Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2015shares | |
Entity Registrant Name | Wowo Ltd |
Entity Central Index Key | 1,527,762 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2015 |
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 | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 1,444,711,838 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 11,151,900 | $ 1,317 |
Accounts receivable, net | 3,748,398 | |
Inventories, net | 94,409 | |
Prepaid expenses and other current assets | 25,281,434 | $ 227,110 |
Amounts due from related parties | $ 806,423 | |
Current assets of discontinued operations | $ 10,077,125 | |
Total current assets | $ 41,082,564 | $ 10,305,552 |
Property and equipment, net | 478,075 | |
Acquired intangible assets, net | 50,562,945 | |
Goodwill | $ 250,650,500 | |
Non-current assets of discontinued operations | $ 10,037,787 | |
Total assets | $ 342,774,084 | $ 20,343,339 |
Current liabilities: | ||
Accounts payable (including accounts payable of the consolidated VIE without recourse to Wowo Limited of nil and $3,818,023 as of December 31, 2014 and 2015, respectively) | 3,831,218 | |
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIE without recourse to Wowo Limited of nil and $19,134,673 as of December 31, 2014 and 2015, respectively) | 19,970,456 | |
Advance from customers (including advance from customers of consolidated VIE entities without recourse to Wowo Limited of nil and $828,437 as of December 31, 2014 and 2015, respectively) | 828,437 | |
Amounts due to related parties (including amounts due to related parties of the consolidated VIE without recourse to Wowo Limited of nil and $319,767 as of December 31, 2014 and 2015, respectively) | $ 319,767 | |
Current liabilities of discontinued operations | $ 67,500,288 | |
Total current liabilities | $ 24,949,878 | 67,500,288 |
Non-current liabilities: | ||
Amounts due to related parties (including amounts due to related parties of the consolidated VIE without recourse to Wowo Limited of nil and nil as of December 31, 2014 and 2015, respectively) | $ 61,965,277 | |
Other non-current liabilities (including other non-current liabilities of the consolidated VIE without recourse to Wowo Limited of nil and nil as of December 31, 2014 and 2015, respectively) | $ 502,180 | |
Deferred tax liabilities (including deferred tax liabilities of the consolidated VIE without recourse to Wowo Limited of nil and nil as of December 31, 2014 and 2015, respectively) | 12,640,736 | |
Total liabilities | $ 38,092,794 | $ 129,465,565 |
Commitments and contingency (Note 18) | ||
Mezzanine equity: | ||
Total mezzanine equity | $ 124,653,928 | |
Deficit: | ||
Ordinary shares ($0.00001 par value; 1,827,462,652 shares authorized, 303,886,640 and 1,476,208,670 shares issued and outstanding as of December 31, 2014 and 2015, respectively) | $ 14,447 | $ 3,039 |
Additional paid-in capital | 630,469,782 | |
Accumulated deficit | (326,711,132) | $ (233,140,944) |
Accumulated other comprehensive (loss)/income | 908,193 | (681,493) |
Total Wowo Limited shareholders' (deficit)/equity | $ 304,681,290 | (233,819,398) |
Non controlling interests of discontinued operations | 43,244 | |
Total (deficit)/equity | $ 304,681,290 | (233,776,154) |
Total liabilities, Mezzanine Equity and deficit/equity | $ 342,774,084 | 20,343,339 |
Series A-1 Preferred Shares [Member] | ||
Mezzanine equity: | ||
Total mezzanine equity | 6,756,046 | |
Series A-2 Preferred Shares [Member] | ||
Mezzanine equity: | ||
Total mezzanine equity | 99,356,343 | |
Series B Preferred Shares [Member] | ||
Mezzanine equity: | ||
Total mezzanine equity | $ 18,541,539 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parantheticals) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts payable | $ 3,831,218 | |
Accrued expenses and other current liabilities | 19,970,456 | |
Advance from customers | 828,437 | |
Amounts due to related parties | $ 319,767 | |
Amounts due to related parties | $ 61,965,277 | |
Other non-current liabilities | $ 502,180 | |
Deferred tax liabilities | $ 12,640,736 | |
Ordinary shares, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Ordinary shares, shares authorized | 1,827,462,652 | 1,827,462,652 |
Ordinary shares, shares issued | 1,476,208,670 | 303,886,640 |
Common shares, shares outstanding | 1,476,208,670 | 303,886,640 |
Series A-1 Preferred Shares [Member] | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Convertible redeemable preferred shares, shares authorized | 20,000,000 | 20,000,000 |
Convertible redeemable preferred shares, shares issued | 12,202,988 | |
Convertible redeemable preferred shares, shares outstanding | 12,202,988 | |
Convertible redeemable preferred shares, liquidation value | $ 10,055,909 | |
Series A-2 Preferred Shares [Member] | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Convertible redeemable preferred shares, shares authorized | 122,029,877 | 122,029,877 |
Convertible redeemable preferred shares, shares issued | 122,029,877 | |
Convertible redeemable preferred shares, shares outstanding | 122,029,877 | |
Convertible redeemable preferred shares, liquidation value | $ 100,559,091 | |
Series B Preferred Shares [Member] | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Convertible redeemable preferred shares, shares authorized | 30,507,471 | 30,507,471 |
Convertible redeemable preferred shares, shares issued | 30,507,471 | |
Convertible redeemable preferred shares, shares outstanding | 30,507,471 | |
Convertible redeemable preferred shares, liquidation value | $ 25,139,774 | |
VIEs [Member] | ||
Accounts payable | $ 3,818,023 | |
Accrued expenses and other current liabilities | 19,134,673 | |
Advance from customers | 828,437 | |
Amounts due to related parties | $ 319,767 | |
Amounts due to related parties | ||
Other non-current liabilities | ||
Deferred tax liabilities |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | $ 11,477,552 | ||
Cost of revenues | (13,220,386) | ||
Gross loss | (1,742,834) | ||
Operating expenses: | |||
Selling and marketing | (5,360,044) | ||
General and administrative (including share-based compensation of nil, $4,190,449 and nil for the years ended December 31, 2013, 2014 and 2015, respectively) | (12,911,773) | $ (4,323,253) | $ (73,090) |
Impairment of goodwill | (85,934,770) | ||
Total operating expenses | (104,206,587) | $ (4,323,253) | $ (73,090) |
Loss from operations | (105,949,421) | (4,323,253) | (73,090) |
Interest income | 7,392 | $ 4 | $ 1 |
Other expenses, net | 46,210 | ||
Loss before provision for income taxes | (105,895,819) | $ (4,323,249) | $ (73,089) |
Provision for income tax benefits | 1,249,696 | ||
Continuing operations | (104,646,123) | $ (4,323,249) | $ (73,089) |
Discontinued operations: | |||
(Loss)/income from discontinued operations (including gain of $47,390,421 upon disposal in the year ended December 31, 2015) | $ 11,075,935 | $ (39,546,576) | (32,179,774) |
Provision for income tax benefits | 80,519 | ||
Discontinued operations | $ 11,075,935 | $ (39,546,576) | (32,099,255) |
Net loss | $ (93,570,188) | (43,869,825) | $ (32,172,344) |
Less: Net loss attributable to noncontrolling interests | (13,478) | ||
Net loss attributable to Wowo Limited | $ (93,570,188) | (43,856,347) | $ (32,172,344) |
Net loss attributable to holders of ordinary shares of Wowo Limited | $ (95,935,539) | $ (84,670,856) | $ (69,814,192) |
Net loss per ordinary shares | |||
Basic | $ (0.09) | $ (0.28) | $ (0.23) |
Diluted | (0.09) | (0.28) | (0.23) |
Net loss per ordinary share from continuing operations | |||
Basic | (0.10) | (0.03) | 0 |
Diluted | (0.10) | (0.03) | 0 |
Net loss per ordinary shares from discontinued operations | |||
Basic | 0.01 | (0.25) | (0.23) |
Diluted | $ 0.01 | $ (0.25) | $ (0.23) |
Basic | |||
Continuing operations | 1,001,754,524 | 303,886,640 | 303,886,640 |
Discontinued operations | 1,001,754,524 | 303,886,640 | 303,886,640 |
Diluted | |||
Continuing operations | 1,001,754,524 | 303,886,640 | 303,886,640 |
Discontinued operations | 1,043,473,265 | 303,886,640 | 303,886,640 |
Series A-1 Preferred Shares [Member] | |||
Discontinued operations: | |||
Accretion for convertible redeemable preferred shares | $ 442,409 | $ 1,445,125 | $ 1,199,007 |
Net loss per ordinary shares | |||
Basic | $ 0.14 | $ 0.12 | $ 0.10 |
Net loss per ordinary shares from discontinued operations | |||
Net income per preferred shares-Basic | $ 0.14 | $ 0.12 | $ 0.10 |
Basic | |||
Continuing operations | 3,242,986 | 12,202,988 | 12,202,988 |
Weighted average shares used in calculating net loss per | |||
Weighted average shares used in calculating net loss per preferred shares | 3,242,986 | 12,202,988 | 12,202,988 |
Series A-2 Preferred Shares [Member] | |||
Discontinued operations: | |||
Accretion for convertible redeemable preferred shares | $ 1,202,748 | $ 36,947,001 | $ 34,336,421 |
Net loss per ordinary shares | |||
Basic | $ 0.04 | $ 0.30 | $ 0.28 |
Net loss per ordinary shares from discontinued operations | |||
Net income per preferred shares-Basic | $ 0.04 | $ 0.30 | $ 0.28 |
Basic | |||
Continuing operations | 32,429,858 | 122,029,877 | 122,029,877 |
Weighted average shares used in calculating net loss per | |||
Weighted average shares used in calculating net loss per preferred shares | 32,429,858 | 122,029,877 | 122,029,877 |
Series B Preferred Shares [Member] | |||
Discontinued operations: | |||
Accretion for convertible redeemable preferred shares | $ 720,194 | $ 2,422,383 | $ 2,106,420 |
Net loss per ordinary shares | |||
Basic | $ 0.09 | $ 0.08 | $ 0.07 |
Net loss per ordinary shares from discontinued operations | |||
Net income per preferred shares-Basic | $ 0.09 | $ 0.08 | $ 0.07 |
Basic | |||
Continuing operations | 8,107,465 | 30,507,471 | 30,507,471 |
Weighted average shares used in calculating net loss per | |||
Weighted average shares used in calculating net loss per preferred shares | 8,107,465 | 30,507,471 | 30,507,471 |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS (Parantheticals) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Gain on disposal | $ 47,390,421 | ||
General and administrative [Member] | |||
Share-based compensation | $ 4,190,449 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | |||
Net loss | $ (93,570,188) | $ (43,869,825) | $ (32,172,344) |
Other comprehensive (loss)/income, net of tax of nil: | |||
Change in cumulative foreign currency translation adjustment | 1,589,686 | 2,031,505 | (1,390,936) |
Comprehensive loss | $ (91,980,502) | (41,838,320) | $ (33,563,280) |
Less: comprehensive loss attributable to noncontrolling interests | (13,353) | ||
Comprehensive loss attributable to Wowo Limited's shareholders | $ (91,980,502) | $ (41,824,967) | $ (33,563,280) |
CONSOLIDATED STATEMENTS OF COM7
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Paranthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | |||
Other comprehensive loss, tax |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Total | Total Wowo Limited shareholders' deficit [Member] | Ordinary shares [Member] | Additional paid-in capital [Member] | Subscription receivable [Member] | Accumulated deficit [Member] | Accumulated other comprehensive loss [Member] | Noncontrolling interest [Member] |
Beginning Balance at Dec. 31, 2012 | $ (86,593,485) | $ (86,593,485) | $ 3,039 | $ 43,761,660 | $ (3,000) | $ (129,033,247) | $ (1,321.937) | |
Beginning Balance (in shares) at Dec. 31, 2012 | 303,886,640 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accretion for Series A1, Series A2 and Series B convertible redeemable preferred shares | (37,641,848) | (37,641,848) | $ (37,641,848) | |||||
Net loss | (32,172,344) | (32,172,344) | $ (32,172,344) | |||||
Share-based compensation | 909,904 | 909,904 | $ 909,904 | |||||
Other comprehensive loss | (1,390,936) | (1,390,936) | $ (1,390,936) | |||||
Ending Balance at Dec. 31, 2013 | (156,888,709) | (156,888,709) | $ 3,039 | $ 7,029,716 | $ (3,000) | $ (161,205,591) | $ (2,712,873) | |
Ending Balance (in shares) at Dec. 31, 2013 | 303,886,640 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accretion for Series A1, Series A2 and Series B convertible redeemable preferred shares | (40,814,509) | (40,814,509) | $ (12,735,503) | (28,079,006) | ||||
Net loss | (43,869,825) | (43,856,347) | $ (43,856,347) | $ (13,478) | ||||
Share-based compensation | 5,762,384 | 5,762,384 | $ 5,762,384 | |||||
Subscription received | $ 3,000 | 3,000 | $ 3,000 | |||||
Partial disposal of a VIE | (56,597) | $ (56,597) | $ 56,597 | |||||
Other comprehensive loss | $ 2,031,505 | 2,031,380 | $ 2,031,380 | 125 | ||||
Ending Balance at Dec. 31, 2014 | $ (233,776,154) | (233,819,398) | $ 3,039 | $ (233,140,944) | $ (681,493) | $ 43,244 | ||
Ending Balance (in shares) at Dec. 31, 2014 | 303,886,640 | 303,886,640 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of ordinary shares upon IPO | $ 37,294,600 | $ 37,294,600 | $ 760 | $ 37,293,840 | ||||
Issuance of ordinary shares upon IPO, shares | 75,960,000 | |||||||
Ordinary shares converted to ADS shares for future exercise of share options (Note 12) | ||||||||
Ordinary shares converted to ADS shares for future exercise of share options (Note 12), shares | 31,496,832 | |||||||
Options exercised | $ 105,908 | $ 105,908 | $ 69 | $ 105,839 | ||||
Options exercised, shares | 6,866,280 | |||||||
Conversion of Mr. Xu's indebtness into ordinary shares | 69,353,223 | 69,353,223 | $ 1,248 | 69,351,975 | ||||
Conversion of Mr. Xu's indebtness into ordinary shares, shares | 124,835,802 | |||||||
Conversion of Series A-1, Series A-2 and Series B convertible redeemable preferred shares into ordinary shares | 127,019,279 | 127,019,279 | $ 1,647 | 127,017,632 | ||||
Conversion of Series A-1, Series A-2 and Series B convertible redeemable preferred shares into ordinary shares, shares | 164,740,336 | |||||||
Issuance of shares as a consideration for acquisition of JMU | 376,964,937 | 376,964,937 | $ 7,414 | 376,957,523 | ||||
Issuance of shares as a consideration for acquisition of JMU, shares | 741,422,780 | |||||||
Issuance of ordinary shares to Mr. Xu | 15,000,000 | 15,000,000 | $ 270 | 14,999,730 | ||||
Issuance of ordinary shares to Mr. Xu, shares | 27,000,000 | |||||||
Purchase the noncontrolling interests of subsidiaries | (111,250) | (68,006) | (68,006) | $ (43,244) | ||||
Accretion for Series A1, Series A2 and Series B convertible redeemable preferred shares | (2,365,351) | (2,365,351) | $ (2,365,351) | |||||
Net loss | (93,570,188) | (93,570,188) | $ (93,570,188) | |||||
Share-based compensation | 7,176,600 | 7,176,600 | $ 7,176,600 | |||||
Other comprehensive loss | 1,589,686 | 1,589,686 | $ 1,589,686 | |||||
Ending Balance at Dec. 31, 2015 | $ 304,681,290 | $ 304,681,290 | $ 14,447 | $ 630,469,782 | $ (326,711,132) | $ 908,193 | ||
Ending Balance (in shares) at Dec. 31, 2015 | 1,476,208,670 | 1,476,208,670 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net loss | $ (93,570,188) | $ (43,869,825) | $ (32,172,344) |
Less: Net (loss)/income from discontinued operations | 11,075,935 | (39,546,576) | (32,099,255) |
Net loss from continuing operations | $ (104,646,123) | (4,323,249) | $ (73,089) |
Adjustments to reconcile net income(loss) to net cash used in operating activities: | |||
Share-based compensation | $ 4,190,449 | ||
Depreciation and amortization | $ 4,949,036 | ||
Impairment of goodwill | 85,934,770 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (3,008,932) | ||
Inventories, net | 957,133 | ||
Amount due from related parties | 8,512,188 | ||
Prepaid expenses and other current assets | (18,524,604) | $ (110,778) | $ (116,968) |
Accounts payable | 1,873,123 | ||
Amounts due to related parties | (2,739,467) | ||
Accrued expenses and other current liabilities | 16,708,637 | $ (16,863) | $ (42,866) |
Other non-current liabilities | 502,180 | ||
Deferred income taxes | (1,249,696) | ||
Net cash used in continuing operations | (10,731,755) | $ (260,441) | $ (232,923) |
Net cash used in discontinued operations | (22,799,544) | (31,699,619) | (28,520,393) |
Net cash used in operating activities | (33,531,299) | $ (31,960,060) | $ (28,753,316) |
Cash flows from investing activities: | |||
Purchase of property and equipment | (93,317) | ||
Payments for acquisition of business (net of cash acquired of nil, nil and $20,196,362 for the years ended December 31, 2013, 2014 and 2015, respectively) | (9,803,638) | ||
Net cash used in continuing operations | (9,896,955) | ||
Net cash provided by (used in) discontinued operations | (1,999,364) | $ (586,534) | $ 2,118,463 |
Net cash provided by (used in) investing activities | (11,896,319) | $ (586,534) | $ 2,118,463 |
Cash flows from financing activities: | |||
Proceeds from issuance of ordinary shares upon IPO | 40,294,600 | ||
Payments for IPO costs | (2,125,372) | $ (874,628) | |
Received from / (Payment to) related parties | $ (250,000) | 36,291,479 | $ 24,587,142 |
Subscription proceeds received | $ 3,000 | ||
Proceeds from option exercise | $ 53,136 | ||
Proceeds from issuance of ordinary shares to Mr. Xu | $ 15,000,000 | ||
Net cash provided by (used in) continuing operations | 52,919,228 | $ 35,419,851 | $ 24,640,278 |
Net cash provided by discontinued operations | 1,963,650 | (1,651,880) | (1,904,218) |
Net cash provided by financing activities | 54,882,878 | 33,767,971 | 22,736,060 |
Effect of exchange rate changes | 50,468 | 5,490 | 70,724 |
(Decrease)/Increase in cash | 9,505,728 | 1,226,867 | (3,828,069) |
Cash, beginning of the year | 1,317 | 419,305 | 4,247,374 |
Cash, end of the year | $ 11,151,900 | $ 1,317 | 419,305 |
Supplement disclosure of cash flow information: | |||
Income taxes paid | 2,727 | ||
Interest paid | $ 104,084 | $ 136,655 |
CONSOLIDATED STATEMENTS OF CA10
CONSOLIDATED STATEMENTS OF CASH FLOWS (Paranthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Payments for acquisition of business, cash acquired | $ 20,196,362 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2015 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Wowo Limited (the "Company") was incorporated in Cayman Islands on July 13, 2011. The Company and its subsidiaries, variable interest entities ("VIEs") and VIEs' subsidiaries (the "Group") are primarily engaged in providing the e-commerce platform networking services, focusing on local entertainment and lifestyle services such as restaurants, movie theaters and beauty salons and also allow local merchants to create online stores and make direct sales to their target customers for consumption at their brick and mortar stores in the People's Republic of China ("PRC"). On April 8, 2015, the Company completed its IPO in NASDAQ ("National Association of Securities Dealers Automated Quotation") by offering 4 72 35.2 220,000 3.96 10 2.1 On June 5, 2015, the Company and its wholly owned subsidiary, New Admiral Limited ("New Admiral") entered into an agreement to acquire Join Me Group (HK) Investment Company Limited ("JMU") with a consideration of 741,422,780 30,000,000 ccjoin.com On September 9, 2015, the Company sold all of its equity interests in Wowo Group Limited, a subsidiary of the Company, together with all of its subsidiaries and consolidated VIEs and their respective subsidiaries (collectively, the "Group Buying Entities"), which were engaged in the Company's group buying business and other non-foodservice-related businesses. The sale was pursuant to a definitive agreement entered into between the Company and Century Winning Limited, an exempted company with limited liability incorporated under the laws of the British Virgin Islands (the "Buyer"), in exchange for the Buyer's payment of $ 1 47,390,420 This disposal represents a strategic shift and has a major effect on the Group's results of operations. Accordingly, assets and liabilities, revenues and expenses, and cash flows related to the Group Buying Entities have been reclassified in the accompanying consolidated financial statements as discontinued operations for all periods presented. The consolidated balance sheets as of December 31, 2014, the consolidated statements of operations and the consolidated statements of cash flows for the years ended December 31, 2013 and 2014 are adjusted retrospectively to reflect this change. Additionally, the presentation of the accompanying notes will not include the financial information as of and for the year ended December 31, 2014 if they were nil due to the disposal mentioned above. As of December 31, 2015, details of the Group's subsidiaries, VIE and VIE's subsidiaries were as follows: Date of acquisition/ incorporation Place of establishment/ incorporation Percentage of legal ownership Subsidiaries: New Admiral Limited ("New Admiral") April 27, 2015 Cayman Islands 100 Join Me Group (HK) Investment Company Limited ("JMU") June 8, 2015 Hong Kong 100 Join Me Group Supply Chain Management Company Limited("JMU Supply Chain") October 15, 2015 Hong Kong 100 Shanghai Zhongming Supply Chain Management Co., Ltd. ( "Shanghai Zhongming" or "WOFE" ) June 8, 2015 PRC 100 VIE: Shanghai Zhongmin Supply Chain Management Co., Ltd. ("Shanghai Zhongmin") June 8, 2015 PRC N/A VIE's subsidiaries: Hefei