Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2013 | |
Document and Entity Information | ' |
Entity Registrant Name | 'LightInTheBox Holding Co., Ltd. |
Entity Central Index Key | '0001523836 |
Document Type | '20-F |
Document Period End Date | 31-Dec-13 |
Amendment Flag | 'false |
Current Fiscal Year End Date | '--12-31 |
Entity Well-known Seasoned Issuer | 'No |
Entity Voluntary Filers | 'No |
Entity Current Reporting Status | 'Yes |
Entity Filer Category | 'Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 101,780,794 |
Document Fiscal Year Focus | '2013 |
Document Fiscal Period Focus | 'FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $23,745 | $19,972 |
Term deposit | 79,958 | ' |
Restricted cash | 1,360 | 1,217 |
Accounts receivable | 259 | 249 |
Inventories, net | 7,081 | 5,753 |
Prepaid expenses and other current assets | 8,890 | 10,562 |
Total current assets | 121,293 | 37,753 |
Property and equipment, net | 3,002 | 1,792 |
Intangible assets, net | 266 | ' |
Goodwill | 690 | ' |
Long-term deposit | 640 | 293 |
TOTAL ASSETS | 125,891 | 39,838 |
Current Liabilities | ' | ' |
Accounts payable (including accounts payable of the consolidated VIEs without recourse to LightInTheBox Holding Co., Ltd. of $61 and $36 as of December 31, 2012 and December 31,2013,respectively) | 18,677 | 9,150 |
Advance from customers (including advance from customers of the consolidated VIEs without recourse to LightInTheBox Holding Co., Ltd. of $13 and $4 as of December 31, 2012 and December 31, 2013, respectively) | 10,263 | 7,098 |
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to LightInTheBox Holding Co., Ltd. of $524 and $1,449 as of December 31, 2012 and December 31, 2013,respectively) | 15,560 | 12,811 |
Convertible notes, net of discount due to beneficial conversion feature (including convertible notes of the consolidated VIEs without recourse to LightInTheBox Holding Co., Ltd. of nil and nil as of December 31, 2012 and December 31, 2013, respectively) | ' | 7,788 |
Total current liabilities | 44,500 | 36,847 |
TOTAL LIABILITIES | 44,500 | 36,847 |
Commitments and contingencies (Note 21) | ' | ' |
Series C convertible redeemable preferred shares ($0.000067 par value; 9,651,565 shares authorized; 9,651,565 and nil shares issued and outstanding as of December 31, 2012; liquidation value of $52,500) | ' | 41,471 |
EQUITY (DEFICIT) | ' | ' |
Ordinary shares ($0.000067 par value; 707,825,710 shares authorized; 36,680,558 and 99,194,991 shares issued and outstanding as of December 31, 2012 and December 31, 2013, respectively) | 7 | 2 |
Additional paid-in capital | 153,124 | 10,459 |
Accumulated deficit | -71,621 | -65,181 |
Accumulated other comprehensive loss | -119 | -30 |
TOTAL (DEFICIT) EQUITY | 81,391 | -38,480 |
TOTAL LIABILITIES, SERIES C CONVERTIBLE REDEEMABLE PREFERRED SHARES AND (DEFICIT) EQUITY | 125,891 | 39,838 |
Series A convertible preferred shares | ' | ' |
EQUITY (DEFICIT) | ' | ' |
Convertible preferred shares | ' | 5,000 |
Series B convertible preferred shares | ' | ' |
EQUITY (DEFICIT) | ' | ' |
Convertible preferred shares | ' | $11,270 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | Consolidated VIEs | Consolidated VIEs | Series A convertible preferred shares | Series A convertible preferred shares | Series B convertible preferred shares | Series B convertible preferred shares | ||
Accounts payable (in dollars) | $18,677 | $9,150 | $36 | $61 | ' | ' | ' | ' |
Advance from customers (in dollars) | 10,263 | 7,098 | 4 | 13 | ' | ' | ' | ' |
Accrued expenses and other current liabilities (in dollars) | 15,560 | 12,811 | 1,449 | 524 | ' | ' | ' | ' |
Convertible notes, net of discount due to beneficial conversion feature (in dollars) | ' | 7,788 | 0 | 0 | ' | ' | ' | ' |
Series C convertible redeemable preferred shares, par value (in dollars per share) | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' |
Series C convertible redeemable preferred shares, shares authorized | 9,651,565 | 9,651,565 | ' | ' | ' | ' | ' | ' |
Series C convertible redeemable preferred shares, shares issued | ' | 9,651,565 | ' | ' | ' | ' | ' | ' |
Series C convertible redeemable preferred shares, shares outstanding | ' | 0 | ' | ' | ' | ' | ' | ' |
Series C convertible redeemable preferred shares, liquidation value (in dollars) | ' | 52,500 | ' | ' | ' | ' | ' | ' |
Convertible preferred shares, par value (in dollars per share) | ' | ' | ' | ' | $0.00 | $0.00 | $0.00 | $0.00 |
Convertible preferred shares, shares authorized | ' | ' | ' | ' | 15,000,000 | 15,000,000 | 17,522,725 | 17,522,725 |
Convertible preferred shares, shares issued | ' | ' | ' | ' | 0 | 15,000,000 | 0 | 17,522,725 |
Convertible preferred shares, shares outstanding | ' | ' | ' | ' | 0 | 15,000,000 | 0 | 17,522,725 |
Convertible preferred shares, liquidation value (in dollars) | ' | ' | ' | ' | ' | $5,000 | ' | $11,270 |
Ordinary shares, par value (in dollars per share) | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' |
Ordinary shares, shares authorized | 707,825,710 | 707,825,710 | ' | ' | ' | ' | ' | ' |
Ordinary shares, shares issued | 99,194,991 | 36,680,558 | ' | ' | ' | ' | ' | ' |
Ordinary shares, shares outstanding | 99,194,991 | 36,680,558 | ' | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net revenues | $292,417 | $200,010 | $116,230 |
Cost of goods sold | 165,267 | 116,465 | 77,465 |
Gross profit | 127,150 | 83,545 | 38,765 |
Operating expenses: | ' | ' | ' |
Fulfillment | 15,963 | 10,088 | 7,124 |
Selling and marketing | 84,245 | 53,418 | 38,465 |
General and administrative | 31,929 | 22,369 | 16,660 |
Impairment loss on goodwill and intangible assets | ' | ' | 1,928 |
Total operating expenses | 132,137 | 85,875 | 64,177 |
Loss from operations | -4,987 | -2,330 | -25,412 |
Interest income | 1,606 | 3 | 3 |
Interest expense | -1,369 | -1,884 | ' |
Loss before income taxes | -4,750 | -4,211 | -25,409 |
Income taxes benefit (expenses) | -69 | -19 | 878 |
Net loss | -4,819 | -4,230 | -24,531 |
Accretion for Series C convertible redeemable preferred shares | 1,621 | 2,971 | 2,800 |
Net loss attributable to ordinary shareholders | ($6,440) | ($7,201) | ($27,331) |
Net loss per ordinary share-basic (in dollars per share) | ($0.09) | ($0.20) | ($0.76) |
Net loss per ordinary share-diluted (in dollars per share) | ($0.09) | ($0.20) | ($0.76) |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ' | ' | ' |
Net loss | ($4,819) | ($4,230) | ($24,531) |
Other comprehensive loss, net of tax: | ' | ' | ' |
Foreign currency translation adjustments, net of tax of nil | -89 | -8 | -57 |
Total comprehensive loss | ($4,908) | ($4,238) | ($24,588) |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ' | ' | ' |
Foreign currency translation adjustments, tax | $0 | $0 | $0 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) (USD $) | Total | Convertible notes | Ordinary Shares | Ordinary Shares | Additional Paid-in Capital | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Series A Convertible Preferred Shares | Series A Convertible Preferred Shares | Series B Convertible Preferred Shares | Series B Convertible Preferred Shares |
In Thousands, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | Convertible notes | USD ($) | Convertible notes | USD ($) | USD ($) | Preferred Shares | Preferred Shares | ||
USD ($) | USD ($) | USD ($) | ||||||||||
Balance at Dec. 31, 2010 | ($10,767) | ' | $2 | ' | $3,575 | ' | $35 | ($30,649) | ' | $5,000 | ' | $11,270 |
Balance (in shares) at Dec. 31, 2010 | ' | ' | 27,246,744 | ' | ' | ' | ' | ' | ' | 15,000,000 | ' | 17,522,725 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting of nonvested shares (in shares) | ' | ' | 4,951,667 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation | 2,093 | ' | ' | ' | 2,093 | ' | ' | ' | ' | ' | ' | ' |
Accretion for Series C convertible redeemable preferred shares | -2,800 | ' | ' | ' | ' | ' | ' | -2,800 | ' | ' | ' | ' |
Net loss | -24,531 | ' | ' | ' | ' | ' | ' | -24,531 | ' | ' | ' | ' |
Foreign currency translation adjustments, net of tax of nil | -57 | ' | ' | ' | ' | ' | -57 | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2011 | -36,062 | ' | 2 | ' | 5,668 | ' | -22 | -57,980 | ' | 5,000 | ' | 11,270 |
Balance (in shares) at Dec. 31, 2011 | ' | ' | 32,198,411 | ' | ' | ' | ' | ' | ' | 15,000,000 | ' | 17,522,725 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting of nonvested shares (in shares) | ' | ' | 4,482,147 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation | 2,695 | ' | ' | ' | 2,695 | ' | ' | ' | ' | ' | ' | ' |
Accretion for Series C convertible redeemable preferred shares | -2,971 | ' | ' | ' | ' | ' | ' | -2,971 | ' | ' | ' | ' |
Net loss | -4,230 | ' | ' | ' | ' | ' | ' | -4,230 | ' | ' | ' | ' |
Beneficial conversion feature of convertible notes | 2,096 | ' | ' | ' | 2,096 | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustments, net of tax of nil | -8 | ' | ' | ' | ' | ' | -8 | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2012 | -38,480 | ' | 2 | ' | 10,459 | ' | -30 | -65,181 | ' | 5,000 | ' | 11,270 |
Balance (in shares) at Dec. 31, 2012 | ' | ' | 36,680,558 | ' | ' | ' | ' | ' | ' | 15,000,000 | ' | 17,522,725 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of preferred shares upon IPO | 43,092 | ' | 3 | ' | 59,359 | ' | ' | ' | ' | -5,000 | ' | -11,270 |
Conversion of preferred shares upon IPO (in shares) | ' | ' | 42,174,290 | ' | ' | ' | ' | ' | ' | -15,000,000 | ' | -17,522,725 |
Conversion of convertible notes upon IPO | ' | 8,000 | ' | ' | ' | 8,000 | ' | ' | ' | ' | ' | ' |
Conversion of convertible notes upon IPO (in shares) | ' | ' | ' | 2,224,610 | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common shares upon IPO (net of offering costs of $9,883) | 70,797 | ' | 2 | ' | 70,795 | ' | ' | ' | ' | ' | ' | ' |
Issuance of common shares upon IPO (in shares) | ' | ' | 16,984,736 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting of nonvested shares (in shares) | ' | ' | 767,397 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of share options | 193 | ' | ' | ' | 193 | ' | ' | ' | ' | ' | ' | ' |
Exercise of share options (in shares) | ' | ' | 363,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation | 4,318 | ' | ' | ' | 4,318 | ' | ' | ' | ' | ' | ' | ' |
Accretion for Series C convertible redeemable preferred shares | -1,621 | ' | ' | ' | ' | ' | ' | -1,621 | ' | ' | ' | ' |
Net loss | -4,819 | ' | ' | ' | ' | ' | ' | -4,819 | ' | ' | ' | ' |
Foreign currency translation adjustments, net of tax of nil | -89 | ' | ' | ' | ' | ' | -89 | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2013 | $81,391 | ' | $7 | ' | $153,124 | ' | ($119) | ($71,621) | ' | ' | ' | ' |
Balance (in shares) at Dec. 31, 2013 | ' | ' | 99,194,991 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) (Parenthetical) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) | ' |
Issuance of common shares upon IPO, offering costs | $9,883 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ' | ' | ' |
Net loss | ($4,819) | ($4,230) | ($24,531) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 1,361 | 1,031 | 899 |
Share-based compensation | 4,318 | 2,695 | 2,093 |
Write-off of rental deposit | ' | 242 | ' |
Inventory provision | -420 | 218 | 515 |
Impairment loss on intangible assets | ' | ' | 1,022 |
Impairment loss on goodwill | 0 | 0 | 906 |
Deferred tax liability | ' | ' | -272 |
Amortization of debt discount | 956 | 1,140 | ' |
Interest on convertible notes | 413 | 744 | ' |
Changes in operating assets and liabilities: | ' | ' | ' |
Accounts receivable | 12 | -176 | -8 |
Inventories | -864 | -1,003 | -508 |
Prepaid expenses and other current assets | -1,148 | -5,807 | -9 |
Long-term deposit | -337 | -225 | 74 |
Accounts payable | 9,508 | 4,020 | 1,727 |
Advance from customers | 3,130 | 3,641 | -118 |
Accrued expenses and other current liabilities | 3,042 | 5,109 | 4,154 |
Net cash (used in) provided by operating activities | 15,152 | 7,399 | -14,056 |
Cash flows from investing activities | ' | ' | ' |
Purchase of property and equipment | -2,451 | -917 | -1,582 |
Purchase of term deposits | -79,958 | ' | ' |
Deposit in restricted cash | -143 | -367 | -252 |
Payment for business acquisition | -1,000 | ' | ' |
Net cash used in investing activities | -83,552 | -1,284 | -1,834 |
Cash flows from financing activities | ' | ' | ' |
Proceeds from issuance of convertible notes | ' | 8,000 | ' |
Proceeds from exercise of share options | 193 | ' | ' |
Proceeds from initial public offering | 75,030 | ' | ' |
Payment of professional fees related to initial public offering | -3,127 | -930 | -602 |
Payment of deferred consideration for Shanghai Ouku acquisition | ' | ' | -185 |
Net cash (used in) provided by financing activities | 72,096 | 7,070 | -787 |
Net (decrease) increase in cash and cash equivalents | 3,696 | 13,185 | -16,677 |
Effect of exchange rate changes on cash and cash equivalents | 77 | 1 | 24 |
Cash and cash equivalents at beginning of year | 19,972 | 6,786 | 23,439 |
Cash and cash equivalents at end of year | 23,745 | 19,972 | 6,786 |
Supplemental cash flow information: | ' | ' | ' |
Income taxes (paid) refunded | -69 | -12 | 606 |
Interest paid | ($1,157) | ' | ' |
ORGANIZATION_AND_PRINCIPAL_ACT
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ' | ||||||||||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ' | ||||||||||
1. ORGANIZATION AND PRINCIPAL ACTIVITIES | |||||||||||
LightInTheBox Holding Co., Ltd. (the “Company” or “LightInTheBox”), incorporated in the Cayman Islands in March 2008 by the five founding shareholders, together with its consolidated subsidiaries, variable interest entities (“VIEs”) and VIE’s subsidiary (collectively referred to the “Group”), is primarily involved in online retailing to sell and deliver products to consumers around the world. | |||||||||||
As of December 31, 2013, details of the Company’s subsidiaries, its VIEs and VIE’s subsidiary are as follows: | |||||||||||
Later of | |||||||||||
acquisition/ | Place of | Percentage of | Principal | ||||||||
Incorporation | incorporation | legal ownership | activities | ||||||||
Subsidiaries | |||||||||||
Light In The Box Limited (“Light In The Box”) | June 13, 2007 | Hong Kong | 100% | Online retail | |||||||
Lanting International Holding Limited | December 19, 2013 | Hong Kong | 100% | Investment holding | |||||||
(“Lanting International”) | |||||||||||
LITB, Inc. | December 18, 2013 | United States | 100% | Marketing and software development and technology support | |||||||
Lanting Jishi Trade (Shenzhen) Co., Ltd. | October 21, 2008 | People’s Republic of China | 100% | Online retail | |||||||
(“WFOE” or “Lanting Jishi”) | |||||||||||
Lanting Jishi Trade (Suzhou) Co., Ltd. | December 2, 2013 | People’s Republic of China | 100% | Inactive | |||||||
(“Lanting Suzhou”) | |||||||||||
LightInTheBox (UK) Limited | May 26, 2009 | United Kingdom | 100% | Inactive | |||||||
VIEs | |||||||||||
Shenzhen Lanting Huitong Technologies Co., Ltd. | June 24, 2008 | People’s Republic of China | Consolidated VIE | Software development and information technology support | |||||||
(“Lanting Huitong”) | |||||||||||
Beijing Lanting Gaochuang Technologies Co., Ltd. | December 6, 2011 | People’s Republic of China | Consolidated VIE | Software development and information technology support | |||||||
(“Lanting Gaochuang”) | |||||||||||
VIE’s (Lanting Huitong’s) wholly owned subsidiary | August 24, 2010 | People’s Republic of China | VIE’s subsidiary | Online retail | |||||||
Shanghai Ouku Network Technologies Co., Ltd. | |||||||||||
(“Shanghai Ouku”) | |||||||||||
History of the Group and corporate reorganization | |||||||||||
The Group commenced its operation in June 2007, with the establishment of Light In The Box in June 2007 in Hong Kong by the same five founding shareholders of the Company. Light In The Box subsequently became the Company’s subsidiary through a share for share exchange in April 2008 which has been accounted for in a manner akin to a pooling of interest as if the Company had been in existence and owned Light In The Box since June 2007. | |||||||||||
Lanting Jishi was established in October 2008 in the People’s Republic of China (the “PRC”) as a wholly owned subsidiary of Light In The Box. | |||||||||||
The VIE arrangements | |||||||||||
The PRC regulations currently limit direct foreign ownership of business entities providing value-added telecommunications services, advertising services and Internet services in the PRC where certain licenses are required for the provision of such services. To comply with these PRC regulations, the Company currently conducts certain aspects of its business in the PRC through Lanting Huitong and Lanting Gaochuang, both of which are VIEs. | |||||||||||
Lanting Huitong was established by the shareholders of the Company in June 2008 in the PRC. Through the contractual arrangements (as described below) among Lanting Jishi, Lanting Huitong and the respective shareholders of Lanting Huitong, Lanting Huitong became the Group’s VIE. | |||||||||||
In order to obtain the benefit granted to domestic enterprises that are held by Chinese nationals who have previously studied overseas, the Chief Executive Officer (“CEO”) and Lanting Huitong established Lanting Gaochuang in December 2011, each holding 51% and 49% of Lanting Gaochuang, respectively, in the China Beijing Wangjing Overseas Students Pioneer Park. | |||||||||||
Through a series of contractual arrangements (as described below) among Lanting Jishi, Lanting Gaochuang and the respective shareholders of Lanting Gaochuang, Lanting Gaochuang became the Group’s VIE. | |||||||||||
Agreements that provide Lanting Jishi effective control over Lanting Huitong and Lanting Gaochuang (collectively, the “VIEs”) | |||||||||||
Powers of Attorney: Each shareholder of the VIEs has executed a power of attorney appointing Lanting Jishi or its designee to be his or her attorney and irrevocably authorizing them to vote on his or her behalf on all of the matters concerning the VIEs that may require shareholders’ approval. The powers of attorney will be valid as long as the shareholders remain as shareholders of the VIEs. | |||||||||||
Equity disposal agreement: The agreements granted Lanting Jishi or its designated party exclusive options to purchase, when and to the extent permitted under PRC law, all or part of the equity interests in the VIEs. The exercise price for the options to purchase all or part of the equity interests will be the minimum amount of consideration permissible under the then applicable PRC law. The agreement will be valid until Lanting Jishi or its designated party purchases all the shares from shareholders of the VIEs. The equity disposal agreement will be valid until the liquidation of the VIEs, unless terminated earlier at Lanting Jishi’s sole discretion. | |||||||||||
The VIE arrangements - continued | |||||||||||
Spousal consent letters: Pursuant to spousal consent letters, the spouses of certain shareholders of Lanting Huitong acknowledged that the equity interests of Lanting Huitong held by and registered in the name of his/her spouse will be disposed of pursuant to the equity disposal and share pledge agreements. These spouses understand that such equity interests are held by their respective spouse on behalf of Lanting Jishi, and they will not take any action to interfere with the disposition of such equity interests, including, without limitation, claiming that such equity interests constitute communal property of marriage. The spousal consent letters will be valid until the liquidation of Lanting Huitong, unless terminated earlier at Lanting Jishi’s sole discretion. | |||||||||||
Loan Agreement: Under the loan agreement entered into in December 2011 between Lanting Jishi and the CEO, Lanting Jishi extended a loan in the amount of $41 (RMB255, 000) to the CEO to be contributed as 51% of the registered capital of Lanting Gaochuang. Under this agreement, the CEO agrees that without prior written consent from Lanting Jishi, Lanting Gaochuang may not enter into any transaction that could materially affect its assets, liabilities, interests or operations, and there will be no earnings distribution in any form by Lanting Gaochuang before such loan has been repaid. This loan can only be repaid by transferring all of the CEO’s equity interest in Lanting Gaochuang to Lanting Jishi or a third party designated by Lanting Jishi, and submitting all proceeds from such transaction to Lanting Jishi. The loan agreement has a term of ten years and will be extended automatically, unless indicated otherwise by Lanting Jishi in writing three months prior to the contract expiration date. | |||||||||||
Agreements that transfer economic benefits to Lanting Jishi | |||||||||||
Business operation agreements: The shareholders of the VIEs and the VIEs agreed that the VIEs may not enter into any transaction that could materially affect the assets, liabilities, interests or operations of the VIEs, without prior written consent from Lanting Jishi or other party designated by Lanting Jishi. In addition, directors, supervisors, chairman, general managers, financial controllers or other senior managers of the VIEs must be Lanting Jishi’s nominees. Lanting Jishi is entitled to any dividend declared by the VIEs. The business operation agreement will be valid until the liquidation of the VIEs, unless terminated earlier at Lanting Jishi’s sole discretion. | |||||||||||
Exclusive technical support and consulting service agreements: Lanting Jishi agreed to provide the VIEs with technology support and consulting services. The VIEs agreed to pay a service fee annually equal to substantially all of the net income of the VIEs. The exclusive technical support and consulting service agreement will be valid until the liquidation of the VIEs, unless terminated earlier at Lanting Jishi’s sole discretion. | |||||||||||
Agreements that transfer economic benefits to Lanting Jishi - continued | |||||||||||
Share pledge agreement: The shareholders of the VIEs pledged all of their respective equity interests in favor of Lanting Jishi to secure the obligations of the VIEs, and the shareholders under the VIE agreements, including the business operation agreements, and the exclusive technical support and consulting service agreements described above. If the VIEs or any of the shareholders of the VIEs breaches any of their respective contractual obligations under these agreements, Lanting Jishi, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. The shareholders of the VIEs agreed not to transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interests in the VIEs, without Lanting Jishi’s prior written consent. Unless terminated at Lanting Jishi’s sole discretion, each share pledge agreement will be valid till the completion of all the contractual obligations of the VIEs, or any of the shareholders of the VIEs under the various agreements, including the business operation agreements, the technical support and consulting service agreements and equity disposal agreements. | |||||||||||
