 % Farglory Life Insurance Co., Ltd. 11,120,320 12 % 12,347,817 19 % |
Schedule Of Accounts Receivable From Related Parties | As of September 30, 2020 and December 31, 2019, the Company’s accounts receivable from these companies were: September 30, 2020 December 31, 2019 % of Total % of Total Accounts Accounts Amount Receivable Amount Receivable TransGlobe Life Insurance Inc. $ 3,668,147 24 % $ 4,239,621 19 % Taiwan Life Insurance Co., Ltd 2,938,229 19 % 4,012,914 18 % Farglory Life Insurance Co., Ltd. 2,111,619 14 % 2,664,140 12 % AIA International Limited Taiwan Branch 1,472,303 10 % 2,447,051 11 % Shin Kong Life Insurance Co., Ltd. 743,251 5 % 3,586,795 16 % |
CASH, CASH EQUIVALENTS AND RE_2
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS | |
Schedule of Cash, Cash Equivalents and Restricted Cash Equivalents | Cash, cash equivalents and restricted cash equivalents consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Cash and cash equivalents: Cash on hand and in banks $ 13,571,935 $ 11,151,816 Time deposits - with original maturities less than three months (see Note 4) — 1,463,192 13,571,935 12,615,008 Restricted cash – noncurrent 63,779 43,492 Total cash, cash equivalents and restricted cash shown in the statements of cash flows $ 13,635,714 $ 12,658,500 |
TIME DEPOSITS (Tables)
TIME DEPOSITS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
TIME DEPOSITS | |
Schedule of Time Deposits | September 30, 2020 December 31, 2019 Total time deposits $ 46,890,005 $ 40,194,850 Less: Time deposits – with original maturities less than three months (see Note 3) — (1,463,192) Time deposits – original maturities over three months but less than one year $ 46,890,005 $ 38,731,658 |
SHORT-TERM LOANS (Tables)
SHORT-TERM LOANS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
SHORT-TERM LOANS | |
Schedule of short-term debt | The Company’s short-term loans consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Credit facility, O-Bank $ 4,000,000 $ 2,600,000 Credit facility, CUB 5,526,184 — Credit facility, KGI 2,100,000 1,500,000 Credit facility, E. Sun 1,000,000 — Credit facility, FEIB 840,000 2,500,000 Credit facility, CTBC — 1,500,000 Total short-term loans $ 13,466,184 $ 8,100,000 |
COMMISSIONS PAYABLE TO SALES _2
COMMISSIONS PAYABLE TO SALES PROFESSIONALS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
COMMISSIONS PAYABLE TO SALES PROFESSIONALS | |
Schedule of commissions payable to professionals | Commissions payable to sales professionals consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Taiwan $ 10,130,726 $ 12,123,149 PRC 335,479 422,581 Hong Kong — — Total commissions payable to sales professionals $ 10,466,205 $ 12,545,730 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
OTHER CURRENT LIABILITIES | |
Schedule of other current liabilities | Other current liabilities consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Accrued bonus $ 3,602,880 $ 4,961,323 Accrued business tax and tax withholdings 1,452,087 1,262,570 Payroll payable and other benefits 880,457 1,317,367 Accrued tax penalties 185,318 — Other accrued liabilities 1,185,415 2,333,949 Total other current liabilities $ 7,306,157 $ 9,875,209 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
OTHER LIABILITIES | |
Schedule of other noncurrent liabilities | The Company’s other liabilities consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Accrued bonus - noncurrent (Note 7) $ 576,191 $ 471,466 Due to previous shareholders of AHFL 518,080 500,782 Net defined benefit liability 271,418 208,230 Total other liabilities $ 1,365,689 $ 1,180,478 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
REVENUE | |
Schedule of revenue recognition guidance | September 30, 2020 December 31, 2019 Accounts receivable $ 15,309,244 $ 22,541,558 Contract assets – current 3,593,536 — Contract liabilities – current 1,609,155 1,781,975 Contract liabilities – noncurrent 271,375 1,049,258 |
Schedule of recognized of revenue and refund | The following table presents the amounts recognized as revenue and refund for each contract year: Contract Revenue Revenue VAT Refund Refund VAT Year Period Execution Fees Amount Amount Amount Amount First 04/15/2013 - 09/30/2014 NTD 50,000,000 NTD 27,137,958 (1) NTD 1,356,898 NTD 20,481,090 (1) NTD 1,024,054 Second 01/01/2016 - 12/31/2016 NTD 35,000,000 NTD 12,855,000 (2) NTD 642,750 NTD 20,478,333 (2) NTD 1,023,917 Third 01/01/2017 - 12/31/2017 NTD 33,000,000 NTD 12,628,201 (3) NTD 631,410 NTD 18,800,370 (3) NTD 940,019 Fourth 01/01/2018 - 12/31/2018 NTD 33,000,000 NTD 11,228,600 (4) NTD 561,429 NTD 20,199,971 (4) NTD 1,010,000 Fifth 01/01/2019 - 12/31/2019 NTD 33,000,000 NTD 9,481,371 (5) NTD 474,069 NTD 21,947,200 (5) NTD 1,097,360 Sixth 01/01/2020 - 12/31/2020 NTD 33,000,000 NTD 11,213,344 (6) NTD 560,667 NTD 20,215,227 (6) NTD 1,010,762 Seventh 01/01/2021 - 12/31/2021 NTD 33,000,000 NTD — NTD — NTD — NTD — TOTAL NTD 250,000,000 NTD 84,544,474 NTD 4,227,223 NTD 122,122,191 NTD 6,106,112 1) 2) 3) 4) 5) 6) |
LEASE (Tables)
LEASE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
LEASE | |
Schedule of operating lease right-of-use assets and lease liabilities | Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As of September 30, 2020, operating lease right-of-use assets and lease liabilities were as follows: September 30, 2020 December 31, 2019 Right-of-use assets under operating leases $ 5,791,689 $ 5,522,665 Operating lease liabilities – current 2,740,054 2,242,034 Operating lease liabilities – noncurrent 3,008,155 3,048,632 |
Schedule of lease term and discount rate | September 30, 2020 December 31, 2019 Weighted average remaining lease term Operating lease 2.64 years 2.91 years Weighted average discount rate Operating lease 3.04 % 2.85 % |
Schedule of supplemental cash flow information related to leases | Supplemental Cash Flow Information Related to Leases September 30, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows related to operating leases $ 2,497,196 $ 2,655,644 |