Zhonglian Supply Chain Management Co., Ltd. ("Hefei Zhonglian") June 8, 2015 PRC N/A Suzhou Zhongming Internet Technology Co., Ltd. ( "Suzhou Zhongming") June 8, 2015 PRC N/A Shanghai Zhonglan Supply Chain Management Co., Ltd. ("Shanghai Zhonglan") June 8, 2015 PRC N/A Shanghai Changzhong Supply Chain Management Co., Ltd. ("Shanghai Changzhong") June 8, 2015 PRC N/A Ningbo Jiangdong Zhongmin Supply Chain Management Co., Ltd. ( Ningbo Jiangdong ) June 8, 2015 PRC N/A Nanjing Zhongminyuan Internet Technology Co., Ltd. ( Nanjing Zhongminyuan ) June 8, 2015 PRC N/A Wuhan Zhongmin Supply Chain Management Co., Ltd. ( Wuhan Zhongmin ) June 8, 2015 PRC N/A Nanchang Zhongmin Supply Chain Management Co., Ltd. ( Nanchang Zhongmin ) June 8, 2015 PRC N/A Yanbian Zhongyue Supply Chain Management Co., Ltd. ( Yanbian Zhongyue ) June 8, 2015 PRC N/A Beijing Zhonglan Supply Chain Management Co., Ltd. ( Beijing Zhonglan ) June 8, 2015 PRC N/A Zhenjiang Zhongyuan Supply Chain Management Co., Ltd. ( Zhenjiang Zhongyuan ) June 8, 2015 PRC N/A Taiyuan Zhongmin Supply Chain Management Co., Ltd. ( Taiyuan Zhongmin ) June 8, 2015 PRC N/A The VIE arrangements The PRC laws and regulations currently place certain restrictions on foreign ownership of companies that engage in internet content and other restricted businesses. Specifically, foreign investors are not allowed to own more than 50 of the equity interests in any entity conducting internet content and other restricted businesses. To comply with these PRC laws and regulations, the Company conducts substantially all its businesses through the VIE and VIE's subsidiaries. To provide the Company control over the VIE and the rights to the expected residual returns of the VIE and VIE's subsidiaries, WOFE entered into a series of contractual arrangements as described below with the VIE including Shanghai Zhongmin and their shareholders. Prior to the acquisition of JMU, JMU formed contractual arrangements through its wholly owned subsidiary Zhongming with the VIE. As a result of the Company's acquisition of JMU, the Company through JMU's wholly owned subsidiary, Zhongming,has (1) power to direct the activities of the VIE that most significantly affect the entity's economic performance and (2) the right to receive economic benefits of the VIE that could be significant to the VIE. Accordingly, the Company is considered the primary beneficiary of the VIE and has consolidated the VIE's financial results of operations, assets, and liabilities in the Company's consolidated financial statements. The Company also believes that this ability to exercise control ensures that the VIE will continue to execute and renew the exclusive consulting and services agreements and pay service fees to the Company. The ability to charge service fees in amounts determined at the Company's sole discretion, and by ensuring that the exclusive services agreements are executed and renewed indefinitely, the Company has the right to receive substantially all of the economic benefits from the VIE. Agreements that Transfer Economic Benefits and Risks to the Company Master Exclusive Service Agreement and Business Cooperation Agreement 30 Agreements that Provide the Company with Effective Control over VIE Equity Pledge Agreements . The shareholder of Zhongmin entered into an equity pledge agreement with the WOFE, under which the shareholder pledged all of the equity interests in Zhongmin to WOFE as collateral to secure performance of all obligations under the Master Exclusive Service Agreement, Business Cooperation Agreement, Proxy Agreement and Power of Attorney and the Exclusive Option Agreement (collectively, the "Principal Agreement"). The dividends generated by the pledged equity interests shall be deposited into the account designated by the WOFE and shall be used to pay the secured indebtedness prior and in preference to any other payment during the term of the pledge. If any event of default incurred under the Principal Agreement, WOFE, as the pledgee, will be entitled to dispose of the pledged equity interests and shall be paid in priority with the proceeds recovered from the disposal. Proxy Agreement and Power of Attorney . The shareholders of Zhongmin signed an irrevocable Proxy Agreement and Power of Attorney to appoint WOFE as the attorney-in-fact to act on Zhongmin's shareholder's behalf on all rights that the shareholder has in respect of such shareholder's equity interest in Zhongmin conferred by relevant laws and regulations and the articles of association of Zhongmin. The rights include but not limited to attending shareholders meeting, exercising voting rights and transferring all or a part of the equity interests of Zhongmin held by the shareholder. The Proxy Agreement and Power of Attorney shall remain effective upon written confirmation issued by WOFE to Zhongmin and the shareholder 30 Exclusive Option Agreements no 30 no Risks in relation to the VIE structure . The Company believes that Zhongming's s and are legally enforceable. The shareholders of the VIE 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 Company's ability to enforce these contractual arrangements and if the shareholders 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 VIE not to pay the service fees when required to do so. The Company's ability to control the VIE also depends on the power of attorney. Zhongming has to vote on all matters requiring shareholder approval in the VIE entity. As noted above, the Company believes this power of attorney is legally enforceable but may not be as effective as direct equity ownership. In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could: revoke the Group's business and operating licenses; require the Group to discontinue or restrict its operations; restrict the Group's right to collect revenues; restrict or prohibit the Group to finance its business and operations in China; shut down our servers or block the Group's website; require the Group to restructure our operations; impose additional conditions or requirements with which the Group might not be able to comply, levy fines, confiscate the Group's income or the income of its PRC subsidiary or affiliated PRC entities; or take other regulatory or enforcement actions against the Group that could be harmful to its business. The imposition of any of these penalties could result in a material 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 VIE, VIE's subsidiaries, or the right to receive their economic benefits, the Group would no The following financial statement balances and amounts of the VIE and VIE's subsidiaries were included in the accompanying audited consolidated financial statements as follows after the elimination of intercompany balances and transactions as of and for the year ended December 31, 2015: December 31, 2015 Cash $ 2,137,414 Accounts receivable, net 3,748,398 Prepaid expenses and other current assets 19,919,504 Inventories, net 94,409 Amounts due from related parties 661,275 Total current assets 26,561,000 Property and equipment, net 317,186 Total non-current assets 317,186 Total assets $ 26,878,186 Accounts payable 3,818,023 Accrued expenses and other current liabilities 19,134,673 Advance from customers 828,437 Amounts due to related parties 319,767 Total current liabilities 24,100,900 Total liabilities $ 24,100,900 For the year ended December 31, 2015 Revenues $ 11,477,552 Net loss $ (8,052,187) For the year ended December 31, 2015 Net cash provided by operating activities $ 238,302 Net cash used in investing activities $ (44,228) Net cash provided by financing activities $ The VIE contributed an aggregate of nil nil 100 , 2013, 2014 and 2015, respectively. As of December 31, 2014 and 2015, the VIE accounted for an aggregate of nil 7.8 nil 63.3 respectively, of the consolidated total liabilities. The assets not associated with the VIE primarily consist of cash and cash equivalents, prepaid expenses and other current assets and property and equipment. The recognized and unrecognized revenue-producing assets that are held by the VIE are primarily property and equipment. There are no consolidated VIE's assets that are collateral for the VIE's obligations and can only be used to settle the VIE's obligations. There are no creditors (or beneficial interest holders) of the VIE that have recourse to the general credit of the Company or any of its consolidated subsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIE through loans to the shareholder of the VIE or entrustment loans to the VIE. Relevant PRC laws and regulations restrict the VIE from transferring a portion of their net assets, equivalent to the balance of its statutory reserve and its share capital, to the Company in the form of loans and advances or cash dividends. Please refer to Note 20 for disclosure of restricted net assets. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2015 | |
GOING CONCERN | |
GOING CONCERN | 2. GOING CONCERN The Group experienced a net loss of approximately 32.2 43.9 93.6 28.8 32.0 33.5 million for the years ended December 31, 2013, 2014 and 2015, respectively. These conditions raise substantial doubt about the Group's ability to continue as a going concern. However, management believes the Group has the ability to fulfill its financial obligations and will continue as a going concern because its primary shareholders, Ms. Xiaoxia Zhu and Ms. Huimin Wang, have agreed in writing to provide adequate funds to enable the Group to meet in full its financial obligations as they fall due through December 31, 2017. In April 2016, Ms. Huimin Wang provided interest-free loan to fund the Group's daily operations with total amounts of $ 6,174,920 40,000,000 The Group believes that it can realize its assets and satisfy its liabilities in the normal course of business with the financial support from Ms. Xiaoxia Zhu and Ms. Huimin Wang. As a result, the consolidated financial statements have been prepared assuming the Group will continue as a going concern. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities as that might be necessary if the Group is unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (US GAAP''). Basis of consolidation The consolidated financial statements of the Group include the financial statements of the Company, and its consolidated subsidiaries, VIE and VIE's subsidiaries which are accounted for under the voting interest model. All intercompany transactions and balances have been eliminated upon consolidation. Business combinations Business combinations are recorded using the acquisition method of accounting. 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 interests of the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Cash is the common form of the consideration paid for acquisitions. Consideration transferred in a business acquisition is measured at the fair value as at the date of acquisition. Discontinued operations A disposal of a component of an entity or a group of components of an entity shall be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. Where an operation is classified as discontinued, a single amount is presented on the face of the consolidated statements of operations. The amount of total current assets, total non-current assets, total current liabilities and total non-current liabilities are presented separately on the consolidated balance sheets. Revenue recognition The Group recognizes revenue from the sales of rice, flavor, bean oil, seafood, wine and some other type of generic food and beverage products through its online platform ccjoin.com The Group utilizes delivery service providers to dispatch goods to its customers directly from its own warehouses. The Group recognizes revenue when the customers confirm the acceptance of the goods online once they receive the delivered goods. If the customers do not confirm the receipt of goods online timely, the online system will confirm automatically after the seven days from the delivery date. The sales returns are considered and estimated when the revenue recognized, but the historical returns on sales on ccjoin.com are inconsequential. Revenue is recorded net of surcharges and value-added tax ("VAT") and related surcharges. The Group primarily generates revenue from online direct sales and online platform services.. Online direct sales The Group primarily sells rice, flavor, bean oil, seafood, wine and some other type of generic food and beverage products through online direct sales. The Group recorded revenue from online direct sales on a gross basis because the Group has the following indicators for gross reporting: it is the primary obligor of the sales arrangements, is subject to inventory risks of physical loss, has latitude in establishing prices, has discretion in suppliers' selection and assumes credit risks on receivables from customers. The Group also retains some of general inventory risks despite its arrangements to return goods to some vendors. Online platform services The Group also provides the online platform services to third-party sellers and purchasers for their transactions. The Group records the related revenue on a net basis, because the Group generally is not the primary obligor, does not bear the inventory risk, does not have the ability to establish the price and control the related shipping services when the online platform is utilized by third-party sellers and purchasers. For the year ended December 31, 2015, the Group did not charge any services fees to the third-party sellers and purchasers. Value-added tax Value added tax ("VAT") on sales is calculated at 17 13 Cost of revenue Costs of revenues primarily consist of purchased cost of the products sold related to online direct sales, payroll of the operating personnel, website hosting cost, processing fees paid to third-party payment platform, logistic fees paid to the third-party courier companies and amortization of acquired trade name/domain name. Selling and marketing expenses Selling and marketing expenses consist primarily of advertising and market promotion expenses, and other overhead expenses incurred by the Group's sales and marketing personnel. Advertising expenses are expensed as incurred. Use of estimates The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Significant accounting estimates reflected in the Group's consolidated financial statements include useful lives and impairment for property and equipment and acquired intangible assets, impairment of goodwill, valuation allowance for deferred tax assets, return allowance, fair value of ordinary shares, share-based compensation and purchase price allocation. Actual results could differ from those estimates. Cash Cash consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use, and have original maturities of three months or less when purchased. Accounts receivable Accounts receivable represents those receivables derived in the ordinary course of business, net of allowance for doubtful accounts. Allowance for doubtful accounts The Group maintains an allowance for doubtful accounts for estimated losses on uncollected accounts receivable. Management considers the following factors when determining the collectability of specific accounts: creditworthiness of customers, aging of the receivables, past transaction history with customers and their current condition, changes in customer payment terms, specific facts and circumstances, and the overall economic climate in the industries the Group serves. Inventories Inventory is stated at the lower of cost or market. Cost of inventory is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventory to the estimated market value for slow-moving merchandise and damaged goods. The amount of written-down depends upon factors such as whether the goods are returnable to vendors, historical and forecasted consumer demand, market condition and the promotional environment. Written-down amounts are recorded in cost of goods sold in the consolidated statements of income (loss) and comprehensive loss, which were nil for the years ended December 31, 2013, 2014 and 2015. Property and equipment, net Property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Computer and software 3 10 Acquired intangible assets Acquired intangible assets with finite lives are carried at cost less accumulated amortization and impairment. Amortization of customer relationship is calculated using the estimated attrition pattern. Amortization of other finite lived intangible assets is calculated on a straight-line basis over the shorter of the contractual terms or the expected useful lives of the acquired assets. The amortization period by major intangible asset classes is as follows: Trade name/domain name 10 Non-compete agreement 4.5 Online platform 5 Customer relationship 5 10 Impairment of intangible assets with finite life The Group evaluates the recoverability of its intangible assets with finite lives, whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the intangible assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the excess of carrying amount over the fair value of the assets. Considering that the Group has recurring operating losses, the Group has determined to perform the annual impairment tests on December 31 of each year. As a result of the annual impairment test, no impairment loss was recognized for the years ended December 31, 2013, 2014 and 2015. Impairment of goodwill The Group annually, or more frequently if the Group believes indicators of impairment exist, reviews the carrying value of goodwill to determine whether impairment may exist. Specifically, goodwill impairment is determined using a two-step process. The first step compares the fair value of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be 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. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being a discounted cash flow. The Group has determined to perform the annual impairment tests on December 31 of each year. Prior to the acquisition of JMU, goodwill was attributable to the Group Buying business which is classified as discontinued operations in the year ended December 31, 2015. No goodwill impairment loss was recognized for this business for the years ended December 31, 2013 and 2014. The goodwill as of December 31, 2015 was attributable solely to the JMU business on which an impairment loss of $ 85,934,770 Operating leases Leases where substantially all the rewards and risks of the ownership of the assets remain with the leasing companies are accounted for as operating leases. Payments made for the operating leases are charged to the consolidated statements of operations on a straight-line basis over the lease term and have been included in the operating expenses in the consolidated statements of operations. Income taxes Current income taxes are provided in accordance with the laws and regulations applicable to the Company as enacted by the relevant tax authorities. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on the characteristics of the underlying assets and liabilities. The impact of an uncertain income tax position on the income tax return is 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. Foreign currency translation The functional and reporting currency of the Company is the United States dollar (U.S. dollars). The functional currency of the Company's HK subsidiary JMU is Hong Kong dollars (HK dollars). The financial records of the Group's subsidiaries, VIE and VIE's subsidiaries located in the PRC are maintained in their local currencies, the Renminbi (RMB), respectively, 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 on 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 Company's entities with functional currency of RMB and HK dollars translate their operating results and financial position into the U.S. dollars, 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. Share-based payments Share-based payment awards with employees are measured based on the grant date fair value of the equity instrument issued, and recognized as compensation costs net of an estimated forfeiture rate using the straight-line method over the requisite service period, which is generally the vesting period of the options, with a corresponding impact reflected in additional paid-in capital. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or is expected to differ, from such estimate. 