Since the Company, through Lanting Jishi, its wholly owned subsidiary, has (1) the power to direct the activities of Lanting Huitong and Lanting Gaochuang that most significantly affect their economic performance and (2) the right to receive the benefits from them, the Company is the primary beneficiary of both entities and has consolidated them as VIEs since their respective inceptions. | |||||||||||
Risks in relation to VIE structure | |||||||||||
The Group believes that Lanting Jishi’s contractual arrangements with the VIEs are in compliance with the PRC law and are legally enforceable. The shareholders of the VIEs are also shareholders of the Company and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, uncertainties in the PRC legal system could limit the Group’s ability to enforce these contractual arrangements and if the shareholders of the VIEs were to reduce their interest in the Company, their interests may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so. The Company’s ability to control the VIEs also depends on the power of attorney Lanting Jishi has to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes this power of attorney is legally enforceable but may not be as effective as direct equity ownership. | |||||||||||
Risks in relation to VIE structure - continued | |||||||||||
In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the PRC government could: | |||||||||||
· revoke the Group’s business and operating licenses; | |||||||||||
· require the Group to discontinue or restrict operations; | |||||||||||
· restrict the Group’s right to collect revenues; | |||||||||||
· block the Group’s websites; | |||||||||||
· revoke the benefits provided by the Wangjing Pioneer Park; | |||||||||||
· require the Group to restructure the operations in such a way as to compel the Group to establish a new enterprise, re-apply for the necessary licenses or relocate their businesses, staff and assets; | |||||||||||
· impose additional conditions or requirements with which the Group may not be able to comply; or | |||||||||||
· take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business. | |||||||||||
The imposition of any of these penalties may result in a material and adverse effect on the Group’s ability to conduct the Group’s business. In addition, if the imposition of any of these penalties causes the Group to lose the rights to direct the activities of the VIEs and its subsidiaries or the right to receive their economic benefits, the Group would possibly no longer be able to consolidate the VIEs. | |||||||||||
The following consolidated financial information of the Group’s VIEs and their subsidiaries was included in the accompanying consolidated financial statements as of and for the years ended, after elimination of intercompany balances and transactions within the Group: | |||||||||||
As of | As of | ||||||||||
December 31, | December 31, | ||||||||||
2012 | 2013 | ||||||||||
Total assets | $ | 2,232 | $ | 2,042 | |||||||
Total liabilities | $ | 1,874 | $ | 1,489 | |||||||
Year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Net revenues | $ | 5,010 | $ | 2,743 | $ | 300 | |||||
Net loss | $ | (1,078 | ) | $ | (204 | ) | $ | (179 | ) | ||
Year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Net cash provided by operating activities | $ | 1,119 | $ | 200 | $ | 647 | |||||
Net cash used in investing activities | $ | (894 | ) | $ | (298 | ) | $ | (798 | ) | ||
There are no consolidated VIEs’ assets that are collateral for the VIEs’ obligations and can only be used to settle the VIEs’ obligations. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||
Dec. 31, 2013 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Basis of presentation | |||
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). | |||
Basis of consolidation | |||
The consolidated financial statements include the financial statements of the Company, its VIEs and VIE’s subsidiaries. All inter-company transactions and balances are eliminated upon consolidation. | |||
Use of estimates | |||
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amount of revenues and expenses in the financial statements and accompanying notes. Actual results may differ from these estimates. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group’s financial statements include revenue recognition, inventories, impairment of goodwill and intangible assets, fair value of ordinary shares, share-based compensation and income taxes. | |||
Cash and cash equivalents | |||
Cash and cash equivalents consist of cash on hand, demand deposits with financial institutions and term deposits with an original maturity of three months or less. | |||
Term deposit | |||
Term deposit with an original maturity of greater than three months and less than one year is classified as held-to-maturity investments and carried at amortized cost. The term deposits mature within one year and are subject to penalty for early withdrawal before their maturity. | |||
Restricted cash | |||
Restricted cash consists of cash which is held under the Group’s name in an escrow account as deposits withheld by third party payment processing agencies and the deposits fluctuate with the volume of payment processed. | |||
Accounts receivable | |||
Accounts receivable represents cash collected by the delivery service providers on behalf of the Group, as a result of completed sales transactions in the PRC under cash-on-delivery terms, and has not been remitted back to the Group. As of December 31, 2012 and 2013, there was no allowance for doubtful accounts due to the nature of the receivables which is cash collected from customers and in-transit to the Group. | |||
Inventories, net | |||
Inventories are accounted for using the first-in-first-out method, and are valued at the lower of cost or market value. Adjustments are recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and broken assortments, which is dependent upon factors such as historical trends with similar merchandise, inventory aging, and historical and forecasted consumer demand. Write downs are recorded in cost of goods sold in the consolidated statements of operations. | |||
Property and equipment, net | |||
Property and equipment, net is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives: | |||
Useful lives | |||
Leasehold improvements | Lesser of the lease term | ||
or estimated useful life of the assets | |||
Furniture, fixtures and office equipment | 5 years | ||
Software and IT equipment | 3 years | ||
Acquired intangible assets, net | |||
Intangible assets, other than goodwill, resulting from the acquisitions of entities accounted for using the acquisition method of accounting are estimated by management based on the fair value of assets acquired. | |||
Identifiable intangible assets are carried at cost less accumulated amortization. Amortization of members is computed based on the estimated attrition pattern. Amortization of technology is computed using the straight-line method over the estimated useful lives. | |||
Useful lives | |||
Domain name/Tradename | Indefinite life | ||
Technology | 3 Years | ||
Members | 4 Years | ||
Impairment of long-lived assets and intangible assets with definite life | |||
Long-lived assets, such as property and equipment and definite-lived intangible assets, are stated at cost less accumulated depreciation or amortization. | |||
The Group evaluates the recoverability of long-lived assets, including identifiable intangible assets, with determinable useful lives, whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. The Group compares the carrying amount of long-lived asset to the estimated undiscounted future cash flows associated with it. Impairment exists when the sum of the expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. Fair value is estimated based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Group to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. | |||
Impairment of Goodwill and Indefinite-lived intangible assets | |||
Goodwill and intangible assets deemed to have indefinite useful lives are not amortized, but tested for impairment annually or more frequently if event and circumstances indicate that they might be impaired. | |||
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. The Group performs a two-step goodwill impairment test. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not considered impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit’s goodwill to the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. In estimating the fair value of each reporting unit the Group estimates the future cash flows of each reporting unit, the Group has taken into consideration the overall and industry economic conditions and trends, market risk of the Group and historical information. The Group recorded an impairment loss of $906, nil and nil for the years ended December 31, 2011, 2012 and 2013, respectively. | |||
An intangible asset that is not subject to amortization is tested for impairment at least annually or if events or changes in circumstances indicate that the asset might be impaired. Such impairment test compares the fair values of assets with their carrying value amounts and an impairment loss is recognized if and when the carrying amounts exceed the fair values. The estimates of fair values of intangible assets not subject to amortization are determined using various discounted cash flow valuation methodologies. Significant assumptions are inherent in this process, including estimates of discount rates. The Group recorded an impairment loss of $1,010, nil and nil for the years ended December 31, 2011, 2012 and 2013, respectively. | |||
Business combinations | |||
The assets acquired, the liabilities assumed, and any noncontrolling interest of the acquiree at the acquisition date, if any, are measured at their fair values as of that date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interest of the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Acquisition costs are expensed when incurred. Consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition. For shares issued in a business combination, if any, the Group estimates the fair value as of the date of acquisition. | |||
Revenue recognition | |||
Revenue is stated net of value added tax (“VAT”) and return allowances. | |||
The Group recognizes revenue from the sale of apparel, electronics and other general merchandise through its websites and other online platforms. | |||
The Group recognizes revenue when the following four revenue recognition criteria are met: | |||
(i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured. | |||
The Group defers revenue and the related product costs for shipments that are in-transit to the customer. Payments received in advance of delivery are classified as advances from customers. The Group recognizes the revenue at the time the end customers receive the products, which is typically within a few days of shipment. Amounts collected by delivery service providers but not remitted to the Group are classified as accounts receivable on the consolidated balance sheets. | |||
Certain employees of the Group register in supplemental online outlets under their own name as these websites require registration using identity cards of individuals to sell the Group’s product on behalf of the Group. The Group has contractual arrangements with these employees which require them to transfer customers’ payments received to the Group for the sale of the products. The Group evaluates the sales transactions performed by certain employees on behalf of the Group to determine whether to recognize the revenues on a gross or net basis. The determination is based upon an assessment as to whether the Group acts as a principal or agent when selling the products. All of the revenues involving employees performing sales transactions on the supplemental online outlets on behalf of the Group are currently accounted for on a gross basis since the Group is the primary obligor, has general and physical inventory risk, latitude in establishing prices, discretion in supplier selection and credit risks. | |||
Revenue recognition - continued | |||
In arrangements whereby certain suppliers place the products at the Group’s premises, the risk and rewards of ownership of the products passed to the Group upon confirmation of orders by the Group’s customers. All of the revenues involving these arrangement are accounted for on a gross basis since the Group is the primary obligor, has physical inventory risk, latitude in establishing prices, discretion in supplier selection and credit risks. | |||
The Group periodically provides incentive offers to its customers to encourage purchases. Current discount offers, when accepted by its customers, are treated as a reduction to the purchase price of the related transaction and are included as a net amount in revenue. The Group also provides discount reward, which may only be used in the future, to customers who have made a current purchase. As the right of receiving future discount does not represent a significant and incremental discount to the customer, the discount is treated as a reduction of revenue when the future transaction takes place. | |||
The Group established a membership program whereby a registered member earns certain points for visiting one of the Group’s websites. Points could only be redeemed in connection with a future purchase. Such points, when redeemed, were charged as costs of sales at the time of future purchase. Since the points were earned not based on past sales transactions, no accrual was made at the time when earned by the registered members. | |||
Promotional free products, which cannot be redeemed for cash are normally shipped together with current qualified sales. Cost of these promotional items or free products are recorded as cost of sales when the revenue of the current qualified sales is recognized. | |||
The Group allows customers to return goods within a period of time subsequent to the delivery of the goods purchased. The return period varies depending on reasons for the return, which normally ranges from 7 days to 30 days. The Group estimates return allowance based on historical experience. The estimation of return allowances is adjusted to the extent that actual returns differ, or are expected to differ. Changes in the estimated return allowance are recognized through a cumulative catch-up adjustment in the period of change and will impact the amount of net revenues in that period. | |||
Outbound shipping charges to customers are included as a part of the revenues. Outbound shipping-related costs are included in the cost of goods sold. Shipping costs incurred for sales of products and recognized as cost of goods sold were $24,589, $40,694 and $63,917 for the years ended December 31, 2011, 2012 and 2013, respectively. | |||
VAT on sales is calculated at 17% on revenue from sale of products in the PRC and paid after deducting input-VAT on purchases. The net VAT balance between input-VAT and output-VAT is reflected in the accounts under prepaid expenses and other current assets or accrued expenses and other current liabilities. | |||
Cost of goods sold | |||
Cost of sales primarily consists of the purchase price of consumer products sold by the Group on its websites, inbound and outbound shipping charges, packaging supplies and inventory write-down. Shipping charges to receive products from its suppliers are included in inventory cost, and recognized as cost of sales upon sale of products to its customers. | |||
Fulfillment | |||
Fulfillment costs represent those costs incurred in operating and staffing the Group’s fulfillment and customer service centers, including costs attributable to buying, receiving, inspecting, and warehousing inventories; picking, packaging, and preparing customer orders for shipment; payment processing and related transaction costs. | |||
Selling and marketing | |||
Selling and marketing expenses consist primarily of search engine marketing and advertising, affiliate market program expenditure, public relations expenditures; and payroll and related expenses for personnel engaged in selling, marketing and business development. The Group pays to use certain relevant key words relating to its business on major search engines and the fee is on a “cost-per-click” basis. The Group also pays commissions to participants in its affiliate program when customer referrals result in product sales, and the Group classifies such costs as selling and marketing expenses in the consolidated statements of operations. Advertising includes fees paid to on-line advertisers who assist the Group to advertise at targeted websites. Such fees are paid at fixed rate or calculated based on volume directed to the Group’s website. | |||
General and administrative | |||
General and administrative expenses consist of payroll and related expenses for employees involved in general corporate functions such as accounting, finance, tax, legal, and human resources; costs associated with the use by these functions of facilities and equipment, such as depreciation expense and rent; professional fees and other general corporate costs. Also included in general and administrative expenses are payroll and related expenses for employees involved in product research and development, and systems support, as well as server charges and costs associated with telecommunications. | |||
General and administrative expenses also include credit losses relating to fraudulent credit card activities which resulted in chargebacks from the payment processing agencies. The Group estimates chargebacks based on historical experience. The estimation of chargebacks is adjusted to the extent that actual chargebacks differ, or are expected to differ. Changes in estimated chargebacks are recognized through a cumulative catch-up adjustment in the period of change and will impact the amount of general and administrative expenses in that period. | |||
Fair value | |||
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. | |||
Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: | |||
· Level 1-inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. | |||
· Level 2-inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||
· Level 3-inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. | |||
Financial instruments | |||
Financial instruments of the Group primarily consist of cash and cash equivalents, term deposit, restricted cash, receivable from processing agencies, accounts payable, convertible notes and preferred shares. The carrying values of cash, term deposit, restricted cash, receivable from processing agencies and accounts payable approximate their fair values due to short-term maturities. The fair value of convertible notes and preferred shares is not readily available. The carrying amounts of convertible notes are measured at amortized cost adopting the effective interest method. The carrying amounts of preferred shares are measured at cost, plus any accretion to redemption value. | |||
Foreign currency translation | |||
The functional currency of the Company, Light In The Box, Lanting International, LITB, Inc. and LightInTheBox (UK) Limited is the United States dollar (“U.S. dollar”). The financial records of the Group’s subsidiaries and VIE entities located in the PRC are maintained in their local currencies, the Renminbi (“RMB”), which are also the functional currencies of these entities. | |||
Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the consolidated statements of operations. | |||
The Group’s entities with functional currency of RMB, translate their operating results and financial position into the U.S. dollar, the Group’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive loss. | |||
Income taxes | |||
Deferred income taxes are provided using the asset and liability method. Under this method, deferred income taxes are recognized for tax credits and net operating losses available for carry forwards and significant temporary differences. Deferred tax assets and liabilities are classified as current or non-current based upon the classification of the related asset or liability in the financial statements or the expected timing of their reversal if they do not relate to a specific asset or liability. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities. | |||
The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. The Group did not recognize any income tax due to uncertain tax position or incur any interest and penalties related to potential underpaid income tax expenses for the years ended December 31, 2011, 2012 or 2013, respectively. | |||
Comprehensive loss | |||
Comprehensive loss includes net loss and foreign currency translation adjustments and is reported in the consolidated statements of comprehensive loss. | |||
Share-based compensation | |||
Share-based payment transactions with employees, such as share options are measured based on the grant date fair value of the equity instrument. The Group has elected to recognize compensation expense using the straight-line method for all employee equity awards granted with graded vesting provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant-date value of the options that are vested at that date, over the requisite service period of the award, which is generally the vesting period of the award. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of share-based compensation expense to be recognized in future periods. | |||
Operating leases | |||
Leases where the rewards and risks of ownership of assets primarily remain with the lessor are accounted for as operating leases. Some of operating lease agreements of the Group contain provisions for future rent increases, rent free periods, or periods in which rent payments are reduced (abated). The total amount of rental payments due over the lease term is being charged to rent expense on the straight-line method over the term of the lease. The difference between rent expense recorded and the amount paid is credited or charged to other accrued expenses, which is included in “Accrued expenses and other current liabilities” in the accompanying consolidated balance sheets. | |||