Schedule of future minimum rental payments | The minimum future lease payments as of September 30, 2020 are as follows: Amount 2020 (reminder of year) $ 792,888 2021 2,642,057 2022 1,387,905 2023 677,494 2024 442,299 Thereafter 47,115 Total minimum lease payments 5,989,758 Less: Interest (241,549) Present value of future minimum lease payments $ 5,748,209 |
NON-CONTROLLING INTERESTS (Tabl
NON-CONTROLLING INTERESTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
NON-CONTROLLING INTERESTS | |
Schedule of non-controlling interests | Non-controlling interests consisted of the following as of September 30, 2020 and December 31, 2019: % of Non- Other controlling December 31, Contribution Net Income Comprehensive September 30, Name of Entity Interest 2019 /Acquisition (Loss) Income 2020 Law Enterprise 34.05 % $ (204,964) $ — $ (232,274) $ 16,642 $ (420,596) Law Broker 34.05 % 19,536,104 — 3,610,495 748,243 23,894,842 Uniwill 50.00 % — 1,547,229 (993,938) 20 553,311 Rays 10.00 % — 1,019 (3,328) — (2,309) PFAL 49.00 % 351,278 — 59,244 881 411,403 MKI 49.00 % 283 — (1,016) — (733) PA Taiwan 49.00 % (167,531) — 5,931 211 (161,389) PTC Nanjing 49.00 % (2,644) — 1,446 1,198 — Total $ 19,512,526 $ 1,548,248 $ 2,446,560 $ 767,195 $ 24,274,529 % of Non- Other Controlling December 31, Net Income Comprehensive December 31, Name of Entity Interests 2018 (Loss) Income (Loss) Dividends 2019 Law Enterprise 34.05 % $ (72,557) $ (147,948) $ 15,541 $ — $ (204,964) Law Broker 34.05 % 16,149,662 2,985,723 400,719 — 19,536,104 PFAL 49.00 % 436,742 7,086 1,265 (93,815) 351,278 MKI 49.00 % (2,630) 2,913 — — 283 PA Taiwan 49.00 % (157,762) (9,694) (75) — (167,531) PTC Nanjing 49.00 % (2,411) (139) (94) — (2,644) Total $ 16,351,044 $ 2,837,941 $ 417,356 $ (93,815) $ 19,512,526 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
INCOME TAX | |
Schedule of effective income tax rate reconciliation | The following table reconciles the Company’s statutory tax rates to effective tax rates for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, 2020 2019 US statutory rate 21 % 21 % Tax rate difference (1) % (1) % Income tax on undistributed earnings 5 % 4 % Change in valuation allowance — % 5 % Utilization of deferred tax assets not previously recognized — % (3) % Withholding taxes 5 % — % Provision for uncertain tax position (5) % — % True up of prior year income tax (1) % 2 % Other 1 % — % Effective tax rate 25 % 28 % Nine Months Ended September 30, 2020 2019 US statutory rate 21 % 21 % Tax rate difference (1) % (1) % Income tax on undistributed earnings 6 % 4 % Change in valuation allowance 5 % 3 % Non-deductible and non-taxable items 4 % — % Utilization of deferred tax not recognized in prior year — % (1) % Withholding taxes 3 % — % True up of prior year income tax (3) % — % Other 1 % — % Effective tax rate 36 % 26 % |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
RELATED PARTY TRANSACTIONS | |
Schedule of due to related parties | The following summarizes the Company’s loans payable to related parties as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Due to Mr. Mao (CEO and Principal shareholder of the Company) $ 102,922 $ 373,183 Due to Ms. Lu (A shareholder of Anhou) 75,381 85,074 Others 12,630 4,602 Total $ 190,933 $ 462,859 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
SEGMENT REPORTING | |
Schedule of Revenue by Major Customers by Reporting Segments | Three Months Ended September 30, Geographical Areas 2020 2019 Revenue Taiwan $ 31,677,340 $ 21,053,131 PRC 1,801,064 1,965,552 Hong Kong 124,879 248,152 Elimination adjustment (367,331) 17 Total revenue $ 33,235,952 $ 23,266,852 Income from operations Taiwan $ 3,983,680 $ 3,181,981 PRC 156,417 45,213 Hong Kong 72,425 179,428 Elimination adjustment 1,123,267 34,188 Total income from operations $ 5,335,789 $ 3,440,810 Net income Taiwan $ 3,743,338 $ 2,180,558 PRC 191,636 62,290 Hong Kong 87,896 151,941 Elimination adjustment 41,033 4,792 Total net income $ 4,063,903 $ 2,399,581 The geographical distributions of the Company’s financial information for the nine months ended September 30, 2020 and 2019 were as follows: Nine Months Ended September 30, Geographical Areas 2020 2019 Revenue Taiwan $ 87,096,588 $ 57,036,548 PRC 4,978,500 6,749,851 Hong Kong 244,065 671,061 Elimination adjustment (1,118,237) (7,466) Total revenue $ 91,200,916 $ 64,449,994 Income from operations Taiwan $ 6,051,545 $ 7,112,388 PRC 126,864 325,018 Hong Kong 104,817 426,774 Elimination adjustment 1,257,593 104,363 Total income from operations $ 7,540,819 7,968,543 Net income Taiwan $ 4,874,683 $ 5,666,549 PRC 155,885 329,141 Hong Kong 120,907 364,074 Elimination adjustment 83,911 11,099 Total net income $ 5,235,386 $ 6,370,863 |
Schedule of long-lived assets | The geographical distribution of the Company’s financial information as of September 30, 2020 and December 31, 2019 were as follows: Geographical Areas September 30, 2020 December 31, 2019 Long-lived assets Taiwan $ 2,076,095 $ 1,280,728 PRC 101,162 124,443 Hong Kong 1,794 602 Elimination adjustment (3,007) (2,907) Total long-lived assets $ 2,176,044 $ 1,402,866 Reportable assets Taiwan $ 161,018,794 $ 144,663,045 PRC 12,863,362 12,349,634 Hong Kong 892,496 800,746 Elimination adjustment (76,446,594) (68,571,003) Total reportable assets $ 98,328,058 $ 89,242,422 Capital investment Taiwan $ 1,239,610 $ 602,442 PRC 9,175 57,569 Hong Kong 1,576 — Total capital investments $ 1,250,361 $ 660,011 |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) | May 27, 2020USD ($)shares | May 27, 2020TWD ($)shares | Jun. 04, 2019USD ($) | Jun. 04, 2019TWD ($) | Sep. 30, 2020USD ($)shares | Sep. 30, 2020USD ($)itemshares | Sep. 30, 2019USD ($) | Nov. 15, 2019USD ($) | Nov. 15, 2019TWD ($) | Jul. 31, 2019 | May 31, 2019USD ($) | May 31, 2019TWD ($) |