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 expenses to be recognized in future years. Comprehensive loss Comprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax, the tax effect is nil for the years ended December 31, 2013, 2014 and 2015. Concentration of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash. The Group places its cash and cash equivalents with financial institutions with high-credit ratings and quality Customers accounting for 10% or more of total revenue are: For the year ended December 31, Customer 2015 A 28.4 % Customers accounting for 10% or more of accounts receivable are: As of December 31, Customer 2015 A 99.9 % 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 1inputs are based upon quoted prices for instruments traded in active markets. ¨ Level 2inputs 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 calculation 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 3inputs 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, cash flow models, and similar techniques. Fair value of financial instruments Financial instruments include cash and cash equivalents, amounts due from/to related parties, accounts receivable and accounts payable. The carrying values of cash, amounts due from/to related parties, accounts receivable and accounts payable approximate their fair values reported in the consolidated balance sheets due to the short-term maturities. Financial assets and liabilities measured at fair value on a non-recurring basis include acquired assets and liabilities and goodwill based on Level 3 inputs in connection with business acquisition set out in Note 4. Net loss per share Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The Group's convertible redeemable participating preferred shares are participating securities as they participate in undistributed earnings on an as-if-converted basis. Accordingly, the Group uses the two-class method whereby undistributed net income is allocated on a pro rata basis to the ordinary shares and convertible redeemable participating preferred shares to the extent that each class may share in income for the period; whereas the undistributed net loss for the period is allocated to ordinary shares only because the convertible redeemable participating preferred shares are not contractually obligated to share the loss. 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 redeemable participating preferred shares, stock options and restricted share units, which could potentially dilute basic loss per share in the future. To calculate the number of shares for diluted loss per ordinary share, the effect of the convertible redeemable participating preferred shares is computed using the as-if-converted method; the effect of the stock options and restricted share units is computed using the treasury stock method. Potential ordinary shares in the diluted net loss per share computation are excluded in periods of losses from continuing operations, as their effect would be anti-dilutive. Recent accounting pronouncements adopted In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") 2014-08 which amends to change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization's operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. This disclosure will provide users with information about the ongoing trends in a reporting organization's results from continuing operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The Company early adopted this ASU in January 2015. The effects of the pronouncement have been reflected in the consolidated financial statements. Recent accounting pronouncements not yet adopted In August, 2014, the FASB issued a new pronouncement ASU 2014-15 which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements. Further, an entity must provide certain disclosures if there is substantial doubt about the entity's ability to continue as a going concern." The new standard is effective for fiscal years ending after December 15, 2016. Adoption of this guidance may have an effect on the Group's consolidated financial statements but the impact has not yet been evaluated by the Group. In February 2015, FASB issued a new pronouncement Inventory (Topic 330): Simplifying the Measurement of Inventory. The current guidance requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. On August 12, 2015, the FASB issued a new pronouncement, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendments in this ASU defer the effective date of ASU 2014-09 for all entities by one year. Public business entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. On September 25, 2015, the FASB issued ASU 2015-16 to simplify the accounting for measurement-period adjustments. The ASU, which is part of the FASB's simplification initiative (i.e., the Board's effort to reduce the cost and complexity of certain aspects of U.S. GAAP), was issued in response to stakeholder feedback that restatements of prior periods to reflect adjustments made to provisional amounts recognized in a business combination increase the cost and complexity of financial reporting but do not significantly improve the usefulness of the information. Under the ASU, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The ASU also requires acquirers to present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. Under this ASU, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The ASU also requires acquirers to present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The ASU must be applied prospectively to adjustments to provisional amounts that occur after the effective date. Early adoption is permitted for financial statements that have not been issued. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. On February 25, 2016, the FASB issued ASU 2016-02 Leases. The core principle of this ASU will require lessees to present right-of-use assets and lease liabilities on their balance sheets. ASU 2016-02 is effective for annual and interim periods beginning January 1, 2019. Early adoption of this ASU is permitted. Upon adoption of this ASU, the Group is required to recognize and measure leases at the beginning of the earliest period presented in the consolidated financial statements using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that the Company may elect to apply. The Group is currently evaluating and assessing the impact of this ASU will have on the Group's consolidated financial statements. |
BUSINESS ACQUISITION
BUSINESS ACQUISITION | 12 Months Ended |
Dec. 31, 2015 | |
BUSINESS ACQUISITION | |
BUSINESS ACQUISITION | 4. BUSINESS ACQUISITION On June 5, 2015, the Company entered into an agreement to acquire JMU HK with a consideration of 741,422,780 30,000,000 741,422,780 shares were issued as part of consideration of which 311,842,983 three 10.39 28 three The transaction was considered as a business acquisition. The Company was determined as the accounting acquirer based on the facts and circumstances of the transaction including the Company's payment of cash consideration for the equity interests of JMU and the Company's relative size is larger than that of JMU. Accordingly the purchase method of accounting has been applied. The acquired net assets were recorded at their estimated fair values on the acquisition date. The acquired goodwill is not deductible for tax purposes. The preliminary purchase price for the acquisition was allocated as follows: Amortization Period Net tangible assets $ 28,793,669 Intangible assets: Trade name/domain name 16,228,000 10 Non-compete agreement 10,096,000 4.5 Online platform 1,364,000 5 Customer relationships 27,760,000 5 10 Total 55,448,000 Deferred tax liabilities (13,862,000 ) Goodwill 336,585,270 Total consideration $ 406,964,939 The goodwill is mainly attributable to intangible assets that cannot be recognized separately as identifiable assets under US GAAP, and comprise of (a) the assembled work force and (b) the expected but unidentifiable business growth resulting from the Acquisition. The following unaudited pro forma information summarizes the results of operations for the years ended December 31, 2014 and 2015 of the Group as if the acquisition had occurred on January 1, 2014. The following pro forma financial information is not necessarily indicative of the results that would have occurred had the acquisition been completed at the beginning of the period indicated, nor is it indicative of future operating results: For the year ended December 31, 2014 2015 (unaudited) (unaudited) Pro forma revenues $ 68,298 $ 11,522,525 Pro forma net loss (16,439,806 ) (115,066,695 ) Pro forma net loss per ordinary share-basic (0.02 ) (0.09 ) Pro forma net loss per ordinary share-diluted (0.02 ) (0.09 ) |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2015 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | 5. DISCONTINUED OPERATIONS The disposal described in Note 1 represents a strategic shift and has a major effect on the Group's results of operations. The Group Buying Entities is accounted as discontinued operations in the consolidated financial statements for the years ended December 31, 2013, 2014 and 2015. A gain of $ 47,390,421 The financial results of the Group Buying Entities are set out below. The assets, liabilities, revenue and expenses have been reclassified as discontinued operations to retrospectively reflect the changes for the year ended December 31, 2014. December 31, 2014 Carrying amounts of assets disposed Cash $ 1,644,855 Accounts receivable, net 1,225,386 Prepaid expenses and other current assets 7,206,884 Current assets of discontinued operations 10,077,125 Property and equipment, net 2,574,081 Goodwill 7,463,706 Non-current assets of discontinued operations 10,037,787 Total assets of discontinued operations $ 20,114,912 Carrying amounts of liabilities disposed Accounts payable $ 22,679,754 Accrued expense and other current liabilities 21,669,131 Advance from customers 22,703,718 Amounts due to related parties 403,585 Income tax payable 44,100 Current liabilities of discontinued operations 67,500,288 Total liabilities of discontinued operations $ 67,500,288 For the years ended December 31, 2013 2014 2015 Net revenues $ 36,253,309 $ 30,073,452 $ 16,832,352 Cost of revenues (6,583,501 ) (7,040,383 ) (2,927,148 ) Gross profit 29,669,808 23,033,069 13,905,204 Operating expenses (61,668,332 ) (62,378,258 ) (50,212,995 ) Loss from operations (31,998,524 ) (39,345,189 ) (36,307,791 ) Gain from disposal of Group Buying Entities 47,390,421 Interest income 43,864 6,699 1,904 Interest expense (136,655 ) (11,798 ) Other expenses, net (89,354 ) (196,288 ) (8,599 ) Gain from disposal of subsidiary 895 (Loss)/Income before income tax (32,179,774 ) (39,546,576 ) 11,075,935 Provision for income tax 80,519 (Loss)/Income from discontinuing operations attributable to owners of the Company $ (32,099,255 ) $ (39,546,576 ) $ 11,075,935 Nature of the relationships with related parties: Name Relationship with the Company Beijing Baifen Tonglian Media Technology Co., Ltd. Controlled by Mr. Xu As of December 31, 2014, the following balances were due to the related parties: December 31, 2014 Amount due to Beijing Baifen Tonglian Media Technology Co., Ltd 403,585 (i) $ 403,585 (i) The amounts represents short messaging service (SMS) distribution platform fee, which has not been paid to Beijing Baifen Tonglian Media Technology Co., Ltd. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
PREPAYMENTS AND OTHER CURRENT ASSETS | |
PREPAYMENTS AND OTHER CURRENT ASSETS | 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: December 31, 2014 December 31, 2015 Receivables from third-party purchasers $ $ 16,510,091 Amount due from third parties 4,917,068 Advance to suppliers 2,475,752 Prepaid rental expenses and other deposits 865,219 Advance to employees 245,897 Prepaid professional service fee 227,110 34,002 Other current assets 233,405 $ 227,110 $ 25,281,434 In connection with the online platform services, receivables from third-party purchasers represented the total amounts paid to third-party sellers on behalf of third-party purchasers through JMU online platform in a period less than one week without any charges. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET Property and equipment, net, consisted of the following: December 31, Computer and software $ 571,564 Total 571,564 Less: accumulated depreciation (93,489) Property and equipment, net $ 478,075 Depreciation expense for the years ended December 31, 2013, 2014 and 2015 was nil , nil 63,981 |
ACQUIRED INTANGIBLE ASSETS, NET
ACQUIRED INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2015 | |
ACQUIRED INTANGIBLE ASSETS, NET | |
ACQUIRED INTANGIBLE ASSETS, NET | 8. ACQUIRED INTANGIBLE ASSETS, NET Acquired intangible assets, net, consisted of the following: December 31, Trade name/domain name $ 16,228,000 Non-compete agreement 10,096,000 Online platform 1,364,000 Customer relationship 27,760,000 Total 55,448,000 Less: Accumulated amortization (4,885,055) Acquired intangible assets, net $ 50,562,945 The amortization expense of acquired intangible assets was nil , nil 4,885,055 for the years ended December 31, 2013, 2014 and 2015, respectively. No impairment loss was recognized for the years ended December 31, 2013, 2014 and 2015. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL | |
GOODWILL | 9. GOODWILL The changes in the goodwill balance for the years ended December 31 , 2014 and 2015 is as follows: December 31, Gross amount: Beginning balance $ Addition 336,585,270 Ending balance 336,585,270 Accumulated impairment loss: Beginning balance Charge for the period (85.934.770 ) Ending balance (85.934.770 Goodwill, net $ 250,650,500 The Group has one 85,934,770 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: December 31, Payables to third-party sellers $ 17,163,716 Accrued payroll and welfare 1,219,730 Payable for professional fee 858,577 Payables for rental fee 639,753 Others 88,680 Total accrued expenses and other current liabilities $ 19,970,456 In connection with the online platform services, payable to third-party sellers represented the total amounts received from third-party purchasers on behalf of third-party sellers through JMU online platform in a period less than one week without any charges. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES | |
INCOME TAXES | 11. INCOME TAXES Cayman Under the current laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. Hong Kong No provision for Hong Kong Profits Tax was made for the years ended December 31, 2013, 2014 and 2015 on the basis that JMU did not have any assessable profits arising in or derived from Hong Kong for those years. PRC The enterprise income tax (EIT'') law applies a uniform 25 No taxable income for both domestic and foreign entities of the Group. Credit for income tax consisted of the following: Year ended December 31, 2015 Income tax benefits: Current income tax expenses $ Deferred income tax benefits 1,249,696 Total $ 1,249,696 The significant components of the Group's deferred tax assets and liabilities were as follows: December 31, Deferred tax assets Current deferred tax assets $ - Total current deferred tax assets - Non-current Net operating loss carry forwards 1,955,301 Total deferred tax assets 1,955,301 Less: valuation allowance (1,955,301 ) Net deferred tax assets $ Deferred tax liabilities Non-current Acquired intangible assets $ 12,640,736 Total deferred tax liabilities $ 12,640,736 The Group considers the following factors, among other matters, when determining whether some portion or all of the deferred tax assets will more likely than not be realized: the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward years, the Group's experience with tax attributes expiring unused and tax planning alternatives. The Group's ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry forward years provided for in the tax law. The Group had incurred net operating losses carry forwards nil 8,064,039 ' nil 1,955,301 Reconciliation between the income taxes benefit computed by applying the PRC tax rate to loss before income taxes and the actual credit for income taxes is as follows: For the year ended December 31, 2015 Net loss before provision for income taxes $ (105,895,819 ) Statutory tax rates in the PRC 25 % Income tax at statutory tax rate (26,473,955 ) Expenses not deductible for tax purposes Goodwill impairment 21,483,693 Entertainment expenses exceeded tax limit 7,687 Other expenses exceeded tax limit 226,428 Effect of income tax rate difference in other jurisdiction 4,050,542 Changes of valuation allowance 1,955,301 Income tax benefits $ 1,249,696 The EIT Law includes a provision specifying that legal entities organized outside the PRC will be considered residents for Chinese income tax purposes if their place of effective management or control is within the PRC. If legal entities organized outside the PRC were considered residents for Chinese income tax purpose, they would become subject to the EIT Law on their worldwide income. This would cause any income legal entities organized outside the PRC earned to be subject to the PRC's 25% EIT. The Implementation Rules to EIT Law provide that non-resident legal entities will be considered as PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc. reside within the PRC. Pursuant to the additional guidance released by the Chinese government on April 22, 2009 and issued bulletin on August 3, 2011 which provide more guidance on the implementation, management does not believe that the legal entities organized outside the PRC should be characterized as the PRC tax residents for EIT Law purposes. Under the EIT Law and its implementation rules which became effective on January 1, 2008, dividends generated after January 1, 2008 and payable by a foreign-invested enterprise in the PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding tax, unless any such foreign investor's jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding arrangement. The Cayman Islands, where the Company are incorporated, does not have a tax treaty with the PRC. There were no aggregate undistributed earnings of the Company's subsidiaries, VIE and VIE's subsidiaries located in the PRC available for dividend distribution. Therefore, no deferred tax liability has been accrued for the Chinese dividend withholding taxes that might be payable upon the distribution of aggregate undistributed earnings as of December 31, 2015. The impact of an uncertain income tax position on the income tax return is 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 has concluded that there are no significant uncertain tax positions requiring recognition in the consolidated financial statements for the years ended December 31, 2013, 2014 and 2015. The Group did not incur any interest and penalties related to potential underpaid income tax expenses and also does not anticipate any significant increases or decreases in unrecognized tax benefits within 12 months from December 31, 2015. The Group has no material unrecognized tax benefits which would favorably affect the effective income tax rate in future years. Since January 1, 2008, the relevant tax authorities of the Group's subsidiaries, VIE and VIE's subsidiaries located in the PRC have not conducted a tax examination. In accordance with relevant PRC tax administration laws, tax years from 2008 to 2015 of the Group's PRC subsidiaries, VIE and VIE's subsidiaries, remain subject to tax audits as of December 31, 2015, at the tax authority's discretion. |
ORDINARY SHARES
ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2015 | |
ORDINARY SHARES | |
ORDINARY SHARES | 12 . ORDINARY SHARES On April 8, 2015, the Company completed its IPO on NASDAQ by offering 4,000,000 72 10 220,000 3.96 10 37,294,600 3,000,000 Upon the completion of the IPO, all of the Company's then outstanding Series A-1, Series A-2 and Series B preferred shares were automatically converted into 12,202,988 122,029,877 30,507,471 69.4 124,835,802 On June 8, 2015, the Company issued 741,422,780 72,000,000 0.5556 40,000,000 15,000,000 27,000,000 27,000,000 On September 27, 2015, the Company issued and transferred 38,363,112 2,131,284 6,866,280 38,363,112 31,496,832 |
CONVERITBLE REDEEMABLE PREFERRE
CONVERITBLE REDEEMABLE PREFERRED SHARES | 12 Months Ended |
Dec. 31, 2014 | |
CONVERITBLE REDEEMABLE PREFERRED SHARES | |