Loss per share | |||
Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by weighted average number of ordinary shares outstanding during the period. | |||
The Group’s Series A convertible preferred shares, Series B convertible preferred shares and Series C convertible redeemable preferred shares are participating securities as the preferred shares participate in undistributed earnings on an as-if-converted basis. Nonvested shares are also participating securities as they enjoy identical dividend rights as ordinary shares. Accordingly, the Group uses the two-class method whereby undistributed net income is allocated on a pro rata basis to each participating share to the extent that each class may share in income for the period. Undistributed net loss is not allocated to preferred shares because they are not contractually obligated to participate in the loss allocated to the ordinary and nonvested shares. | |||
Diluted loss per ordinary share reflects the potential dilution that could occur if securities were exercised or converted into ordinary shares. The Group had convertible preferred shares, convertible redeemable preferred shares, stock options, nonvested shares and convertible notes, which could potentially dilute basic earnings per share in the future. To calculate the number of shares for diluted income per share, the effect of the convertible preferred shares, convertible redeemable preferred shares and convertible notes is computed using the as-if-converted method; and the effect of the stock options and nonvested shares is computed using the treasury stock method. | |||
Significant risks and uncertainties | |||
The Group participates in an industry with rapid changes in regulations, customer demand and competition and believes that changes in any of the following areas could have a material adverse effect on the Group’s future financial position, results of operations, or cash flows: advances and trends in e-commerce industry; changes in certain supplier and vendor relationships; regulatory or other PRC related factors; and risks associated with the Group’s ability to keep and increase the market coverage | |||
Concentration of credit risk | |||
Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and advances to suppliers. The Group places its cash and cash equivalents with financial institutions located in the Cayman Islands, the PRC and Hong Kong. Accounts receivable primarily comprise amounts receivable from product delivery service providers. These amounts are collected from customers by the service providers upon product delivery. With respect to advances to product suppliers, the Group performs on-going credit evaluations of the financial condition of its suppliers. | |||
Foreign currency risk | |||
The RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China foreign exchange trading system market. The Group’s cash and cash equivalents, term deposit, and restricted cash denominated in RMB amounted to $683 and $56,602 at December 31, 2012 and 2013, respectively. | |||
Recent accounting pronouncements | |||
In July 2013, the FASB issued a pronouncement which provides guidance on financial statement presentation of an unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The FASB’s objective in issuing this Accounting Standards Updates (“ASU”) is to eliminate diversity in practice resulting from a lack of guidance on this topic in current US GAAP. | |||
The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. | |||
This ASU applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. |
INVENTORIES_NET
INVENTORIES, NET | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INVENTORIES, NET | ' | |||||||
INVENTORIES, NET | ' | |||||||
3. INVENTORIES, NET | ||||||||
Inventories consisted of the following: | ||||||||
As of December 31, | ||||||||
2012 | 2013 | |||||||
Merchandise available for sale | $ | 6,642 | $ | 7,550 | ||||
Less: inventories provision for slow-moving and obsolescence | (889 | ) | (469 | ) | ||||
Total inventories, net | $ | 5,753 | $ | 7,081 |
PREPAID_EXPENSES_AND_OTHER_CUR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ' | |||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ' | |||||||
4. PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||||||
Components of other current assets which are included in the prepaid expenses and other current assets are as follows: | ||||||||
As of December 31, | ||||||||
2012 | 2013 | |||||||
Receivable from processing agencies (1) | $ | 7,633 | $ | 4,659 | ||||
Deferred offering cost | 1,188 | — | ||||||
Prepayment to suppliers | 1,032 | 1,525 | ||||||
Interest receivable | — | 721 | ||||||
Option exercise receivable | — | 663 | ||||||
Rental deposits and prepaid rents | 337 | 339 | ||||||
VAT recoverable | 74 | — | ||||||
Staff advance | 57 | 104 | ||||||
Others | 241 | 879 | ||||||
Total | $ | 10,562 | $ | 8,890 | ||||
(1) Receivables from processing agencies represented cash that had been received from customers but held by the processing agencies as of December 31, 2012 and 2013. The receivables were collected by the Group subsequent to the respective period end. |
PROPERTY_AND_EQUIPMENT_NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PROPERTY AND EQUIPMENT, NET | ' | |||||||
PROPERTY AND EQUIPMENT, NET | ' | |||||||
5. PROPERTY AND EQUIPMENT, NET | ||||||||
The components of property and equipment are as follows: | ||||||||
As of December 31, | ||||||||
2012 | 2013 | |||||||
Leasehold improvements | $ | 1,663 | $ | 3,043 | ||||
Furniture, fixtures and office equipment | 1,183 | 1,817 | ||||||
Software and IT equipment | 1,450 | 2,099 | ||||||
Property and equipment, gross | 4,296 | 6,959 | ||||||
Less: Accumulated depreciation | (2,504 | ) | (3,957 | ) | ||||
Property and equipment, net | $ | 1,792 | $ | 3,002 | ||||
Depreciation expenses incurred for the years ended December 31, 2011, 2012 and 2013 are $846, $1,031 and $1,361, respectively. |
GOODWILL
GOODWILL | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
GOODWILL | ' | |||||||
GOODWILL | ' | |||||||
6. GOODWILL | ||||||||
During the year ended December 31, 2011, Shanghai Ouku, which was acquired in May 2010, was the only reporting unit of the Group that carried goodwill balance. Based on the impairment analysis as of December 31, 2011, the goodwill of Shanghai Ouku was fully impaired by $906 for the year ended December 31, 2011. The fair value determination of the goodwill is set out in Note 20. | ||||||||
On December 31, 2013, the Group acquired the fashion-focused site business from Ador Inc. This acquisition is expected to bolster talent and maximize the Group’s global e-commerce sales opportunities and was recorded using the acquisition method of accounting. The acquired assets were recorded at fair value at the date of acquisition, including net working capital of $44, goodwill of $690 and other intangible assets of $266. The fair value determination of the acquired assets is set out in Note 20. | ||||||||
The changes in the carrying amount of goodwill and accumulated impairment losses for the years ended December 31, 2012 and 2013 were as follows: | ||||||||
2012 | 2013 | |||||||
Gross amount | ||||||||
Beginning balance | $ | 906 | $ | 926 | ||||
Goodwill acquired during the year | — | 690 | ||||||
Exchange difference | 20 | 14 | ||||||
Ending balance | 926 | 1,630 | ||||||
Accumulated impairment loss | ||||||||
Beginning balance | (906 | ) | (926 | ) | ||||
Changes during the year | — | — | ||||||
Exchange difference | (20 | ) | (14 | ) | ||||
Ending balance | (926 | ) | (940 | ) | ||||
Goodwill, net | $ | — | $ | 690 | ||||
ACQUIRED_INTANGIBLE_ASSETS_NET
ACQUIRED INTANGIBLE ASSETS, NET | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
ACQUIRED INTANGIBLE ASSETS, NET | ' | |||||||||||||||||||||||||
ACQUIRED INTANGIBLE ASSETS, NET | ' | |||||||||||||||||||||||||
7. ACQUIRED INTANGIBLE ASSETS, NET | ||||||||||||||||||||||||||
The Group’s intangible assets, presented in the following table, arose from the acquisition of Shanghai Ouku on May 24, 2010 and the acquisition of the fashion-focused site business from Ador Inc. on December 31, 2013. | ||||||||||||||||||||||||||
December 31, 2012 | December 31, 2013 | |||||||||||||||||||||||||
Gross | Accumulated | Accumulated | Net | Gross | Accumulated | Accumulated | Net | |||||||||||||||||||
carrying | amortization | impairment | carrying | carrying | amortization | impairment | carrying | |||||||||||||||||||
amount | loss | amount | amount | loss | amount | |||||||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||||
Trademark/Domain Name | $ | 1,010 | $ | — | $ | (1,010 | ) | $ | — | $ | 1,220 | $ | — | $ | (1,010 | ) | $ | 210 | ||||||||
Intangible assets subject to amortization: | ||||||||||||||||||||||||||
- Technology Platform | 90 | (90 | ) | — | — | 90 | (90 | ) | — | — | ||||||||||||||||
- Non-compete Agreement | 9 | (7 | ) | (2 | ) | — | 9 | (7 | ) | (2 | ) | — | ||||||||||||||
- Customer Base | 32 | (22 | ) | (10 | ) | — | 32 | (22 | ) | (10 | ) | — | ||||||||||||||
- Technology | — | — | — | — | 36 | — | — | 36 | ||||||||||||||||||
- Members | — | — | — | — | 20 | — | — | 20 | ||||||||||||||||||
$ | 1,141 | $ | (119 | ) | $ | (1,022 | ) | $ | — | $ | 1,407 | $ | (119 | ) | $ | (1,022 | ) | $ | 266 | |||||||
Due to the recurring losses and lower-than-expected performance of Shanghai Ouku, as of December 31, 2011, the Group performed an impairment assessment of intangible assets of Shanghai Ouku. Based on the assessment, the intangible assets of Shanghai Ouku were fully impaired by $1,022 for the year ended December 31, 2011. The fair value determination of the intangible assets is set out in Note 20. | ||||||||||||||||||||||||||
The amortization expenses incurred for the years ended December 31, 2011, 2012 and 2013 were $53, nil and nil, respectively. The Group expects to record amortization expenses of $17, $17, $17, $5 and nil for the years ended December 31, 2014, 2015, 2016, 2017, and 2018, respectively. |
ACCRUED_EXPENSES_AND_OTHER_CUR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ' | |||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ' | |||||||
8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||||||||
As of December 31, | ||||||||
2012 | 2013 | |||||||
Accrued payroll and staff welfare | $ | 6,345 | $ | 9,147 | ||||
Individual income tax withheld | 3,702 | 875 | ||||||
Business tax payable | 398 | 152 | ||||||
Accrued professional fees | 636 | 1,950 | ||||||
Accrued advertising fees | 911 | 1,004 | ||||||
Credit card processing charges | 370 | 401 | ||||||
Accrued sales return (1) | 116 | 751 | ||||||
Accrued chargebacks (2) | 85 | 100 | ||||||
Other accrued expenses | 248 | 1,180 | ||||||
Total | $ | 12,811 | $ | 15,560 | ||||
(1) Accrued sales return represents the gross profit effect of estimated sales return at the end of each of the respective years assuming products returned had no value to the Group. Movements during the respective years are as follows: | ||||||||
2012 | 2013 | |||||||
Balance at January 1 | $ | 292 | $ | 116 | ||||
Allowance for sales return made in the year | 5,336 | 9,897 | ||||||
Utilization of accrued sales return | (5,512 | ) | (9,262 | ) | ||||
Balance at December 31 | $ | 116 | $ | 751 | ||||
(2) Chargeback represents credit losses relating to fraudulent credit card activities which resulted in chargebacks from the payment processing agencies. For the years ended December 31, 2011, 2012 and 2013, the Group incurred chargeback of $447, $604 and $1,041, respectively, which was included in the general and administrative expenses. |
CONVERTIBLE_NOTES
CONVERTIBLE NOTES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
CONVERTIBLE NOTES | ' | |||||||
CONVERTIBLE NOTES | ' | |||||||
9. CONVERTIBLE NOTES | ||||||||
On March 23, 2012, the Company issued convertible notes of $8,000 with a term of 18 months to certain holders of Series C redeemable convertible preferred shares. The total principal amount of $8,000 was received in March 2012. The convertible notes bore interest at 12% per annum, or 15% per annum upon an event of default, uncompounded and computed on the basis of the actual number of days elapsed. | ||||||||
The convertible notes would be automatically converted into the same class of equity securities upon the completion of a qualified financing event, including a qualified initial public offering (“IPO”) if such qualified financing event occurred within the 18 months term. The conversion price would be equal to the per share issuance price of the equity securities issued for the qualified financing event; provided that in the event the total pre-money valuation of the Company prior to such financing event, without taking into account the convertible notes or the equity securities issued, was greater than $350,000 the conversion price would be equal to $350,000 divided by the total number of outstanding equity shares of the Company prior to such financing event which would include any shares issued or reserved for issuance under any benefit plan of the Company. The conversion price would be multiplied by 95% as the applicable conversion discount if the Company’s qualified financing event took place after three months but on or before six months from the convertible note issuance date, by 90% as the applicable conversion discount if the Company’s qualified financing event took place after six months but on or before 12 months from the convertible note issuance date and by 85% as the applicable conversion discount if the Company’s qualified financing event took place after 12 months from the convertible note issuance date. All interest accrued under the convertible notes would be paid in cash after a qualified financing event or at maturity. | ||||||||
In case there was no qualified financing event occurring during the 18 months term, the convertible notes would be automatically converted into Series C redeemable convertible preferred shares upon maturity. The maturity conversion price would be equal to $255,000 divided by the total number of outstanding equity shares of the Company on the maturity date which would include any shares issued or reserved for issuance under any benefit plan of the Company, but excluding the maturity conversion shares. | ||||||||
A beneficial conversion feature (“BCF”) of $2,096 was resulted as the estimated maturity conversion price as of December 31, 2012 was lower than the fair value of the ordinary shares on March 23, 2012, which was recognized as additional paid-in capital with a corresponding entry in debt discount. The debt discount would be amortized over the term of the convertible notes using effective interest method. During the year ended December 31, 2012, the amortized discount of $1,140 was included as part of interest income (expense) and other in the consolidated statements of operations. The embedded feature of interest rate reset upon an event of default in the convertible notes was a derivative but not subject to bifurcation as it was clearly and closely related to the economic risks and characteristics of the convertible notes. | ||||||||
Upon the IPO of the Company on June 11, 2013, the convertible notes were converted into 2,224,610 ordinary shares. | ||||||||
The carrying amount of the convertible notes was as follows: | ||||||||
As of December 31, | ||||||||
2012 | 2013 | |||||||
Principal | $ | 8,000 | $ | 8,000 | ||||
Debt discount | (2,096 | ) | (2,096 | ) | ||||
Accumulated amortization of debt discount | 1,140 | 2,096 | ||||||
Accrued interest | 744 | 1,157 | ||||||
Interest paid | — | (1,157 | ) | |||||
Conversion of convertible notes upon IPO | — | (8,000 | ) | |||||
Carrying amount | $ | 7,788 | $ | — | ||||
Amortization of debt discount and interest expense recognized related to the convertible notes was as follows: | ||||||||
2012 | 2013 | |||||||
Amortization of debt discount | $ | 1,140 | $ | 956 | ||||
Interest at coupon rate | 744 | 413 | ||||||
Total expense recognized | $ | 1,884 | $ | 1,369 |
SERIES_A_AND_SERIES_B_CONVERTI
SERIES A AND SERIES B CONVERTIBLE PREFERRED SHARES (SERIES A AND SERIES B CONVERTIBLE PREFERRED SHARES) | 12 Months Ended |
Dec. 31, 2013 | |
SERIES A AND SERIES B CONVERTIBLE PREFERRED SHARES | ' |
SERIES A AND SERIES B CONVERTIBLE PREFERRED SHARES | ' |
SERIES A AND SERIES B CONVERTIBLE PREFERRED SHARES | ' |
10. SERIES A AND SERIES B CONVERTIBLE PREFERRED SHARES | |
On October 27, 2008, the Company issued 15,000,000 Series A convertible preferred shares (“Series A preferred shares”) with par value of $0.000067 per share to third party investors for cash proceeds of $5,000, at an issuance price of $0.33 per Series A preferred share. As a part of this financing transaction, Series A preferred share investors required three of the Group’s founding shareholders to place all of their 24,633,333 ordinary shares under restriction. (see Note 12, Nonvested Shares for more details). | |
The Company determined that there was no beneficial conversion feature attributable to the Series A preferred shares because the initial and subsequent adjusted conversion price of Series A preferred shares was higher than the fair value of the Company’s ordinary shares on issue date of Series A preferred shares. Series A preferred shares were not redeemable. | |
On June 26, 2009, the Company issued 17,522,725 Series B convertible preferred shares (“Series B preferred shares”) with par value of $0.000067 per share to third party investors for cash proceeds of $11,270, at an issuance price of $0.643 per Series B preferred share. | |
The Company determined that there was no beneficial conversion feature attributable to the Series B preferred shares because the initial and subsequent adjusted conversion price of Series B preferred shares was higher than the fair value of the Company’s ordinary shares on issue date of Series B preferred shares. Series B preferred shares were not redeemable. | |
In June 2013 upon the completion of the Company’s IPO, the 15,000,000 Series A preferred shares and 17,522,725 Series B preferred shares were converted into an aggregate of 32,522,725 ordinary shares of the Company. | |
Key terms of the Series A and Series B preferred shares when they were outstanding are summarized as follows: | |
Dividends | |
Only after full payment of dividend or distribution on the Series C preferred shares, the holders of Series B preferred shares and Series A preferred shares would participate on an as-if converted basis with respect to any dividends payable to the ordinary shares on a pro rata and on an as-if converted basis. | |
Liquidation preference | |
In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, distributions to the shareholders of the Company would be made in the following manners (after satisfaction of all creditors’ claims and claims that may be preferred by law): | |
1. If the valuation of the Company immediately prior to such liquidation, dissolution or winding up was at least $300,000, the entire assets of the Company legally available for distribution would be distributed to the holders of Series A preferred shares, Series B preferred shares, Series C preferred shares and ordinary shares on a pro rata basis, according to the relative number of ordinary shares held by each such holder (determined on an as-if converted basis). | |
2. If the valuation of the Company immediately prior to such liquidation, dissolution or winding up was less than $300,000, holders of Series C preferred shares would be paid an amount equal to 150% of Series C preferred issuance price plus unpaid dividends if any first. Then Series B preferred shareholders would be paid an amount equal to Series B issuance price plus unpaid dividends if any. Then Series A preferred shareholders would be paid an amount equal to Series A issuance price plus unpaid dividends if any. Any remaining assets would be distributed ratably among Series C preferred shareholders, Series B preferred shareholders, Series A preferred shareholders and ordinary shareholders on an as-if converted basis. | |
Voting rights | |
Each outstanding ordinary shareholder had right to one vote. Each preferred shareholder had a number of voting rights equivalent to the number of ordinary shares into which Series A, Series B and Series C preferred shares could have converted at the record date for determination of the shareholders entitled to vote on related matters. | |
Conversion | |
Series A preferred shares would be convertible at the option of the holder any time into ordinary shares as determined by dividing the Series A issuance price by the Series A preferred shares conversion price. The Series A preferred shares conversion price would initially be the Series A issuance price per ordinary share. Series B preferred share would be convertible at the option of the holder any time into ordinary shares as determined by dividing the Series B issuance price by the Series B conversion price. The Series B preferred shares conversion price would initially be the Series B issuance price per ordinary share. Series C preferred shares would be convertible at the option of the holder any time into ordinary shares as determined by dividing the Series C issuance price by the Series C conversion price. The conversion price would initially be the Series C issuance price per ordinary share. | |
Applicable conversion price would be adjusted for share dividends, subdivisions, combinations, or consolidations of ordinary shares, other distributions, reclassification, exchange and substitution. Applicable conversion price share would also be adjusted in respect of the issuance of additional ordinary shares if the consideration per additional ordinary share issued or deemed to be issued by the Company is less than such applicable conversion price in effect on the date of and immediately prior to such issue. | |
All preferred shares would automatically be converted into ordinary shares at the then effective applicable conversion price upon the closing of a Company qualified initial public offering or the written consent of holders of more than two thirds of the outstanding preferred shares (voting as a single class on an as-if converted basis) including consent of holders of a majority of the outstanding Series C preferred shares. |
SERIES_C_CONVERTIBLE_REDEEMABL
SERIES C CONVERTIBLE REDEEMABLE PREFERRED SHARES (Series C preferred shares) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Series C preferred shares | ' | |||||||
SERIES C CONVERTIBLE REDEEMABLE PREFERRED SHARES | ' | |||||||
SERIES C CONVERTIBLE REDEEMABLE PREFERRED SHARES | ' | |||||||
11. SERIES C CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||||||||