Compensation cost in connection with issuance of preferred stock on the Company's subsidiary, Uniwill, to nonemployees | $ 1,547,229 | $ 0 | ||||||||||
Loss on disposal of a subsidiary | 5,645 | $ 0 | ||||||||||
Prime Management Consulting (Nanjing) Co., Limited | ||||||||||||
Loss on disposal of a subsidiary | $ 5,645 | $ 5,645 | ||||||||||
Uniwill | ||||||||||||
Increase In amount of Paid Up Capital | $ 13,300,000 | $ 400,000,000 | ||||||||||
Preferred Shares Issued | shares | 9,608 | |||||||||||
Voting rights per share | item | 1,000 | |||||||||||
Percentage of earning receivable from operating subsidiary | 50.00% | |||||||||||
Compensation cost in connection with issuance of preferred stock on the Company's subsidiary, Uniwill, to nonemployees | $ 0 | $ 1,547,229 | ||||||||||
Preferred stock, conversion ratio | shares | 1,000 | 1,000 | 1,000 | 1,000 | ||||||||
Rays Technology Corporation ("Rays") | ||||||||||||
Percentage of remaining ownership interest acquired | 90.00% | 90.00% | ||||||||||
Consideration for insurance brokerage licenses | $ 9,177 | $ 270,000 | ||||||||||
Number of shares acquired | shares | 27,000 | 27,000 | ||||||||||
Ilife | AHFL | ||||||||||||
Ownership percentage | 93.75% | 93.75% | ||||||||||
Percentage of remaining ownership interest acquired | 6.25% | |||||||||||
AIlife | Uniwill | ||||||||||||
Increase In amount of Paid Up Capital | $ 3,300,000 | $ 3,300,000 | ||||||||||
AHFL | Ilife | ||||||||||||
Capital contributions | $ 485,909 | $ 15,000,000 | ||||||||||
Ilife | Uniwill | ||||||||||||
Consideration for insurance brokerage licenses | $ 14,535 | $ 450,000 | ||||||||||
Legal deposits | $ 6,455 | $ 200,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Details) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
New Taiwan dollar (NTD) | |||
Foreign Currency Average Rate Translation | 29.770854 | 31.032055 | |
Foreign Currency Exchange Rate, Translation | 28.953074 | 29.953143 | |
China yuan (RMB) | |||
Foreign Currency Average Rate Translation | 6.994085 | 6.861782 | |
Foreign Currency Exchange Rate, Translation | 6.801266 | 6.966764 | |
Hong Kong dollar (HKD) | |||
Foreign Currency Average Rate Translation | 7.757236 | 7.837965 | |
Foreign Currency Exchange Rate, Translation | 7.749884 | 7.787223 | |
United States dollar ($) | |||
Foreign Currency Average Rate Translation | 1 | 1 | |
Foreign Currency Exchange Rate, Translation | 1 | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value of Financial Instruments (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Total time deposits | $ 46,890,005 | $ 40,194,850 |
Total cash equivalents and time deposits | 40,194,850 | |
Marketable securities | ||
Mutual funds | 1,214,712 | 290,153 |
Long-term investment: | ||
Government bonds held for available-for-sale | 104,165 | 101,203 |
REITs | 1,352,533 | 1,308,711 |
Total assets measured at fair value | 49,561,415 | 41,894,917 |
Fair Value, Inputs, Level 1 | ||
Total time deposits | 46,890,005 | |
Total cash equivalents and time deposits | 40,194,850 | |
Marketable securities | ||
Mutual funds | 1,214,712 | 290,153 |
Long-term investment: | ||
REITs | 1,352,533 | 1,308,711 |
Total assets measured at fair value | 49,457,250 | 41,793,714 |
Fair Value, Inputs, Level 2 | ||
Long-term investment: | ||
Government bonds held for available-for-sale | 104,165 | 101,203 |
Total assets measured at fair value | $ 104,165 | $ 101,203 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk ( Accounts Receivable) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Taiwan Life Insurance Co., Ltd | |||||
Concentration Risk [Line Items] | |||||
Financial Services Revenues | $ 8,435,924 | $ 6,048,897 | $ 19,656,521 | $ 13,589,908 | |
Financial Services Percentage | 25.00% | 26.00% | 22.00% | 21.00% | |
Accounts Receivable, Net | $ 2,938,229 | $ 2,938,229 | $ 4,012,914 | ||
Percentage of accounts receivable | 19.00% | 19.00% | 18.00% | ||
TransGlobe Life Insurance Inc | |||||
Concentration Risk [Line Items] | |||||
Financial Services Revenues | $ 8,160,190 | $ 2,952,262 | $ 20,012,602 | $ 7,927,576 | |
Financial Services Percentage | 25.00% | 13.00% | 22.00% | 12.00% | |
Accounts Receivable, Net | $ 3,668,147 | $ 3,668,147 | $ 4,239,621 | ||
Percentage of accounts receivable | 24.00% | 24.00% | 19.00% | ||
Farglory Life Insurance Co., Ltd. | |||||
Concentration Risk [Line Items] | |||||
Financial Services Revenues | $ 4,157,250 | $ 3,662,473 | $ 11,120,320 | $ 12,347,817 | |
Financial Services Percentage | 13.00% | 16.00% | 12.00% | 19.00% | |
Accounts Receivable, Net | $ 2,111,619 | $ 2,111,619 | $ 2,664,140 | ||
Percentage of accounts receivable | 14.00% | 14.00% | 12.00% | ||
AIA International Limited Taiwan Branch | |||||
Concentration Risk [Line Items] | |||||
Accounts Receivable, Net | $ 1,472,303 | $ 1,472,303 | $ 2,447,051 | ||
Percentage of accounts receivable | 10.00% | 10.00% | 11.00% | ||
Shin Kong Life Insurance Co., Ltd. | |||||
Concentration Risk [Line Items] | |||||
Accounts Receivable, Net | $ 743,251 | $ 743,251 | $ 3,586,795 | ||
Percentage of accounts receivable | 5.00% | 5.00% | 16.00% |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 9 Months Ended | |||||
Sep. 30, 2020USD ($) | Sep. 30, 2020TWD ($) | Sep. 30, 2020CNY (¥) | Sep. 30, 2020HKD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019TWD ($) | |
Disclosure of Summary Of Significant Accounting Policies | ||||||
Assets transferred between levels | $ 0 | |||||
Liabilities transferred between levels | 0 | |||||
Regulatory Requirements Minimum Amount | 103,616 | $ 3,000,000 | $ 100,156 | $ 3,000,000 | ||
Cost or Amortized Cost | 103,742 | $ 3,003,650 | 100,479 | $ 3,009,674 | ||
Cash, Uninsured Amount | $ 250,000 | |||||
Tax Benefit Percentage Expected to be Realized Upon Settlement | 50.00% | 50.00% | 50.00% | 50.00% | ||
Taiwan | ||||||