CONVERITBLE REDEEMABLE PREFERRED SHARES | 13 . CONVERTIBLE REDEEMABLE PREFERRED SHARES On April 3, 2011, Wowo Group Limited ("Wowo BVI") 5,489,604 0.9108 5,000,000 18,072 On May 25, June 8, and July 5, 2011, Wowo BVI issued 30,803,678 2,053,580 18,482,206 0.9739 30,000,000 2,000,000 18,000,000 192,149 On February 29, 2012, the Company issued an aggregate of 30,507,471 0.4097 12,500,000 31,153 6,713,384 70,690,413 0.4097 43,234,050 Each Series A and Series B convertible preferred share had been automatically converted into one The rights, preferences, privileges and restriction granted to and imposed on the Series A-1, A-2 (collectively referred to as Series A Preferred Shares'') and Series B Preferred Shares (collectively, "Preferred Shares")were as follows: Voting rights Each Preferred Share carried a According to the Third Amended Memorandum and Article of Association after above issuance of Series A-1, Series A-2 and Series B Preferred Shares, the number of the Board of directors of the Company was four one three Dividends No dividends shall be declared or paid on the ordinary shares or any future series of Preferred Shares, unless and until a dividend in like amount is declared and paid on each outstanding Preferred Share on an as-if converted basis. Each holder of Series B Preferred Shares shall be entitled to receive, on annual basis, preferential, non-cumulative dividends at the rate equal to the greater of (i) 8 After the full preferential dividends for Series B Preferred Shares had been paid on all outstanding Series B Preferred Shares, each holder of Series A-2 Preferred Shares shall be entitled to receive, on an annual basis, preferential, non-cumulative dividends at the rate equal to the greater of (i) 8 After the full preferential dividends for Series B and Series A-2 Preferred Shares had been paid on all outstanding Series B and Series A-2 Preferred Shares, each holder of Series A-1 Preferred Shares shall be entitled to receive, on an annual basis, preferential, non-cumulative dividends at the rate equal to the greater of (i) 8 In addition to any dividend pursuant to above, the holders of Preferred Shares shall be entitled to receive on a pari passu basis, when as and if declared at the sole discretion of the Board, but only out of funds that are legally available there for, cash dividends at the rate or in the amount as the Board considers appropriate. Liquidation preference In the event of any liquidation, dissolution or winding up of the Company, each holder of Series B Preferred Shares shall be entitled to receive, prior to any distribution to the holders of Series A Preferred Shares, Ordinary Shares or any other class or series of shares then outstanding, an amount per Series B Preferred Share equal to 100 After the full Series B Preference Amount had been paid on all outstanding Series B Preferred Shares, the each holder of Series A-2 Preferred Shares shall be entitled to receive, prior to any distribution to the holders of Ordinary Shares or any other class or series of shares then outstanding, an amount per Series A-2 Preferred Share equal to 100 After the full Series A-2 Preference Amount had been paid on all outstanding Series A-2 Preferred Shares, the each holder of Series A-1 Preferred Shares shall be entitled to receive, prior to any distribution to the holders of Ordinary Shares or any other class or series of shares then outstanding, an amount per Series A-1 Preferred Share equal to 100 After the full Series B and Series A Preference Amount had been paid, any remaining funds or assets of the Company legally available for distribution to shareholders shall be distributed pro rata among the holders of Preferred Shares (on an as-converted basis) and the holders of the Ordinary Shares. In the event the Company proposed to distribute assets other than cash in connection with any liquidation, dissolution or winding up of the Company, the value of the assets to be distributed to the holders of Preferred Shares and Ordinary Shares shall be determined by the Board. Conversion Optional conversion Each holder of Preferred Shares shall have the right to convert all or any portion of the Preferred Shares into Ordinary Shares at any time. The conversion rate for the Series B Preferred Shares and Series A Preferred Shares shall be determined by dividing the Series B and Series A Issue Price for each of the Series B Preferred Shares and Series A Preferred Shares by its conversion price, respectively, provided that in the event of any share splits, share combinations, share dividends, recapitalizations and similar events, the initial Series B and Series A Conversion Price shall be adjusted accordingly, respectively. Automatic conversion The Preferred Shares would automatically be converted into Ordinary Shares, at its then respective Conversion Prices, upon a Qualified IPO, which is defined as an initial public offering of securities of the Company on a recognized regional or national exchange or quotation system in the United States, Hong Kong, the PRC or any other jurisdiction approved by the investors, and the aggregate proceeds to the Company in such initial public offering shall be not less than $ 100,000,000 No adjustment in the Series B Conversion Price shall be made in respect of the issuance of additional ordinary shares unless the consideration per share for an additional ordinary share issued or deemed to be issued by the Company is less than the Series B Conversion Price. If the Company issues any additional ordinary shares and 0.85 0.85 No adjustment in the Series A Preferred Shares Conversion Price shall be made in respect of the issuance of additional ordinary shares unless the consideration per share for an additional ordinary share issued or deemed to be issued by the Company is less than the Series A Conversion Price. If the Company issues any additional ordinary shares and 0.85 Series A Conversion Price, the Series A Conversion Price shall be reduced to a price (to the nearest one thousandth (1/1000) of a cent) equal to 0.85 The conversion price will be adjusted for share dividends, subdivisions, combinations or consolidations of ordinary shares, other distributions, reclassification, exchange and substitution. The Company will protect the Conversion Rights of the holders of the Preferred Shares against impairment, and not amend its Memorandum and Articles of Association or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by the Company. The Group had determined that there was embedded beneficial conversion feature of $43,234,050 attributable to the Series A-1 and Series A-2 Preferred Shares because the adjusted conversion price of Series A-1 and Series A-2 Preferred Shares is lower than the fair value of the Group's ordinary share as of respective issuance dates and there was no embedded beneficial conversion feature attributable to the Series B Preferred Shares because the conversion price of the Series B Preferred Shares is higher than the fair value of the Group's ordinary share as of the issuance date. The initial conversion price of Series B and Series A Preferred Shares shall be their Issue Price, therefore, the initial conversion rate was one one one one The Group assessed $ 37,641,848 40,814,509 2,365,351 as accretion for Series A-1 Preferred Shares, Series A-2 Preferred Shares and Series B Preferred Shares for the years ended December 31, 2013, 2014 and 2015, respectively. The changes in Preferred Shares balance for the years ended December 31, 2013, 2014 and 2015 are as follows: Series A-1 Preferred Series A-2 Preferred Shares Series B Preferred Shares Total Balance as of January 1, 2013 $ 4,111,914 $ 28,072,921 $ 14,012,736 $ 46,197,571 Accretion for the Preferred Shares 1,199,007 34,336,421 2,106,420 37,641,848 Balance as of December 31, 2013 $ 5,310,921 $ 62,409,342 $ 16,119,156 $ 83,839,419 Accretion for the Preferred Shares 1,445,125 36,947,001 2,422,383 40,814,509 Balance as of December 31, 2014 $ 6,756,046 $ 99,356,343 $ 18,541,539 $ 124,653,928 Accretion for the Preferred Shares 442,409 1,202,748 720,194 2,365,351 Conversion to Ordinary Shares (7,198,455 (100,559,091 (19,261,733 (127,019,279 Balance as of December 31, 2015 $ - $ - $ - $ - On April 8, 2015, all the issued and outstanding Series A-1, Series A-2 and Series B preferred shares were automatically converted into 12,202,988 122,029,877 30,507,471 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | 14 . FAIR VALUE MEASUREMENT Measured at fair value on a recurring basis The Group had no financial assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2014 and 2015. Measured at fair value on a non-recurring basis The Group measured share options granted to employees and directors and executives and restricted share units using various valuation methods. These share options are considered Level 3 fair value measurement because the Company used unobservable inputs, reflecting the Company's assessment of the assumptions that market participants would use in valuing these share options. The Group measures the acquired assets and liabilities at fair value on a nonrecurring basis as result of the business acquisition as set forth in Note 4. The fair value was determined using models with significant unobservable inputs (Level 3 inputs), primarily the management projection on the discounted future cash flow and the discount rate. The Group measures goodwill at fair value on a nonrecurring basis when it is annually evaluated or whenever events or changes in circumstances indicate that carrying amount of a reporting unit exceeds its fair value. The fair value was determined using models with significant unobservable inputs (Level 3 inputs) which primarily included management projections on the discounted future cash flow analysis including the discount rate using the weighted average cost of capital of 17 85,934,770 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2015 | |
SHARE-BASED COMPENSATION [Abstract] | |
SHARE-BASED COMPENSATION | 15 . SHARE-BASED COMPENSATION 2011 Share Incentive Plan On February 1, 2011, the Board of Directors approved the Company 2011 Share Incentive Plan (2011 Plan''). The 2011 Plan provides for the grant of options, restricted shares, and other share-based awards. On March 15, 2013, under the 2011 Plan, the Company granted share option to the employees and managements to purchase 1,128,590 100,000 share option with exercise price of $ 0.2 0.2 per share option, respectively. On April 18, 2014, under the 2011 Plan, the Company granted share option to the employees and managements to purchase 9,341,500 2,104,000 options with exercise price of $ 0.01 0.01 per share option The Group recognized compensation cost on the share options to employees on a straight-line basis over the requisite service period. The options granted during 2012 and 2013 vest ratably over 48 5 On July 27, 2015, the Board of Directors approved to grant 28,841,700 Restricted Share Units ("RSUs") awards pursuant to the 2011 Plan. Each RSU represents the contingent right of the participant to receive an ordinary share. Each RSU is an agreement to issue ordinary share at the time the award vests with zero 50 50 2 The fair value of each RSU is measured on the grant date based on the market closing price of the ordinary share on the grant date. Outstanding RSUs Weighted average Number of grant date RSUs fair value Outstanding as of January 1, 2015 - $ - Granted 28,841,700 0.265 Forfeited and expired (201,800 ) 0.265 Vested 28,639,900 0.265 Outstanding as of December 31, 2015 28,639,900 $ 0.265 Exercisable as of December 31, 2015 28,639,900 $ 0.265 The following summary of share option activities under the 2011 Plan as of December 31, 2015, reflected all modifications is presented below: Options Number of share options Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual life Aggregate intrinsic value Outstanding as of January 1, 2015 39,249,022 $ 0.07 $ 0.11 2.51 $ 3,512,311 Granted $ $ Forfeited and expired (1,079,202 ) $ 0.02 $ 0.08 Exercised (6,866,280 ) $ 0.02 $ 0.08 Outstanding as of December 31, 2015 31,303,540 $ 0.08 $ 0.26 1.34 $ 1,734,975 Exercisable as of December 31, 2015 31,303,540 $ 0.08 $ 0.26 1.34 $ 1,734,975 No $ 909,904 $ 1,571,935 7,176,600 2013, 2014 and 2015, respectively. On September 1, 2015, the Board of Directors approved that all 3,312,618 7,503,976 As all batches of options and RSUs were vested as of September 1, 2015, the actual forfeiture rates were trued up, which resulted a reversal of $ 327,376 The fair value of the options granted/modified was estimated on the date of grant/modification with the assistance of an independent third-party appraiser, and was determined using binomial model with the following assumptions March 15, 2013 April 18, September 1, Expected volatility (1) 65 58 60.3 65.1 Risk-free interest rate (2) 0.90 1.8 0.47 0.88 Expected dividend yield (3) nil nil nil Exercise price (4) $ 0.2 $ 0.01 $ 0.01 0.20 Fair value of the underlying ordinary shares (5) $ $ 0.0611 $ $ 0.0590 $ 0.38 (1) Volatility The volatility of the underlying ordinary shares during the life of the options was estimated based on average historical volatility of comparable companies for the period before the valuation date with lengths equal to the life of the options. (2) Risk-free rate Risk free rate is estimated based on yield to maturity of PRC international government bonds with maturity term close to the life of the options. (3) Dividend yield The dividend yield was estimated by the Group based on its expected dividend policy over the life of the options. (4) Exercise price The exercise price of the options was determined by the Group's Board of Directors. (5) Fair value of underlying ordinary shares The estimated fair value of the ordinary shares underlying the options as of the respective valuation dates was determined based on a contemporaneous valuation. When estimating the fair value of the ordinary shares on the valuation dates, management has considered a number of factors, including the result of a third-party appraisal and equity transactions of the Group, while taking into account standard valuation methods and the achievement of certain events. The fair value of the ordinary shares in connection with the option grants on the valuation dates was determined with the assistance of an independent third-party appraiser. After the Company listed on NASDAQ in April 2015, the closing market price of the ordinary shares of the Company as of the grant/modification date was used as the fair value of the ordinary shares on that date. Ordinary shares to directors and executives On June 29, 2014, Mr. Xu 30,372,540 0.138 4,190,449 |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
NET LOSS PER SHARE [Abstract] | |
NET LOSS PER SHARE | 16 . NET LOSS PER SHARE The calculation of the net loss per share is as follows: For the years ended December 31, 2013 2014 2015 Numerator: Net loss attributable to Wowo Limited $ (32,172,344 ) $ (43,856,347 ) $ (93,570,188 ) -Continuing operations (73,089 ) (4,323,249 ) (104,646,123 ) -Discontinued operations (32,099,255 ) (39,533,098 ) 11,075,935 Accretion for Series A-1 Preferred Shares (1,199,007 ) (1,445,125 ) (442,409 ) Accretion for Series A-2 Preferred Shares (34,336,421 ) (36,947,001 ) (1,202,748 ) Accretion for Series B Preferred Shares (2,106,420 ) (2,422,383 ) (720,194 ) Net loss attributable to ordinary shareholders for computing basic net loss per ordinary shares (69,814,192 ) (84,670,856 ) (95,935,539 ) -Continuing operations (158,604 ) (8,346,641 ) (104,646,123 ) -Discontinued operations (69,655,588 ) (76,324,215 ) 8,710,584 Accretion for Series A-1 Preferred Shares 1,199,007 1,445,125 442,409 Net income attributable to Series A-1 P referred Shareholders for computing basic net income per Series A-1 Preferred Shares 1,199,007 1,445,125 442,409 Accretion for Series A-2 Preferred Shares 34,336,421 36,947,001 1,202,748 Net income attributable to Series A-2 P referred Shareholders for computing basic net income per Series A-2 Preferred Shares 34,336,421 36,947,001 1,202,748 Accretion for Series B Preferred Shares 2,106,420 2,422,383 720,194 Net income attributable to Series B P referred Shareholders for computing basic net income per Series B Preferred Shares 2,106,420 2,422,383 720,194 Denominator: Weighted average ordinary shares outstanding used in computing basic net loss per ordinary shares 303,886,640 303,886,640 1,001,754,524 Weighted average ordinary shares outstanding used in computing diluted net loss per ordinary shares 303,886,640 303,886,640 1,001,754,524 Weighted average shares outstanding used in computing basic net income per Series A-1 Preferred Shares 12,202,988 12,202,988 3,242,986 Weighted average shares outstanding used in computing basic net income per Series A-2 Preferred Shares 122,029,877 122,029,877 32,429,858 Weighted average shares outstanding used in computing basic net income per Series B Preferred Shares 30,507,471 30,507,471 8,107,465 Net loss per ordinary shares Basic $ (0.23 ) $ (0.28 ) $ (0.09 ) Diluted $ (0.23 ) $ (0.28 ) $ (0.09 ) Net loss per ordinary share from continuing operations Basic (0.00 ) (0.03 ) (0.10 ) Diluted (0.00 ) (0.03 ) (0.10 ) Net (loss)/income per share from discontinued operations Basic (0.23 ) (0.25 ) 0.01 Diluted (0.23 ) (0.25 ) 0.01 Net income per Series A-1 P referred S haresBasic $ 0.10 $ 0.12 $ 0.14 Net income per Series A-2 P referred S haresBasic $ 0.28 $ 0.30 $ 0.04 Net income per Series B P referred S haresBasic $ 0.07 $ 0.08 $ 0.09 Weighted average shares used in calculating net loss per ordinary shares Basic Continuing operations 303,886,640 303,886,640 1,001,754,524 Discontinued operations 303,886,640 303,886,640 1,001,754,524 Diluted Continuing operations 303,886,640 303,886,640 1,001,754,524 Discontinued operations 303,886,640 303,886,640 1,043,473,265 Weighted average shares used in calculating net loss per Series A-1 preferred shares 12,202,988 12,202,988 3,242,986 Series A-2 preferred shares 122,029,877 122,029,877 32,429,858 Series B preferred shares 30,507,471 30,507,471 8,107,465 Series A-1, Series A-2 and Series B Preferred Shares were excluded from the computation of diluted net loss per ordinary share for the years ended December 31, 2013, 2014 and 2015 because their effects were anti-dilutive. For the years ended December 31, 2013, 2014 and 2015, 34,681,354 , 39,249,022 and 59,943,440 ordinary shares resulting from the assumed exercise of share options were excluded as their effect was anti-dilutive for the continuing operations of the Group, respectively. For the years ended December 31, 2013, 2014 and 2015, 34,681,354 39,249,022 18,224,699 |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
RELATED PARTY BALANCES AND TRANSACTIONS [Abstract] | |
RELATED PARTY BALANCES AND TRANSACTIONS | 17 . RELATED PARTY BALANCES AND TRANSACTIONS Nature of the relationships with related parties: Name Relationship with the Company Mr. Xu Shareholder Dallsfield Ltd. Controlled by Mr.Xu Rizhao Yinxingshu Equity Investment Fund, L.P Controlled by Mr. Xu Beijing Shiletao Ecommerce Co., Ltd. Controlled by Mr. Xu Noodles Dao (HK) Co., Ltd. Controlled by Xiaoxia Zhu Hong Kong Sunward Fishery Restaurant Management Co., Ltd. Controlled by Xiaoxia Zhu Nanjing Xinzijing Sunward Fishery Restaurant Co., Ltd. Controlled by Xiaoxia Zhu Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. Controlled by Xiaoxia Zhu Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. Controlled by Xiaoxia Zhu Ningbo Jingzhou Sunward Logistics Co., Ltd. Controlled by Xiaoxia Zhu Zhejiang Sunward Fishery Restaurant Co., Ltd. Controlled by Xiaoxia Zhu Shanghai MIN Group Co., Ltd. Controlled by Huimin Wang Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co.,Ltd. Controlled by Huimin Wang WM Ming Hotel Controlled by Huimin Wang Shanghai MIN Hongshi Trading Co., Ltd. Controlled by Huimin Wang (a) As of December 31, 2015 the following balances were due from/to the related parties: December 31, 2015 Amount due from Noodles Dao (HK) Co., Ltd. $ 74,187 (i) Amount due from Hong Kong Sunward Fishery Restaurant Management Co., Ltd. 70,962 (i) Amount due from Nanjing Xinzijing Sunward Fishery Restaurant Co., Ltd. 29,469 (i) Amount due from Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. 29,831 (i) Amount due from Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. 13,015 (i) Amount due from Ningbo Jingzhou Sunward Logistics Co., Ltd. 149,033 (i) Amount due from Zhejiang Sunward Fishery Restaurant Co., Ltd. 128,845 (i) Amount due from Shanghai MIN Group Co., Ltd. 48,643 (i) Amount due from Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co.,Ltd. 260,623 (i) Amount due from WM Ming Hotel 1,815 (i) Total $ 806,423 (i) The amounts represents the receivables from related parties who purchase product on JMU online platform. December 31, December 3 1 , 2014 2015 Amount due to Dallsfield Ltd. 250,000 (ii) - Amount due to Rizhao Yinxingshu Equity Investment Fund, L.P 32,717,713 (ii) - Amount due to Beijing Shiletao Ecommerce Co., Ltd. 969,927 (ii) - Amount due to Mr. Xu 28,027,637 (ii) - Amount due to Shanghai MIN Hongshi Trading Co., Ltd. - 319,767 (iii) Total $ 61,965,277 $ 319,767 (ii) The amounts represents the funds provided by Mr. Xu, to support the working capital for the Group's daily operations, which was included in the indebtedness from Mr. Xu and had been converted into ordinary shares immediately after the completion of the IPO. (iii) The amounts represents the payables to related parties who sell products on JMU online platform. (b) Details of related party transactions occurred for the years ended December 31, 2015 were as follows: Rental expense to: For the year ended December 31,2015 Amount due to Shanghai MIN Group Co., Ltd. $ 335,249 Total $ 335,249 Revenue from: For the year ended December 31, 2015 Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co.,Ltd. $ 393,147 Ningbo Jingzhou Sunward Logistics Co., Ltd. 58,560 Nanjing Xinzijing Sunward Fishery Restaurant Co., Ltd. 38,179 Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. 32,726 Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. 17,573 WM Ming Hotel 1,573 Total $ 541,758 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 18 . COMMITMENTS AND CONTINGENCIES Operating lease The Group leases certain office premises under non-cancellable leases. Rental expenses under operating leases for the years ended December 31, 2013, 2014 and 2015 were nil nil 985,214 The future aggregate minimum lease payments under non-cancelable operating lease agreements were as follows: Years ending December 31: 2016 $ 1,483,747 2017 1,432,141 2018 1,436,065 2019 1,432,141 2020 1,432,141 2021 and after 13,689,704 Total $ 20,905,939 Withholding tax obligation Pursuant to PRC individual income tax laws, when a corporation purchases equity interest from individuals, the individuals are obligated to pay individual income tax based on 20 |