On September 28, 2010, the Company issued a total of 9,651,565 convertible redeemable preferred shares (“Series C preferred shares”) with par value of $0.000067 per share to third party investors for cash proceeds of $35,000, at an issuance price of $3.626 per Series C preferred share. | ||||||||
The Company determined that there was no beneficial conversion feature attributable to the Series C preferred shares because the initial and subsequent adjusted conversion price of Series C preferred shares was higher than the fair value of the Company’s ordinary shares on the issue date of Series C preferred shares. The Company accreted changes in the redemption value over the period from the date of issuance to the earliest redemption date of the security. | ||||||||
In June 2013 upon the completion of the Company’s IPO, the 9,651,565 Series C preferred shares were converted into 9,651,565 ordinary shares of the Company. | ||||||||
Key terms of the Series C preferred shares when they were outstanding did not differ from those of Series A and Series B preferred shares except redemption right which is summarized as follows: | ||||||||
Redemption | ||||||||
During a period of ten years after the fourth year anniversary of the Series C preferred shares issue date, the holders of Series C preferred shares would have the right to redeem the Series C preferred shares. | ||||||||
The redemption price of each Series C preferred shares would be equal to, subject to adjustment for combinations, consolidations, subdivisions, share splits, share dividends or the like with respect to such share, the sum of: | ||||||||
(i) the Series C preferred share issuance price; plus, | ||||||||
(ii) 8% compound interest per annum on the Series C preferred share issuance price for each Series C preferred share accreted over the period from the date of issuance to the earliest redemption date of the security; plus, all accrued but unpaid dividends per Series C preferred share. | ||||||||
Below is the movement in the carrying value of the Series C preferred shares. | ||||||||
2012 | 2013 | |||||||
Balance on January 1 | $ | 38,500 | $ | 41,471 | ||||
Accretion to redemption value of Series C preferred shares | 2,971 | 1,621 | ||||||
Conversion of Series C preferred shares upon IPO | — | (43,092 | ) | |||||
Balance on December 31 | $ | 41,471 | $ | — |
ORDINARY_SHARES
ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2013 | |
ORDINARY SHARES | ' |
ORDINARY SHARES | ' |
12. ORDINARY SHARES | |
In June 2013, the Company completed its IPO of ADSs on the New York Stock Exchange with a total issuance of 8,492,368 ADSs at issuing price of $9.5 per ADS. Each ADS represents two ordinary shares of the Company. As such, the total ADSs represent 16,984,736 ordinary shares. Total net proceeds received were $75,030 from the IPO and the concurrent private placements, net of offering costs of $4,235. | |
In December 2013, the board of directors approved the Company to repurchase up to $20,000 of its own outstanding ADSs within one year from December 2013. |
SHARE_OPTIONS
SHARE OPTIONS | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SHARE OPTIONS | ' | ||||||||||||
SHARE OPTIONS | ' | ||||||||||||
13. SHARE OPTIONS | |||||||||||||
On October 27, 2008, the Company adopted the 2008 Share Incentive Option Plan (“2008 Plan”) for the granting of share options to employees to reward them for services provided to the Company and to provide incentives for future services. Pursuant to the 2008 Plan, total shares that the 2008 Plan was authorized to grant were 4,444,444 shares. The majority of the options will vest over four years where 25% of the options will vest at the end of the first year after the grant date through the fourth year. The share options expire 10 years from the date of grant. | |||||||||||||
In 2011, the Company granted 357,000, 8,000 and 119,000 share options under the 2008 Plan to employees at exercise prices of $4.25, $0.96 and $4.29 per share, respectively. These share options vest over a period ranged from three to four years. | |||||||||||||
In 2013, the Company granted 307,250 share options under the 2008 Plan to employees at exercise price of $4.75 per share. These share options vest over a period ranged from three to four years. | |||||||||||||
The fair value of each option granted was estimated on the date of grant using binomial option pricing model with the following assumptions during the applicable periods: | |||||||||||||
2011 | 2013 | ||||||||||||
Risk-free interest rate | 3.86% - 4.05% | 3.06%-3.83% | |||||||||||
Exercise multiple | 2 | 2-2.8 | |||||||||||
Expected volatility | 58% - 61% | 56%-60% | |||||||||||
Expected dividend yield | 0% | 0% | |||||||||||
Fair value of ordinary shares | $4.02 - $4.03 | $4.75-$4.97 | |||||||||||
(1) Risk-free interest rate | |||||||||||||
Risk-free interest rate was estimated based on the yield to maturity of China international government bonds with a maturity period close to the contractual term of the options. | |||||||||||||
(2) Exercise multiple | |||||||||||||
Exercise multiple represents the value of the underlying share as a multiple of exercise price of the option which, if achieved, results in exercise of the option. | |||||||||||||
(3) Volatility | |||||||||||||
The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of comparable listed companies over a period comparable to the contractual term of the options. | |||||||||||||
(4) Dividend yield | |||||||||||||
The dividend yield was estimated by the Group based on its expected dividend policy over the contractual term of the options. | |||||||||||||
(5) Fair value of underlying ordinary shares | |||||||||||||
Before the Company’s IPO, the estimated fair value of the ordinary shares underlying the options as of the respective grant dates was determined based on a retrospective valuation. When estimating the fair value of the ordinary shares on the grant dates, management has considered a number of factors, including the result of the third-party appraisals prepared by independent valuation firms, and equity transactions of the Company. | |||||||||||||
After the Company’s IPO, the fair value of the underlying ordinary shares is estimated based on the closing market price of the ADS of the Company as of the grant date. | |||||||||||||
A summary of the stock option activity under the 2008 Plan as of December 31, 2013, and changes during the year then ended is presented below: | |||||||||||||
Weighted average | Weighted average | ||||||||||||
Weighted average | fair value per | intrinsic value | |||||||||||
exercise price | option at | per option at | |||||||||||
Options granted | per option | grant date | grant date | ||||||||||
Outstanding at January 1, 2013 | 1,778,250 | $ | 1.12 | ||||||||||
Granted | 307,250 | $ | 4.75 | $ | 2.45 | $ | — | ||||||
Exercised | (363,400 | ) | $ | 0.65 | $ | 0.29 | $ | 0.12 | |||||
Forfeited | (159,250 | ) | $ | 3.46 | $ | 1.61 | $ | 0.12 | |||||
Outstanding at December 31, 2013 | 1,562,850 | $ | 1.71 | ||||||||||
The following table summarizes information regarding the share options granted as of December 31, 2013: | |||||||||||||
As of December 31, 2013 | |||||||||||||
Weighted- | |||||||||||||
Weighted- | average remaining | ||||||||||||
average exercise | contractual | Aggregate | |||||||||||
Options Number | price | life (years) | intrinsic value | ||||||||||
Options | |||||||||||||
Outstanding | 1,562,850 | $ | 1.71 | 6.55 | $ | 3,892 | |||||||
Exercisable | 945,663 | $ | 0.19 | 5.4 | $ | 3,627 | |||||||
Expected to vest | 524,609 | $ | 4.03 | 8.31 | $ | 226 | |||||||
The total intrinsic value of options exercised during the years ended December 31, 2011, 2012 and 2013 were nil, nil, and $1,235, respectively. | |||||||||||||
The weighted average grant date fair value of options granted during the years ended December 31, 2011 and 2013 was $1.96 and $2.45 per share, respectively. There were no options granted during the year ended December 31, 2012. | |||||||||||||
For the years ended December 31, 2011, 2012 and 2013, the Group recorded share-based compensation expense of $191, $216 and $280 related to the options under the 2008 Plan, respectively. As of December 31, 2013, there was $657 of unrecognized compensation cost related to the options, which is expected to be recognized over a weighted-average period of 2.98 years. | |||||||||||||
NONVESTED_SHARES
NONVESTED SHARES | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
NONVESTED SHARES | ' | ||||||||||
NONVESTED SHARES | ' | ||||||||||
14. NONVESTED SHARES | |||||||||||
Nonvested shares granted to founding shareholders under the restricted share agreement | |||||||||||
In October 2008, the Company’s three of the five founding shareholders who were also employees, entered into an arrangement with the investors in conjunction with the issuance of Series A preferred shares, whereby all of their 24,633,333 ordinary shares became subject to transfer restrictions. In addition, such nonvested shares were subject to repurchase by the Company upon termination of employment. The repurchase price was the par value of the ordinary shares. The founding shareholders retained the voting rights of such nonvested shares, and any additional securities or cash received as the result of ownership of such shares. This arrangement was accounted for as a reverse stock split followed by the grant of a restricted stock award under a performance-based plan. Accordingly, the Group measured the fair value of the nonvested shares and was recognizing the amount as compensation expense over the four year deemed service period. | |||||||||||
The founding shareholders’ nonvested shares vested as follows: (i) twenty percent on the date of October 23, 2008 (the Vesting Starting Date); (ii) twenty percent on the first anniversary of the Vesting Starting Date; (iii) after the first anniversary of the Vesting Starting Date, 1/36 of the remaining shares every thirty days thereafter. Vesting would be accelerated upon a qualified IPO or change of control of the Company. | |||||||||||
Before the founding shareholders’ nonvested shares were vested and released from the repurchase rights, the holders of the nonvested shares were entitle to all rights and privileges of those of ordinary shareholders, and were entitled to voting rights and dividends. Therefore, these nonvested shares were considered participating securities for the purpose of net loss per share calculation. In March 2012, the founding shareholders’ nonvested shares had been fully vested and released from the repurchase rights. | |||||||||||
Nonvested shares granted to employees under the 2008 Plan | |||||||||||
In 2011, the Company granted 1,820,010 nonvested shares to certain employees. These nonvested shares vest over a four year period from the date of the grant. | |||||||||||
In 2013, the Company granted 711,571 nonvested shares to certain officers and employees. These nonvested shares vest over a period ranged from two to four years. | |||||||||||
Nonvested shares granted to employees under the 2008 Plan - continued | |||||||||||
The following table summarizes information regarding the nonvested shares granted and vested: | |||||||||||
Weighted average | |||||||||||
grant date | |||||||||||
Number of Shares | fair value | ||||||||||
Outstanding at January 1, 2013 | 1,054,778 | $ | 4.46 | ||||||||
Granted | 711,571 | $ | 4.75 | ||||||||
Forfeited | (3,750 | ) | $ | 4.75 | |||||||
Vested | (767,397 | ) | $ | 4.5 | |||||||
Outstanding at December 31, 2013 | 995,202 | $ | 4.52 | ||||||||
The total fair value of shares vested during the years ended December 31, 2011, 2012 and 2013, was 21,342, 19,318, and 3,453 respectively. | |||||||||||
For the years ended December 31, 2011, 2012 and 2013, the Group recorded share-based compensation expenses of $1,902, $2,479 and $4,038 related to the nonvested shares, respectively. As of December 31, 2013, there was $3,027 of unrecognized compensation costs related to nonvested shares, which are expected to be recognized over a weighted-average period of 1.70 years. | |||||||||||
Total share-based compensation expenses for the years ended December 31, 2011, 2012 and 2013 were as follows: | |||||||||||
Year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Fulfillment | $ | 13 | $ | 10 | $ | 9 | |||||
Selling and marketing | 90 | 117 | 134 | ||||||||
General and administrative | 1,990 | 2,568 | 4,175 | ||||||||
Total | $ | 2,093 | $ | 2,695 | $ | 4,318 |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
INCOME TAXES | ' | ||||||||||
INCOME TAXES | ' | ||||||||||
15. INCOME TAXES | |||||||||||
Cayman Islands | |||||||||||
The Company is a tax-exempted company incorporated in the Cayman Islands and is not subject to tax on income or capital gains. | |||||||||||
Hong Kong | |||||||||||
Light In The Box and Lanting International are located in Hong Kong and subject to Hong Kong profits tax at 16.5% with respect to the profit generated from Hong Kong. | |||||||||||
PRC | |||||||||||
Except Lanting Huitong and Lanting Gaochuang, other entities of the Group domiciled in the PRC are subject to 25% statutory income tax rates in accordance with the Enterprise Income Tax Law (“EIT Law”) in the periods presented. Lanting Huitong qualified as a “software enterprise” and therefore enjoyed a two-year income tax exemption starting from 2010, the first profit making year, followed by a reduced tax rate of 12.5% for the subsequent three years. Lanting Gaochuang qualified as a “software enterprise” in 2012 and therefore is entitled to a two-year income tax exemption starting from 2012, its first profit making year, followed by a reduced tax rate of 12.5% for the subsequent three years. | |||||||||||
For the years ended December 31, 2011, 2012 and 2013, income tax expense (benefit) included in the consolidated statements of operations were attributable to the Group’s PRC subsidiary and VIEs and comprised current tax expense (benefit) of $(606), $19 and $69, respectively. There was a deferred tax benefit of $272 included in income tax benefit for the year ended December 31, 2011 and no material deferred tax expense (benefit) for the years ended December 31, 2012 and 2013. | |||||||||||
The principal components of the deferred tax assets and liabilities are as follows: | |||||||||||
As of December 31, | |||||||||||
2012 | 2013 | ||||||||||
Current deferred tax assets: | |||||||||||
Accrued payroll | $ | 502 | $ | 638 | |||||||
Accrued expenses | — | 45 | |||||||||
Less: Valuation allowance | (502 | ) | (683 | ) | |||||||
Current deferred tax assets, net | — | — | |||||||||
Non-current deferred tax asset: | |||||||||||
Net operating loss carry forwards | 8,338 | 7,959 | |||||||||
Less: Valuation allowance | (8,338 | ) | (7,959 | ) | |||||||
Non-current deferred tax asset, net | — | — | |||||||||
Total deferred tax asset, net | $ | — | $ | — | |||||||
The Group had no deferred tax liabilities as of December 31, 2012 and 2013. | |||||||||||
PRC - continued | |||||||||||
The Group operates through its subsidiaries and VIE entities and the valuation allowance is considered on each individual subsidiary and VIE basis. The net operating loss carry forwards of the subsidiaries and VIE registered in the PRC will expire on various dates through 2018. The Group has recognized a full valuation allowance against deferred tax assets as the Group believes that it is more likely than not that its deferred tax assets will not be realized as it does not expect to generate sufficient taxable income in the near future. | |||||||||||
Reconciliation between the expense (benefit) of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes is as follows: | |||||||||||
Year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Loss before provision of income tax | $ | (25,409 | ) | $ | (4,211 | ) | $ | (4,750 | ) | ||
Statutory tax rate in the PRC | 25 | % | 25 | % | 25 | % | |||||
Income tax at statutory tax rate | (6,352 | ) | (1,053 | ) | (1,187 | ) | |||||
Non-deductible expenses | 672 | 403 | 225 | ||||||||
Effect of income tax holiday and preferential tax rates | (828 | ) | (41 | ) | (62 | ) | |||||
Write-off/(refund) of prepaid income tax* | (606 | ) | — | — | |||||||
Effect of income tax rate differences in jurisdictions other than the PRC | 1,897 | 1,105 | 1,291 | ||||||||
Changes in valuation allowances | 4,339 | (395 | ) | (198 | ) | ||||||
Income tax expense (benefit) | $ | (878 | ) | $ | 19 | $ | 69 | ||||
* During the year of 2010, Lanting Huitong paid income tax of $579 at the request of the PRC tax authority. The Group did not expect to recover such prepaid income tax and, therefore, recorded the amount as income tax expenses in 2010. In September 2011, the PRC tax authority reassessed the tax payment and decided to refund the amount prepaid. The Group recorded such amount as tax refund in 2011. | |||||||||||
The Group did not identify significant unrecognized tax benefits for the years ended December 31, 2012 and 2013. The Group did not incur any interest related to unrecognized tax benefits, did not recognize any penalties as income tax expenses and does not anticipate any significant change in unrecognized tax benefits within 12 months from December 31, 2013. | |||||||||||
PRC - continued | |||||||||||
Uncertainties exist with respect to how the current income tax law in the PRC applies to the Group’s overall operations, and more specifically, with regard to tax residency status. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese Income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the New EIT Law provide that non-resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting and properties occurs within the PRC. On April 22, 2009, the State Administration of Taxation (the “SAT”) issued the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a Chinese-controlled offshore-incorporated enterprise is located in China. In addition, on August 3, 2011, the SAT issued a bulletin to made clarification in the areas of resident status determination, post-determination administration, as well as competent tax authorities. The Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. However, if the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed resident enterprises, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income taxes, at a rate of 25%. | |||||||||||
If any entity within the Group that is outside the PRC were to be a non-resident for PRC tax purposes dividends paid to it out of profits earned after January 1, 2008 would be subject to a withholding tax at a rate of 10%, subject to reduction by an applicable tax treaty with the PRC. As of December 31, 2012 and December 31, 2013, the Company’s subsidiaries located in the PRC recorded aggregate accumulated deficits. Accordingly, no deferred tax liability has been accrued for the Chinese dividend withholding taxes. In the future, aggregate undistributed earnings of the Company’s subsidiaries located in the PRC, if any, that are taxable upon distribution to the Company, will be considered to be indefinitely reinvested, because the Group does not have any plan to pay cash dividends on its ordinary shares in the foreseeable future and intends to retain most of its available funds and any future earnings for use in the operation and expansion of its business. | |||||||||||
In accordance with relevant the PRC tax administration laws, tax years from 2008 to 2012 of the Group’s PRC entities remain subject to tax audits as of December 31, 2013, at the tax authority’s discretion. |
LOSS_PER_SHARE
LOSS PER SHARE | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
LOSS PER SHARE | ' | ||||||||||
LOSS PER SHARE | ' | ||||||||||
16. LOSS PER SHARE | |||||||||||
The following table sets forth the computation of basic and diluted net loss per ordinary share for the following years: | |||||||||||
2011 | 2012 | 2013 | |||||||||
Numerator: | |||||||||||
Net loss | $ | (24,531 | ) | $ | (4,230 | ) | $ | (4,819 | ) | ||
Accretion of Series C convertible redeemable preferred shares | 2,800 | 2,971 | 1,621 | ||||||||
Undistributed earnings allocated to Series C preferred shares | — | ||||||||||
Net income attributable to Series C preferred shares for computing basic net income per Series C preferred share | 2,800 | 2,971 | 1,621 | ||||||||
Undistributed earnings allocated to Series A preferred shares | — | — | — | ||||||||
Net income attributable to Series A preferred shares for computing basic net income per Series A preferred share | — | — | — | ||||||||
Undistributed earnings allocated to Series B preferred shares | — | — | — | ||||||||
Net income attributable to Series B preferred shares for computing basic net income per Series B preferred share | — | — | — | ||||||||
Net loss attributable to ordinary shareholders of LightInTheBox Holding Co., Ltd. | (27,331 | ) | (7,201 | ) | (6,440 | ) | |||||
Net loss attributable to shareholders of the Company allocated for computing net loss per ordinary share-basic | (22,288 | ) | (6,843 | ) | (6,440 | ) | |||||
Net loss attributable to shareholders of the Company allocated for computing net loss per nonvested share-basic | (5,043 | ) | (358 | ) | — | ||||||
Plus: income effect from assumed conversion of Series A and Series B preferred shares | — | — | — | ||||||||
Undistributed earnings allocated to Series A preferred shares | — | — | — | ||||||||
Undistributed earnings allocated to Series B preferred shares | — | — | — | ||||||||
Net loss per ordinary share-basic | $ | (0.76 | ) | $ | (0.20 | ) | $ | (0.09 | ) | ||
Net loss per nonvested share-basic | $ | (0.76 | ) | $ | (0.20 | ) | $ | — | |||
Net loss per ordinary share-diluted | $ | (0.76 | ) | $ | (0.20 | ) | $ | (0.09 | ) | ||
Net loss per Series A preferred share | — | — | — | ||||||||
Net loss per Series B preferred share | — | — | — | ||||||||
Net income per Series C preferred share | $ | 0.29 | $ | 0.31 | $ | 0.38 | |||||
2011 | 2012 | 2013 | |||||||||
Numerator | |||||||||||
Shares (denominator): | |||||||||||
Weighted average number of shares used in calculating net loss per nonvested share-basic | 6,663,370 | 1,792,535 | — | ||||||||
Weighted average number of shares used in calculating net loss per Series A preferred share-basic | 15,000,000 | 15,000,000 | 6,616,438 | ||||||||
Weighted average number of shares used in calculating net loss per Series B preferred share —basic | 17,522,725 | 17,522,725 | 7,729,202 | ||||||||
Weighted average number of shares used in calculating net loss per Series C preferred share —basic | 9,651,565 | 9,651,565 | 4,257,266 | ||||||||
Weighted average number of shares used in calculating net loss per ordinary share —basic | 29,445,595 | 34,316,430 | 71,555,449 | ||||||||