Disclosure of Summary Of Significant Accounting Policies | ||||||
Cash, FDIC Insured Amount | $ 3,000,000 | |||||
CHINA | ||||||
Disclosure of Summary Of Significant Accounting Policies | ||||||
Cash, FDIC Insured Amount | ¥ | ¥ 500,000 | |||||
HONG KONG | ||||||
Disclosure of Summary Of Significant Accounting Policies | ||||||
Cash, FDIC Insured Amount | $ 500,000 | |||||
Credit concentration | ||||||
Disclosure of Summary Of Significant Accounting Policies | ||||||
Cash, FDIC Insured Amount | $ 2,483,000 | 2,293,000 | ||||
Cash, Uninsured Amount | $ 60,540,000 | $ 50,108,000 |
CASH, CASH EQUIVALENTS AND RE_3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS | ||||
Cash on hand and in banks | $ 13,571,935 | $ 11,151,816 | ||
Time deposits - with original maturities less than three months (see Note 4) | 0 | 1,463,192 | ||
Total cash and cash equivalents | 13,571,935 | 12,615,008 | ||
Restricted cash - noncurrent | 63,779 | 43,492 | ||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | $ 13,635,714 | $ 12,658,500 | $ 15,590,658 | $ 20,639,771 |
TIME DEPOSITS (Details)
TIME DEPOSITS (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
TIME DEPOSITS | ||
Total time deposits | $ 46,890,005 | $ 40,194,850 |
Less: Time deposits - with original maturities less than three months | 0 | (1,463,192) |
Time deposits - original maturities over three months but less than one year | $ 46,890,005 | $ 38,731,658 |
TIME DEPOSITS - Additional Info
TIME DEPOSITS - Additional Information (Details) $ in Millions | Sep. 30, 2020USD ($) | Sep. 30, 2020TWD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019TTD ($) |
TIME DEPOSITS | ||||
Restricted Time Deposits | $ 14,786,148 | $ 11,920,632 | ||
Time Deposits, Pledged As Collateral For Credit Card | 34,539 | $ 1 | ||
Restricted Cash | $ 14,751,609 | $ 11,920,632 |
SHORT-TERM LOANS (Details)
SHORT-TERM LOANS (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Short-term Debt [Line Items] | ||
Total short term loans | $ 13,466,184 | $ 8,100,000 |
Credit facility, O-Bank | ||
Short-term Debt [Line Items] | ||
Line of Credit, Current | 4,000,000 | 2,600,000 |
Credit facility, CUB | ||
Short-term Debt [Line Items] | ||
Line of Credit, Current | 5,526,184 | |
Credit facility, KGI | ||
Short-term Debt [Line Items] | ||
Line of Credit, Current | 2,100,000 | 1,500,000 |
Credit Facility E Sun Bank | ||
Short-term Debt [Line Items] | ||
Line of Credit, Current | 1,000,000 | |
Credit facility, FEIB | ||
Short-term Debt [Line Items] | ||
Line of Credit, Current | $ 840,000 | 2,500,000 |
Credit facility, CTBC | ||
Short-term Debt [Line Items] | ||
Line of Credit, Current | $ 1,500,000 |
SHORT-TERM LOANS - Additional i
SHORT-TERM LOANS - Additional information (Details) ¥ in Millions | Oct. 22, 2020USD ($) | Oct. 02, 2020USD ($) | Apr. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Oct. 22, 2020TWD ($) | Sep. 30, 2020TWD ($) | Sep. 30, 2020CNY (¥) | Aug. 31, 2020USD ($) | Aug. 31, 2020TWD ($) | Jun. 03, 2020USD ($) | Apr. 30, 2020TWD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019TWD ($) | Dec. 31, 2019CNY (¥) |
Short-term Debt [Line Items] | |||||||||||||||||
Short-term Debt | $ 13,466,184 | $ 13,466,184 | $ 8,100,000 | ||||||||||||||
AHFL | Cathay United Bank Company Ltd [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 8,500,000 | $ 250,000,000 | |||||||||||||||
Short-term Debt | $ 5,526,184 | $ 5,526,184 | $ 160,000,000 | ||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 1.20% | 1.20% | 1.20% | 1.20% | |||||||||||||
Cash Collateral for Borrowed Securities | $ 5,526,184 | $ 5,526,184 | |||||||||||||||
Adjustable rates for loans | AHFL | Cathay United Bank Company Ltd [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Debt Instrument, Description of Variable Rate Basis | 0.41% | ||||||||||||||||
1 month TAIBOR rate | AHFL | Cathay United Bank Company Ltd [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Debt Instrument, Description of Variable Rate Basis | 0.8% | ||||||||||||||||
O Bank [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 3,300,000 | 4,000,000 | 4,000,000 | $ 100,000,000 | |||||||||||||
Short-term Debt | $ 4,000,000 | $ 4,000,000 | $ 0 | $ 2,600,000 | $ 0 | ||||||||||||
Debt Instrument, Description of Variable Rate Basis | 0.75% | 0.5% | |||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 1.18% | 1.18% | 1.18% | 1.18% | 2.83% | 2.83% | 2.83% | ||||||||||
Cash Collateral for Borrowed Securities | $ 4,766,333 | $ 4,766,333 | $ 138,000,000 | $ 3,038,079 | $ 91,000,000 | ||||||||||||
CTBC Bank [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,500,000 | 1,500,000 | $ 3,300,000 | $ 100,000,000 | |||||||||||||
Short-term Debt | $ 0 | $ 0 | $ 0 | 1,500,000 | 0 | ||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 3.20% | 3.20% | 3.20% | 3.20% | |||||||||||||
Cash Collateral for Borrowed Securities | 1,736,045 | $ 52,000,000 | |||||||||||||||
Interest Expense, Short-term Borrowings | $ 33,443 | $ 64,273 | $ 153,703 | $ 144,416 | |||||||||||||
CTBC Bank [Member] | LIBOR | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Debt Instrument, Description of Variable Rate Basis | 1% | ||||||||||||||||
Eastern International Bank [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 840,000 | $ 840,000 | $ 2,500,000 | ||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 1.83% | 1.83% | 1.83% | 1.83% | 3.05% | 3.05% | 3.05% | ||||||||||
Cash Collateral for Borrowed Securities | $ 1,098,329 | $ 1,098,329 | $ 31,800,000 | $ 3,064,787 | $ 91,800,000 | ||||||||||||
Eastern International Bank [Member] | Law Broker | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 2,600,000 | $ 2,600,000 | $ 80,000,000 | ||||||||||||||
Eastern International Bank [Member] | LIBOR | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Debt Instrument, Description of Variable Rate Basis | 0.85% | ||||||||||||||||