MAINLAND CHINA CONTRIBUTION PLA
MAINLAND CHINA CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2015 | |
MAINLAND CHINA CONTRIBUTION PLAN [Abstract] | |
MAINLAND CHINA CONTRIBUTION PLAN | 19 . MAINLAND CHINA CONTRIBUTION PLAN Full time PRC employees of the Group are eligible to participate in a government-mandated multi- employer defined contribution plan under which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to these employees. The PRC labor regulations require the Group to accrue for these benefits based on a percentage of each employee's income. Total provisions for employee benefits were nil nil 902,418 2013, 2014 and 2015, respectively, reported as a component of operating expenses when incurred. |
STATUTORY RESERVES AND RESTRICT
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS [Abstract] | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 20. STATUTORY RESERVES AND RESTRICTED NET ASSETS In accordance with the Regulations on Enterprises with Foreign Investment of China and their articles of association, the Group's subsidiaries, VIE and VIE ' subsidiaries located in the PRC, being foreign invested enterprises established in the PRC, are required to provide for certain statutory reserves. These statutory reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund or discretionary reserve fund, and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires a minimum annual appropriation of 10% of after-tax profit (as determined under accounting principles generally accepted in China at each year-end); the other fund appropriations are at the subsidiaries' or the affiliated PRC entities' discretion. These statutory reserve funds can only be used for specific purposes of enterprise expansion, staff bonus and welfare, and are not distributable as cash dividends except in the event of liquidation of our subsidiaries, our affiliated PRC entities and their respective subsidiaries. The Group's subsidiaries, VIE and VIE ' subsidiaries are required to allocate at least 10 50 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. The appropriation to these reserves by the Group's PRC subsidiaries and VIE were all nil 2013, 2014 and 2015. 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 Group's PRC subsidiaries and VIE entity. The aggregate amounts of capital and statutory reserves restricted which represented the amount of net assets of the relevant subsidiaries and VIE in the Group not available for distribution were $ 26,017,742 21,598,935 4,324,871 1,599,100 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
SEGMENT INFORMATION [Abstract] | |
SEGMENT INFORMATION | 21 . SEGMENT INFORMATION The Group is mainly engaged in operating a B2B online e-commerce platform that provides integrated services to suppliers and consumers in the catering industry throughout the PRC. The Group's chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group's revenue and net loss are substantially derived from online direct sales. The Group does not have discrete financial information of costs and expenses in its internal reporting, and reports costs and expenses by nature as a whole. one The table below is only presented at the revenue level with no December 31, 2015 Online direct sales $ 11,477,552 Online platform services Total $ 11,477,552 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 22. SUBSEQUENT EVENTS In January 2016, the Company invested in Shanghai Cold Chain Link Global International Logistic Co., Ltd. (CCLG), a company established in the PRC that is mainly engaged in cold chain logistics services, with total consideration payable of $ 3.1 10 |
SUMMARY OF SIGNIFICANT ACCOUN33
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (policies) | 12 Months Ended |
Dec. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (US GAAP''). |
Basis of consolidation | Basis of consolidation The consolidated financial statements of the Group include the financial statements of the Company, and its consolidated subsidiaries, VIE and VIE's subsidiaries which are accounted for under the voting interest model. All intercompany transactions and balances have been eliminated upon consolidation. |
Business combinations | Business combinations Business combinations are recorded using the acquisition method of accounting. 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 interests of the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Cash is the common form of the consideration paid for acquisitions. Consideration transferred in a business acquisition is measured at the fair value as at the date of acquisition. |
Discontinued operations | Discontinued operations A disposal of a component of an entity or a group of components of an entity shall be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. Where an operation is classified as discontinued, a single amount is presented on the face of the consolidated statements of operations. The amount of total current assets, total non-current assets, total current liabilities and total non-current liabilities are presented separately on the consolidated balance sheets. |
Revenue recognition | Revenue recognition The Group recognizes revenue from the sales of rice, flavor, bean oil, seafood, wine and some other type of generic food and beverage products through its online platform ccjoin.com The Group utilizes delivery service providers to dispatch goods to its customers directly from its own warehouses. The Group recognizes revenue when the customers confirm the acceptance of the goods online once they receive the delivered goods. If the customers do not confirm the receipt of goods online timely, the online system will confirm automatically after the seven days from the delivery date. The sales returns are considered and estimated when the revenue recognized, but the historical returns on sales on ccjoin.com are inconsequential. Revenue is recorded net of surcharges and value-added tax ("VAT") and related surcharges. The Group primarily generates revenue from online direct sales and online platform services.. Online direct sales The Group primarily sells rice, flavor, bean oil, seafood, wine and some other type of generic food and beverage products through online direct sales. The Group recorded revenue from online direct sales on a gross basis because the Group has the following indicators for gross reporting: it is the primary obligor of the sales arrangements, is subject to inventory risks of physical loss, has latitude in establishing prices, has discretion in suppliers' selection and assumes credit risks on receivables from customers. The Group also retains some of general inventory risks despite its arrangements to return goods to some vendors. Online platform services The Group also provides the online platform services to third-party sellers and purchasers for their transactions. The Group records the related revenue on a net basis, because the Group generally is not the primary obligor, does not bear the inventory risk, does not have the ability to establish the price and control the related shipping services when the online platform is utilized by third-party sellers and purchasers. For the year ended December 31, 2015, the Group did not charge any services fees to the third-party sellers and purchasers. |
Value-added tax | Value-added tax Value added tax ("VAT") on sales is calculated at 17 13 |
Cost of revenue | Cost of revenue Costs of revenues primarily consist of purchased cost of the products sold related to online direct sales, payroll of the operating personnel, website hosting cost, processing fees paid to third-party payment platform, logistic fees paid to the third-party courier companies and amortization of acquired trade name/domain name. |
Selling and marketing expenses | Selling and marketing expenses Selling and marketing expenses consist primarily of advertising and market promotion expenses, and other overhead expenses incurred by the Group's sales and marketing personnel. Advertising expenses are expensed as incurred. |
Use of estimates | Use of estimates The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Significant accounting estimates reflected in the Group's consolidated financial statements include useful lives and impairment for property and equipment and acquired intangible assets, impairment of goodwill, valuation allowance for deferred tax assets, return allowance, fair value of ordinary shares, share-based compensation and purchase price allocation. Actual results could differ from those estimates. |
Cash | Cash Cash consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use, and have original maturities of three months or less when purchased. |
Accounts receivable | Accounts receivable Accounts receivable represents those receivables derived in the ordinary course of business, net of allowance for doubtful accounts. |
Allowance for doubtful accounts | Allowance for doubtful accounts The Group maintains an allowance for doubtful accounts for estimated losses on uncollected accounts receivable. Management considers the following factors when determining the collectability of specific accounts: creditworthiness of customers, aging of the receivables, past transaction history with customers and their current condition, changes in customer payment terms, specific facts and circumstances, and the overall economic climate in the industries the Group serves. |
Inventories | Inventories Inventory is stated at the lower of cost or market. Cost of inventory is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventory to the estimated market value for slow-moving merchandise and damaged goods. The amount of written-down depends upon factors such as whether the goods are returnable to vendors, historical and forecasted consumer demand, market condition and the promotional environment. Written-down amounts are recorded in cost of goods sold in the consolidated statements of income (loss) and comprehensive loss, which were nil for the years ended December 31, 2013, 2014 and 2015. |
Property and equipment, net | Property and equipment, net Property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Computer and software 3 10 |
Acquired intangible assets | Acquired intangible assets Acquired intangible assets with finite lives are carried at cost less accumulated amortization and impairment. Amortization of customer relationship is calculated using the estimated attrition pattern. Amortization of other finite lived intangible assets is calculated on a straight-line basis over the shorter of the contractual terms or the expected useful lives of the acquired assets. The amortization period by major intangible asset classes is as follows: Trade name/domain name 10 Non-compete agreement 4.5 Online platform 5 Customer relationship 5 10 |
Impairment of intangible assets with finite life | Impairment of intangible assets with finite life The Group evaluates the recoverability of its intangible assets with finite lives, whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the intangible assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the excess of carrying amount over the fair value of the assets. Considering that the Group has recurring operating losses, the Group has determined to perform the annual impairment tests on December 31 of each year. As a result of the annual impairment test, no impairment loss was recognized for the years ended December 31, 2013, 2014 and 2015. |
Impairment of goodwill | Impairment of goodwill The Group annually, or more frequently if the Group believes indicators of impairment exist, reviews the carrying value of goodwill to determine whether impairment may exist. Specifically, goodwill impairment is determined using a two-step process. The first step compares the fair value of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be 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. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being a discounted cash flow. The Group has determined to perform the annual impairment tests on December 31 of each year. Prior to the acquisition of JMU, goodwill was attributable to the Group Buying business which is classified as discontinued operations in the year ended December 31, 2015. No goodwill impairment loss was recognized for this business for the years ended December 31, 2013 and 2014. The goodwill as of December 31, 2015 was attributable solely to the JMU business on which an impairment loss of $ 85,934,770 |
Operating leases | Operating leases Leases where substantially all the rewards and risks of the ownership of the assets remain with the leasing companies are accounted for as operating leases. Payments made for the operating leases are charged to the consolidated statements of operations on a straight-line basis over the lease term and have been included in the operating expenses in the consolidated statements of operations. |
Income taxes | Income taxes Current income taxes are provided in accordance with the laws and regulations applicable to the Company as enacted by the relevant tax authorities. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on the characteristics of the underlying assets and liabilities. The impact of an uncertain income tax position on the income tax return is 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. |
Foreign currency translation | Foreign currency translation The functional and reporting currency of the Company is the United States dollar (U.S. dollars). The functional currency of the Company's HK subsidiary JMU is Hong Kong dollars (HK dollars). The financial records of the Group's subsidiaries, VIE and VIE's subsidiaries located in the PRC are maintained in their local currencies, the Renminbi (RMB), respectively, 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 on 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 Company's entities with functional currency of RMB and HK dollars translate their operating results and financial position into the U.S. dollars, 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. |
Share-based payments | Share-based payments Share-based payment awards with employees are measured based on the grant date fair value of the equity instrument issued, and recognized as compensation costs net of an estimated forfeiture rate using the straight-line method over the requisite service period, which is generally the vesting period of the options, with a corresponding impact reflected in additional paid-in capital. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or is expected to differ, from such estimate. 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 expenses to be recognized in future years. |
Comprehensive loss | Comprehensive loss Comprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax, the tax effect is nil for the years ended December 31, 2013, 2014 and 2015. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash. The Group places its cash and cash equivalents with financial institutions with high-credit ratings and quality Customers accounting for 10% or more of total revenue are: For the year ended December 31, Customer 2015 A 28.4 % Customers accounting for 10% or more of accounts receivable are: As of December 31, Customer 2015 A 99.9 % |
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 1inputs are based upon quoted prices for instruments traded in active markets. ¨ Level 2inputs 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 calculation 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 3inputs 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, cash flow models, and similar techniques. |
Fair value of financial instruments | Fair value of financial instruments Financial instruments include cash and cash equivalents, amounts due from/to related parties, accounts receivable and accounts payable. The carrying values of cash, amounts due from/to related parties, accounts receivable and accounts payable approximate their fair values reported in the consolidated balance sheets due to the short-term maturities. Financial assets and liabilities measured at fair value on a non-recurring basis include acquired assets and liabilities and goodwill based on Level 3 inputs in connection with business acquisition set out in Note 4. |
Net loss per share | Net loss per share Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The Group's convertible redeemable participating preferred shares are participating securities as they participate in undistributed earnings on an as-if-converted basis. Accordingly, the Group uses the two-class method whereby undistributed net income is allocated on a pro rata basis to the ordinary shares and convertible redeemable participating preferred shares to the extent that each class may share in income for the period; whereas the undistributed net loss for the period is allocated to ordinary shares only because the convertible redeemable participating preferred shares are not contractually obligated to share the loss. 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 redeemable participating preferred shares, stock options and restricted share units, which could potentially dilute basic loss per share in the future. To calculate the number of shares for diluted loss per ordinary share, the effect of the convertible redeemable participating preferred shares is computed using the as-if-converted method; the effect of the stock options and restricted share units is computed using the treasury stock method. Potential ordinary shares in the diluted net loss per share computation are excluded in periods of losses from continuing operations, as their effect would be anti-dilutive. |
Recent accounting pronouncements adopted | Recent accounting pronouncements adopted In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") 2014-08 which amends to change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization's operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. This disclosure will provide users with information about the ongoing trends in a reporting organization's results from continuing operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The Company early adopted this ASU in January 2015. The effects of the pronouncement have been reflected in the consolidated financial statements. |
Recent accounting pronouncements not yet adopted | Recent accounting pronouncements not yet adopted In August, 2014, the FASB issued a new pronouncement ASU 2014-15 which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements. Further, an entity must provide certain disclosures if there is substantial doubt about the entity's ability to continue as a going concern." The new standard is effective for fiscal years ending after December 15, 2016. Adoption of this guidance may have an effect on the Group's consolidated financial statements but the impact has not yet been evaluated by the Group. In February 2015, FASB issued a new pronouncement Inventory (Topic 330): Simplifying the Measurement of Inventory. The current guidance requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. On August 12, 2015, the FASB issued a new pronouncement, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendments in this ASU defer the effective date of ASU 2014-09 for all entities by one year. Public business entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. On September 25, 2015, the FASB issued ASU 2015-16 to simplify the accounting for measurement-period adjustments. The ASU, which is part of the FASB's simplification initiative (i.e., the Board's effort to reduce the cost and complexity of certain aspects of U.S. GAAP), was issued in response to stakeholder feedback that restatements of prior periods to reflect adjustments made to provisional amounts recognized in a business combination increase the cost and complexity of financial reporting but do not significantly improve the usefulness of the information. Under the ASU, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The ASU also requires acquirers to present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. Under this ASU, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The ASU also requires acquirers to present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The ASU must be applied prospectively to adjustments to provisional amounts that occur after the effective date. Early adoption is permitted for financial statements that have not been issued. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. On February 25, 2016, the FASB issued ASU 2016-02 Leases. The core principle of this ASU will require lessees to present right-of-use assets and lease liabilities on their balance sheets. ASU 2016-02 is effective for annual and interim periods beginning January 1, 2019. Early adoption of this ASU is permitted. Upon adoption of this ASU, the Group is required to recognize and measure leases at the beginning of the earliest period presented in the consolidated financial statements using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that the Company may elect to apply. The Group is currently evaluating and assessing the impact of this ASU will have on the Group's consolidated financial statements. |