As a result of the Group’s net loss for each of the three years ended December 31, 2013, 1,975,000, 1,778,250 and 1,562,850 options outstanding and 5,536,925, 1,054,778 and 995,202 nonvested shares outstanding as of December 31, 2011, 2012 and 2013, respectively, were excluded from the computation of diluted net loss per share as their inclusion would have been anti-dilutive. In addition, 15,000,000 Series A preferred shares, 17,522,725 Series B preferred shares, 9,651,565 Series C preferred shares and the convertible notes computed using as-if converted method were excluded from the calculation of diluted loss per share as their inclusion would have been anti-dilutive. | |||||||||||
EMPLOYEE_RETIREMENT_BENEFIT
EMPLOYEE RETIREMENT BENEFIT | 12 Months Ended |
Dec. 31, 2013 | |
EMPLOYEE RETIREMENT BENEFIT | ' |
EMPLOYEE RETIREMENT BENEFIT | ' |
17. EMPLOYEE RETIREMENT BENEFIT | |
Full time employees in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. The PRC labor regulations require the Group to make contributions based on certain percentages of the employees’ basic salaries. Other than the contribution, there is no further obligation under these plans. The total contribution for such employee benefits was $2,897, $3,848 and $5,603 for the years ended December 31, 2011, 2012 and 2013, respectively. |
STATUTORY_RESERVES_AND_RESTRIC
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2013 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | ' |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | ' |
18. STATUTORY RESERVES AND RESTRICTED NET ASSETS | |
In accordance with the PRC laws and regulations, the group is required to provide for certain statutory reserves, namely general reserve, enterprise expansion reserve, and staff welfare and bonus reserve, all of which are appropriated from net profit as reported in their PRC statutory accounts. The Group’s subsidiaries are required to allocate at least 10% of their after-tax profits to the general reserve until such reserve has reached 50% of their respective registered capital. | |
Appropriations to the enterprise expansion reserve and the staff welfare and bonus reserve are to be made at the discretion of the board of directors of each of the Group’s subsidiaries. There are no appropriations to these reserves by the Group’s PRC (mainland) subsidiaries for the years ended December 31, 2011, 2012 and 2013. | |
As a result of these PRC laws and regulations and the requirement that distributions by the PRC entities can only be paid out of distributable profits computed in accordance with the PRC GAAP, the PRC entities are restricted from transferring a portion of their net assets to the Group. Amounts restricted include paid-in capital and the statutory reserves of the Company’s PRC subsidiaries and VIE. As of December 31, 2012 and December 31, 2013, the amounts of capital represented the amount of net assets of the relevant subsidiaries and VIE in the Group not available for distribution amounted to $3,293 and $3,293, respectively. |
SEGMENT_REPORTING
SEGMENT REPORTING | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SEGMENT REPORTING | ' | ||||||||||||||||
SEGMENT REPORTING | ' | ||||||||||||||||
19. SEGMENT REPORTING | |||||||||||||||||
The Group’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group has one operating segment. | |||||||||||||||||
Components of the Group’s net revenues are presented in the following table: | |||||||||||||||||
For the years ended December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Apparel | $ | 46,888 | $ | 80,274 | $ | 86,459 | |||||||||||
Electronics and other general merchandise | 69,342 | 119,736 | 205,958 | ||||||||||||||
Total net revenues | $ | 116,230 | $ | 200,010 | $ | 292,417 | |||||||||||
The following table summarizes the Group’s total net revenues generated in different geographic locations and as a percentage of total net revenues. | |||||||||||||||||
For the years ended December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Revenues | % | Revenues | % | Revenues | % | ||||||||||||
Europe | $ | 57,853 | 49.8 | $ | 101,424 | 50.7 | $ | 182,958 | 62.5 | ||||||||
North America | 32,721 | 28.2 | 47,985 | 24 | 54,858 | 18.8 | |||||||||||
South America | 4,097 | 3.5 | 12,876 | 6.4 | 26,205 | 9 | |||||||||||
Other countries | 21,559 | 18.5 | 37,725 | 18.9 | 28,396 | 9.7 | |||||||||||
Total net revenues | $ | 116,230 | 100 | $ | 200,010 | 100 | $ | 292,417 | 100 | ||||||||
North America’s net revenues include revenues from the United States of $29,117, $41,840 and $46,136 during the years ended December 31, 2011, 2012 and 2013, respectively. Europe’s net revenues include revenues from France of $22,448, $32,913 and $42,504 and revenues from the United Kingdom of $6,541, $13,577 and $12,986 during the years ended December 31, 2011, 2012 and 2013, respectively. | |||||||||||||||||
As of December 31, 2012 and 2013, substantially all of long-lived assets of the Group are located in the PRC. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2013 | |
FAIR VALUE MEASUREMENTS | ' |
FAIR VALUE MEASUREMENTS | ' |
20. FAIR VALUE MEASUREMENTS | |
The Group had no financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2012 and December 31, 2013. | |
Goodwill and other intangible assets are measured at fair value on a nonrecurring basis and they are recorded at fair value only when impairment is recognized. The Group estimated the fair value of a reporting unit using the discounted cash flow method under the income approach. The discounted cash flows were based on five years financial forecasts developed by management for planning purposes and estimated discount rates. Cash flows beyond the forecasted period were estimated using a terminal value calculation. The fair values of intangible asset were determined based on various valuation methods, including the replacement cost method and the relief from royalty method. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2013 | |
RELATED PARTY TRANSACTIONS | ' |
RELATED PARTY TRANSACTIONS | ' |
21. RELATED PARTY TRANSACTIONS | |
The Company entered into indemnification agreements with certain directors. These agreements require the Company to indemnify such individuals, to the fullest extent permitted by law, for certain liabilities to which they may become subject as a result of their affiliation with the Company. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
22. COMMITMENTS AND CONTINGENCIES | |||||
(1) Commitments | |||||
Lease commitment | |||||
The Group has operating lease agreements for warehouses and offices. Rent expenses under operating leases for the year ended December 31, 2011, 2012 and 2013 were $1,716, $2,074 and $3,005, respectively. Future minimum lease payments under non-cancellable operating lease agreements as of December 31, 2013 are as follows: | |||||
2014 | $ | 3,921 | |||
2015 | 3,482 | ||||
2016 | 556 | ||||
2017 | 198 | ||||
2018 | — | ||||
$ | 8,157 | ||||
(2) Contingencies | |||||
The Company’s PRC subsidiary, VIE and VIE’s subsidiary, have not fully paid the contributions for employee benefit plans as required by applicable PRC regulations. While the Company believes it has made adequate provision of such outstanding amounts in the audited consolidated financial statements, prior failure to make payments may be in violation of applicable PRC labor-related laws and the Group may be subject to fines up to maximum of $19,006 if it fails to rectify any such breaches within the period prescribed by the relevant authorities. As of December 31, 2013, there had been no actions initiated by the relevant authorities. The Group is unable to reasonably estimate the actual amount of fines and penalty that may rise if the authorities were to become aware of the non-compliance and were to take action. | |||||
The Company’s PRC subsidiary, VIEs and VIEs’ subsidiary did not withhold appropriate amount of individual income tax as required by applicable PRC tax laws. While the Company believes it has made adequate provision of such outstanding amounts in the consolidated financial statements, and in March 2013, the accrued amounts were substantially paid by the Company on a voluntary basis to the relevant tax authority, the Company may still be subject to future fines or levies for such non-compliance. As of December 31, 2013, there had been no actions initiated by the relevant authorities. The Group is unable to reasonably estimate the actual amount of fines or levies that may rise if the authorities were to take action. | |||||
On August 27, 2013, the Company was named as a defendant in the first of three putative shareholder class action lawsuits filed in the United States District Court for the Southern District of New York. These three actions have been consolidated under the master caption In re LightInTheBox Holding Co., Ltd. Securities Litigation, No. 13-cv-6016. On March 14, 2014, the lead plaintiff filed a consolidated second amended complaint purportedly on behalf of a class of purchasers of the Company’s ADSs during the period from June 6, 2013 to August 19, 2013, inclusive. The complaint generally alleges that the registration statement and prospectus filed in connection with the Company’s initial public offering contained misrepresentations regarding the Company’s customers, revenue growth, marketing efforts, and costs of revenue, and failed to disclose, among other things, a decline in the sales of the Company’s apparel business during the second quarter of 2013. Plaintiff asserts claims and seeks unspecified damages against the Company and/or certain of the current and former executive officers for violation of sections 10(b) and 20(a) of the Exchange Act. On April 17, 2014, the court granted the Company leave to move to dismiss the complaint for failure to state a claim as a matter of law. As of this stage, it is not possible to predict, with a reasonable of certainty, the ultimate outcome. However, managements believe these lawsuits are without merit, and the likelihood of a material outcome is remote. As of December 31, 2013, no losses with respect to this contingency were accrued. | |||||
The Group is subject to periodic legal or administrative proceedings in the ordinary course of business. The Group does not believe that any currently pending legal or administrative proceeding to which the Group is a party will have a material effect on its business or financial condition. | |||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||
Dec. 31, 2013 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
Basis of presentation | ' | ||
Basis of presentation | |||
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). | |||
Basis of consolidation | ' | ||
Basis of consolidation | |||
The consolidated financial statements include the financial statements of the Company, its VIEs and VIE’s subsidiaries. All inter-company transactions and balances are eliminated upon consolidation. | |||
Use of estimates | ' | ||
Use of estimates | |||
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amount of revenues and expenses in the financial statements and accompanying notes. Actual results may differ from these estimates. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group’s financial statements include revenue recognition, inventories, impairment of goodwill and intangible assets, fair value of ordinary shares, share-based compensation and income taxes. | |||
Cash and cash equivalents | ' | ||
Cash and cash equivalents | |||
Cash and cash equivalents consist of cash on hand, demand deposits with financial institutions and term deposits with an original maturity of three months or less. | |||
Term deposit | ' | ||
Term deposit | |||
Term deposit with an original maturity of greater than three months and less than one year is classified as held-to-maturity investments and carried at amortized cost. The term deposits mature within one year and are subject to penalty for early withdrawal before their maturity. | |||
Restricted cash | ' | ||
Restricted cash | |||
Restricted cash consists of cash which is held under the Group’s name in an escrow account as deposits withheld by third party payment processing agencies and the deposits fluctuate with the volume of payment processed. | |||
Accounts receivable | ' | ||
Accounts receivable | |||
Accounts receivable represents cash collected by the delivery service providers on behalf of the Group, as a result of completed sales transactions in the PRC under cash-on-delivery terms, and has not been remitted back to the Group. As of December 31, 2012 and 2013, there was no allowance for doubtful accounts due to the nature of the receivables which is cash collected from customers and in-transit to the Group. | |||
Inventories, net | ' | ||
Inventories, net | |||
Inventories are accounted for using the first-in-first-out method, and are valued at the lower of cost or market value. Adjustments are recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and broken assortments, which is dependent upon factors such as historical trends with similar merchandise, inventory aging, and historical and forecasted consumer demand. Write downs are recorded in cost of goods sold in the consolidated statements of operations. | |||
Property and equipment, net | ' | ||
Property and equipment, net | |||
Property and equipment, net is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives: | |||
Useful lives | |||
Leasehold improvements | Lesser of the lease term | ||
or estimated useful life of the assets | |||
Furniture, fixtures and office equipment | 5 years | ||
Software and IT equipment | 3 years | ||
Acquired intangible assets, net | ' | ||
Acquired intangible assets, net | |||
Intangible assets, other than goodwill, resulting from the acquisitions of entities accounted for using the acquisition method of accounting are estimated by management based on the fair value of assets acquired. | |||
Identifiable intangible assets are carried at cost less accumulated amortization. Amortization of members is computed based on the estimated attrition pattern. Amortization of technology is computed using the straight-line method over the estimated useful lives. | |||
Useful lives | |||
Domain name/Tradename | Indefinite life | ||
Technology | 3 Years | ||
Members | 4 Years | ||
Impairment of long-lived assets and intangible assets with definite life | ' | ||
Impairment of long-lived assets and intangible assets with definite life | |||
Long-lived assets, such as property and equipment and definite-lived intangible assets, are stated at cost less accumulated depreciation or amortization. | |||
The Group evaluates the recoverability of long-lived assets, including identifiable intangible assets, with determinable useful lives, whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. The Group compares the carrying amount of long-lived asset to the estimated undiscounted future cash flows associated with it. Impairment exists when the sum of the expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. Fair value is estimated based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Group to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. | |||
Impairment of Goodwill and Indefinite-lived intangible assets | ' | ||
Impairment of Goodwill and Indefinite-lived intangible assets | |||
Goodwill and intangible assets deemed to have indefinite useful lives are not amortized, but tested for impairment annually or more frequently if event and circumstances indicate that they might be impaired. | |||
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. The Group performs a two-step goodwill impairment test. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not considered impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit’s goodwill to the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. In estimating the fair value of each reporting unit the Group estimates the future cash flows of each reporting unit, the Group has taken into consideration the overall and industry economic conditions and trends, market risk of the Group and historical information. The Group recorded an impairment loss of $906, nil and nil for the years ended December 31, 2011, 2012 and 2013, respectively. | |||
An intangible asset that is not subject to amortization is tested for impairment at least annually or if events or changes in circumstances indicate that the asset might be impaired. Such impairment test compares the fair values of assets with their carrying value amounts and an impairment loss is recognized if and when the carrying amounts exceed the fair values. The estimates of fair values of intangible assets not subject to amortization are determined using various discounted cash flow valuation methodologies. Significant assumptions are inherent in this process, including estimates of discount rates. The Group recorded an impairment loss of $1,010, nil and nil for the years ended December 31, 2011, 2012 and 2013, respectively. | |||
Business combinations | ' | ||
Business combinations | |||
The assets acquired, the liabilities assumed, and any noncontrolling interest of the acquiree at the acquisition date, if any, are measured at their fair values as of that date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interest of the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Acquisition costs are expensed when incurred. Consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition. For shares issued in a business combination, if any, the Group estimates the fair value as of the date of acquisition. | |||
Revenue recognition | ' | ||
Revenue recognition | |||
Revenue is stated net of value added tax (“VAT”) and return allowances. | |||
The Group recognizes revenue from the sale of apparel, electronics and other general merchandise through its websites and other online platforms. | |||
The Group recognizes revenue when the following four revenue recognition criteria are met: | |||
(i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured. | |||
The Group defers revenue and the related product costs for shipments that are in-transit to the customer. Payments received in advance of delivery are classified as advances from customers. The Group recognizes the revenue at the time the end customers receive the products, which is typically within a few days of shipment. Amounts collected by delivery service providers but not remitted to the Group are classified as accounts receivable on the consolidated balance sheets. | |||
Certain employees of the Group register in supplemental online outlets under their own name as these websites require registration using identity cards of individuals to sell the Group’s product on behalf of the Group. The Group has contractual arrangements with these employees which require them to transfer customers’ payments received to the Group for the sale of the products. The Group evaluates the sales transactions performed by certain employees on behalf of the Group to determine whether to recognize the revenues on a gross or net basis. The determination is based upon an assessment as to whether the Group acts as a principal or agent when selling the products. All of the revenues involving employees performing sales transactions on the supplemental online outlets on behalf of the Group are currently accounted for on a gross basis since the Group is the primary obligor, has general and physical inventory risk, latitude in establishing prices, discretion in supplier selection and credit risks. | |||
Revenue recognition - continued | |||
In arrangements whereby certain suppliers place the products at the Group’s premises, the risk and rewards of ownership of the products passed to the Group upon confirmation of orders by the Group’s customers. All of the revenues involving these arrangement are accounted for on a gross basis since the Group is the primary obligor, has physical inventory risk, latitude in establishing prices, discretion in supplier selection and credit risks. | |||
The Group periodically provides incentive offers to its customers to encourage purchases. Current discount offers, when accepted by its customers, are treated as a reduction to the purchase price of the related transaction and are included as a net amount in revenue. The Group also provides discount reward, which may only be used in the future, to customers who have made a current purchase. As the right of receiving future discount does not represent a significant and incremental discount to the customer, the discount is treated as a reduction of revenue when the future transaction takes place. | |||
The Group established a membership program whereby a registered member earns certain points for visiting one of the Group’s websites. Points could only be redeemed in connection with a future purchase. Such points, when redeemed, were charged as costs of sales at the time of future purchase. Since the points were earned not based on past sales transactions, no accrual was made at the time when earned by the registered members. | |||
Promotional free products, which cannot be redeemed for cash are normally shipped together with current qualified sales. Cost of these promotional items or free products are recorded as cost of sales when the revenue of the current qualified sales is recognized. | |||
The Group allows customers to return goods within a period of time subsequent to the delivery of the goods purchased. The return period varies depending on reasons for the return, which normally ranges from 7 days to 30 days. The Group estimates return allowance based on historical experience. The estimation of return allowances is adjusted to the extent that actual returns differ, or are expected to differ. Changes in the estimated return allowance are recognized through a cumulative catch-up adjustment in the period of change and will impact the amount of net revenues in that period. | |||
Outbound shipping charges to customers are included as a part of the revenues. Outbound shipping-related costs are included in the cost of goods sold. Shipping costs incurred for sales of products and recognized as cost of goods sold were $24,589, $40,694 and $63,917 for the years ended December 31, 2011, 2012 and 2013, respectively. | |||
VAT on sales is calculated at 17% on revenue from sale of products in the PRC and paid after deducting input-VAT on purchases. The net VAT balance between input-VAT and output-VAT is reflected in the accounts under prepaid expenses and other current assets or accrued expenses and other current liabilities. | |||
Cost of goods sold | ' | ||