KGI Commercial Bank Co Ltd [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,600,000 | $ 2,100,000 | $ 2,100,000 | $ 1,500,000 | |||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 1.58% | 1.58% | 1.58% | 1.58% | 3.06% | 3.06% | 3.06% | ||||||||||
Cash Collateral for Borrowed Securities | $ 2,357,415 | $ 2,357,415 | $ 36,000,000 | ¥ 7.6 | $ 2,295,061 | $ 36,000,000 | ¥ 7.6 | ||||||||||
Face amount of debt | 1,600,000 | 1,600,000 | $ 50,000,000 | ||||||||||||||
KGI Commercial Bank Co Ltd [Member] | Law Broker | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Cash Collateral for Borrowed Securities | $ 1,786,660 | ¥ 12 | |||||||||||||||
KGI Commercial Bank Co Ltd [Member] | LIBOR | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Debt Instrument, Description of Variable Rate Basis | 0.90% | ||||||||||||||||
E Sun Bank [Member] | |||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000 | ||||||||||||||||
Short-term Debt | $ 1,000,000 | $ 1,000,000 | |||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 1.16% | 1.16% | 1.16% | 1.16% | 1.14% | ||||||||||||
Cash Collateral for Borrowed Securities | $ 1,003,348 | $ 1,003,348 |
COMMISSIONS PAYABLE TO SALES _3
COMMISSIONS PAYABLE TO SALES PROFESSIONALS (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Commissions payable to sales professionals | $ 10,466,205 | $ 12,545,730 |
Taiwan | ||
Commissions payable to sales professionals | 10,130,726 | 12,123,149 |
PRC | ||
Commissions payable to sales professionals | 335,479 | 422,581 |
Hong Kong | ||
Commissions payable to sales professionals | $ 0 | $ 0 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
OTHER CURRENT LIABILITIES | ||
Accrued bonus | $ 3,602,880 | $ 4,961,323 |
Accrued business tax and tax withholdings | 1,452,087 | 1,262,570 |
Payroll payable and other benefits | 880,457 | 1,317,367 |
Accrued tax penalties | 185,318 | 0 |
Other accrued liabilities | 1,185,415 | 2,333,949 |
Total other current liabilities | $ 7,306,157 | $ 9,875,209 |
OTHER CURRENT LIABILITIES - Add
OTHER CURRENT LIABILITIES - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||
Accrued bonus current | $ 3,602,880 | $ 3,602,880 | $ 4,961,323 | ||
Accrued bonus non current | 576,191 | 576,191 | 471,466 | ||
Accrued bonus amount | 2,406,183 | 2,406,183 | 4,057,515 | ||
Other accrued liabilities | 1,185,415 | 1,185,415 | 2,333,949 | ||
Compensation Plan [Member] | |||||
Debt Instrument [Line Items] | |||||
Accrued bonus current | 1,196,697 | 1,196,697 | 903,808 | ||
Accrued bonus non current | 576,191 | 576,191 | $ 471,466 | ||
Bonus expense | $ 157,267 | $ 302,598 | $ 437,519 | $ 501,672 |
OTHER LIABILITIES - Other noncu
OTHER LIABILITIES - Other noncurrent liabilities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
OTHER LIABILITIES | ||
Accrued bonus-noncurrent (Note 7) | $ 576,191 | $ 471,466 |
Due to previous shareholders of AHFL | 518,080 | 500,782 |
Net defined benefit liability | 271,418 | 208,230 |
Total other liabilities | $ 1,365,689 | $ 1,180,478 |
OTHER LIABILITIES - Additional
OTHER LIABILITIES - Additional Information (Details) $ in Millions | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 27, 2019TWD ($) |
OTHER LIABILITIES | |||
Amount due to previous shareholders to AHFL | $ 518,080 | $ 500,782 | $ 15 |
REVENUE - Contract balance (Det
REVENUE - Contract balance (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
REVENUE | ||
Accounts receivable | $ 15,309,244 | $ 22,541,558 |
Contract assets | 3,593,536 | 0 |
Contract liabilities - current | 1,609,155 | 1,781,975 |
Contract liabilities - noncurrent | $ 271,375 | $ 1,049,258 |
REVENUE - Revenue and refund fo
REVENUE - Revenue and refund for each contract (Details) | Jun. 14, 2017TWD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020TWD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2019TWD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020TWD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2019TWD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020TWD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019TWD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018TWD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017TWD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016TWD ($) | Sep. 30, 2020TWD ($) | Dec. 31, 2019TWD ($) | Dec. 31, 2018TWD ($) | Dec. 31, 2017TWD ($) | Dec. 31, 2016TWD ($) | Feb. 23, 2016USD ($) | Feb. 23, 2016TWD ($) | Dec. 03, 2015USD ($) | Dec. 03, 2015TWD ($) | Jun. 10, 2013USD ($) | Jun. 10, 2013TWD ($) |
Basic Business Promotion Fees | $ 33,000,000 | |||||||||||||||||||||||||||||
Revenue Amount | $ 94,493 | $ 2,813,139 | $ 73,691 | $ 2,281,470 | $ 282,491 | $ 8,410,008 | $ 234,852 | $ 7,271,032 | ||||||||||||||||||||||
Contract liabilities - noncurrent | 271,375 | 271,375 | $ 1,049,258 | |||||||||||||||||||||||||||
Contract liabilities - current | $ 1,609,155 | $ 1,609,155 | 1,781,975 | |||||||||||||||||||||||||||
Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Execution Fees | $ 250,000,000 | |||||||||||||||||||||||||||||
Revenue Amount | 84,544,474 | |||||||||||||||||||||||||||||
Revenue VAT Amount | $ 4,227,223 | |||||||||||||||||||||||||||||
Refund Amount | 122,122,191 | |||||||||||||||||||||||||||||
Refund VAT Amount | 6,106,112 | |||||||||||||||||||||||||||||
Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Execution Fees | $ 8,326,700 | $ 250,000,000 | ||||||||||||||||||||||||||||
Revenue Amount | $ 395,488 | $ 11,774,011 | ||||||||||||||||||||||||||||
Refund Amount | $ 11,904,762 | |||||||||||||||||||||||||||||
First Year [Member] | ||||||||||||||||||||||||||||||
Basic Business Promotion Fees | 50,000,000 | |||||||||||||||||||||||||||||
First Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Contract Initiation Date | Apr. 15, 2013 | Apr. 15, 2013 | ||||||||||||||||||||||||||||
Contract Maturity Date | Sep. 30, 2014 | Sep. 30, 2014 | ||||||||||||||||||||||||||||