ORGANIZATION AND PRINCIPAL AC34
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Schedule of the Group's subsidiaries, VIEs and VIEs' subsidiaries | Date of acquisition/ incorporation Place of establishment/ incorporation Percentage of legal ownership Subsidiaries: New Admiral Limited ("New Admiral") April 27, 2015 Cayman Islands 100 Join Me Group (HK) Investment Company Limited ("JMU") June 8, 2015 Hong Kong 100 Join Me Group Supply Chain Management Company Limited("JMU Supply Chain") October 15, 2015 Hong Kong 100 Shanghai Zhongming Supply Chain Management Co., Ltd. ( "Shanghai Zhongming" or "WOFE" ) June 8, 2015 PRC 100 VIE: Shanghai Zhongmin Supply Chain Management Co., Ltd. ("Shanghai Zhongmin") June 8, 2015 PRC N/A VIE's subsidiaries: Hefei Zhonglian Supply Chain Management Co., Ltd. ("Hefei Zhonglian") June 8, 2015 PRC N/A Suzhou Zhongming Internet Technology Co., Ltd. ( "Suzhou Zhongming") June 8, 2015 PRC N/A Shanghai Zhonglan Supply Chain Management Co., Ltd. ("Shanghai Zhonglan") June 8, 2015 PRC N/A Shanghai Changzhong Supply Chain Management Co., Ltd. ("Shanghai Changzhong") June 8, 2015 PRC N/A Ningbo Jiangdong Zhongmin Supply Chain Management Co., Ltd. ( Ningbo Jiangdong ) June 8, 2015 PRC N/A Nanjing Zhongminyuan Internet Technology Co., Ltd. ( Nanjing Zhongminyuan ) June 8, 2015 PRC N/A Wuhan Zhongmin Supply Chain Management Co., Ltd. ( Wuhan Zhongmin ) June 8, 2015 PRC N/A Nanchang Zhongmin Supply Chain Management Co., Ltd. ( Nanchang Zhongmin ) June 8, 2015 PRC N/A Yanbian Zhongyue Supply Chain Management Co., Ltd. ( Yanbian Zhongyue ) June 8, 2015 PRC N/A Beijing Zhonglan Supply Chain Management Co., Ltd. ( Beijing Zhonglan ) June 8, 2015 PRC N/A Zhenjiang Zhongyuan Supply Chain Management Co., Ltd. ( Zhenjiang Zhongyuan ) June 8, 2015 PRC N/A Taiyuan Zhongmin Supply Chain Management Co., Ltd. ( Taiyuan Zhongmin ) June 8, 2015 PRC N/A |
Schedule of the financial statement balances and amounts of the VIEs and VIEs' subsidiaries | December 31, 2015 Cash $ 2,137,414 Accounts receivable, net 3,748,398 Prepaid expenses and other current assets 19,919,504 Inventories, net 94,409 Amounts due from related parties 661,275 Total current assets 26,561,000 Property and equipment, net 317,186 Total non-current assets 317,186 Total assets $ 26,878,186 Accounts payable 3,818,023 Accrued expenses and other current liabilities 19,134,673 Advance from customers 828,437 Amounts due to related parties 319,767 Total current liabilities 24,100,900 Total liabilities $ 24,100,900 For the year ended December 31, 2015 Revenues $ 11,477,552 Net loss $ (8,052,187) For the year ended December 31, 2015 Net cash provided by operating activities $ 238,302 Net cash used in investing activities $ (44,228) Net cash provided by financing activities $ |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of property, plant and equipment, useful life | Computer and software 3 10 |
Schedule of intangible assets, useful life | Trade name/domain name 10 Non-compete agreement 4.5 Online platform 5 Customer relationship 5 10 |
Schedule of concentration of credit risk | For the year ended December 31, Customer 2015 A 28.4 % As of December 31, Customer 2015 A 99.9 % |
BUSINESS ACQUISITION (Tables)
BUSINESS ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
BUSINESS ACQUISITION | |
Schedule of preliminary purchase price for the acquisition | Amortization Period Net tangible assets $ 28,793,669 Intangible assets: Trade name/domain name 16,228,000 10 Non-compete agreement 10,096,000 4.5 Online platform 1,364,000 5 Customer relationships 27,760,000 5 10 Total 55,448,000 Deferred tax liabilities (13,862,000 ) Goodwill 336,585,270 Total consideration $ 406,964,939 |
Summary of unaudited pro forma information | For the year ended December 31, 2014 2015 (unaudited) (unaudited) Pro forma revenues $ 68,298 $ 11,522,525 Pro forma net loss (16,439,806 ) (115,066,695 ) Pro forma net loss per ordinary share-basic (0.02 ) (0.09 ) Pro forma net loss per ordinary share-diluted (0.02 ) (0.09 ) |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DISCONTINUED OPERATIONS | |
Schedule of assets, liabilities, revenue and expenses have been reclassified as discontinued operations | December 31, 2014 Carrying amounts of assets disposed Cash $ 1,644,855 Accounts receivable, net 1,225,386 Prepaid expenses and other current assets 7,206,884 Current assets of discontinued operations 10,077,125 Property and equipment, net 2,574,081 Goodwill 7,463,706 Non-current assets of discontinued operations 10,037,787 Total assets of discontinued operations $ 20,114,912 Carrying amounts of liabilities disposed Accounts payable $ 22,679,754 Accrued expense and other current liabilities 21,669,131 Advance from customers 22,703,718 Amounts due to related parties 403,585 Income tax payable 44,100 Current liabilities of discontinued operations 67,500,288 Total liabilities of discontinued operations $ 67,500,288 For the years ended December 31, 2013 2014 2015 Net revenues $ 36,253,309 $ 30,073,452 $ 16,832,352 Cost of revenues (6,583,501 ) (7,040,383 ) (2,927,148 ) Gross profit 29,669,808 23,033,069 13,905,204 Operating expenses (61,668,332 ) (62,378,258 ) (50,212,995 ) Loss from operations (31,998,524 ) (39,345,189 ) (36,307,791 ) Gain from disposal of Group Buying Entities 47,390,421 Interest income 43,864 6,699 1,904 Interest expense (136,655 ) (11,798 ) Other expenses, net (89,354 ) (196,288 ) (8,599 ) Gain from disposal of subsidiary 895 (Loss)/Income before income tax (32,179,774 ) (39,546,576 ) 11,075,935 Provision for income tax 80,519 (Loss)/Income from discontinuing operations attributable to owners of the Company $ (32,099,255 ) $ (39,546,576 ) $ 11,075,935 December 31, 2014 Amount due to Beijing Baifen Tonglian Media Technology Co., Ltd 403,585 (i) $ 403,585 (i) The amounts represents short messaging service (SMS) distribution platform fee, which has not been paid to Beijing Baifen Tonglian Media Technology Co., Ltd. |
PREPAID EXPENSES AND OTHER CU38
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
PREPAYMENTS AND OTHER CURRENT ASSETS | |
Schedule of prepayments and other current assets | December 31, 2014 December 31, 2015 Receivables from third-party purchasers $ $ 16,510,091 Amount due from third parties 4,917,068 Advance to suppliers 2,475,752 Prepaid rental expenses and other deposits 865,219 Advance to employees 245,897 Prepaid professional service fee 227,110 34,002 Other current assets 233,405 $ 227,110 $ 25,281,434 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment, net | December 31, Computer and software $ 571,564 Total 571,564 Less: accumulated depreciation (93,489) Property and equipment, net $ 478,075 |
ACQUIRED INTANGIBLE ASSETS, N40
ACQUIRED INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
ACQUIRED INTANGIBLE ASSETS, NET | |
Schedule of acquired intangible assets | December 31, Trade name/domain name $ 16,228,000 Non-compete agreement 10,096,000 Online platform 1,364,000 Customer relationship 27,760,000 Total 55,448,000 Less: Accumulated amortization (4,885,055) Acquired intangible assets, net $ 50,562,945 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL | |
Schedule of goodwill | December 31, Gross amount: Beginning balance $ Addition 336,585,270 Ending balance 336,585,270 Accumulated impairment loss: Beginning balance Charge for the period (85.934.770 ) Ending balance (85.934.770 Goodwill, net $ 250,650,500 |
ACCRUED EXPENSES AND OTHER CU42
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | December 31, Payables to third-party sellers $ 17,163,716 Accrued payroll and welfare 1,219,730 Payable for professional fee 858,577 Payables for rental fee 639,753 Others 88,680 Total accrued expenses and other current liabilities $ 19,970,456 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES | |
Schedule of credit for income tax | Year ended December 31, 2015 Income tax benefits: Current income tax expenses $ Deferred income tax benefits 1,249,696 Total $ 1,249,696 |
Schedule of significant components of the deferred tax assets and liabilities | December 31, Deferred tax assets Current deferred tax assets $ - Total current deferred tax assets - Non-current Net operating loss carry forwards 1,955,301 Total deferred tax assets 1,955,301 Less: valuation allowance (1,955,301 ) Net deferred tax assets $ Deferred tax liabilities Non-current Acquired intangible assets $ 12,640,736 Total deferred tax liabilities $ 12,640,736 |
Schedule of reconciliation between the income taxes benefit computed by applying the PRC tax rate to loss before income taxes and the actual provision (credit) of income taxes | For the year ended December 31, 2015 Net loss before provision for income taxes $ (105,895,819 ) Statutory tax rates in the PRC 25 % Income tax at statutory tax rate (26,473,955 ) Expenses not deductible for tax purposes Goodwill impairment 21,483,693 Entertainment expenses exceeded tax limit 7,687 Other expenses exceeded tax limit 226,428 Effect of income tax rate difference in other jurisdiction 4,050,542 Changes of valuation allowance 1,955,301 Income tax benefits $ 1,249,696 |
CONVERITBLE REDEEMABLE PREFER44
CONVERITBLE REDEEMABLE PREFERRED SHARES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
CONVERITBLE REDEEMABLE PREFERRED SHARES | |
Schedule of changes in Preferred Shares balance | Series A-1 Preferred Series A-2 Preferred Shares Series B Preferred Shares Total Balance as of January 1, 2013 $ 4,111,914 $ 28,072,921 $ 14,012,736 $ 46,197,571 Accretion for the Preferred Shares 1,199,007 34,336,421 2,106,420 37,641,848 Balance as of December 31, 2013 $ 5,310,921 $ 62,409,342 $ 16,119,156 $ 83,839,419 Accretion for the Preferred Shares 1,445,125 36,947,001 2,422,383 40,814,509 Balance as of December 31, 2014 $ 6,756,046 $ 99,356,343 $ 18,541,539 $ 124,653,928 Accretion for the Preferred Shares 442,409 1,202,748 720,194 2,365,351 Conversion to Ordinary Shares (7,198,455 (100,559,091 (19,261,733 (127,019,279 Balance as of December 31, 2015 $ - $ - $ - $ - |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SHARE-BASED COMPENSATION [Abstract] | |
Schedule of Outstanding RSUs | Outstanding RSUs Weighted average Number of grant date RSUs fair value Outstanding as of January 1, 2015 - $ - Granted 28,841,700 0.265 Forfeited and expired (201,800 ) 0.265 Vested 28,639,900 0.265 Outstanding as of December 31, 2015 28,639,900 $ 0.265 Exercisable as of December 31, 2015 28,639,900 $ 0.265 |
Schedule of fair value assumptions | March 15, 2013 April 18, September 1, Expected volatility (1) 65 58 60.3 65.1 Risk-free interest rate (2) 0.90 1.8 0.47 0.88 Expected dividend yield (3) nil nil nil Exercise price (4) $ 0.2 $ 0.01 $ 0.01 0.20 Fair value of the underlying ordinary shares (5) $ $ 0.0611 $ $ 0.0590 $ 0.38 (1) Volatility The volatility of the underlying ordinary shares during the life of the options was estimated based on average historical volatility of comparable companies for the period before the valuation date with lengths equal to the life of the options. (2) Risk-free rate Risk free rate is estimated based on yield to maturity of PRC international government bonds with maturity term close to the life of the options. (3) Dividend yield The dividend yield was estimated by the Group based on its expected dividend policy over the life of the options. (4) Exercise price The exercise price of the options was determined by the Group's Board of Directors. (5) Fair value of underlying ordinary shares |
Summary of information regarding share options granted | Options Number of share options Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual life Aggregate intrinsic value Outstanding as of January 1, 2015 39,249,022 $ 0.07 $ 0.11 2.51 $ 3,512,311 Granted $ $ Forfeited and expired (1,079,202 ) $ 0.02 $ 0.08 Exercised (6,866,280 ) $ 0.02 $ 0.08 Outstanding as of December 31, 2015 31,303,540 $ 0.08 $ 0.26 1.34 $ 1,734,975 Exercisable as of December 31, 2015 31,303,540 $ 0.08 $ 0.26 1.34 $ 1,734,975 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
NET LOSS PER SHARE [Abstract] | |
Schedule of net loss per share, basic and diluted | For the years ended December 31, 2013 2014 2015 Numerator: Net loss attributable to Wowo Limited $ (32,172,344 ) $ (43,856,347 ) $ (93,570,188 ) -Continuing operations (73,089 ) (4,323,249 ) (104,646,123 ) -Discontinued operations (32,099,255 ) (39,533,098 ) 11,075,935 Accretion for Series A-1 Preferred Shares (1,199,007 ) (1,445,125 ) (442,409 ) Accretion for Series A-2 Preferred Shares (34,336,421 ) (36,947,001 ) (1,202,748 ) Accretion for Series B Preferred Shares (2,106,420 ) (2,422,383 ) (720,194 ) Net loss attributable to ordinary shareholders for computing basic net loss per ordinary shares (69,814,192 ) (84,670,856 ) (95,935,539 ) -Continuing operations (158,604 ) (8,346,641 ) (104,646,123 ) -Discontinued operations (69,655,588 ) (76,324,215 ) 8,710,584 Accretion for Series A-1 Preferred Shares 1,199,007 1,445,125 442,409 Net income attributable to Series A-1 P referred Shareholders for computing basic net income per Series A-1 Preferred Shares 1,199,007 1,445,125 442,409 Accretion for Series A-2 Preferred Shares 34,336,421 36,947,001 1,202,748 Net income attributable to Series A-2 P referred Shareholders for computing basic net income per Series A-2 Preferred Shares 34,336,421 36,947,001 1,202,748 Accretion for Series B Preferred Shares 2,106,420 2,422,383 720,194 Net income attributable to Series B P referred Shareholders for computing basic net income per Series B Preferred Shares 2,106,420 2,422,383 720,194 Denominator: Weighted average ordinary shares outstanding used in computing basic net loss per ordinary shares 303,886,640 303,886,640 1,001,754,524 Weighted average ordinary shares outstanding used in computing diluted net loss per ordinary shares 303,886,640 303,886,640 1,001,754,524 Weighted average shares outstanding used in computing basic net income per Series A-1 Preferred Shares 12,202,988 12,202,988 3,242,986 Weighted average shares outstanding used in computing basic net income per Series A-2 Preferred Shares 122,029,877 122,029,877 32,429,858 Weighted average shares outstanding used in computing basic net income per Series B Preferred Shares 30,507,471 30,507,471 8,107,465 Net loss per ordinary shares Basic $ (0.23 ) $ (0.28 ) $ (0.09 ) Diluted $ (0.23 ) $ (0.28 ) $ (0.09 ) Net loss per ordinary share from continuing operations Basic (0.00 ) (0.03 ) (0.10 ) Diluted (0.00 ) (0.03 ) (0.10 ) Net (loss)/income per share from discontinued operations Basic (0.23 ) (0.25 ) 0.01 Diluted (0.23 ) (0.25 ) 0.01 Net income per Series A-1 P referred S haresBasic $ 0.10 $ 0.12 $ 0.14 Net income per Series A-2 P referred S haresBasic $ 0.28 $ 0.30 $ 0.04 Net income per Series B P referred S haresBasic $ 0.07 $ 0.08 $ 0.09 Weighted average shares used in calculating net loss per ordinary shares Basic Continuing operations 303,886,640 303,886,640 1,001,754,524 Discontinued operations 303,886,640 303,886,640 1,001,754,524 Diluted Continuing operations 303,886,640 303,886,640 1,001,754,524 Discontinued operations 303,886,640 303,886,640 1,043,473,265 Weighted average shares used in calculating net loss per Series A-1 preferred shares 12,202,988 12,202,988 3,242,986 Series A-2 preferred shares 122,029,877 122,029,877 32,429,858 Series B preferred shares 30,507,471 30,507,471 8,107,465 |
RELATED PARTY BALANCES AND TR47
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
RELATED PARTY BALANCES AND TRANSACTIONS [Abstract] | |
Schedule of nature of the relationships with related parties | Name Relationship with the Company Mr. Xu Shareholder Dallsfield Ltd. Controlled by Mr.Xu Rizhao Yinxingshu Equity Investment Fund, L.P Controlled by Mr. Xu Beijing Shiletao Ecommerce Co., Ltd. Controlled by Mr. Xu Noodles Dao (HK) Co., Ltd. Controlled by Xiaoxia Zhu Hong Kong Sunward Fishery Restaurant Management Co., Ltd. Controlled by Xiaoxia Zhu Nanjing Xinzijing Sunward Fishery Restaurant Co., Ltd. Controlled by Xiaoxia Zhu Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. Controlled by Xiaoxia Zhu Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. Controlled by Xiaoxia Zhu Ningbo Jingzhou Sunward Logistics Co., Ltd. Controlled by Xiaoxia Zhu Zhejiang Sunward Fishery Restaurant Co., Ltd. Controlled by Xiaoxia Zhu Shanghai MIN Group Co., Ltd. Controlled by Huimin Wang Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co.,Ltd. Controlled by Huimin Wang WM Ming Hotel Controlled by Huimin Wang Shanghai MIN Hongshi Trading Co., Ltd. Controlled by Huimin Wang |
Schedule of balances due from/to the related parties | December 31, December 3 1 , 2014 2015 Amount due to Dallsfield Ltd. 250,000 (ii) - Amount due to Rizhao Yinxingshu Equity Investment Fund, L.P 32,717,713 (ii) - Amount due to Beijing Shiletao Ecommerce Co., Ltd. 969,927 (ii) - Amount due to Mr. Xu 28,027,637 (ii) - Amount due to Shanghai MIN Hongshi Trading Co., Ltd. - 319,767 (iii) Total $ 61,965,277 $ 319,767 (ii) The amounts represents the funds provided by Mr. Xu, to support the working capital for the Group's daily operations, which was included in the indebtedness from Mr. Xu and had been converted into ordinary shares immediately after the completion of the IPO. (iii) The amounts represents the payables to related parties who sell products on JMU online platform. December 31, 2015 Amount due from Noodles Dao (HK) Co., Ltd. $ 74,187 (i) Amount due from Hong Kong Sunward Fishery Restaurant Management Co., Ltd. 70,962 (i) Amount due from Nanjing Xinzijing Sunward Fishery Restaurant Co., Ltd. 29,469 (i) Amount due from Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. 29,831 (i) Amount due from Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. 13,015 (i) Amount due from Ningbo Jingzhou Sunward Logistics Co., Ltd. 149,033 (i) Amount due from Zhejiang Sunward Fishery Restaurant Co., Ltd. 128,845 (i) Amount due from Shanghai MIN Group Co., Ltd. 48,643 (i) Amount due from Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co.,Ltd. 260,623 (i) Amount due from WM Ming Hotel 1,815 (i) Total $ 806,423 (i) The amounts represents the receivables from related parties who purchase product on JMU online platform. |
Schedule of related party transactions | Rental expense to: For the year ended December 31,2015 Amount due to Shanghai MIN Group Co., Ltd. $ 335,249 Total $ 335,249 Revenue from: For the year ended December 31, 2015 Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co.,Ltd. $ 393,147 Ningbo Jingzhou Sunward Logistics Co., Ltd. 58,560 Nanjing Xinzijing Sunward Fishery Restaurant Co., Ltd. 38,179 Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. 32,726 Nanjing Yongji Sunward Fishery Restaurant Co., Ltd. 17,573 WM Ming Hotel 1,573 Total $ 541,758 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
The schedule of the future minimum lease payments under non-cancelable operating lease agreements | 2016 $ 1,483,747 2017 1,432,141 2018 1,436,065 2019 1,432,141 2020 1,432,141 2021 and after 13,689,704 Total $ 20,905,939 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of components of net revenue | December 31, 2015 Online direct sales $ 11,477,552 Online platform services Total $ 11,477,552 |
ORGANIZATION AND PRINCIPAL AC50
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) - USD ($) | Sep. 09, 2015 | Jun. 08, 2015 | Jun. 05, 2015 | Apr. 27, 2015 | Apr. 08, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Organization Consolidation And V I E Arrangements [Line Items] | |||||||||
Maximum foreign ownership in equity interest of PRC internet businesses (as a percent) | 50.00% | ||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | |||||||||
Cash | $ 11,151,900 | $ 1,317 | $ 419,305 | $ 4,247,374 | |||||
Accounts receivable, net | 3,748,398 | ||||||||
Prepaid expenses and other current assets | 25,281,434 | $ 227,110 | |||||||
Inventories, net | 94,409 | ||||||||
Amounts due from related parties | 806,423 | ||||||||
Total current assets | 41,082,564 | $ 10,305,552 | |||||||
Property and equipment, net | 478,075 | ||||||||
Total assets | 342,774,084 | $ 20,343,339 | |||||||
Advance from customers | 828,437 | ||||||||
Accounts payable | 3,831,218 | ||||||||
Accrued expenses and other current liabilities | 19,970,456 | ||||||||
Amounts due to related parties | 319,767 | ||||||||
Total current liabilities | 24,949,878 | $ 67,500,288 | |||||||
Total liabilities | 38,092,794 | $ 129,465,565 | |||||||
Revenues | 11,477,552 | ||||||||
Net loss | (93,570,188) | $ (43,856,347) | $ (32,172,344) | ||||||
Net cash provided by/ (used in) operating activities | (10,731,755) | $ (260,441) | $ (232,923) | ||||||
Net cash used in investing activities | (9,896,955) | ||||||||
Net cash provided by financing activities | 52,919,228 | $ 35,419,851 | $ 24,640,278 | ||||||