Cost of goods sold | |||
Cost of sales primarily consists of the purchase price of consumer products sold by the Group on its websites, inbound and outbound shipping charges, packaging supplies and inventory write-down. Shipping charges to receive products from its suppliers are included in inventory cost, and recognized as cost of sales upon sale of products to its customers. | |||
Fulfillment | ' | ||
Fulfillment | |||
Fulfillment costs represent those costs incurred in operating and staffing the Group’s fulfillment and customer service centers, including costs attributable to buying, receiving, inspecting, and warehousing inventories; picking, packaging, and preparing customer orders for shipment; payment processing and related transaction costs. | |||
Selling and marketing | ' | ||
Selling and marketing | |||
Selling and marketing expenses consist primarily of search engine marketing and advertising, affiliate market program expenditure, public relations expenditures; and payroll and related expenses for personnel engaged in selling, marketing and business development. The Group pays to use certain relevant key words relating to its business on major search engines and the fee is on a “cost-per-click” basis. The Group also pays commissions to participants in its affiliate program when customer referrals result in product sales, and the Group classifies such costs as selling and marketing expenses in the consolidated statements of operations. Advertising includes fees paid to on-line advertisers who assist the Group to advertise at targeted websites. Such fees are paid at fixed rate or calculated based on volume directed to the Group’s website. | |||
General and administrative | ' | ||
General and administrative | |||
General and administrative expenses consist of payroll and related expenses for employees involved in general corporate functions such as accounting, finance, tax, legal, and human resources; costs associated with the use by these functions of facilities and equipment, such as depreciation expense and rent; professional fees and other general corporate costs. Also included in general and administrative expenses are payroll and related expenses for employees involved in product research and development, and systems support, as well as server charges and costs associated with telecommunications. | |||
General and administrative expenses also include credit losses relating to fraudulent credit card activities which resulted in chargebacks from the payment processing agencies. The Group estimates chargebacks based on historical experience. The estimation of chargebacks is adjusted to the extent that actual chargebacks differ, or are expected to differ. Changes in estimated chargebacks are recognized through a cumulative catch-up adjustment in the period of change and will impact the amount of general and administrative expenses in that period. | |||
Fair value | ' | ||
Fair value | |||
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. | |||
Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: | |||
· Level 1-inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. | |||
· Level 2-inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||
· Level 3-inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. | |||
Financial instruments | ' | ||
Financial instruments | |||
Financial instruments of the Group primarily consist of cash and cash equivalents, term deposit, restricted cash, receivable from processing agencies, accounts payable, convertible notes and preferred shares. The carrying values of cash, term deposit, restricted cash, receivable from processing agencies and accounts payable approximate their fair values due to short-term maturities. The fair value of convertible notes and preferred shares is not readily available. The carrying amounts of convertible notes are measured at amortized cost adopting the effective interest method. The carrying amounts of preferred shares are measured at cost, plus any accretion to redemption value. | |||
Foreign currency translation | ' | ||
Foreign currency translation | |||
The functional currency of the Company, Light In The Box, Lanting International, LITB, Inc. and LightInTheBox (UK) Limited is the United States dollar (“U.S. dollar”). The financial records of the Group’s subsidiaries and VIE entities located in the PRC are maintained in their local currencies, the Renminbi (“RMB”), which are also the functional currencies of these entities. | |||
Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the consolidated statements of operations. | |||
The Group’s entities with functional currency of RMB, translate their operating results and financial position into the U.S. dollar, the Group’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive loss. | |||
Income taxes | ' | ||
Income taxes | |||
Deferred income taxes are provided using the asset and liability method. Under this method, deferred income taxes are recognized for tax credits and net operating losses available for carry forwards and significant temporary differences. Deferred tax assets and liabilities are classified as current or non-current based upon the classification of the related asset or liability in the financial statements or the expected timing of their reversal if they do not relate to a specific asset or liability. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities. | |||
The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. The Group did not recognize any income tax due to uncertain tax position or incur any interest and penalties related to potential underpaid income tax expenses for the years ended December 31, 2011, 2012 or 2013, respectively. | |||
Comprehensive loss | ' | ||
Comprehensive loss | |||
Comprehensive loss includes net loss and foreign currency translation adjustments and is reported in the consolidated statements of comprehensive loss. | |||
Share-based compensation | ' | ||
Share-based compensation | |||
Share-based payment transactions with employees, such as share options are measured based on the grant date fair value of the equity instrument. The Group has elected to recognize compensation expense using the straight-line method for all employee equity awards granted with graded vesting provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant-date value of the options that are vested at that date, over the requisite service period of the award, which is generally the vesting period of the award. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of share-based compensation expense to be recognized in future periods. | |||
Operating leases | ' | ||
Operating leases | |||
Leases where the rewards and risks of ownership of assets primarily remain with the lessor are accounted for as operating leases. Some of operating lease agreements of the Group contain provisions for future rent increases, rent free periods, or periods in which rent payments are reduced (abated). The total amount of rental payments due over the lease term is being charged to rent expense on the straight-line method over the term of the lease. The difference between rent expense recorded and the amount paid is credited or charged to other accrued expenses, which is included in “Accrued expenses and other current liabilities” in the accompanying consolidated balance sheets. | |||
Loss per share | ' | ||
Loss per share | |||
Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by weighted average number of ordinary shares outstanding during the period. | |||
The Group’s Series A convertible preferred shares, Series B convertible preferred shares and Series C convertible redeemable preferred shares are participating securities as the preferred shares participate in undistributed earnings on an as-if-converted basis. Nonvested shares are also participating securities as they enjoy identical dividend rights as ordinary shares. Accordingly, the Group uses the two-class method whereby undistributed net income is allocated on a pro rata basis to each participating share to the extent that each class may share in income for the period. Undistributed net loss is not allocated to preferred shares because they are not contractually obligated to participate in the loss allocated to the ordinary and nonvested shares. | |||
Diluted loss per ordinary share reflects the potential dilution that could occur if securities were exercised or converted into ordinary shares. The Group had convertible preferred shares, convertible redeemable preferred shares, stock options, nonvested shares and convertible notes, which could potentially dilute basic earnings per share in the future. To calculate the number of shares for diluted income per share, the effect of the convertible preferred shares, convertible redeemable preferred shares and convertible notes is computed using the as-if-converted method; and the effect of the stock options and nonvested shares is computed using the treasury stock method. | |||
Significant risks and uncertainties | ' | ||
Significant risks and uncertainties | |||
The Group participates in an industry with rapid changes in regulations, customer demand and competition and believes that changes in any of the following areas could have a material adverse effect on the Group’s future financial position, results of operations, or cash flows: advances and trends in e-commerce industry; changes in certain supplier and vendor relationships; regulatory or other PRC related factors; and risks associated with the Group’s ability to keep and increase the market coverage | |||
Concentration of credit risk | |||
Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and advances to suppliers. The Group places its cash and cash equivalents with financial institutions located in the Cayman Islands, the PRC and Hong Kong. Accounts receivable primarily comprise amounts receivable from product delivery service providers. These amounts are collected from customers by the service providers upon product delivery. With respect to advances to product suppliers, the Group performs on-going credit evaluations of the financial condition of its suppliers. | |||
Foreign currency risk | |||
The RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China foreign exchange trading system market. The Group’s cash and cash equivalents, term deposit, and restricted cash denominated in RMB amounted to $683 and $56,602 at December 31, 2012 and 2013, respectively. | |||
Concentration of credit risk | ' | ||
Concentration of credit risk | |||
Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and advances to suppliers. The Group places its cash and cash equivalents with financial institutions located in the Cayman Islands, the PRC and Hong Kong. Accounts receivable primarily comprise amounts receivable from product delivery service providers. These amounts are collected from customers by the service providers upon product delivery. With respect to advances to product suppliers, the Group performs on-going credit evaluations of the financial condition of its suppliers. | |||
Foreign currency risk | ' | ||
Foreign currency risk | |||
The RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China foreign exchange trading system market. The Group’s cash and cash equivalents, term deposit, and restricted cash denominated in RMB amounted to $683 and $56,602 at December 31, 2012 and 2013, respectively. | |||
Recent accounting pronouncements | ' | ||
Recent accounting pronouncements | |||
In July 2013, the FASB issued a pronouncement which provides guidance on financial statement presentation of an unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The FASB’s objective in issuing this Accounting Standards Updates (“ASU”) is to eliminate diversity in practice resulting from a lack of guidance on this topic in current US GAAP. | |||
The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. | |||
This ASU applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. |
ORGANIZATION_AND_PRINCIPAL_ACT1
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ' | ||||||||||
Schedule of the Company's subsidiaries, VIEs and VIE's subsidiary | ' | ||||||||||
As of December 31, 2013, details of the Company’s subsidiaries, its VIEs and VIE’s subsidiary are as follows: | |||||||||||
Later of | |||||||||||
acquisition/ | Place of | Percentage of | Principal | ||||||||
Incorporation | incorporation | legal ownership | activities | ||||||||
Subsidiaries | |||||||||||
Light In The Box Limited (“Light In The Box”) | June 13, 2007 | Hong Kong | 100% | Online retail | |||||||
Lanting International Holding Limited | December 19, 2013 | Hong Kong | 100% | Investment holding | |||||||
(“Lanting International”) | |||||||||||
LITB, Inc. | December 18, 2013 | United States | 100% | Marketing and software development and technology support | |||||||
Lanting Jishi Trade (Shenzhen) Co., Ltd. | October 21, 2008 | People’s Republic of China | 100% | Online retail | |||||||
(“WFOE” or “Lanting Jishi”) | |||||||||||
Lanting Jishi Trade (Suzhou) Co., Ltd. | December 2, 2013 | People’s Republic of China | 100% | Inactive | |||||||
(“Lanting Suzhou”) | |||||||||||
LightInTheBox (UK) Limited | May 26, 2009 | United Kingdom | 100% | Inactive | |||||||
VIEs | |||||||||||
Shenzhen Lanting Huitong Technologies Co., Ltd. | June 24, 2008 | People’s Republic of China | Consolidated VIE | Software development and information technology support | |||||||
(“Lanting Huitong”) | |||||||||||
Beijing Lanting Gaochuang Technologies Co., Ltd. | December 6, 2011 | People’s Republic of China | Consolidated VIE | Software development and information technology support | |||||||
(“Lanting Gaochuang”) | |||||||||||
VIE’s (Lanting Huitong’s) wholly owned subsidiary | August 24, 2010 | People’s Republic of China | VIE’s subsidiary | Online retail | |||||||
Shanghai Ouku Network Technologies Co., Ltd. | |||||||||||
(“Shanghai Ouku”) | |||||||||||
Consolidated financial information of the Group's VIE and their subsidiaries included in consolidated financial statements after elimination of intercompany balances and transactions within the Group | ' | ||||||||||
As of | As of | ||||||||||
December 31, | December 31, | ||||||||||
2012 | 2013 | ||||||||||
Total assets | $ | 2,232 | $ | 2,042 | |||||||
Total liabilities | $ | 1,874 | $ | 1,489 | |||||||
Year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Net revenues | $ | 5,010 | $ | 2,743 | $ | 300 | |||||
Net loss | $ | (1,078 | ) | $ | (204 | ) | $ | (179 | ) | ||
Year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Net cash provided by operating activities | $ | 1,119 | $ | 200 | $ | 647 | |||||
Net cash used in investing activities | $ | (894 | ) | $ | (298 | ) | $ | (798 | ) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
Schedule of estimated useful lives of property and equipment | ' | ||
Useful lives | |||
Leasehold improvements | Lesser of the lease term | ||
or estimated useful life of the assets | |||
Furniture, fixtures and office equipment | 5 years | ||
Software and IT equipment | 3 years | ||
Schedule of estimated useful lives of identifiable intangible assets | ' | ||
Useful lives | |||
Domain name/Tradename | Indefinite life | ||
Technology | 3 Years | ||
Members | 4 Years |
INVENTORIES_NET_Tables
INVENTORIES, NET (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INVENTORIES, NET | ' | |||||||
Schedule of inventories | ' | |||||||
As of December 31, | ||||||||
2012 | 2013 | |||||||
Merchandise available for sale | $ | 6,642 | $ | 7,550 | ||||
Less: inventories provision for slow-moving and obsolescence | (889 | ) | (469 | ) | ||||
Total inventories, net | $ | 5,753 | $ | 7,081 |
PREPAID_EXPENSES_AND_OTHER_CUR1
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ' | |||||||
Schedule of components of other current assets which are included in the prepaid expenses and other current assets | ' | |||||||
As of December 31, | ||||||||
2012 | 2013 | |||||||
Receivable from processing agencies (1) | $ | 7,633 | $ | 4,659 | ||||
Deferred offering cost | 1,188 | — | ||||||
Prepayment to suppliers | 1,032 | 1,525 | ||||||
Interest receivable | — | 721 | ||||||
Option exercise receivable | — | 663 | ||||||
Rental deposits and prepaid rents | 337 | 339 | ||||||
VAT recoverable | 74 | — | ||||||
Staff advance | 57 | 104 | ||||||
Others | 241 | 879 | ||||||
Total | $ | 10,562 | $ | 8,890 | ||||
(1) Receivables from processing agencies represented cash that had been received from customers but held by the processing agencies as of December 31, 2012 and 2013. The receivables were collected by the Group subsequent to the respective period end. |
PROPERTY_AND_EQUIPMENT_NET_Tab
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PROPERTY AND EQUIPMENT, NET | ' | |||||||
Schedule of components of property and equipment | ' | |||||||
As of December 31, | ||||||||
2012 | 2013 | |||||||
Leasehold improvements | $ | 1,663 | $ | 3,043 | ||||
Furniture, fixtures and office equipment | 1,183 | 1,817 | ||||||
Software and IT equipment | 1,450 | 2,099 | ||||||
Property and equipment, gross | 4,296 | 6,959 | ||||||
Less: Accumulated depreciation | (2,504 | ) | (3,957 | ) | ||||
Property and equipment, net | $ | 1,792 | $ | 3,002 |
GOODWILL_Tables
GOODWILL (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
GOODWILL | ' | |||||||
Schedule of changes in carrying amounts of goodwill and accumulated impairment losses | ' | |||||||
2012 | 2013 | |||||||
Gross amount | ||||||||
Beginning balance | $ | 906 | $ | 926 | ||||
Goodwill acquired during the year | — | 690 | ||||||
Exchange difference | 20 | 14 | ||||||
Ending balance | 926 | 1,630 | ||||||
Accumulated impairment loss | ||||||||
Beginning balance | (906 | ) | (926 | ) | ||||
Changes during the year | — | — | ||||||
Exchange difference | (20 | ) | (14 | ) | ||||
Ending balance | (926 | ) | (940 | ) | ||||
Goodwill, net | $ | — | $ | 690 | ||||
ACQUIRED_INTANGIBLE_ASSETS_NET1
ACQUIRED INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
ACQUIRED INTANGIBLE ASSETS, NET | ' | |||||||||||||||||||||||||
Schedule of intangible assets | ' | |||||||||||||||||||||||||
December 31, 2012 | December 31, 2013 | |||||||||||||||||||||||||
Gross | Accumulated | Accumulated | Net | Gross | Accumulated | Accumulated | Net | |||||||||||||||||||
carrying | amortization | impairment | carrying | carrying | amortization | impairment | carrying | |||||||||||||||||||
amount | loss | amount | amount | loss | amount | |||||||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||||
Trademark/Domain Name | $ | 1,010 | $ | — | $ | (1,010 | ) | $ | — | $ | 1,220 | $ | — | $ | (1,010 | ) | $ | 210 | ||||||||
Intangible assets subject to amortization: | ||||||||||||||||||||||||||
- Technology Platform | 90 | (90 | ) | — | — | 90 | (90 | ) | — | — | ||||||||||||||||
- Non-compete Agreement | 9 | (7 | ) | (2 | ) | — | 9 | (7 | ) | (2 | ) | — | ||||||||||||||
- Customer Base | 32 | (22 | ) | (10 | ) | — | 32 | (22 | ) | (10 | ) | — | ||||||||||||||
- Technology | — | — | — | — | 36 | — | — | 36 | ||||||||||||||||||
- Members | — | — | — | — | 20 | — | — | 20 | ||||||||||||||||||
$ | 1,141 | $ | (119 | ) | $ | (1,022 | ) | $ | — | $ | 1,407 | $ | (119 | ) | $ | (1,022 | ) | $ | 266 |
ACCRUED_EXPENSES_AND_OTHER_CUR1
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ' | |||||||
Schedule of accrued expenses and other current liabilities | ' | |||||||
As of December 31, | ||||||||
2012 | 2013 | |||||||
Accrued payroll and staff welfare | $ | 6,345 | $ | 9,147 | ||||
Individual income tax withheld | 3,702 | 875 | ||||||
Business tax payable | 398 | 152 | ||||||
Accrued professional fees | 636 | 1,950 | ||||||
Accrued advertising fees | 911 | 1,004 | ||||||
Credit card processing charges | 370 | 401 | ||||||
Accrued sales return (1) | 116 | 751 | ||||||
Accrued chargebacks (2) | 85 | 100 | ||||||
Other accrued expenses | 248 | 1,180 | ||||||
Total | $ | 12,811 | $ | 15,560 | ||||
(1) Accrued sales return represents the gross profit effect of estimated sales return at the end of each of the respective years assuming products returned had no value to the Group. Movements during the respective years are as follows: | ||||||||
2012 | 2013 | |||||||
Balance at January 1 | $ | 292 | $ | 116 | ||||
Allowance for sales return made in the year | 5,336 | 9,897 | ||||||
Utilization of accrued sales return | (5,512 | ) | (9,262 | ) | ||||
Balance at December 31 | $ | 116 | $ | 751 | ||||
(2) Chargeback represents credit losses relating to fraudulent credit card activities which resulted in chargebacks from the payment processing agencies. For the years ended December 31, 2011, 2012 and 2013, the Group incurred chargeback of $447, $604 and $1,041, respectively, which was included in the general and administrative expenses. | ||||||||
Schedule of movements in accrued sales return | ' | |||||||
2012 | 2013 | |||||||
Balance at January 1 | $ | 292 | $ | 116 | ||||
Allowance for sales return made in the year | 5,336 | 9,897 | ||||||
Utilization of accrued sales return | (5,512 | ) | (9,262 | ) | ||||
Balance at December 31 | $ | 116 | $ | 751 |
CONVERTIBLE_NOTES_Tables
CONVERTIBLE NOTES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
CONVERTIBLE NOTES | ' | |||||||
Schedule of carrying amount of the convertible notes | ' | |||||||
As of December 31, | ||||||||
2012 | 2013 | |||||||
Principal | $ | 8,000 | $ | 8,000 | ||||
Debt discount | (2,096 | ) | (2,096 | ) | ||||
Accumulated amortization of debt discount | 1,140 | 2,096 | ||||||
Accrued interest | 744 | 1,157 | ||||||
Interest paid | — | (1,157 | ) | |||||
Conversion of convertible notes upon IPO | — | (8,000 | ) | |||||
Carrying amount | $ | 7,788 | $ | — | ||||
Schedule of amortization of debt discount and interest expense recognized related to the convertible notes | ' | |||||||
2012 | 2013 | |||||||
Amortization of debt discount | $ | 1,140 | $ | 956 | ||||
Interest at coupon rate | 744 | 413 | ||||||
Total expense recognized | $ | 1,884 | $ | 1,369 |
SERIES_C_CONVERTIBLE_REDEEMABL1
SERIES C CONVERTIBLE REDEEMABLE PREFERRED SHARES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
SERIES C CONVERTIBLE REDEEMABLE PREFERRED SHARES | ' | |||||||
Schedule of movement in carrying value of the Series C preferred shares | ' | |||||||
2012 | 2013 | |||||||
Balance on January 1 | $ | 38,500 | $ | 41,471 | ||||
Accretion to redemption value of Series C preferred shares | 2,971 | 1,621 | ||||||
Conversion of Series C preferred shares upon IPO | — | (43,092 | ) | |||||
Balance on December 31 | $ | 41,471 | $ | — |
SHARE_OPTIONS_Tables
SHARE OPTIONS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SHARE OPTIONS | ' | ||||||||||||