Execution Fees | 50,000,000 | |||||||||||||||||||||||||||||
Revenue Amount | $ 27,137,958 | |||||||||||||||||||||||||||||
Revenue VAT Amount | 1,356,898 | |||||||||||||||||||||||||||||
Refund Amount | 20,481,090 | |||||||||||||||||||||||||||||
Refund VAT Amount | 1,024,054 | |||||||||||||||||||||||||||||
First Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Revenue Amount | $ 892,742 | $ 27,137,958 | ||||||||||||||||||||||||||||
Second Year [Member] | ||||||||||||||||||||||||||||||
Basic Business Promotion Fees | $ 35,000,000 | |||||||||||||||||||||||||||||
Second Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Contract Initiation Date | Jan. 1, 2016 | Jan. 1, 2016 | ||||||||||||||||||||||||||||
Contract Maturity Date | Dec. 31, 2016 | Dec. 31, 2016 | ||||||||||||||||||||||||||||
Execution Fees | 35,000,000 | |||||||||||||||||||||||||||||
Revenue Amount | $ 12,855,000 | |||||||||||||||||||||||||||||
Revenue VAT Amount | $ 642,750 | |||||||||||||||||||||||||||||
Refund Amount | 20,478,333 | |||||||||||||||||||||||||||||
Refund VAT Amount | 1,023,917 | |||||||||||||||||||||||||||||
Second Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Revenue Amount | $ 422,883 | $ 12,855,000 | ||||||||||||||||||||||||||||
Refund Amount | $ 690,537 | $ 20,478,333 | ||||||||||||||||||||||||||||
Third Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Contract Initiation Date | Jan. 1, 2017 | Jan. 1, 2017 | ||||||||||||||||||||||||||||
Contract Maturity Date | Dec. 31, 2017 | Dec. 31, 2017 | ||||||||||||||||||||||||||||
Execution Fees | 33,000,000 | |||||||||||||||||||||||||||||
Revenue Amount | $ 12,628,201 | |||||||||||||||||||||||||||||
Revenue VAT Amount | $ 631,410 | |||||||||||||||||||||||||||||
Refund Amount | 18,800,370 | |||||||||||||||||||||||||||||
Refund VAT Amount | 940,019 | |||||||||||||||||||||||||||||
Third Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Revenue Amount | $ 415,423 | $ 12,628,201 | ||||||||||||||||||||||||||||
Refund Amount | $ 633,955 | $ 18,800,370 | ||||||||||||||||||||||||||||
Fourth Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Contract Initiation Date | Jan. 1, 2018 | Jan. 1, 2018 | ||||||||||||||||||||||||||||
Contract Maturity Date | Dec. 31, 2018 | Dec. 31, 2018 | ||||||||||||||||||||||||||||
Execution Fees | 33,000,000 | |||||||||||||||||||||||||||||
Revenue Amount | $ 11,228,600 | |||||||||||||||||||||||||||||
Revenue VAT Amount | $ 561,429 | |||||||||||||||||||||||||||||
Refund Amount | 20,199,971 | |||||||||||||||||||||||||||||
Refund VAT Amount | 1,010,000 | |||||||||||||||||||||||||||||
Fourth Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Revenue Amount | $ 372,650 | $ 11,228,600 | ||||||||||||||||||||||||||||
Refund Amount | $ 670,389 | $ 20,199,971 | ||||||||||||||||||||||||||||
Fifth Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Contract Initiation Date | Jan. 1, 2019 | Jan. 1, 2019 | ||||||||||||||||||||||||||||
Contract Maturity Date | Dec. 31, 2019 | Dec. 31, 2019 | ||||||||||||||||||||||||||||
Execution Fees | 33,000,000 | |||||||||||||||||||||||||||||
Revenue Amount | $ 9,481,371 | |||||||||||||||||||||||||||||
Revenue VAT Amount | $ 474,069 | |||||||||||||||||||||||||||||
Refund Amount | 21,947,200 | |||||||||||||||||||||||||||||
Refund VAT Amount | 1,097,360 | |||||||||||||||||||||||||||||
Fifth Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Revenue Amount | 314,953 | $ 9,481,371 | ||||||||||||||||||||||||||||
Refund Amount | $ 729,045 | $ 21,947,200 | ||||||||||||||||||||||||||||
Sixth Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Contract Initiation Date | Jan. 1, 2020 | Jan. 1, 2020 | ||||||||||||||||||||||||||||
Contract Maturity Date | Dec. 31, 2020 | Dec. 31, 2020 | ||||||||||||||||||||||||||||
Execution Fees | 33,000,000 | |||||||||||||||||||||||||||||
Revenue Amount | $ 11,213,344 | |||||||||||||||||||||||||||||
Revenue VAT Amount | $ 560,667 | |||||||||||||||||||||||||||||
Refund Amount | 20,215,227 | |||||||||||||||||||||||||||||
Refund VAT Amount | 1,010,762 | |||||||||||||||||||||||||||||
Seventh Year [Member] | Strategic Alliance Agreement [Member] | ||||||||||||||||||||||||||||||
Contract Initiation Date | Jan. 1, 2021 | Jan. 1, 2021 | ||||||||||||||||||||||||||||
Contract Maturity Date | Dec. 31, 2021 | Dec. 31, 2021 | ||||||||||||||||||||||||||||
Execution Fees | 33,000,000 | |||||||||||||||||||||||||||||
Revenue Amount | $ 0 | |||||||||||||||||||||||||||||
Revenue VAT Amount | $ 0 | |||||||||||||||||||||||||||||
Refund Amount | 0 | |||||||||||||||||||||||||||||
Refund VAT Amount | $ 0 | |||||||||||||||||||||||||||||
AIATW [Member] | ||||||||||||||||||||||||||||||
Refund Amount | $ 530,056 | $ 15,719,185 | $ 160,573 | $ 4,761,905 |
REVENUE - Additional Informatio
REVENUE - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
REVENUE | ||||
Revenue | $ 33,235,952 | $ 23,266,852 | $ 91,200,916 | $ 64,449,994 |
LEASE - Operating lease right-o
LEASE - Operating lease right-of-use assets and lease liabilities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2019 |
LEASE | |||
Right-of-use assets under operating leases | $ 5,791,689 | $ 5,522,665 | $ 4,000,000 |
Operating lease liabilities - current | 2,740,054 | 2,242,034 | |
Operating lease liabilities - noncurrent | $ 3,008,155 | $ 3,048,632 |
LEASE - Lease term and discount
LEASE - Lease term and discount rate (Details) | Sep. 30, 2020 | Dec. 31, 2019 |
LEASE | ||
Weighted average remaining lease term, Operating lease | 2 years 6 months 14 days | 2 years 10 months 28 days |
Weighted average discount rate, Operating lease | 3.04% | 2.85% |
LEASE - Supplemental cash flow
LEASE - Supplemental cash flow information related to leases (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows related to operating leases | $ 2,497,196 | $ 2,655,644 |
LEASE - Minimum future lease pa