Net cash provided by operating activities | (33,531,299) | (31,960,060) | (28,753,316) | ||||||
Net cash used in investing activities | (11,896,319) | (586,534) | 2,118,463 | ||||||
Net cash provided by financing activities | $ 54,882,878 | $ 33,767,971 | $ 22,736,060 | ||||||
Century Winning Limited [Member] | Wowo Group Limited [Member] | |||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | |||||||||
Payment received from sale of equity interest of a subsidiary | $ 1 | ||||||||
Payment by Buyer for net liabilities | $ 47,390,420 | ||||||||
JMU HK [Member] | |||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | |||||||||
Ordinary shares issued for consideration | 741,422,780 | 741,422,780 | |||||||
Cash consideration | $ 30,000,000 | ||||||||
Ordinary shares [Member] | |||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | |||||||||
Shares issued | 75,960,000 | ||||||||
Ordinary shares issued for consideration | 741,422,780 | ||||||||
Ordinary shares [Member] | IPO [Member] | |||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | |||||||||
Shares issued | 72,000,000 | ||||||||
Ordinary shares [Member] | Over-allotment option [Member] | |||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | |||||||||
Shares issued | 3,960,000 | ||||||||
ADS [Member] | IPO [Member] | |||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | |||||||||
Shares issued | 4,000,000 | ||||||||
Net proceeds received | $ 35,200,000 | ||||||||
Price per share | $ 10 | ||||||||
ADS [Member] | Over-allotment option [Member] | |||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | |||||||||
Shares issued | 220,000 | ||||||||
Net proceeds received | $ 2,100,000 | ||||||||
Price per share | $ 10 | ||||||||
VIEs [Member] | |||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | |||||||||
Cash | $ 2,137,414 | ||||||||
Accounts receivable, net | 3,748,398 | ||||||||
Prepaid expenses and other current assets | 19,919,504 | ||||||||
Inventories, net | 94,409 | ||||||||
Amounts due from related parties | 661,275 | ||||||||
Total current assets | 26,561,000 | ||||||||
Property and equipment, net | 317,186 | ||||||||
Total noncurrent assets | 317,186 | ||||||||
Total assets | 26,878,186 | ||||||||
Advance from customers | 828,437 | ||||||||
Accounts payable | 3,818,023 | ||||||||
Accrued expenses and other current liabilities | 19,134,673 | ||||||||
Amounts due to related parties | 319,767 | ||||||||
Total current liabilities | 24,100,900 | ||||||||
Total liabilities | 24,100,900 | ||||||||
Revenues | 11,477,552 | ||||||||
Net loss | $ (8,052,187) | ||||||||
Percentage contributed to consolidated revenues | 100.00% | ||||||||
Percentage contributed to consolidated total assets | 7.80% | ||||||||
Percentage contributed to consolidated total liabilities | 63.30% | ||||||||
Net cash provided by operating activities | $ 238,302 | ||||||||
Net cash used in investing activities | $ (44,228) | ||||||||
Net cash provided by financing activities | |||||||||
New Admiral [Member] | |||||||||
Organization Consolidation And V I E Arrangements [Line Items] | |||||||||
Percentage of legal ownership | 100.00% | ||||||||
JMU HK [Member] | |||||||||
Organization Consolidation And V I E Arrangements [Line Items] | |||||||||
Percentage of legal ownership | 100.00% | ||||||||
Shanghai Zhongming" or "WOFE" [Member] | |||||||||
Organization Consolidation And V I E Arrangements [Line Items] | |||||||||
Percentage of legal ownership | 100.00% | ||||||||
Financial statement balances and amounts of the VIEs and VIEs' subsidiaries | |||||||||
Period for which service agreements shall remain effective upon the written confirmation issued by WOFE to Zhongmin and/or its shareholder | 30 days | ||||||||
Period for which Proxy Agreement and Power of Attorney shall remain effective upon the written confirmation issued by WOFE to Zhongmin and/or its shareholder | 30 days | ||||||||
Period for which exclusive option agreements shall remain effective upon the written confirmation issued by WOFE to Zhongmin and/or its shareholder | 30 days | ||||||||
JMU Supply Chain [Member] | |||||||||
Organization Consolidation And V I E Arrangements [Line Items] | |||||||||
Percentage of legal ownership | 100.00% |
GOING CONCERN (Details)
GOING CONCERN (Details) | 12 Months Ended | ||||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Apr. 30, 2016USD ($) | Apr. 30, 2016CNY (¥) | |
Net loss | $ (93,570,188) | $ (43,856,347) | $ (32,172,344) | ||
Negative cash flows from operations | $ (33,531,299) | $ (31,960,060) | $ (28,753,316) | ||
Ms. Huimin Wang [Member] | Working Capital Loan [Member] | Subsequent event [Member] | |||||
Interest-free loan to fund | $ 6,174,920 | ¥ 40,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN52
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Value-added tax ("VAT") | |||
VAT rate one (as a percent) | 17.00% | ||
VAT rate two (as a percent) | 13.00% | ||
Inventories | |||
Inventory written-down |
SUMMARY OF SIGNIFICANT ACCOUN53
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Impairment of intangible assets with finite life | |||
Intangible asset impairment loss | $ 0 | $ 0 | $ 0 |
Impairment of goodwill | |||
Goodwill impairment loss | $ 85,934,770 | ||
Comprehensive loss | |||
Other comprehensive loss, tax | |||
Trade name/domain name [Member] | |||
Acquired intangible assets | |||
Amortization years | 10 years | ||
Non-compete agreement [Member] | |||
Acquired intangible assets | |||
Amortization years | 4 years 6 months | ||
Online platform [Member] | |||
Acquired intangible assets | |||
Amortization years | 5 years | ||
Minimum [Member] | Customer relationship [Member] | |||
Acquired intangible assets | |||
Amortization years | 5 years | ||
Maximum [Member] | Customer relationship [Member] | |||
Acquired intangible assets | |||
Amortization years | 10 years | ||
Computer and software [Member] | Minimum [Member] | |||
Property and equipment, net [Line Items] | |||
Estimated useful lives | 3 years | ||
Computer and software [Member] | Maximum [Member] | |||
Property and equipment, net [Line Items] | |||
Estimated useful lives | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN54
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - Customer concentration risk [Member] - Customer A [Member] | 12 Months Ended |
Dec. 31, 2015 | |
Revenue [Member] | |
Concentration of credit risk [Line Items] | |
Concentration risk, percentage | 28.40% |
Accounts receivable [Member] | |
Concentration of credit risk [Line Items] | |
Concentration risk, percentage | 99.90% |
BUSINESS ACQUISITION (Details)
BUSINESS ACQUISITION (Details) - JMU HK [Member] - USD ($) | Jun. 08, 2015 | Jun. 05, 2015 |
BUSINESS ACQUISITION [Line Items] | ||
Ordinary shares issued for consideration | 741,422,780 | 741,422,780 |
Cash consideration | $ 30,000,000 | |
Ordinary shares issued for consideration, subject to lock-up period | 311,842,983 | |
Percentage of lock-up shares which will be removed on each anniversary date of the issuance date | 0.3333% | |
Period for which specified percentage of lock-up shares which will be removed on each anniversary date of the issuance date | 3 years | |
Stock price per American Depositary Shares (in dollars per share) | $ 10.39 | |
Percentage of discount rate to the stock price for shares that are subject to lock-up | 28.00% | |
Period for which specified percentage of lock-up shares which will be used to determine value of consideration date of the issuance date | 3 years |
BUSINESS ACQUISITION (Details 2
BUSINESS ACQUISITION (Details 2) - USD ($) | Jun. 05, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
BUSINESS ACQUISITION [Line Items] | |||
Goodwill | $ 250,650,500 | ||
Trade name/domain name [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Amortization Period | 10 years | ||
Non-compete agreement [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Amortization Period | 4 years 6 months | ||
Online platform [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Amortization Period | 5 years | ||
Customer relationships [Member] | Minimum [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Amortization Period | 5 years | ||
Customer relationships [Member] | Maximum [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Amortization Period | 10 years | ||
JMU HK [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Net tangible assets | $ 28,793,669 | ||
Total | 55,448,000 | ||
Deferred tax liabilities | (13,862,000) | ||
Goodwill | 336,585,270 | ||
Total consideration | 406,964,939 | ||
JMU HK [Member] | Trade name/domain name [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Intangible assets: | $ 16,228,000 | ||
Amortization Period | 10 years | ||
JMU HK [Member] | Non-compete agreement [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Intangible assets: | $ 10,096,000 | ||
Amortization Period | 4 years 6 months | ||
JMU HK [Member] | Online platform [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Intangible assets: | $ 1,364,000 | ||
Amortization Period | 5 years | ||
JMU HK [Member] | Customer relationships [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Intangible assets: | $ 27,760,000 | ||
JMU HK [Member] | Customer relationships [Member] | Minimum [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Amortization Period | 5 years | ||
JMU HK [Member] | Customer relationships [Member] | Maximum [Member] | |||
BUSINESS ACQUISITION [Line Items] | |||
Amortization Period | 10 years |
BUSINESS ACQUISITION (Details 3
BUSINESS ACQUISITION (Details 3) - JMU HK [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
BUSINESS ACQUISITION [Line Items] | ||
Pro forma revenues | $ 11,522,525 | $ 68,298 |
Pro forma net loss | $ (115,066,695) | $ (16,439,806) |
Pro forma net loss per ordinary share-basic | $ (0.09) | $ (0.02) |
Pro forma net loss per ordinary share-diluted | $ (0.09) | $ (0.02) |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
DISCONTINUED OPERATIONS [Line Items] | |||
Gain on disposal | $ 47,390,421 | ||
Carrying amounts of assets disposed | |||
Current assets of discontinued operations | $ 10,077,125 | ||
Non-current assets of discontinued operations | 10,037,787 | ||
Carrying amounts of liabilities disposed | |||
Current liabilities of discontinued operations | $ 67,500,288 | ||
Wowo Group Limited [Member] | |||
DISCONTINUED OPERATIONS [Line Items] | |||
Gain on disposal | $ (47,390,421) | ||
Carrying amounts of assets disposed | |||
Cash | $ 1,644,855 | ||
Accounts receivable, net | 1,225,386 | ||
Prepaid expenses and other current assets | 7,206,884 | ||
Current assets of discontinued operations | 10,077,125 | ||
Property and equipment, net | 2,574,081 | ||
Goodwill | 7,463,706 | ||
Non-current assets of discontinued operations | 10,037,787 | ||
Total assets of discontinued operations | 20,114,912 | ||
Carrying amounts of liabilities disposed | |||
Accounts payable | 22,679,754 | ||
Accrued expense and other current liabilities | 21,669,131 | ||
Advance from customers | 22,703,718 | ||
Amounts due to related parties | 403,585 | ||
Income tax payable | 44,100 | ||
Current liabilities of discontinued operations | 67,500,288 | ||
Total liabilities of discontinued operations | $ 67,500,288 |
DISCONTINUED OPERATIONS (Deta59
DISCONTINUED OPERATIONS (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
DISCONTINUED OPERATIONS [Line Items] | |||
Gain from disposal of Group Buying Entities | $ (47,390,421) | ||
(Loss)/Income before income tax | $ 11,075,935 | $ (39,546,576) | $ (32,179,774) |
Provision for income tax | 80,519 | ||
(Loss)/Income from discontinuing operations attributable to owners of the Company | $ 11,075,935 | $ (39,546,576) | (32,099,255) |
Wowo Group Limited [Member] | |||
DISCONTINUED OPERATIONS [Line Items] | |||
Net revenues | 16,832,352 | 30,073,452 | 36,253,309 |
Cost of revenues | (2,927,148) | (7,040,383) | (6,583,501) |
Gross profit | 13,905,204 | 23,033,069 | 29,669,808 |
Operating expenses | (50,212,995) | (62,378,258) | (61,668,332) |
Loss from operations | (36,307,791) | $ (39,345,189) | $ (31,998,524) |
Gain from disposal of Group Buying Entities | 47,390,421 | ||
Interest income | $ 1,904 | $ 6,699 | $ 43,864 |
Interest expense | (11,798) | (136,655) | |
Other expenses, net | $ (8,599) | $ (196,288) | (89,354) |
Gain from disposal of subsidiary | 895 | ||
(Loss)/Income before income tax | $ 11,075,935 | $ (39,546,576) | (32,179,774) |
Provision for income tax | 80,519 | ||
(Loss)/Income from discontinuing operations attributable to owners of the Company | $ 11,075,935 | $ (39,546,576) | $ (32,099,255) |
DISCONTINUED OPERATIONS (Deta60
DISCONTINUED OPERATIONS (Details 3) - Wowo Group Limited [Member] - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | |
DISCONTINUED OPERATIONS [Line Items] | |||
Amounts due to related parties | $ 403,585 | ||
Beijing Baifen Tonglian Media Technology Co., Ltd [Member] | |||
DISCONTINUED OPERATIONS [Line Items] | |||
Amounts due to related parties | [1] | $ 403,585 | |
[1] | The amounts represents short messaging service (“SMS”) distribution platform fee, which has not been paid to Beijing Baifen Tonglian Media Technology Co., Ltd. |
PREPAID EXPENSES AND OTHER CU61
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Receivables from third-party purchasers | $ 16,510,091 | |
Amount due from third parties | 4,917,068 | |
Advance to suppliers | 2,475,752 | |
Prepaid rental expenses and other deposits | 865,219 | |
Advance to employees | 245,897 | |
Prepaid professional service fee | 34,002 | $ 227,110 |
Other current assets | 233,405 | |
Prepaid expenses and other current assets | $ 25,281,434 | $ 227,110 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, gross | $ 571,564 | ||
Less: accumulated depreciation | (93,489) | ||
Property and equipment, net | 478,075 | ||
Depreciation of expenses | 63,981 | ||
Computer and software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, gross | $ 571,564 |
ACQUIRED INTANGIBLE ASSETS, N63
ACQUIRED INTANGIBLE ASSETS, NET (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||
Acquired intangible assets, gross | $ 55,448,000 | ||
Less: Accumulated amortization | (4,885,055) | ||
Acquired intangible assets, net | 50,562,945 | ||
Amortization expenses | 4,885,055 | ||
Impairment loss | 0 | $ 0 | $ 0 |
Trade name and domain names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired intangible assets, gross | 16,228,000 | ||
Non-compete agreement [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired intangible assets, gross | 10,096,000 | ||
Online platform [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired intangible assets, gross | 1,364,000 | ||
Customer relationship [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired intangible assets, gross | $ 27,760,000 |
GOODWILL (Details)
GOODWILL (Details) | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Goodwill rollforward | |||
Beginning balance | |||
Addition | $ 336,585,270 | ||
Ending balance | $ 336,585,270 | ||
Accumulated impairment loss: | |||
Beginning balance | |||
Charge for the period | $ 85,934,770 | ||
Ending balance | |||
Goodwill, net | $ 250,650,500 | ||
Number of reporting units | item | 1 |
ACCRUED EXPENSES AND OTHER CU65
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) | Dec. 31, 2015USD ($) |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Payables to third-party sellers | $ 17,163,716 |
Accrued payroll and welfare | 1,219,730 |
Payable for professional fee | 858,577 |
Payables for rental fee | 639,753 |
Others | 88,680 |
Total accrued expenses and other current liabilities | $ 19,970,456 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Line Items] | |||
Income tax rate (as a percent) | 25.00% | ||
Taxable income for foreign entities | $ 0 | ||
Taxable income for domestic entities | $ 0 | ||
Income tax benefits: | |||
Current income tax expenses | |||
Deferred income tax benefits | $ 1,249,696 | ||
Income tax benefits | $ 1,249,696 | ||
Deferred tax assets, Current | |||
Current deferred tax assets | |||
Total current deferred tax assets | |||
Deferred tax assets, Non-current | |||
Net operating loss carry forwards | $ 1,955,301 | ||
Total deferred tax assets | 1,955,301 | ||
Less: valuation allowance | $ (1,955,301) | ||
Net deferred tax assets | |||
Deferred tax liabilities, Non-current | |||
Acquired intangible assets | $ 12,640,736 | ||
Total deferred tax liabilities | 12,640,736 | ||
Net operating losses carry forwards | 8,064,039 | ||
Reconciliation between the income taxes benefit computed by applying the PRC tax rate to loss before income taxes and the actual credit for income taxes [Abstract] | |||
Net loss before provision for income taxes | $ (105,895,819) | $ (4,323,249) | $ (73,089) |
Statutory tax rates in the PRC | 25.00% | ||
Income tax at statutory tax rate | $ (26,473,955) | ||
Expenses not deductible for tax purposes | |||
Goodwill impairment | 21,483,693 | ||
Entertainment expenses exceeded tax limit | 7,687 | ||
Other expenses exceeded tax limit | 226,428 | ||
Effect of income tax rate difference in other jurisdiction | 4,050,542 | ||
Changes of valuation allowance | 1,955,301 | ||
Income tax benefits | 1,249,696 | ||
Aggregate undistributed earnings | 0 | ||
Deferred tax liability payable upon the distribution of aggregate undistributed earnings | 0 | ||
Inland Revenue, Hong Kong [Member] | |||
Income tax benefits: | |||
Income tax benefits | 0 | $ 0 | $ 0 |
Expenses not deductible for tax purposes | |||
Income tax benefits | $ 0 | $ 0 | $ 0 |
State Administration of Taxation, China [Member] | |||
Income Tax Disclosure [Line Items] | |||
Income tax rate (as a percent) | 25.00% | ||
Reconciliation between the income taxes benefit computed by applying the PRC tax rate to loss before income taxes and the actual credit for income taxes [Abstract] | |||
Statutory tax rates in the PRC | 25.00% |
ORDINARY SHARES (Details)
ORDINARY SHARES (Details) - USD ($) | Sep. 27, 2015 | Sep. 07, 2015 | Jun. 08, 2015 | Jun. 05, 2015 | Apr. 27, 2015 | Apr. 08, 2015 | Feb. 29, 2012 | Apr. 03, 2011 | Jul. 05, 2011 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
ORDINARY SHARES [Line Items] | |||||||||||||
Total proceeds from issuance of ordinary shares upon IPO, after deducting the IPO related cost | $ 40,294,600 | ||||||||||||
IPO related cost | 2,125,372 | $ 874,628 | |||||||||||
Amount of Mr. Xu's indebtness converted into ordinary shares | 69,353,223 | ||||||||||||
Total purchase price | 376,964,937 | ||||||||||||
Shares issued pursuant to supplemental agreement | $ 15,000,000 | ||||||||||||
Employees and former employees [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
Ordinary shares issued upon the exercise of their share options | 6,866,280 | ||||||||||||
Common shares remain for future issuance | 31,496,832 | 31,496,832 | |||||||||||
JMU [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
Ordinary shares issued for consideration | 741,422,780 | 741,422,780 | |||||||||||
Stock Issued During Period Shares Acquisitions Subject To Lock Up Period | 311,842,983 | ||||||||||||
Mr. Xu [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
Additional subscription amount | 27,000,000 | ||||||||||||
Stock Issued During Period, Shares, Other | 27,000,000 | ||||||||||||
Mr. Xu [Member] | JMU [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
Ordinary shares issued for consideration | 72,000,000 | ||||||||||||
Additional subscription amount | 27,000,000 | ||||||||||||
Purchase price (in dollars per share) | $ 0.5556 | ||||||||||||
Total purchase price | $ 40,000,000 | ||||||||||||
Shares issued pursuant to supplemental agreement | $ 15,000,000 | ||||||||||||
Stock Issued During Period, Shares, Other | 27,000,000 | ||||||||||||
Ordinary shares [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
Shares issued | 75,960,000 | ||||||||||||
Total proceeds from issuance of ordinary shares upon IPO, after deducting the IPO related cost | $ 37,294,600 | ||||||||||||
IPO related cost | 3,000,000 | ||||||||||||
Ordinary shares issued upon automatic conversion of preferred shares, upon the completion of the IPO | 164,740,336 | ||||||||||||
Amount of Mr. Xu's indebtness converted into ordinary shares | $ 69,400,000 | $ 1,248 | |||||||||||
Ordinary shares issued upon conversion of Mr. Xu's debt | 124,835,802 | 124,835,802 | |||||||||||
Ordinary shares issued for consideration | 741,422,780 | ||||||||||||
Additional subscription amount | 27,000,000 | ||||||||||||
Total purchase price | $ 7,414 | ||||||||||||
Shares issued pursuant to supplemental agreement | $ 270 | ||||||||||||
Stock Issued During Period, Shares, Other | 27,000,000 | ||||||||||||
Ordinary shares issued upon the exercise of their share options | 6,866,280 | ||||||||||||
Ordinary shares [Member] | Employees and former employees [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
Shares issued and transferred to depositary bank | 38,363,112 | ||||||||||||
Ordinary shares [Member] | IPO [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
Shares issued | 72,000,000 | ||||||||||||
Ordinary shares [Member] | Over-allotment option [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