Schedule of assumptions used for estimating the fair value of each option granted on the date of grant | ' | ||||||||||||
2011 | 2013 | ||||||||||||
Risk-free interest rate | 3.86% - 4.05% | 3.06%-3.83% | |||||||||||
Exercise multiple | 2 | 2-2.8 | |||||||||||
Expected volatility | 58% - 61% | 56%-60% | |||||||||||
Expected dividend yield | 0% | 0% | |||||||||||
Fair value of ordinary shares | $4.02 - $4.03 | $4.75-$4.97 | |||||||||||
(1) Risk-free interest rate | |||||||||||||
Risk-free interest rate was estimated based on the yield to maturity of China international government bonds with a maturity period close to the contractual term of the options. | |||||||||||||
(2) Exercise multiple | |||||||||||||
Exercise multiple represents the value of the underlying share as a multiple of exercise price of the option which, if achieved, results in exercise of the option. | |||||||||||||
(3) Volatility | |||||||||||||
The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of comparable listed companies over a period comparable to the contractual term of the options. | |||||||||||||
(4) Dividend yield | |||||||||||||
The dividend yield was estimated by the Group based on its expected dividend policy over the contractual term of the options. | |||||||||||||
(5) Fair value of underlying ordinary shares | |||||||||||||
Before the Company’s IPO, the estimated fair value of the ordinary shares underlying the options as of the respective grant dates was determined based on a retrospective valuation. When estimating the fair value of the ordinary shares on the grant dates, management has considered a number of factors, including the result of the third-party appraisals prepared by independent valuation firms, and equity transactions of the Company. | |||||||||||||
After the Company’s IPO, the fair value of the underlying ordinary shares is estimated based on the closing market price of the ADS of the Company as of the grant date. | |||||||||||||
Summary of the stock option activity under the 2008 Plan | ' | ||||||||||||
Weighted average | Weighted average | ||||||||||||
Weighted average | fair value per | intrinsic value | |||||||||||
exercise price | option at | per option at | |||||||||||
Options granted | per option | grant date | grant date | ||||||||||
Outstanding at January 1, 2013 | 1,778,250 | $ | 1.12 | ||||||||||
Granted | 307,250 | $ | 4.75 | $ | 2.45 | $ | — | ||||||
Exercised | (363,400 | ) | $ | 0.65 | $ | 0.29 | $ | 0.12 | |||||
Forfeited | (159,250 | ) | $ | 3.46 | $ | 1.61 | $ | 0.12 | |||||
Outstanding at December 31, 2013 | 1,562,850 | $ | 1.71 | ||||||||||
Summary of information regarding the share options granted | ' | ||||||||||||
As of December 31, 2013 | |||||||||||||
Weighted- | |||||||||||||
Weighted- | average remaining | ||||||||||||
average exercise | contractual | Aggregate | |||||||||||
Options Number | price | life (years) | intrinsic value | ||||||||||
Options | |||||||||||||
Outstanding | 1,562,850 | $ | 1.71 | 6.55 | $ | 3,892 | |||||||
Exercisable | 945,663 | $ | 0.19 | 5.4 | $ | 3,627 | |||||||
Expected to vest | 524,609 | $ | 4.03 | 8.31 | $ | 226 |
NONVESTED_SHARES_Tables
NONVESTED SHARES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
NONVESTED SHARES | ' | ||||||||||
Summary of information regarding the nonvested shares granted and vested | ' | ||||||||||
Weighted average | |||||||||||
grant date | |||||||||||
Number of Shares | fair value | ||||||||||
Outstanding at January 1, 2013 | 1,054,778 | $ | 4.46 | ||||||||
Granted | 711,571 | $ | 4.75 | ||||||||
Forfeited | (3,750 | ) | $ | 4.75 | |||||||
Vested | (767,397 | ) | $ | 4.5 | |||||||
Outstanding at December 31, 2013 | 995,202 | $ | 4.52 | ||||||||
Schedule of share-based compensation expenses | ' | ||||||||||
Year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Fulfillment | $ | 13 | $ | 10 | $ | 9 | |||||
Selling and marketing | 90 | 117 | 134 | ||||||||
General and administrative | 1,990 | 2,568 | 4,175 | ||||||||
Total | $ | 2,093 | $ | 2,695 | $ | 4,318 |
INCOME_TAXES_Table
INCOME TAXES (Table) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
INCOME TAXES | ' | ||||||||||
Schedule of principal components of the deferred tax assets and liabilities | ' | ||||||||||
As of December 31, | |||||||||||
2012 | 2013 | ||||||||||
Current deferred tax assets: | |||||||||||
Accrued payroll | $ | 502 | $ | 638 | |||||||
Accrued expenses | — | 45 | |||||||||
Less: Valuation allowance | (502 | ) | (683 | ) | |||||||
Current deferred tax assets, net | — | — | |||||||||
Non-current deferred tax asset: | |||||||||||
Net operating loss carry forwards | 8,338 | 7,959 | |||||||||
Less: Valuation allowance | (8,338 | ) | (7,959 | ) | |||||||
Non-current deferred tax asset, net | — | — | |||||||||
Total deferred tax asset, net | $ | — | $ | — | |||||||
Schedule of reconciliation between the expense (benefit) of income taxes computed by applying the PRC tax rate to income (loss) before income taxes and the actual provision for income taxes | ' | ||||||||||
Year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Loss before provision of income tax | $ | (25,409 | ) | $ | (4,211 | ) | $ | (4,750 | ) | ||
Statutory tax rate in the PRC | 25 | % | 25 | % | 25 | % | |||||
Income tax at statutory tax rate | (6,352 | ) | (1,053 | ) | (1,187 | ) | |||||
Non-deductible expenses | 672 | 403 | 225 | ||||||||
Effect of income tax holiday and preferential tax rates | (828 | ) | (41 | ) | (62 | ) | |||||
Write-off/(refund) of prepaid income tax* | (606 | ) | — | — | |||||||
Effect of income tax rate differences in jurisdictions other than the PRC | 1,897 | 1,105 | 1,291 | ||||||||
Changes in valuation allowances | 4,339 | (395 | ) | (198 | ) | ||||||
Income tax expense (benefit) | $ | (878 | ) | $ | 19 | $ | 69 | ||||
* During the year of 2010, Lanting Huitong paid income tax of $579 at the request of the PRC tax authority. The Group did not expect to recover such prepaid income tax and, therefore, recorded the amount as income tax expenses in 2010. In September 2011, the PRC tax authority reassessed the tax payment and decided to refund the amount prepaid. The Group recorded such amount as tax refund in 2011. |
LOSS_PER_SHARE_Tables
LOSS PER SHARE (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
LOSS PER SHARE | ' | ||||||||||
Schedule of computation of basic and diluted net loss per ordinary share | ' | ||||||||||
2011 | 2012 | 2013 | |||||||||
Numerator: | |||||||||||
Net loss | $ | (24,531 | ) | $ | (4,230 | ) | $ | (4,819 | ) | ||
Accretion of Series C convertible redeemable preferred shares | 2,800 | 2,971 | 1,621 | ||||||||
Undistributed earnings allocated to Series C preferred shares | — | ||||||||||
Net income attributable to Series C preferred shares for computing basic net income per Series C preferred share | 2,800 | 2,971 | 1,621 | ||||||||
Undistributed earnings allocated to Series A preferred shares | — | — | — | ||||||||
Net income attributable to Series A preferred shares for computing basic net income per Series A preferred share | — | — | — | ||||||||
Undistributed earnings allocated to Series B preferred shares | — | — | — | ||||||||
Net income attributable to Series B preferred shares for computing basic net income per Series B preferred share | — | — | — | ||||||||
Net loss attributable to ordinary shareholders of LightInTheBox Holding Co., Ltd. | (27,331 | ) | (7,201 | ) | (6,440 | ) | |||||
Net loss attributable to shareholders of the Company allocated for computing net loss per ordinary share-basic | (22,288 | ) | (6,843 | ) | (6,440 | ) | |||||
Net loss attributable to shareholders of the Company allocated for computing net loss per nonvested share-basic | (5,043 | ) | (358 | ) | — | ||||||
Plus: income effect from assumed conversion of Series A and Series B preferred shares | — | — | — | ||||||||
Undistributed earnings allocated to Series A preferred shares | — | — | — | ||||||||
Undistributed earnings allocated to Series B preferred shares | — | — | — | ||||||||
Net loss per ordinary share-basic | $ | (0.76 | ) | $ | (0.20 | ) | $ | (0.09 | ) | ||
Net loss per nonvested share-basic | $ | (0.76 | ) | $ | (0.20 | ) | $ | — | |||
Net loss per ordinary share-diluted | $ | (0.76 | ) | $ | (0.20 | ) | $ | (0.09 | ) | ||
Net loss per Series A preferred share | — | — | — | ||||||||
Net loss per Series B preferred share | — | — | — | ||||||||
Net income per Series C preferred share | $ | 0.29 | $ | 0.31 | $ | 0.38 | |||||
2011 | 2012 | 2013 | |||||||||
Numerator | |||||||||||
Shares (denominator): | |||||||||||
Weighted average number of shares used in calculating net loss per nonvested share-basic | 6,663,370 | 1,792,535 | — | ||||||||
Weighted average number of shares used in calculating net loss per Series A preferred share-basic | 15,000,000 | 15,000,000 | 6,616,438 | ||||||||
Weighted average number of shares used in calculating net loss per Series B preferred share —basic | 17,522,725 | 17,522,725 | 7,729,202 | ||||||||
Weighted average number of shares used in calculating net loss per Series C preferred share —basic | 9,651,565 | 9,651,565 | 4,257,266 | ||||||||
Weighted average number of shares used in calculating net loss per ordinary share —basic | 29,445,595 | 34,316,430 | 71,555,449 | ||||||||
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SEGMENT REPORTING | ' | ||||||||||||||||
Schedule of components of the Group's net revenues | ' | ||||||||||||||||
For the years ended December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Apparel | $ | 46,888 | $ | 80,274 | $ | 86,459 | |||||||||||
Electronics and other general merchandise | 69,342 | 119,736 | 205,958 | ||||||||||||||
Total net revenues | $ | 116,230 | $ | 200,010 | $ | 292,417 | |||||||||||
Summary of Group's total net revenues generated in different geographic locations and as a percentage of total net revenues | ' | ||||||||||||||||
For the years ended December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Revenues | % | Revenues | % | Revenues | % | ||||||||||||
Europe | $ | 57,853 | 49.8 | $ | 101,424 | 50.7 | $ | 182,958 | 62.5 | ||||||||
North America | 32,721 | 28.2 | 47,985 | 24 | 54,858 | 18.8 | |||||||||||
South America | 4,097 | 3.5 | 12,876 | 6.4 | 26,205 | 9 | |||||||||||
Other countries | 21,559 | 18.5 | 37,725 | 18.9 | 28,396 | 9.7 | |||||||||||
Total net revenues | $ | 116,230 | 100 | $ | 200,010 | 100 | $ | 292,417 | 100 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Table) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
Schedule of future minimum lease payments under non-cancellable operating lease agreements | ' | ||||
2014 | $ | 3,921 | |||
2015 | 3,482 | ||||
2016 | 556 | ||||
2017 | 198 | ||||
2018 | — | ||||
$ | 8,157 |
ORGANIZATION_AND_PRINCIPAL_ACT2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) | 1 Months Ended | |
Jun. 30, 2007 | Dec. 31, 2013 | |
item | ||
Light In The Box | ' | ' |
Details of the entity's subsidiaries, its VIEs and VIE's subsidiary | ' | ' |
Number of founding shareholders | 5 | ' |
Percentage of legal ownership | ' | 100.00% |
Lanting Jishi Trade (Shenzhen) Co., Ltd (WFOE or Lanting Jishi) | ' | ' |
Details of the entity's subsidiaries, its VIEs and VIE's subsidiary | ' | ' |
Percentage of legal ownership | ' | 100.00% |
LightInTheBox (UK) Limited | ' | ' |
Details of the entity's subsidiaries, its VIEs and VIE's subsidiary | ' | ' |
Percentage of legal ownership | ' | 100.00% |
Lanting International Holding Limited ("Lanting International") | ' | ' |
Details of the entity's subsidiaries, its VIEs and VIE's subsidiary | ' | ' |
Percentage of legal ownership | ' | 100.00% |
LITB, Inc. | ' | ' |
Details of the entity's subsidiaries, its VIEs and VIE's subsidiary | ' | ' |
Percentage of legal ownership | ' | 100.00% |
Lanting Jishi Trade (Suzhou) Co., Ltd. ("Lanting Suzhou") | ' | ' |
Details of the entity's subsidiaries, its VIEs and VIE's subsidiary | ' | ' |
Percentage of legal ownership | ' | 100.00% |
ORGANIZATION_AND_PRINCIPAL_ACT3
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details 2) (Primary beneficiary) | 12 Months Ended | |||
Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | |
Lanting Gaochuang | Lanting Gaochuang | Lanting Jishi Trade (Shenzhen) Co., Ltd (WFOE or Lanting Jishi) | Lanting Jishi Trade (Shenzhen) Co., Ltd (WFOE or Lanting Jishi) | |
CEO | Lanting Huitong | CEO | CEO | |
USD ($) | CNY | |||
The VIE arrangements | ' | ' | ' | ' |
Ownership interest in VIE (as a percent) | 51.00% | 49.00% | ' | ' |
Loan Agreement | ' | ' | ' | ' |
Amount of loan extended | ' | ' | $41,000 | 255,000 |
Loan agreement term | ' | ' | '10 years | '10 years |
ORGANIZATION_AND_PRINCIPAL_ACT4
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Consolidated financial information of the Group's VIE and its subsidiaries included in consolidated financial statements | ' | ' | ' |
Net revenues | $292,417 | $200,010 | $116,230 |
Net loss | -4,819 | -4,230 | -24,531 |
Net cash provided by operating activities | 15,152 | 7,399 | -14,056 |
Net cash used in investing activities | -83,552 | -1,284 | -1,834 |
VIE and its subsidiaries | ' | ' | ' |
Consolidated financial information of the Group's VIE and its subsidiaries included in consolidated financial statements | ' | ' | ' |
Total assets | 2,042 | 2,232 | ' |
Total liabilities | 1,489 | 1,874 | ' |
Net revenues | 300 | 2,743 | 5,010 |
Net loss | -179 | -204 | -1,078 |
Net cash provided by operating activities | 647 | 200 | 1,119 |
Net cash used in investing activities | -798 | -298 | -894 |
Amount of consolidated VIEs' assets that are collateral for the VIEs' obligations | $0 | $0 | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Furniture, fixtures and office equipment | Software and IT equipment | ||
Accounts receivable | ' | ' | ' | ' |
Allowance for doubtful accounts | $0 | $0 | ' | ' |
Property and equipment, net | ' | ' | ' | ' |
Useful lives | ' | ' | '5 years | '3 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Impairment of Goodwill and Indefinite-lived intangible assets | ' | ' | ' |
Impairment loss of goodwill | $0 | $0 | $906 |
Impairment loss of indefinite-lived intangible asset | $0 | $0 | $1,010 |
Technology | ' | ' | ' |
Acquired intangible assets, net | ' | ' | ' |
Useful lives | '3 years | ' | ' |
Members | ' | ' | ' |
Acquired intangible assets, net | ' | ' | ' |
Useful lives | '4 years | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
criteria | |||
Revenue recognition | ' | ' | ' |
Number of criteria to be met prior to recognition of revenue | 4 | ' | ' |
Shipping costs | $63,917 | $40,694 | $24,589 |
VAT on sales as a percentage on revenue from the sale of products | 17.00% | ' | ' |
Foreign currency risk | Denominated in RMB | ' | ' | ' |
Foreign currency risk | ' | ' | ' |
Cash and cash equivalents, term deposit and restricted cash | $56,602 | $683 | ' |
Minimum | ' | ' | ' |
Revenue recognition | ' | ' | ' |
Return period subsequent to the delivery of the goods purchased by the customers | '7 days | ' | ' |
Maximum | ' | ' | ' |
Revenue recognition | ' | ' | ' |
Return period subsequent to the delivery of the goods purchased by the customers | '30 days | ' | ' |
INVENTORIES_NET_Details
INVENTORIES, NET (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
INVENTORIES, NET | ' | ' |
Merchandise available for sale | $7,550 | $6,642 |
Less: inventories provision for slow-moving and obsolescence | -469 | -889 |
Total inventories, net | $7,081 | $5,753 |
PREPAID_EXPENSES_AND_OTHER_CUR2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ' | ' |
Receivable from processing agencies | $4,659 | $7,633 |
Deferred offering cost | ' | 1,188 |
Prepayment to suppliers | 1,525 | 1,032 |
Interest receivable | 721 | ' |
Option exercise receivable | 663 | ' |
Rental deposits and prepaid rents | 339 | 337 |
VAT recoverable | ' | 74 |
Staff advance | 104 | 57 |
Others | 879 | 241 |
Total | $8,890 | $10,562 |
PROPERTY_AND_EQUIPMENT_NET_Det
PROPERTY AND EQUIPMENT, NET (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property and equipment, net | ' | ' | ' |
Property and equipment, gross | $6,959 | $4,296 | ' |
Less: Accumulated depreciation | -3,957 | -2,504 | ' |
Property and equipment, net | 3,002 | 1,792 | ' |
Depreciation expense | 1,361 | 1,031 | 846 |
Leasehold improvements | ' | ' | ' |
Property and equipment, net | ' | ' | ' |
Property and equipment, gross | 3,043 | 1,663 | ' |
Furniture, fixtures and office equipment | ' | ' | ' |
Property and equipment, net | ' | ' | ' |
Property and equipment, gross | 1,817 | 1,183 | ' |
Software and IT equipment | ' | ' | ' |
Property and equipment, net | ' | ' | ' |
Property and equipment, gross | $2,099 | $1,450 | ' |
GOODWILL_Details
GOODWILL (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Gross amount: | ' | ' |
Beginning balance | $926 | $906 |
Goodwill acquired during the year | 690 | ' |
Exchange difference | 14 | 20 |
Ending balance | 1,630 | 926 |
Accumulated impairment loss: | ' | ' |
Beginning balance | -926 | -906 |
Exchange difference | -14 | -20 |
Ending balance | -940 | -926 |
Goodwill, net | 690 | ' |
Ador | ' | ' |
GOODWILL | ' | ' |
Net working capital | 44 | ' |
Other intangible assets | $266 | ' |
ACQUIRED_INTANGIBLE_ASSETS_NET2
ACQUIRED INTANGIBLE ASSETS, NET (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Acquired intangible assets, net | ' | ' | ' |
Gross carrying amount | $1,407 | $1,141 | ' |
Less: Accumulated amortization | -119 | -119 | ' |
Less: Accumulated impairment loss | -1,022 | -1,022 | ' |
Net carrying amount | 266 | ' | ' |
Impairment loss on intangible assets | ' | ' | 1,022 |
Amortization expenses | 0 | 0 | 53 |
Expected amortization expenses | ' | ' | ' |
2014 | 17 | ' | ' |
2015 | 17 | ' | ' |
2016 | 17 | ' | ' |
2017 | 5 | ' | ' |
2018 | 0 | ' | ' |
Shanghai Ouku | ' | ' | ' |
Acquired intangible assets, net | ' | ' | ' |
Impairment loss on intangible assets | ' | ' | 1,022 |
Technology Platform | ' | ' | ' |
Acquired intangible assets, net | ' | ' | ' |
Gross carrying amount | 90 | 90 | ' |
Less: Accumulated amortization | -90 | -90 | ' |
Non-compete Agreement | ' | ' | ' |
Acquired intangible assets, net | ' | ' | ' |
Gross carrying amount | 9 | 9 | ' |
Less: Accumulated amortization | -7 | -7 | ' |
Less: Accumulated impairment loss | -2 | -2 | ' |
Customer Base | ' | ' | ' |
Acquired intangible assets, net | ' | ' | ' |
Gross carrying amount | 32 | 32 | ' |
Less: Accumulated amortization | -22 | -22 | ' |
Less: Accumulated impairment loss | -10 | -10 | ' |
Technology | ' | ' | ' |
Acquired intangible assets, net | ' | ' | ' |
Gross carrying amount | 36 | ' | ' |
Net carrying amount | 36 | ' | ' |
Members | ' | ' | ' |
Acquired intangible assets, net | ' | ' | ' |
Gross carrying amount | 20 | ' | ' |
Net carrying amount | 20 | ' | ' |
Trademark/Domain Name | ' | ' | ' |
Acquired intangible assets, net | ' | ' | ' |
Intangible assets not subject to amortization | 1,220 | 1,010 | ' |
Less: Accumulated impairment loss | -1,010 | -1,010 | ' |
Net carrying amount | $210 | ' | ' |
ACCRUED_EXPENSES_AND_OTHER_CUR2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ' | ' | ' |
Accrued payroll and staff welfare | $9,147 | $6,345 | ' |
Individual income tax withheld | 875 | 3,702 | ' |
Business tax payable | 152 | 398 | ' |
Accrued professional fees | 1,950 | 636 | ' |
Accrued advertising fees | 1,004 | 911 | ' |
Credit card processing charges | 401 | 370 | ' |
Accrued sales return | 751 | 116 | 292 |
Accrued chargebacks | 100 | 85 | ' |
Other accrued expenses | 1,180 | 248 | ' |
Total | 15,560 | 12,811 | ' |
Movements in accrued sales return | ' | ' | ' |
Balance at the beginning of the period | 116 | 292 | ' |
Allowance for sales return made in the year | 9,897 | 5,336 | ' |
Utilization of accrued sales return | -9,262 | -5,512 | ' |
Balance at the end of the period | 751 | 116 | 292 |
Additional disclosures | ' | ' | ' |
Chargeback incurred | $1,041 | $604 | $447 |
CONVERTIBLE_NOTES_Details
CONVERTIBLE NOTES (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Jun. 11, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 23, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Convertible notes | Convertible notes | Convertible notes | Convertible notes | Convertible notes | Convertible notes | ||||
Period after three months but on or before six months from the convertible note issuance date | Period after six months but on or before 12 months from the convertible note issuance date | Period after 12 months from the convertible note issuance date | |||||||
CONVERTIBLE NOTES | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face amount of debt instrument | ' | ' | ' | $8,000 | $8,000 | $8,000 | ' | ' | ' |
Term of debt instrument | ' | ' | ' | '18 months | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | 12.00% | ' | ' | ' | ' | ' |
Interest rate upon an event of default (as a percent) | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' |
Minimum pre-money valuation of the entity required prior to financing event | ' | 350,000 | ' | ' | ' | ' | ' | ' | ' |
Base amount used for calculation of conversion price of convertible notes | ' | ' | ' | ' | 350,000 | ' | ' | ' | ' |
Multiplier used for calculation of conversion price of convertible notes (as a percent) | ' | ' | ' | ' | ' | ' | 95.00% | 90.00% | 85.00% |
Base amount used for calculation of conversion price of convertible notes at maturity | ' | ' | ' | ' | 255,000 | ' | ' | ' | ' |
Beneficial conversion feature | ' | ' | ' | 2,096 | ' | ' | ' | ' | ' |
Number of ordinary shares issued upon conversion of convertible notes | 2,224,610 | ' | ' | ' | ' | ' | ' | ' | ' |
Amortized debt discount | ' | 956 | 1,140 | ' | 956 | 1,140 | ' | ' | ' |
Carrying amount of the convertible notes | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal | ' | ' | ' | 8,000 | 8,000 | 8,000 | ' | ' | ' |
Debt discount | ' | ' | ' | ' | -2,096 | -2,096 | ' | ' | ' |
Accumulated amortization of debt discount | ' | ' | ' | ' | 2,096 | 1,140 | ' | ' | ' |
Accrued interest | ' | ' | ' | ' | 1,157 | 744 | ' | ' | ' |
Interest paid | ' | 1,157 | ' | ' | -1,157 | ' | ' | ' | ' |
Conversion of convertible notes upon IPO | ' | ' | ' | ' | -8,000 | ' | ' | ' | ' |
Carrying amount | ' | ' | 7,788 | ' | ' | 7,788 | ' | ' | ' |
Amortization of debt discount and interest expense recognized related to the convertible notes | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of debt discount | ' | 956 | 1,140 | ' | 956 | 1,140 | ' | ' | ' |
Interest at coupon rate | ' | ' | ' | ' | 413 | 744 | ' | ' | ' |
Total expense recognized | ' | ' | ' | ' | $1,369 | $1,884 | ' | ' | ' |
SERIES_A_AND_SERIES_B_CONVERTI1