LEASE - Minimum future lease payments (Details) - USD ($) | Sep. 30, 2020 | Jan. 01, 2019 |
LEASE | ||
2020 (reminder of year) | $ 792,888 | |
2021 | 2,642,057 | |
2022 | 1,387,905 | |
2023 | 677,494 | |
2024 | 442,299 | |
Thereafter | 47,115 | |
Total minimum lease payments | 5,989,758 | |
Less: Interest | (241,549) | |
Present value of future minimum lease payments | $ 5,748,209 | $ 3,700,000 |
LEASE - Additional Information
LEASE - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jan. 01, 2019 | |
Operating Lease, Liability | $ 5,748,209 | $ 5,748,209 | $ 3,700,000 | ||
Operating Lease, Cost | $ 910,073 | $ 701,341 | $ 2,562,384 | $ 2,076,084 | |
Minimum [Member] | |||||
Lessor, Operating Lease, Term of Contract | 1 year | ||||
Maximum [Member] | |||||
Lessor, Operating Lease, Term of Contract | 6 years |
NON-CONTROLLING INTERESTS (Deta
NON-CONTROLLING INTERESTS (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020USD ($)shares | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)itemshares | Sep. 30, 2020TTD ($)itemshares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | May 27, 2020shares | Dec. 31, 2018USD ($) | |
Non-Controlling Interests [Line Items] | ||||||||
Contribution | $ 1,548,248 | |||||||
Net Income (Loss) | $ 1,277,587 | $ 1,071,427 | 2,446,560 | $ 2,557,603 | $ 2,837,941 | |||
Other Comprehensive Income (Loss) | 767,195 | 417,356 | ||||||
Dividends | (93,815) | |||||||
Noncontrolling Interests | $ 24,274,529 | 24,274,529 | $ 19,512,526 | $ 16,351,044 | ||||
Compensation cost in connection with issuance of preferred stock on the Company's subsidiary, Uniwill, to nonemployees | 1,547,229 | $ 0 | ||||||
Uniwill | ||||||||
Non-Controlling Interests [Line Items] | ||||||||
Contribution | $ 1,547,229 | |||||||
Preferred Shares Issued | shares | 9,608 | 9,608 | ||||||
Voting rights per share | item | 1,000 | 1,000 | ||||||
Preferred stock, conversion ratio | shares | 1,000 | 1,000 | 1,000 | |||||
Percentage of earning receivable from operating subsidiary | 50.00% | 50.00% | ||||||
Compensation cost in connection with issuance of preferred stock on the Company's subsidiary, Uniwill, to nonemployees | $ 0 | $ 1,547,229 | ||||||
Law Enterprise [Member] | ||||||||
Non-Controlling Interests [Line Items] | ||||||||
% of Non-controlling Interests | 34.05% | |||||||
Contribution | $ 0 | |||||||
Net Income (Loss) | (232,274) | $ (147,948) | ||||||
Other Comprehensive Income (Loss) | 16,642 | 15,541 | ||||||
Dividends | 0 | |||||||
Noncontrolling Interests | (420,596) | (420,596) | $ (204,964) | (72,557) | ||||
Law Broker | ||||||||
Non-Controlling Interests [Line Items] | ||||||||
% of Non-controlling Interests | 34.05% | |||||||
Contribution | 0 | |||||||
Net Income (Loss) | 3,610,495 | $ 2,985,723 | ||||||
Other Comprehensive Income (Loss) | 748,243 | 400,719 | ||||||
Dividends | 0 | |||||||
Noncontrolling Interests | 23,894,842 | 23,894,842 | $ 19,536,104 | 16,149,662 | ||||
PFAL [Member] | ||||||||
Non-Controlling Interests [Line Items] | ||||||||
% of Non-controlling Interests | 49.00% | |||||||
Contribution | 0 | |||||||
Net Income (Loss) | 59,244 | $ 7,086 | ||||||
Other Comprehensive Income (Loss) | 881 | 1,265 | ||||||
Dividends | (93,815) | |||||||
Noncontrolling Interests | 411,403 | 411,403 | $ 351,278 | 436,742 | ||||
Uniwill | ||||||||
Non-Controlling Interests [Line Items] | ||||||||
% of Non-controlling Interests | 50.00% | |||||||
Contribution | 1,547,229 | |||||||
Net Income (Loss) | (993,938) | |||||||
Other Comprehensive Income (Loss) | 20 | |||||||
Noncontrolling Interests | 553,311 | 553,311 | $ 0 | |||||
Rays | ||||||||
Non-Controlling Interests [Line Items] | ||||||||
% of Non-controlling Interests | 10.00% | |||||||
Contribution | 1,019 | |||||||
Net Income (Loss) | (3,328) | |||||||
Other Comprehensive Income (Loss) | 0 | |||||||
Noncontrolling Interests | (2,309) | (2,309) | $ 0 | |||||
MKI [Member] | ||||||||
Non-Controlling Interests [Line Items] | ||||||||
% of Non-controlling Interests | 49.00% | |||||||
Contribution | 0 | |||||||
Net Income (Loss) | (1,016) | $ 2,913 | ||||||
Other Comprehensive Income (Loss) | 0 | 0 | ||||||
Dividends | 0 | |||||||
Noncontrolling Interests | (733) | (733) | $ 283 | (2,630) | ||||
PA Taiwan [Member] | ||||||||
Non-Controlling Interests [Line Items] | ||||||||
% of Non-controlling Interests | 49.00% | |||||||
Contribution | 0 | |||||||
Net Income (Loss) | 5,931 | $ (9,694) | ||||||
Other Comprehensive Income (Loss) | 211 | (75) | ||||||
Dividends | 0 | |||||||
Noncontrolling Interests | (161,389) | (161,389) | $ (167,531) | (157,762) | ||||
PTC Nanjing [Member] | ||||||||
Non-Controlling Interests [Line Items] | ||||||||
% of Non-controlling Interests | 49.00% | |||||||
Contribution | $ 0 | |||||||
Net Income (Loss) | 1,446 | $ (139) | ||||||
Other Comprehensive Income (Loss) | 1,198 | (94) | ||||||
Dividends | 0 | |||||||
Noncontrolling Interests | $ 0 | $ 0 | $ (2,644) | $ (2,411) |
INCOME TAX - Effective Income t
INCOME TAX - Effective Income tax rate reconciliation (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
INCOME TAX | ||||
US statutory rate | 21.00% | 21.00% | 21.00% | 21.00% |
Tax rate difference | (1.00%) | (1.00%) | (1.00%) | (1.00%) |
Income tax on undistributed earnings | 5.00% | 4.00% | 6.00% | 4.00% |
Change in valuation allowance | 0.00% | 5.00% | 5.00% | 3.00% |
Non-deductible and non-taxable items | 4.00% | 0.00% | ||
Utilization of deferred tax assets not previously recognized | 0.00% | (3.00%) | 0.00% | (1.00%) |
Withholding taxes | 5.00% | 0.00% | 3.00% | 0.00% |
Provision for uncertain tax position | (5.00%) | 0.00% | ||
True up of prior year income tax | (1.00%) | 2.00% | (3.00%) | 0.00% |
Others | 1.00% | 0.00% | 1.00% | 0.00% |
Effective tax rate | 25.00% | 28.00% | 36.00% | 26.00% |
INCOME TAX - Additional Informa
INCOME TAX - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Schedule of Income Tax [Line Items] | |||||