Shares issued | 3,960,000 | ||||||||||||
ADS [Member] | Employees and former employees [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
Shares issued and transferred to depositary bank | 2,131,284 | ||||||||||||
ADS [Member] | IPO [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
Shares issued | 4,000,000 | ||||||||||||
Price per share | $ 10 | ||||||||||||
ADS [Member] | Over-allotment option [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
Shares issued | 220,000 | ||||||||||||
Price per share | $ 10 | ||||||||||||
Series A-1 Preferred Shares [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
IPO related cost | $ 18,072 | ||||||||||||
Ordinary shares issued upon automatic conversion of preferred shares, upon the completion of the IPO | 12,202,988 | ||||||||||||
Series A-2 Preferred Shares [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
IPO related cost | $ 192,149 | ||||||||||||
Ordinary shares issued upon automatic conversion of preferred shares, upon the completion of the IPO | 122,029,877 | ||||||||||||
Series B Preferred Shares [Member] | |||||||||||||
ORDINARY SHARES [Line Items] | |||||||||||||
IPO related cost | $ 31,153 | ||||||||||||
Ordinary shares issued upon automatic conversion of preferred shares, upon the completion of the IPO | 30,507,471 |
CONVERITBLE REDEEMABLE PREFER68
CONVERITBLE REDEEMABLE PREFERRED SHARES (Details) | Apr. 08, 2015shares | Feb. 29, 2012USD ($)$ / shares | Feb. 29, 2012$ / shares | Jul. 05, 2011USD ($)$ / shares | Jun. 08, 2011USD ($) | Jun. 08, 2011$ / shares | May. 25, 2011USD ($) | May. 25, 2011$ / shares | Apr. 03, 2011USD ($)$ / shares | Jul. 05, 2011USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) |
CONVERITBLE REDEEMABLE PREFERRED SHARES [Line Items] | ||||||||||||||
IPO related costs | $ 2,125,372 | $ 874,628 | ||||||||||||
Number of board of directors appointed | 4 | |||||||||||||
Preferred Stocks, Outstanding [Roll Forward] | ||||||||||||||
Beneficial conversion feature | $ 43,234,050 | |||||||||||||
Ordinary shares [Member] | ||||||||||||||
CONVERITBLE REDEEMABLE PREFERRED SHARES [Line Items] | ||||||||||||||
Number of board of directors appointed | 3 | |||||||||||||
Conversion ratio | 1 | |||||||||||||
Preferred Shares [Member] | ||||||||||||||
CONVERITBLE REDEEMABLE PREFERRED SHARES [Line Items] | ||||||||||||||
Number of board of directors appointed | 1 | |||||||||||||
Minimum qualified IPO proceeds to automatically convert shares to ordinary shares | 100,000,000 | |||||||||||||
Preferred Stocks, Outstanding [Roll Forward] | ||||||||||||||
Balance as of the beginning of the year | 124,653,928 | 83,839,419 | $ 46,197,571 | |||||||||||
Accretion for the Preferred Shares | 2,365,351 | 40,814,509 | 37,641,848 | |||||||||||
Conversion to Ordinary Shares | $ (127,019,279) | |||||||||||||
Balance as of the end of the year | $ 124,653,928 | 83,839,419 | 46,197,571 | |||||||||||
Series A [Member] | ||||||||||||||
CONVERITBLE REDEEMABLE PREFERRED SHARES [Line Items] | ||||||||||||||
Percentage of common shares subscription price used to measure reduction of preferred shares subscription price | 0.85% | |||||||||||||
Adjusted priced of preferred shares, as a percentage to additional ordinary shares issued | 0.85% | |||||||||||||
Conversion rate at issuance date | 1 | |||||||||||||
Conversion rate at end of year | 1 | 1 | ||||||||||||
Series A-1 Preferred Shares [Member] | ||||||||||||||
CONVERITBLE REDEEMABLE PREFERRED SHARES [Line Items] | ||||||||||||||
Convertible redeemable preferred shares, shares issued | $ 6,713,384 | $ 5,489,604 | ||||||||||||
Issuance price | $ / shares | $ 0 | $ 0.9108 | ||||||||||||
Issuance cash proceeds | $ 5,000,000 | |||||||||||||
IPO related costs | $ 18,072 | |||||||||||||
Conversion price | $ / shares | $ 0.4097 | |||||||||||||
Dividend rate | 8.00% | |||||||||||||
Liquidation preference, as a percent to issue price | 100.00% | |||||||||||||
Preferred Stocks, Outstanding [Roll Forward] | ||||||||||||||
Balance as of the beginning of the year | $ 6,756,046 | $ 5,310,921 | 4,111,914 | |||||||||||
Accretion for the Preferred Shares | 442,409 | 1,445,125 | 1,199,007 | |||||||||||
Conversion to Ordinary Shares | $ (7,198,455) | |||||||||||||
Balance as of the end of the year | 6,756,046 | 5,310,921 | 4,111,914 | |||||||||||
Ordinary shares issued upon automatic conversion of preferred shares, upon the completion of the IPO | shares | 12,202,988 | |||||||||||||
Series A-2 Preferred Shares [Member] | ||||||||||||||
CONVERITBLE REDEEMABLE PREFERRED SHARES [Line Items] | ||||||||||||||
Convertible redeemable preferred shares, shares issued | $ 70,690,413 | $ 18,482,206 | $ 2,053,580 | $ 30,803,678 | ||||||||||
Issuance price | $ / shares | 0 | $ 0.9739 | $ 0.9739 | $ 0.9739 | ||||||||||
Issuance cash proceeds | $ 18,000,000 | $ 2,000,000 | $ 30,000,000 | |||||||||||
IPO related costs | $ 192,149 | |||||||||||||
Conversion price | $ / shares | $ 0.4097 | |||||||||||||
Dividend rate | 8.00% | |||||||||||||
Liquidation preference, as a percent to issue price | 100.00% | |||||||||||||
Preferred Stocks, Outstanding [Roll Forward] | ||||||||||||||
Balance as of the beginning of the year | $ 99,356,343 | 62,409,342 | 28,072,921 | |||||||||||
Accretion for the Preferred Shares | 1,202,748 | 36,947,001 | 34,336,421 | |||||||||||
Conversion to Ordinary Shares | $ (100,559,091) | |||||||||||||
Balance as of the end of the year | 99,356,343 | 62,409,342 | 28,072,921 | |||||||||||
Ordinary shares issued upon automatic conversion of preferred shares, upon the completion of the IPO | shares | 122,029,877 | |||||||||||||
Series B Preferred Shares [Member] | ||||||||||||||
CONVERITBLE REDEEMABLE PREFERRED SHARES [Line Items] | ||||||||||||||
Convertible redeemable preferred shares, shares issued | $ 30,507,471 | |||||||||||||
Issuance price | $ / shares | $ 0.4097 | |||||||||||||
Issuance cash proceeds | $ 12,500,000 | |||||||||||||
IPO related costs | $ 31,153 | |||||||||||||
Dividend rate | 8.00% | |||||||||||||
Liquidation preference, as a percent to issue price | 100.00% | |||||||||||||
Percentage of common shares subscription price used to measure reduction of preferred shares subscription price | 0.85% | |||||||||||||
Adjusted priced of preferred shares, as a percentage to additional ordinary shares issued | 0.85% | |||||||||||||
Conversion rate at issuance date | 1 | |||||||||||||
Conversion rate at end of year | 1 | |||||||||||||
Preferred Stocks, Outstanding [Roll Forward] | ||||||||||||||
Balance as of the beginning of the year | $ 18,541,539 | 16,119,156 | 14,012,736 | |||||||||||
Accretion for the Preferred Shares | 720,194 | 2,422,383 | 2,106,420 | |||||||||||
Conversion to Ordinary Shares | $ (19,261,733) | |||||||||||||
Balance as of the end of the year | $ 18,541,539 | $ 16,119,156 | $ 14,012,736 | |||||||||||
Ordinary shares issued upon automatic conversion of preferred shares, upon the completion of the IPO | shares | 30,507,471 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Assets and liabilities measured and recorded at fair value on a recurring and non-recurring basis [Line Items] | |||
Fair value inputs, discount rate | 17.00% | ||
Impairment of goodwill | $ 85,934,770 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - 2011 Plan [Member] - $ / shares | Apr. 18, 2014 | Mar. 15, 2013 | Dec. 31, 2015 | Dec. 31, 2012 | Dec. 31, 2013 |
SHARE-BASED COMPENSATION [Line Item] | |||||
Share options granted | |||||
Exercise price | |||||
Estimated fair value at grant date | |||||
Options [Member] | |||||
SHARE-BASED COMPENSATION [Line Item] | |||||
Vesting period | 48 months | ||||
Exercise period | 5 years | ||||
Restricted Stock Units (RSUs) [Member] | |||||
SHARE-BASED COMPENSATION [Line Item] | |||||
Exercise price | $ 0 | ||||
Recognition period | 2 years | ||||
Number of RSUs | |||||
Outstanding at beginning of year | |||||
Granted | 28,841,700 | ||||
Forfeited and expired | (201,800) | ||||
Vested | 28,639,900 | ||||
Outstanding at end of year | 28,639,900 | ||||
Exercisable at end of year | 28,639,900 | ||||
Weighted average grant date fair value | |||||
Outstanding at beginning of year | |||||
Granted | $ 0.265 | ||||
Forfeited and expired | 0.265 | ||||
Vested | 0.265 | ||||
Outstanding at end of year | 0.265 | ||||
Exercisable at end of year | $ 0.265 | ||||
Employees [Member] | |||||
SHARE-BASED COMPENSATION [Line Item] | |||||
Share options granted | 9,341,500 | 1,128,590 | |||
Exercise price | $ 0.01 | $ 0.2 | |||
Managements [Member] | |||||
SHARE-BASED COMPENSATION [Line Item] | |||||
Share options granted | 2,104,000 | 100,000 | |||
Exercise price | $ 0.01 | $ 0.2 | |||
First tranche [Member] | Restricted Stock Units (RSUs) [Member] | |||||
SHARE-BASED COMPENSATION [Line Item] | |||||
Vesting percentage | 50.00% | ||||
Second tranche [Member] | Restricted Stock Units (RSUs) [Member] | |||||
SHARE-BASED COMPENSATION [Line Item] | |||||
Vesting percentage | 50.00% |
SHARE-BASED COMPENSATION (Det71
SHARE-BASED COMPENSATION (Details 2) - USD ($) | Sep. 01, 2015 | Sep. 29, 2014 | Apr. 18, 2014 | Mar. 15, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Operating expense [Member] | Continuing operations [Member] | |||||||
Other disclosures | |||||||
Share-based compensation | |||||||
Operating expense [Member] | Discontinued operations [Member] | |||||||
Other disclosures | |||||||
Share-based compensation | $ 7,176,600 | $ 1,571,935 | $ 909,904 | ||||
2011 Plan [Member] | |||||||
Number of share options | |||||||
Outstanding at beginning of year | 39,249,022 | ||||||
Granted | |||||||
Forfeited and expired | (1,079,202) | ||||||
Exercised | (6,866,280) | ||||||
Outstanding at end of year | 31,303,540 | 39,249,022 | |||||
Exercisable at end of year | 31,303,540 | ||||||
Weighted average exercise price | |||||||
Outstanding at beginning of year | $ 0.07 | ||||||
Granted | |||||||
Forfeited and expired | $ 0.02 | ||||||
Exercised | 0.02 | ||||||
Outstanding at end of year | 0.08 | $ 0.07 | |||||
Exercisable at end of year | 0.08 | ||||||
Weighted average grant date fair value | |||||||
Outstanding at beginning of year | $ 0.11 | ||||||
Granted | |||||||
Forfeited and expired | $ 0.08 | ||||||
Exercised | 0.08 | ||||||
Outstanding at end of year | 0.26 | $ 0.11 | |||||
Exercisable at end of year | $ 0.26 | ||||||
Weighted average remaining contractual life | |||||||
Outstanding at end of year | 1 year 4 months 2 days | 2 years 6 months 4 days | |||||
Exercisable at end of year | 1 year 4 months 2 days | ||||||
Aggregate intrinsic value | |||||||
Outstanding | $ 1,734,975 | $ 3,512,311 | |||||
Exercisable | 1,734,975 | ||||||
Other disclosures | |||||||
Share-based compensation due to modification | 7,503,976 | ||||||
Reversal amount of share-based compensation | $ 327,376 | ||||||
2011 Plan [Member] | Options [Member] | |||||||
Other disclosures | |||||||
Unvested options | 3,312,618 | ||||||
Fair value assumptions | |||||||
Expected volatility | 58.00% | 65.00% | |||||
Risk-free interest rate | 1.80% | 0.90% | |||||
Expected dividend yield | |||||||
Exercise price | $ 0.01 | $ 0.2 | |||||
Fair value of the underlying ordinary shares | $ 0.38 | $ 0.0590 | $ 0.0611 | ||||
2011 Plan [Member] | Options [Member] | Minimum [Member] | |||||||
Fair value assumptions | |||||||
Expected volatility | 60.30% | ||||||
Risk-free interest rate | 0.47% | ||||||
Exercise price | $ 0.01 | ||||||
2011 Plan [Member] | Options [Member] | Maximum [Member] | |||||||
Fair value assumptions | |||||||
Expected volatility | 65.10% | ||||||
Risk-free interest rate | 0.88% | ||||||
Exercise price | $ 0.20 | ||||||
2011 Plan [Member] | Board of Directors and Executives [Member] | Ordinary shares [Member] | |||||||
Other disclosures | |||||||
Shares transferred by main shareholder | 30,372,540 | ||||||
Fair value | $ 0.138 | ||||||
Share-based compensation | $ 4,190,449 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator: | |||
Net loss attributable to Wowo Limited | $ (93,570,188) | $ (43,856,347) | $ (32,172,344) |
Continuing operations | (104,646,123) | (4,323,249) | (73,089) |
Discontinued operations | 11,075,935 | (39,546,576) | (32,099,255) |
Net loss attributable to ordinary shareholders for computing basic net loss per ordinary shares | (95,935,539) | (84,670,856) | (69,814,192) |
Continuing operations | (104,646,123) | (8,346,641) | (158,604) |
Discontinued operations | $ 8,710,584 | $ (76,324,215) | $ (69,655,588) |
Denominator: | |||
Weighted average ordinary shares outstanding used in computing basic net loss per shares | 1,001,754,524 | 303,886,640 | 303,886,640 |
Weighted average ordinary shares outstanding used in computing diluted net loss per ordinary shares | 1,001,754,524 | 303,886,640 | 303,886,640 |
Net loss per ordinary shares | |||
Basic | $ (0.09) | $ (0.28) | $ (0.23) |
Diluted | (0.09) | (0.28) | (0.23) |
Net loss per ordinary share from continuing operations | |||
Basic | (0.10) | (0.03) | 0 |
Diluted | (0.10) | (0.03) | 0 |
Net (loss)/income per share from discontinued operations | |||
Basic | 0.01 | (0.25) | (0.23) |
Diluted | $ 0.01 | $ (0.25) | $ (0.23) |
Basic | |||
Continuing operations | 1,001,754,524 | 303,886,640 | 303,886,640 |
Discontinued operations | 1,001,754,524 | 303,886,640 | 303,886,640 |
Diluted | |||
Continuing operations | 1,001,754,524 | 303,886,640 | 303,886,640 |
Discontinued operations | 1,043,473,265 | 303,886,640 | 303,886,640 |
Options [Member] | Continuing operations [Member] | |||
Weighted average shares used in calculating net loss per | |||
Anti-dilutive ordinary shares excluded from the calculation of diluted net income per share | 59,943,440 | 39,249,022 | 34,681,354 |
Options [Member] | Discontinued operations [Member] | |||
Weighted average shares used in calculating net loss per | |||
Anti-dilutive ordinary shares excluded from the calculation of diluted net income per share | 18,224,699 | 39,249,022 | 34,681,354 |
Series A-1 Preferred Shares [Member] | |||
Numerator: | |||
Accretion for convertible redeemable preferred shares | $ (442,409) | $ (1,445,125) | $ (1,199,007) |
Net income attributable to Preferred Shareholders for computing basic net income per Preferred Shares | $ 442,409 | $ 1,445,125 | $ 1,199,007 |
Denominator: | |||
Weighted average ordinary shares outstanding used in computing basic net loss per shares | 3,242,986 | 12,202,988 | 12,202,988 |
Net loss per ordinary shares | |||
Basic | $ 0.14 | $ 0.12 | $ 0.10 |
Basic | |||
Continuing operations | 3,242,986 | 12,202,988 | 12,202,988 |
Weighted average shares used in calculating net loss per | |||
Weighted average shares used in calculating net loss per preferred shares | 3,242,986 | 12,202,988 | 12,202,988 |
Series A-2 Preferred Shares [Member] | |||
Numerator: | |||
Accretion for convertible redeemable preferred shares | $ (1,202,748) | $ (36,947,001) | $ (34,336,421) |
Net income attributable to Preferred Shareholders for computing basic net income per Preferred Shares | $ 1,202,748 | $ 36,947,001 | $ 34,336,421 |
Denominator: | |||
Weighted average ordinary shares outstanding used in computing basic net loss per shares | 32,429,858 | 122,029,877 | 122,029,877 |
Net loss per ordinary shares | |||
Basic | $ 0.04 | $ 0.30 | $ 0.28 |
Basic | |||
Continuing operations | 32,429,858 | 122,029,877 | 122,029,877 |
Weighted average shares used in calculating net loss per | |||
Weighted average shares used in calculating net loss per preferred shares | 32,429,858 | 122,029,877 | 122,029,877 |
Series B Preferred Shares [Member] | |||
Numerator: | |||
Accretion for convertible redeemable preferred shares | $ (720,194) | $ (2,422,383) | $ (2,106,420) |
Net income attributable to Preferred Shareholders for computing basic net income per Preferred Shares | $ 720,194 | $ 2,422,383 | $ 2,106,420 |
Denominator: | |||
Weighted average ordinary shares outstanding used in computing basic net loss per shares | 8,107,465 | 30,507,471 | 30,507,471 |
Net loss per ordinary shares | |||
Basic | $ 0.09 | $ 0.08 | $ 0.07 |
Basic | |||
Continuing operations | 8,107,465 | 30,507,471 | 30,507,471 |
Weighted average shares used in calculating net loss per | |||
Weighted average shares used in calculating net loss per preferred shares | 8,107,465 | 30,507,471 | 30,507,471 |
RELATED PARTY BALANCES AND TR73
RELATED PARTY BALANCES AND TRANSACTIONS - (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | ||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | $ 806,423 | ||||
Amounts due to related parties | 319,767 | $ 61,965,277 | |||
Rental expense to related parties | 335,249 | ||||
Revenue from related parties | 541,758 | ||||
Noodles Dao (HK) Co., Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | [1] | 74,187 | |||
Hong Kong Sunward Fishery Restaurant Management Co., Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | [1] | 70,962 | |||
Nanjing Xinzijing Sunward Fishery Restaurant Co., Ltd [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | [1] | 29,469 | |||
Revenue from related parties | 38,179 | ||||
Nanjing Jiangdong Sunward Fishery Restaurant Co., Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | [1] | 29,831 | |||
Revenue from related parties | 32,726 | ||||
Nanjing Yongji Sunward Fishery Restaurant Co., Ltd [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | [1] | 13,015 | |||
Revenue from related parties | 17,573 | ||||
Ningbo Jingzhou Sunward Logistics Co., Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | [1] | 149,033 | |||
Revenue from related parties | 58,560 | ||||
Zhejiang Sunward Fishery Restaurant Co., Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | [1] | 128,845 | |||
Shanghai MIN Group Co., Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | [1] | 48,643 | |||
Rental expense to related parties | 335,249 | ||||
Shanghai Xiao Nan Guo Hai Zhi Yuan Restaurant Management Co.,Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | [1] | 260,623 | |||
Revenue from related parties | 393,147 | ||||
WM Ming Hotel [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | [1] | 1,815 | |||
Revenue from related parties | $ 1,573 | ||||
Dallsfield [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due to related parties | 250,000 | [2] | |||
Rizhao Yinxingshu Equity Investment Fund, L.P [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | 32,717,713 | [2] | |||
Beijing Shiletao Ecommerce Co., Ltd [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | 969,927 | [2] | |||
Mr. Xu [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | $ 28,027,637 | [2] | |||
Shanghai MIN Hongshi Trading Co., Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amounts due to related parties | $ 319,767 | [3] | |||
[1] | The amounts represents the receivables from related parties who purchase product on JMU online platform. | ||||
[2] | The amounts represents the funds provided by Mr. Xu, to support the working capital for the Group's daily operations, which was included in the indebtedness from Mr. Xu and had been converted into ordinary shares immediately after the completion of the IPO. | ||||
[3] | The amounts represents the payables to related parties who sell products on JMU online platform. |
COMMITMENTS AND CONTINGENCIES74
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |||
Rental expenses under operating leases | $ 985,214 | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2,016 | 1,483,747 | ||
2,017 | 1,432,141 | ||
2,018 | 1,436,065 | ||
2,019 | 1,432,141 | ||
2,020 | 1,432,141 | ||
2021 and after | 13,689,704 | ||
Total | $ 20,905,939 | ||
PRC individual income tax rate applied on capital gain | 20.00% |
MAINLAND CHINA CONTRIBUTION P75
MAINLAND CHINA CONTRIBUTION PLAN (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating expense [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Total provisions for employee benefits | $ 902,418 |
STATUTORY RESERVES AND RESTRI76
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS [Line Item] | |||
Required minimum percentage of annual appropriations to general reserve fund | 10.00% | ||
Statutory threshold percentage of the reserve fund to the registered capital of the respective company, above which the appropriation is not required | 50.00% | ||
Appropriation made to the enterprise expansion reserve and the staff welfare and bonus reserve | |||
Restricted net assets | $ 21,598,935 | $ 26,017,742 | |
VIEs [Member] | |||
STATUTORY RESERVES AND RESTRICTED NET ASSETS [Line Item] | |||
Restricted net assets | $ 1,599,100 | $ 4,324,871 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) | 12 Months Ended | ||
Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
SEGMENT INFORMATION [Line Items] | |||
Number of operating segments | segment | 1 | ||
Net revenue | $ 11,477,552 | ||
Online direct sales [Member] | |||
SEGMENT INFORMATION [Line Items] | |||
Net revenue | $ 11,477,552 | ||
Online platform services [Member] | |||
SEGMENT INFORMATION [Line Items] | |||
Net revenue |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event [Member] - CCLG [Member] $ in Millions | Jan. 31, 2016USD ($) |
Subsequent Event [Line Items] | |
Total consideration | $ 3.1 |
Equity interests (as a percent) | 10.00% |