SERIES A AND SERIES B CONVERTIBLE PREFERRED SHARES (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Oct. 27, 2008 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Jun. 26, 2009 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 30, 2013 | Sep. 28, 2010 |
vote | Minimum | Series A and Series B convertible preferred shares | Series A preferred shares | Series A preferred shares | Series A preferred shares | Series A preferred shares | Series B preferred shares | Series B preferred shares | Series B preferred shares | Series B preferred shares | Series C preferred shares | Series C preferred shares | Series C preferred shares | |
shareholder | ||||||||||||||
SERIES A AND SERIES B CONVERTIBLE PREFERRED SHARES | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible preferred stock, shares issued | ' | ' | ' | 15,000,000 | ' | ' | ' | 17,522,725 | ' | ' | ' | ' | ' | ' |
Convertible preferred shares, par value (in dollars per share) | ' | ' | ' | $0.00 | $0.00 | ' | $0.00 | $0.00 | $0.00 | ' | $0.00 | ' | ' | ' |
Number of shares of convertible preferred stock converted to ordinary shares | ' | ' | ' | ' | ' | 15,000,000 | ' | ' | ' | 17,522,725 | ' | ' | 9,651,565 | ' |
Number of ordinary shares issued upon conversion of convertible preferred stock | ' | ' | 32,522,725 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,651,565 | ' |
Proceeds from issuance of convertible preferred shares | ' | ' | ' | $5,000 | ' | ' | ' | $11,270 | ' | ' | ' | ' | ' | ' |
Convertible preferred shares, issuance price (in dollars per share) | ' | ' | ' | $0.33 | ' | ' | ' | $0.64 | ' | ' | ' | ' | ' | $3.63 |
Number of founding shareholders who entered into an arrangement with the investors | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ordinary shares subject to transfer restrictions | ' | ' | ' | 24,633,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beneficial conversion feature | ' | ' | ' | ' | 0 | ' | ' | ' | 0 | ' | ' | 0 | ' | ' |
Minimum valuation of the Company required immediately prior to liquidation, dissolution or winding up for distribution of entire assets among shareholders on a pro rate basis | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum valuation of the Company required immediately prior to liquidation, dissolution or winding up for distribution of entire assets among shareholders on a preference basis | $300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150.00% | ' | ' |
Number of voting rights eligible for each outstanding ordinary shareholder | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of holders of outstanding preferred shares whose written consent will be required for automatic conversion of preferred shares into ordinary shares | ' | 0.67% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
SERIES_C_CONVERTIBLE_REDEEMABL2
SERIES C CONVERTIBLE REDEEMABLE PREFERRED SHARES (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 28, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 |
SERIES C CONVERTIBLE REDEEMABLE PREFERRED SHARES | ' | ' | ' | ' |
Convertible redeemable preferred stock, par value (in dollars per share) | ' | $0.00 | $0.00 | ' |
Movement in the carrying value of the Series C preferred shares | ' | ' | ' | ' |
Balance at the end of the period | ' | ' | $41,471 | ' |
Series C preferred shares | ' | ' | ' | ' |
SERIES C CONVERTIBLE REDEEMABLE PREFERRED SHARES | ' | ' | ' | ' |
Convertible redeemable preferred shares issued | 9,651,565 | ' | ' | ' |
Convertible redeemable preferred stock, par value (in dollars per share) | $0.00 | ' | ' | ' |
Proceeds from issuance of convertible preferred shares | 35,000 | ' | ' | ' |
Convertible redeemable preferred shares, issuance price (in dollars per share) | $3.63 | ' | ' | ' |
Number of shares of convertible preferred stock converted to ordinary shares | ' | ' | ' | 9,651,565 |
Number of ordinary shares issued upon conversion of convertible preferred stock | ' | ' | ' | 9,651,565 |
Beneficial conversion feature | ' | 0 | ' | ' |
Period from the specified date during which holders have right to redeem Series C preferred shares | ' | '10 years | ' | ' |
Compound interest per annum (as a percent) | ' | 8.00% | ' | ' |
Movement in the carrying value of the Series C preferred shares | ' | ' | ' | ' |
Balance at the beginning of the period | ' | 41,471 | 38,500 | ' |
Accretion to redemption value of Series C preferred shares | ' | 1,621 | 2,971 | ' |
Conversion of Stock, Amount Converted | ' | -43,092 | ' | ' |
Balance at the end of the period | ' | ' | $41,471 | ' |
ORDINARY_SHARES_Details
ORDINARY SHARES (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | ||||
ORDINARY SHARES | ' | ' | ' | ' |
Number of ADSs issued (in shares) | 8,492,368 | ' | ' | ' |
Issue price of ADSs issued (in dollars per ADS) | $9.50 | ' | ' | ' |
Number of ordinary shares per ADSs | 2 | ' | ' | ' |
Number of ordinary shares for issued ADSs | 16,984,736 | ' | ' | ' |
Net proceeds from IPO | $75,030 | $75,030 | ' | ' |
Offering costs from IPO | 4,235 | 3,127 | 930 | 602 |
Number of shares approved to be repurchased | ' | $20,000 | ' | ' |
Period to repurchase shares | ' | '1 year | ' | ' |
SHARE_OPTIONS_Details
SHARE OPTIONS (Details) (2008 Plan, USD $) | 0 Months Ended | 12 Months Ended | |
Oct. 27, 2008 | Dec. 31, 2013 | Dec. 31, 2011 | |
Share options | ' | ' | ' |
Shares authorized to grant | 4,444,444 | ' | ' |
Share options | ' | ' | ' |
Share options | ' | ' | ' |
Vesting period | '4 years | ' | ' |
Vesting percentage at the end of the first year through the fourth year | 25.00% | ' | ' |
Expiration period | '10 years | ' | ' |
Shares options granted | ' | 307,250 | ' |
Exercise price of shares options granted (in dollars per share) | ' | $4.75 | ' |
Assumptions used for estimating the fair value of options granted on the date of grant | ' | ' | ' |
Risk-free interest rate, minimum (as a percent) | ' | 3.06% | 3.86% |
Risk-free interest rate, maximum (as a percent) | ' | 3.83% | 4.05% |
Exercise multiple | ' | ' | 2 |
Expected volatility, minimum (as a percent) | ' | 56.00% | 58.00% |
Expected volatility, maximum (as a percent) | ' | 60.00% | 61.00% |
Expected dividend yield (as a percent) | ' | 0.00% | 0.00% |
Share options | Minimum | ' | ' | ' |
Share options | ' | ' | ' |
Vesting period | ' | '3 years | '3 years |
Assumptions used for estimating the fair value of options granted on the date of grant | ' | ' | ' |
Exercise multiple | ' | 2 | ' |
Fair value of ordinary shares (in dollars per share) | ' | $4.75 | 4.02 |
Share options | Maximum | ' | ' | ' |
Share options | ' | ' | ' |
Vesting period | ' | '4 years | '4 years |
Assumptions used for estimating the fair value of options granted on the date of grant | ' | ' | ' |
Exercise multiple | ' | 2.8 | ' |
Fair value of ordinary shares (in dollars per share) | ' | $4.97 | 4.03 |
Share options | First Group | ' | ' | ' |
Share options | ' | ' | ' |
Shares options granted | ' | ' | 357,000 |
Exercise price of shares options granted (in dollars per share) | ' | ' | 4.25 |
Share options | Second Group | ' | ' | ' |
Share options | ' | ' | ' |
Shares options granted | ' | ' | 8,000 |
Exercise price of shares options granted (in dollars per share) | ' | ' | 0.96 |
Share options | Third Group | ' | ' | ' |
Share options | ' | ' | ' |
Shares options granted | ' | ' | 119,000 |
Exercise price of shares options granted (in dollars per share) | ' | ' | 4.29 |
SHARE_OPTIONS_Details_2
SHARE OPTIONS (Details 2) (2008 Plan, Share options, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2011 | |
2008 Plan | Share options | ' | ' |
Options granted | ' | ' |
Balance at the beginning of the period (in shares) | 1,778,250 | ' |
Granted (in shares) | 307,250 | ' |
Exercised (in shares) | -363,400 | ' |
Forfeited (in shares) | -159,250 | ' |
Balance at the end of the period (in shares) | 1,562,850 | ' |
Weighted average exercise price per option | ' | ' |
Balance at the beginning of the period (in shares) | $1.12 | ' |
Granted (in dollars per share) | $4.75 | ' |
Exercised (in dollars per share) | $0.65 | ' |
Forfeited (in dollars per share) | $3.46 | ' |
Balance at the end of the period (in dollars per share) | $1.71 | ' |
Weighted average fair value per option at grant date | ' | ' |
Granted (in dollars per share) | $2.45 | $1.96 |
Exercised (in dollars per share) | $0.29 | ' |
Forfeited (in dollars per share) | $1.61 | ' |
Weighted average intrinsic value per option at grant date | ' | ' |
Exercised (in dollars per share) | $0.12 | ' |
Forfeited (in dollars per share) | $0.12 | ' |
SHARE_OPTIONS_Details_3
SHARE OPTIONS (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Additional disclosures | ' | ' | ' |
Share-based compensation expense | $4,318,000 | $2,695,000 | $2,093,000 |
2008 Plan | Share options | ' | ' | ' |
Options Number | ' | ' | ' |
Outstanding (in shares) | 1,562,850 | 1,778,250 | ' |
Exercisable (in shares) | 945,663 | ' | ' |
Expected to vest (in shares) | 524,609 | ' | ' |
Weighted-average exercise price | ' | ' | ' |
Outstanding (in dollars per share) | $1.71 | $1.12 | ' |
Exercisable (in dollars per share) | $0.19 | ' | ' |
Expected to vest (in dollars per share) | $4.03 | ' | ' |
Weighted-average remaining contractual life (years) | ' | ' | ' |
Outstanding | '6 years 6 months 18 days | ' | ' |
Exercisable | '5 years 4 months 24 days | ' | ' |
Expected to vest | '8 years 3 months 22 days | ' | ' |
Aggregate intrinsic value | ' | ' | ' |
Outstanding (in dollars) | 3,892,000 | ' | ' |
Exercisable (in dollars) | 3,627,000 | ' | ' |
Expected to vest (in dollars) | 226,000 | ' | ' |
Additional disclosures | ' | ' | ' |
Total intrinsic value of options exercised | 1,235,000 | 0 | 0 |
Share-based compensation expense | 280,000 | 216,000 | 191,000 |
Unrecognized compensation cost | $657,000 | ' | ' |
Weighted-average period of recognition of unrecognized compensation cost | '2 years 11 months 23 days | ' | ' |
NONVESTED_SHARES_Details
NONVESTED SHARES (Details) | 1 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2008 | Oct. 31, 2008 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | |
Performance-based plan | Performance-based plan | Share Plan | Share Plan | Share Plan | 2008 Plan | 2008 Plan | 2008 Plan | 2008 Plan | |
item | Nonvested shares | Nonvested shares | Nonvested shares | Nonvested shares | Nonvested shares | Nonvested shares | Nonvested shares | Nonvested shares | |
October 23, 2008 (the Vesting Starting Date) | First anniversary of the Vesting Starting Date | Every thirty days after first anniversary of the Vesting Starting Date | Minimum | Maximum | |||||
Nonvested shares | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of founding shareholders entered into an arrangement with the investors | 3 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of founding shareholders | 5 | ' | ' | ' | ' | ' | ' | ' | ' |
Ordinary shares subject to transfer restrictions | 24,633,333 | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting period | ' | '4 years | ' | ' | ' | ' | '4 years | '2 years | '4 years |
Vesting percentage | ' | ' | 20.00% | 20.00% | 2.77% | ' | ' | ' | ' |
Shares granted | ' | ' | ' | ' | ' | 711,571 | 1,820,010 | ' | ' |
NONVESTED_SHARES_Details_2
NONVESTED SHARES (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Weighted average grant date fair value | ' | ' | ' |
Share-based compensation expenses | $4,318 | $2,695 | $2,093 |
2008 Plan | Nonvested shares | ' | ' | ' |
Number of Shares | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | 1,054,778 | ' | ' |
Granted (in shares) | 711,571 | ' | 1,820,010 |
Forfeited (in shares) | -3,750,000 | ' | ' |
Vested (in shares) | -767,397 | ' | ' |
Outstanding at the end of the period (in shares) | 995,202 | 1,054,778 | ' |
Weighted average grant date fair value | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $4.46 | ' | ' |
Granted (in dollars per share) | $4.75 | ' | ' |
Forfeited (in dollars per share) | $4.75 | ' | ' |
Vested (in dollars per share) | $4.50 | ' | ' |
Outstanding at the end of the period (in dollars per share) | $4.52 | $4.46 | ' |
Fair value of shares vested | 3,453 | 19,318 | 21,342 |
Share-based compensation expenses | 4,038 | 2,479 | 1,902 |
Unrecognized compensation cost | $3,027 | ' | ' |
Weighted-average period of recognition of unrecognized compensation cost | '1 year 8 months 12 days | ' | ' |
NONVESTED_SHARES_Details_3
NONVESTED SHARES (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based compensation expenses for non-vested shares | ' | ' | ' |
Share-based compensation expenses | $4,318 | $2,695 | $2,093 |
Nonvested shares | Fulfillment | ' | ' | ' |
Share-based compensation expenses for non-vested shares | ' | ' | ' |
Share-based compensation expenses | 9 | 10 | 13 |
Nonvested shares | Selling and marketing | ' | ' | ' |
Share-based compensation expenses for non-vested shares | ' | ' | ' |
Share-based compensation expenses | 134 | 117 | 90 |
Nonvested shares | General and administrative | ' | ' | ' |
Share-based compensation expenses for non-vested shares | ' | ' | ' |
Share-based compensation expenses | $4,175 | $2,568 | $1,990 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | |||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2012 |
Hong Kong | PRC | PRC | PRC | PRC | ||||
Light In The Box | Lanting Huitong | Lanting Huitong | Lanting Gaochuang | |||||
Income taxes | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax exemption period | ' | ' | ' | ' | ' | ' | '2 years | '2 years |
Reduced tax rate for three years subsequent the exemption period (as a percent) | ' | ' | ' | ' | ' | 12.50% | ' | 12.50% |
Period for reduced tax rate | ' | ' | ' | ' | ' | '3 years | ' | '3 years |
Current tax expense (benefit) | $69 | $19 | ($606) | ' | ' | ' | ' | ' |
Deferred tax benefit | ' | ' | 272 | ' | ' | ' | ' | ' |
Current deferred tax assets: | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued payroll | 638 | 502 | ' | ' | ' | ' | ' | ' |
Accrued expenses | 45 | ' | ' | ' | ' | ' | ' | ' |
Less: Valuation allowance | -683 | -502 | ' | ' | ' | ' | ' | ' |
Non-current deferred tax asset: | ' | ' | ' | ' | ' | ' | ' | ' |
Net operating loss carry forwards | 7,959 | 8,338 | ' | ' | ' | ' | ' | ' |
Less: Valuation allowance | -7,959 | -8,338 | ' | ' | ' | ' | ' | ' |
Deferred tax liabilities | 0 | 0 | ' | ' | ' | ' | ' | ' |
Reconciliation between the expense (benefit) of income taxes computed by applying the PRC tax rate to income (loss) before income taxes and the actual provision for income taxes | ' | ' | ' | ' | ' | ' | ' | ' |
Loss before provision of income tax | -4,750 | -4,211 | -25,409 | ' | ' | ' | ' | ' |
Statutory income tax rates (as a percent) | 25.00% | 25.00% | 25.00% | 16.50% | 25.00% | ' | ' | ' |
Income tax at statutory tax rate | -1,187 | -1,053 | -6,352 | ' | ' | ' | ' | ' |
Non-deductible expenses | 225 | 403 | 672 | ' | ' | ' | ' | ' |
Effect of income tax holiday and preferential tax rates | -62 | -41 | -828 | ' | ' | ' | ' | ' |
Write-off/(refund) of prepaid income tax | ' | ' | -606 | ' | ' | ' | ' | ' |
Effect of income tax rate differences in jurisdictions other than the PRC | 1,291 | 1,105 | 1,897 | ' | ' | ' | ' | ' |
Changes in valuation allowances | -198 | -395 | 4,339 | ' | ' | ' | ' | ' |
Income tax expense (benefit) | 69 | 19 | -878 | ' | ' | ' | ' | ' |
Income tax paid | ' | ' | ' | ' | ' | ' | 579 | ' |
Additional disclosures | ' | ' | ' | ' | ' | ' | ' | ' |
Withholding tax rate on dividends distributed to non-resident entities (as a percent) | ' | ' | ' | ' | 10.00% | ' | ' | ' |
Deferred tax liability accrued for the Chinese dividend withholding taxes | ' | ' | ' | ' | $0 | ' | ' | ' |
LOSS_PER_SHARE_Details
LOSS PER SHARE (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Numerator: | ' | ' | ' |
Net loss attributable to LightInTheBox Holding Co., Ltd | ($4,819) | ($4,230) | ($24,531) |
Accretion of Series C convertible redeemable preferred shares | -1,621 | -2,971 | -2,800 |
Net loss attributable to ordinary shareholders | -6,440 | -7,201 | -27,331 |
Net loss attributable to shareholders of the Company allocated for computing net loss per ordinary share-basic | -6,440 | -6,843 | -22,288 |
Net loss attributable to shareholders of the company allocated for computing net loss per nonvested share-basic | ' | -358 | -5,043 |
Net loss per ordinary share-basic | ($0.09) | ($0.20) | ($0.76) |
Net loss per nonvested share-basic | ' | ($0.20) | ($0.76) |
Net Loss per ordinary share-diluted | ($0.09) | ($0.20) | ($0.76) |
Shares (denominator): | ' | ' | ' |
Weighted average number of shares used in calculating net loss per nonvested share-basic | ' | 1,792,535 | 6,663,370 |
Weighted average number of shares used in calculating net loss per ordinary share-basic | 71,555,449 | 34,316,430 | 29,445,595 |
Series A preferred shares | ' | ' | ' |
Computation of basic and diluted net loss per ordinary share | ' | ' | ' |
Weighted average number of shares used in calculating net loss per share-basic | 6,616,438 | 15,000,000 | 15,000,000 |
Series B preferred shares | ' | ' | ' |
Computation of basic and diluted net loss per ordinary share | ' | ' | ' |
Weighted average number of shares used in calculating net loss per share-basic | 7,729,202 | 17,522,725 | 17,522,725 |
Series C preferred shares | ' | ' | ' |
Computation of basic and diluted net loss per ordinary share | ' | ' | ' |
Net income attributable to preferred shares for computing basic net income per preferred share | $1,621 | $2,971 | $2,800 |
Net loss per preferred share (in dollars per share) | $0.38 | $0.31 | $0.29 |
Weighted average number of shares used in calculating net loss per share-basic | 4,257,266 | 9,651,565 | 9,651,565 |
LOSS_PER_SHARE_Details_2
LOSS PER SHARE (Details 2) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Series A preferred shares | ' | ' | ' |
Shares excluded from the calculation of diluted loss per share | ' | ' | ' |
Shares excluded from the calculation of diluted loss per share | 15,000,000 | ' | ' |
Series B preferred shares | ' | ' | ' |
Shares excluded from the calculation of diluted loss per share | ' | ' | ' |
Shares excluded from the calculation of diluted loss per share | 17,522,725 | ' | ' |
Series C preferred shares | ' | ' | ' |
Shares excluded from the calculation of diluted loss per share | ' | ' | ' |
Shares excluded from the calculation of diluted loss per share | 9,651,565 | ' | ' |
Options outstanding | ' | ' | ' |
Shares excluded from the calculation of diluted loss per share | ' | ' | ' |
Shares excluded from the calculation of diluted loss per share | 1,562,850 | 1,778,250 | 1,975,000 |
Nonvested shares outstanding | ' | ' | ' |
Shares excluded from the calculation of diluted loss per share | ' | ' | ' |
Shares excluded from the calculation of diluted loss per share | 995,202 | 1,054,778 | 5,536,925 |
EMPLOYEE_RETIREMENT_BENEFIT_De
EMPLOYEE RETIREMENT BENEFIT (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
EMPLOYEE RETIREMENT BENEFIT | ' | ' | ' |
Total contribution for employee benefits | $5,603 | $3,848 | $2,897 |
STATUTORY_RESERVES_AND_RESTRIC1
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | ' | ' | ' |
Minimum percentage of after-tax profit required to be transferred to general reserve till such reserve reaches specified percentage of registered capital | 10.00% | ' | ' |
General reserve as a percentage of registered capital up to which after-tax profit of PRC subsidiaries and VIEs shall be transferred | 50.00% | ' | ' |
Discretionary appropriations to enterprise expansion reserve, staff welfare and bonus reserve | $0 | $0 | $0 |
Amount of restricted net assets of consolidated subsidiaries and VIE not available for distribution | $3,293 | $3,293 | ' |
SEGMENT_REPORTING_Details
SEGMENT REPORTING (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | |||
Segment reporting | ' | ' | ' |
Number of operating segment | 1 | ' | ' |
Total net revenues | $292,417 | $200,010 | $116,230 |
Apparel | ' | ' | ' |
Segment reporting | ' | ' | ' |
Total net revenues | 86,459 | 80,274 | 46,888 |
Electronics and other general merchandise | ' | ' | ' |
Segment reporting | ' | ' | ' |
Total net revenues | $205,958 | $119,736 | $69,342 |
SEGMENT_REPORTING_Details_2
SEGMENT REPORTING (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment reporting | ' | ' | ' |
Revenues | $292,417 | $200,010 | $116,230 |
Total net revenues | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues (as a percent) | 100.00% | 100.00% | 100.00% |
Europe | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues | 182,958 | 101,424 | 57,853 |
Europe | Total net revenues | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues (as a percent) | 62.50% | 50.70% | 49.80% |
Europe | France | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues | 42,504 | 32,913 | 22,448 |
Europe | United Kingdom | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues | 12,986 | 13,577 | 6,541 |
North America | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues | 54,858 | 47,985 | 32,721 |
North America | Total net revenues | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues (as a percent) | 18.80% | 24.00% | 28.20% |
North America | United States | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues | 46,136 | 41,840 | 29,117 |
South America | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues | 26,205 | 12,876 | 4,097 |
South America | Total net revenues | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues (as a percent) | 9.00% | 6.40% | 3.50% |
Other countries | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues | $28,396 | $37,725 | $21,559 |
Other countries | Total net revenues | ' | ' | ' |
Segment reporting | ' | ' | ' |
Revenues (as a percent) | 9.70% | 18.90% | 18.50% |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
Recurring | Recurring | ||
Fair value measurements | ' | ' | ' |
Financial assets | ' | $0 | $0 |
Financial liabilities | ' | $0 | $0 |
Period of financial forecasts on which discounted cash flows is based | '5 years | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
COMMITMENTS AND CONTINGENCIES | ' | ' | ' |
Rent expenses under operating leases | $3,005 | $2,074 | $1,716 |
Future minimum lease payments under non-cancellable operating lease agreements | ' | ' | ' |
2014 | 3,921 | ' | ' |
2015 | 3,482 | ' | ' |
2016 | 556 | ' | ' |
2017 | 198 | ' | ' |
Total | $8,157 | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | 0 Months Ended | |
In Thousands, unless otherwise specified | Aug. 27, 2013 | Dec. 31, 2013 |
item | ||
Failure to make payments of contributions for employee benefit plans | ' | ' |
Contingencies | ' | ' |
Maximum fines | ' | $19,006 |
Shareholder class action lawsuits | ' | ' |
Contingencies | ' | ' |
Number of lawsuits filed | 3 | ' |
Maximum fines | ' | $0 |