Tax per financial statements | 25.00% | 28.00% | 36.00% | 26.00% | |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 0.00% | 5.00% | 5.00% | 3.00% | |
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 21.00% | 21.00% | 21.00% | 21.00% | |
Undistributed Earnings, Diluted | $ 1,199,195 | ||||
Income Tax Expense (Benefit) | $ 1,364,725 | $ 933,985 | 2,893,297 | $ 2,254,086 | |
Accrued Income Taxes, Noncurrent | 719,515 | 719,515 | $ 815,451 | ||
Accrued Income Taxes, Current | 2,583,652 | 2,583,652 | 2,389,304 | ||
Taxes Payable, Current | 98,757 | $ 98,757 | 101,518 | ||
Consolidated Affiliated Entity in Jiangsu | |||||
Schedule of Income Tax [Line Items] | |||||
Tax per financial statements | 25.00% | ||||
Percentage of total revenue taxed | 10.00% | ||||
New Taiwan dollar (NTD) | |||||
Schedule of Income Tax [Line Items] | |||||
Additional Income Tax Rate On Undistributed Earnings | 5.00% | ||||
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 20.00% | ||||
Taxes Payable, Current | 2,484,895 | $ 2,484,895 | 2,230,793 | ||
Unrecognized Tax Benefits, Income Tax Penalties Expense | 178,000 | 178,000 | |||
Supplementary tax payment | 281,605 | ||||
Interest and penalties | $ 0 | ||||
Hong Kong | |||||
Schedule of Income Tax [Line Items] | |||||
Tax per financial statements | 8.25% | ||||
Taxes Payable, Current | $ 0 | $ 0 | $ 56,993 | ||
Subsidiary [Member] | |||||
Schedule of Income Tax [Line Items] | |||||
Tax per financial statements | 25.00% |
RELATED PARTY TRANSACTIONS - Du
RELATED PARTY TRANSACTIONS - Due to related parties (Details) | Sep. 30, 2020USD ($) | Sep. 30, 2020TTD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019TTD ($) |
Related Party Transaction [Line Items] | ||||
Less: Accrued bonus for Ms. Chao - noncurrent (Note 9) | $ (576,191) | $ (471,466) | ||
Due to related parties, Total | 190,933 | 462,859 | ||
Mr.Mao [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties, Total | 102,922 | $ 102,922 | 373,183 | $ 373,183 |
Ms. Lu [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties, Total | 75,381 | 85,074 | ||
Ms.Lu [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties, Total | 75,381 | 85,074 | ||
Others [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties, Total | $ 12,630 | $ 4,602 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) | Sep. 30, 2020USD ($) | Sep. 30, 2020TTD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019TTD ($) |
Related Party Transaction [Line Items] | ||||
Due to Related Parties, Current | $ 190,933 | $ 462,859 | ||
Mr.Mao [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Related Parties, Current | 102,922 | $ 102,922 | 373,183 | $ 373,183 |
Ms. Lu [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Related Parties, Current | $ 75,381 | $ 85,074 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
COMMITMENTS AND CONTINGENCIES | ||||
Surplus Bonus Percentage | 1.25% | |||
Compensation expenses | $ 86,240 | $ 89,408 | $ 164,095 | $ 125,954 |
Performance Bonus | $ 189,333 | $ 213,190 | $ 273,424 | $ 375,718 |
Number of years | 3 years |
SEGMENT REPORTING - Revenue by
SEGMENT REPORTING - Revenue by major customers by reporting segments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Revenue | $ 33,235,952 | $ 23,266,852 | $ 91,200,916 | $ 64,449,994 |
Income (loss) from operations | ||||
Total income from operations | 5,335,789 | 3,440,810 | 7,540,819 | 7,968,543 |
Net income (loss) | ||||
Total net income | 4,063,903 | 2,399,581 | 5,235,386 | 6,370,863 |
Elimination adjustment | ||||
Revenue | ||||
Revenue | (367,331) | 17 | (1,118,237) | (7,466) |
Income (loss) from operations | ||||
Total income from operations | 1,123,267 | 34,188 | 1,257,593 | 104,363 |
Net income (loss) | ||||
Total net income | 41,033 | 4,792 | 83,911 | 11,099 |
New Taiwan dollar (NTD) | ||||
Revenue | ||||
Revenue | 31,677,340 | 21,053,131 | 87,096,588 | 57,036,548 |
Income (loss) from operations | ||||
Total income from operations | 3,983,680 | 3,181,981 | 6,051,545 | 7,112,388 |
Net income (loss) | ||||
Total net income | 3,743,338 | 2,180,558 | 4,874,683 | 5,666,549 |
PRC | ||||
Revenue | ||||
Revenue | 1,801,064 | 1,965,552 | 4,978,500 | 6,749,851 |
Income (loss) from operations | ||||
Total income from operations | 156,417 | 45,213 | 126,864 | 325,018 |
Net income (loss) | ||||
Total net income | 191,636 | 62,290 | 155,885 | 329,141 |
Hong Kong | ||||
Revenue | ||||
Revenue | 124,879 | 248,152 | 244,065 | 671,061 |
Income (loss) from operations | ||||
Total income from operations | 72,425 | 179,428 | 104,817 | 426,774 |
Net income (loss) | ||||
Total net income | $ 87,896 | $ 151,941 | $ 120,907 | $ 364,074 |
SEGMENT REPORTING - Long term l
SEGMENT REPORTING - Long term liabilities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Long-lived assets | ||
Total long-lived assets | $ 2,176,044 | $ 1,402,866 |
Reportable assets | ||
Total reportable assets | 98,328,058 | 89,242,422 |
Capital Investment | ||
Total capital investments | 1,250,361 | 660,011 |
Elimination adjustment | ||
Long-lived assets | ||
Total long-lived assets | (3,007) | (2,907) |
Reportable assets | ||
Total reportable assets | (76,446,594) | (68,571,003) |
New Taiwan dollar (NTD) | ||
Long-lived assets | ||
Total long-lived assets | 2,076,095 | 1,280,728 |
Reportable assets | ||
Total reportable assets | 161,018,794 | 144,663,045 |
Capital Investment | ||
Total capital investments | 1,239,610 | 602,442 |
PRC | ||
Long-lived assets | ||
Total long-lived assets | 101,162 | 124,443 |
Reportable assets | ||
Total reportable assets | 12,863,362 | 12,349,634 |
Capital Investment | ||
Total capital investments | 9,175 | 57,569 |
Hong Kong | ||
Long-lived assets | ||
Total long-lived assets | 1,794 | 602 |
Reportable assets | ||
Total reportable assets | 892,496 | $ 800,746 |
Capital Investment | ||
Total capital investments | $ 1,576 |